Many States do not have gold. The dollar is too expensive for them and they expect an inflation to pay their debts. The government reacts by buying huge amounts of silver bullion paid from 1878 with Silver Certificates of Deposit that are redeemable in silver coins.
Silver still does not appeal the users. In 1889 the federal reserves of silver coins reached $ 283 million. They had to find something else. Once again the remedy will be worse than the disease. The Silver Purchase Act of July 14, 1890 doubles the volume of silver purchased by the government while authorizing its payment by a new bill named Treasury Note or Coin Note, redeemable in coins without stipulating the metal.
Speculators rush to sell their silver bullion for this paper which they immediately exchange for gold coins. In the year 1890 the price of silver per ounce fell from $ 1.16 to $ 0.69. The increasingly severe crisis will lead to the catastrophic depression of 1893.
The Treasury Notes are issued in seven denominations in 1890, to which the $ 50 will be added in the following year. The Treasury wants to do too well. For the two largest denominations, $ 100 and $ 1000, the ornamental sharpness of the back is intended to discourage counterfeiting. With this intricacy, they become uneasy to inspect with a risk of no longer discriminating between real and fake.
The numbers 0 of these two denominations are huge and ugly. The $ 100 and $ 1000 are pejoratively nicknamed Watermelon and Grand Watermelon. The government understands its design blunders and creates in 1891 a series with new backs without the 'watermelons', which will be just as ephemeral : the production of Treasury Notes ceases after the series of 1891.
Seven $ 1000 Grand Watermelons survive, split into two variants. Three are in private hands. The top ranked of the seven units, graded About New 50 by PCGS, was sold for $ 1.1M including premium by Lyn Knight in October 2005. It is estimated $ 1.25M by Stack's Bowers in Baltimore on October 25, lot 3042. The unique example in private hands of the second variant was sold for $ 3,3M including premium by Heritage on January 10, 2014.
SOLD for $ 2.04M including premium