1861 The Two Year Note
2018 SOLD for $ 1.02M including premium
The reaction does not wait for the new administration. On March 2, 1861, two days before Lincoln's inauguration, the Morrill Tariff is one of Buchanan's last signed Acts. This act intending to revive the industrial activity surcharges imports and authorizes the government to create bonds. It thus puts an end to the previous proceeding of the Treasury to redeem any debt in specie payment.
One of the first financial initiatives of the Lincoln administration is the creation of a loan note pre-printed in value and duration based on the Morrill Act. The first issues are a 60-day note with three denominations and 6% interest and a two-year note with four denominations and an interest of 6% per annum.
The release related to the Morrill Act was limited to $ 10 million, to be compared with the $ 64 million of the public debt. The Lincoln administration understands the benefits of the Treasury's issuance of paper money and the development of an operational circulation will be extremely rapid.
The Act of July 17, 1861 authorizes an emission of $ 250 million, of which $ 50 million may be interest-free. The Act of August 5, 1861 defines the conditions of this operation. The new note excluding an interest is the Demand Note. Easy to use for any financial transaction, the Demand Note is the first modern federal bill.
The note with interest is indeed not interrupted by the Act of July 17 : three-year notes are created with coupons for phased payments. To differentiate them from the other Treasury Notes, they are designated as Interest Bearing Note, this wording being also applied a posteriori to the notes issued under the Morrill Act.
Bearers did not have a reason to hoard such notes which quickly gave them a little money, especially in that period of civil war. Only two units issued under the Morrill Act survive, both at $ 50 for two years after date. One of them is kept in a government institution.
The other example is thus the only one of its whole category in private hands. It was dated August 9, 1861 in handwriting by the clerk and signed by the bearer. It was sold for $ 605K by Heritage-CAA in May 2001 and for $ 370K including premium by Heritage in May 2005. A comment in the 2005 catalog warned very fairly that the 2001 result was impossible to reach again by that date.
This Interest Bearing Note graded Very Fine 25 by PCGS is estimated $ 300K for sale by Stack's Bowers in Philadelphia on August 16, lot 2021. Its image is shared by Wikimedia.
1862-1863 When the Treasury became a Banker
2013 SOLD 880 K$ including premium
The Civil War put the government itself in trouble and turns the Treasury to behave like a banker. In 1861, a federal bill is created as a Demand Note, indicating on the back the repayment terms (also known as the obligation) as the banks were doing.
It was not enough to overcome the crisis. As early as the following year, the federal government creates a note that can be used in a broader range of public and private transactions. This is the Legal Tender Note, which will be the most lasting success in the history of paper money.
The largest denomination is $ 1,000. The note bears the effigy of Senator Morris who had been in the previous century the treasurer of the War of Independence.
Three of these notes have survived, but only one has the original date of 10 March 1862. Marked also as New series, it was probably printed in 1863 before March 10, before the second edition of this denomination. This unique specimen was included in a hoard found in 1966 after 90 years hiding in a jar in a Missouri farm.
It is graded Fine 15 by PCGS, which is not so bad when considering its storage history. It was sold for $ 750K including premium by Lyn Knight in October 2005. It is estimated $ 800K, for sale by Stack's Bowers in Chicago on August 15.
POST SALE COMMENT
Very good price for this unique piece in fine condition : $ 880K including premium.
1863 A Piece of Paper for a Big Debt
2018 SOLD for $ 960K including premium
The obligation printed on the note stipulates this liberalized use : This note is a legal tender for all debts public and private except duties on imports and interest on the public debt. A variant of an additional clause is early modified and the very first copies are easily identified.
The highest denomination of the Demand Note was $ 20. For the Legal Tender Note it was $ 1,000, a very high amount mostly intended for bank-to-bank operations.
This $ 1000 Legal Tender is referred as Fr-186* in the Friedberg nomenclature. No example survives with the first obligation of February 1862 (Fr-186 and Fr-186a). The earliest known item is a unique Fr-186c bearing the printed date of March 10, 1862. Graded Fine 15 by PCGS, it was sold for $ 880K including premium by Stack's Bowers on August 15, 2013.
The Fr-186d was the first variant with the printed date modified to March 10, 1863 and referring to the act of March 3, 1863. Three notes survive. The only one in private hands has certainly never been used and retains its original embossing. Graded Choice About New 58 by PCGS, it is estimated $ 800K in the first sale of the Joel R. Anderson collection by Stack's Bowers in Baltimore on March 22, lot 1018.
1866 How the Government promoted its Gold
2013 SOLD 2.1 M$ including premium
The act of Congress of March 3, 1863 authorized the issue of Gold certificates redeemable only at the Treasury against gold coins of the designated amount. Six denominations are allowed: $ 20, 100, 500, 1000, 5000 and 10000.
The equivalence between metal and paper would be a good idea if the price of the raw metal was immutable. After a relatively short time during which the success of the operation can be considerable, a party is aggrieved: either the government or the speculators. The papers are reimbursed and disappear.
