During the American Civil War, metals became scarce, and paper money became more popular even for denominations of less than $1. The smallest was for three cents, and the bill was about the size of a business card. In 1865, a silver three cent coin replaced this "fractional currency," and shortly thereafter it was made out of nickel. As such, they are known as three cent nickels.
They feature Lady Liberty, as was traditional for the time.