Very few units of the first issue of the top five denominations have survived. None $ 500 and $ 10,000. The only known copy in $ 1000 and $ 5000, and two of the three known in $ 100 are in the collections of the Smithsonian.
The interest of collectors at the only "1863" $ 100 certificate in private hands is obvious, especially since it is graded PCGS Apparent Extremely Fine 40. It is dated December 13, 1866.
It was privately sold through Heritage in June 2006 along with the Grand Watermelon Fr.379c, to the same collector and at the same price, $ 2.1 M. Both are now listed in the same auction sale, again by Heritage, on April 26 in Schaumburg IL.
This Grand Watermelon has been previous discussed in this column. The Gold certificate is estimated $ 1.5 M. Here is the link to the catalog.
POST SALE COMMENT
This note both exceptional and historically significant was sold for $ 2.1 million including premium.
Please watch the video shared by Heritage :
1883-1885 The Revenge of Silver
2018 SOLD for $ 1.02M including premium
To respond to the concern and reprobation of the producers and speculators of silver, a new Act requires in 1878 that the Treasury buys between $ 2 million and 4 million silver bullion per month. These purchases are paid by a new paper currency, the Silver Certificate of Deposit, immediately issued in six denominations of $ 10 to $ 1000 and known with the descriptive nickname of Black back.
A new series was issued in 1880 with minor modifications including the color of the seal. At the beginning of the same year the counter signing by the receiver of the deposit is abandoned.
The surviving copies of the highest denominations are extremely rare. Joel R. Anderson has achieved the feat of gathering a complete collection of the six denominations of the 1880 series. These silver certificates will be sold in separate lots by Stack's Bowers in Philadelphia on August 16.
The Friedberg nomenclature takes into account the combinations of the printed signatures of the Register of the Treasury and of the Treasurer of the United States. The Friedberg census records for the $ 500 certificate one countersigned 1878 and seven of the 1880 series divided between the Bruce-Gilfilan signatures in force from 1881 to 1883 and the Bruce-Wyman applied from 1883 to 1885.
The $ 500 certificate of the next sale is estimated $ 700K, lot 2039. This Bruce-Gilfilan (Friedberg 345c) is graded Very Fine 20 by PCGS. It was sold for $ 480K including premium by Lyn Knight in October 2005. It is one of the three remaining in private hands : two 345c and one 345d Bruce-Wyman.
Friedberg records for the $ 1000 certificate five copies of the 1880 series, all of them in the Bruce-Wyman configuration. The $ 1000 certificate of the next sale is estimated $ 800K, lot 2041. This Bruce-Wyman (Friedberg 346d) is graded Very Fine 25 by PCGS. It was sold for $ 670K including premium by Lyn Knight in October 2005. It is one of the two remaining in private hands. No $ 1000 from the 1878 series has survived.
RESULTS INCLUDING PREMIUM :
$ 1000 : SOLD for $ 1.02M
$ 500 : SOLD for $ 750K
This 1880 $1,000 Black Back Certificate of Deposit is One of Two in private hands, with this VF25 example being the finest known. @StacksBowers will be selling this banknote in one month, and we are excited to see it reach or exceed their estimates!— PCGS Currency (@PCGSCurrency) July 12, 2018
#auction #money #pcgscurrency pic.twitter.com/zAoj5QqVbZ
1887-1889 From the Estate of a Banker
2014 SOLD 1.4 M$ including premium
2018 SOLD for $ 900K including premium
In June 2013 Heritage announced a discovery which looked like an incredible dream to any collector of US currency : an old box had surfaced with four high denomination gold certificates from the Series of 1882 in very fine condition later confirmed VF 35 by PCGS. Coming from the estate of a banker, this hoard had been untouched for more than hundred years.
The rarest was the $ 500 (Friedberg reference Fr. 1215d), the only known copy of this variant apart from another one which is permanently kept in the collection of the Federal Reserve Bank. The other three notes in the hoard were $ 1000 in variants Fr. 1218d, 1218e and 1218f.
They were sold by Heritage on January 10, 2014 : $ 1.4M for the $ 500, $ 880K each for the first two $ 1000 and $ 294K for the latest $ 1000. These figures include the premium. The $ 500 was illustrated by a video.
Their emission dates are as follows :
$ 500, Fr. 1215d with Rosecrans-Hyatt signatures : 1887-1889
$ 1000, Fr. 1218d with Rosecrans-Huston signatures : 1889-1891
$ 1000, Fr. 1218e with Rosecrans-Nebeker signatures : 1891-1893
$ 1000, Fr. 1218f with Lyons-Roberts signatures : 1898-1905
The Fr. 1215d $ 500 gold certificate is now estimated $ 1M for sale by Stack's Bowers in Baltimore on October 25, lot 3044.
I positioned their scarcity as follows before the 2014 sale :
Conceived in 1863, the Gold certificate is originally a recognition of a nominative debt by the US government, redeemable at face value against gold coins. At the time of the Civil War, it was a way to better control the circulation of dollars.
The process changes in 1882, when these notes are no longer individual but become payable to the bearer.
American people are pragmatic. The paper currency of the nineteenth century was not hoarded. The scarcity of Gold certificates increased further in 1933 during the great offensive by Roosevelt to revive the economy, when it became illegal to own them as for gold metal in coins and bullion.
The Series of 1882 included a wide range of monetary values. The $ 5,000 and $ 10,000 are known only in two copies each, according to the Friedberg guide. The classification of this author includes eight variants in a single type for the $ 1000 certificate and seven variants divided into two types for the $ 500.
Please watch the video prepared by Heritage for the 2014 sale :
1890 The Silver Inflation
2014 SOLD 3.3 M$ including premium
In 1890, faced with a glut of silver, the U.S. government had also to address the parity between silver and gold. The decision is known as the Sherman Silver Purchase Act against the wishes of Senator Sherman, the best federal financial official of his time, who was not supporting this operation.
The government buys silver in huge quantities, and pays with a new type of bill named the Treasury Note which can be be repaid either in gold coins or in silver coins. They naively believed that this provision of liquidity would encourage consumerism. The opposite effect, however, was immediate. Due to lack of confidence in maintaining the value of the federal silver, holders of Treasury Notes rushed to gold.
In 1893, fearing a financial disaster, the Sherman Act is repealed. The Treasury Notes are redeemed. The big denominations were obviously too expensive to be kept in collections.
The $ 1000 Treasury notes became the rarest units of federal money. The Friedberg guide assigns them with the reference Fr.379, divided in two 1890 variants Fr.379a and b, and one variant Fr.379c of the following year. The alignment of the three opulent oval 0 has provided to this design the nickname Grand Watermelon.
The two rarest notes entered together in 2006 in the Greensboro collection by a private transaction organized by Heritage. Each of them is unique in private hands in its variant.
The 379c, graded Extremely Fine 45 by PCGS, was sold for $ 2.6 million including premium by Heritage on 26 April 2013.
The 379b, dating from the very year of the Sherman Act, is the most prestigious although in a slightly lower state graded Extremely Fine 40 by PCGS. It is estimated in excess of $ 2M for sale by Heritage in Orlando on January 10. Here is the link to the catalog.
Two 379a are in private hands. One of them, graded Apparent Extremely Fine 45 by PCGS, was sold for $ 1.53 million by Heritage on April 26, 2013. The other unit was sold for $ 1.1 million including premium in October 2005 by Lyn Knight, becoming the first note to break the million dollars at auction.
POST SALE COMMENT
This specimen of Grand Watermelon is the undisputed star of US paper currency. It was sold for $ 3.3 million including premium.
Please watch the video shared by Heritage :
1890 The Season of the Watermelons
2018 SOLD for $ 2.04M including premium
The Coinage Act of 1792 based the balance of the American coinage on an invariable 15:1 parity between gold and silver. This bimetallism did not resist the gold rushes. From 1873 on, the government tried in vain to support both the popularity of gold and the abundance of silver.
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.
1891 The Watermelon Rush
2013 SOLD 2.6 M$ including premium
The U.S. government is powerful. In 1878, an act of Congress guarantees a minimum monthly purchase of silver by the government at the highest rate of the market. Speculators are becoming more pressing. On 14 July 1890, another act decides the edition of Treasury notes, a new variety of paper currency redeemable only against silver coins or gold coins.
The $ 1000 Treasury note is identified as reference Fr.379 in the catalog of Friedberg, with three sub-variants. Not only the three variants are extremely rare, but the system itself was of very short duration. The Treasury note was declared uneconomic by the government in 1893 because of its success that depleted too quickly the Federal reserve of gold coins.
A 1890 Treasury note of the first type Fr.379a is estimated $ 1.25 million, for sale by Heritage in Schaumburg (Chicago) IL on April 26. It is graded PCGS Apparent Extremely Fine 45, 'apparent' meaning that a rework invisible to the naked eye has been made. It is one of only two in private hands from five remaining units. Here is the link to the catalog.
In December 2006, Heritage operated a private sale of a note from the second 1890 variant Fr.379b for $ 2.255 M. Graded VF 35, it is the only one in private hands from two known units.
Variants a and b are known as the Grand Watermelon in relationship, not indeed with a juicy quality, but with the look of the three green ovals that make the 0 in the 1000 figure.
In 1891, the variant Fr.379c removes the watermelon figures. In the same next sale on April 26, one of them is estimated $ 2M. This is the only privately owned from two known units. It is graded PCGS Extremely Fine 45, with a very slight evidence of circulation. Here is the link to the catalog.
Additional Information: In June 2006, the Fr.379c discussed above, for sale on April 26, was sold for $ 2.1 million in a private transaction operated by Heritage.
RESULTS INCLUDING PREMIUM :
1890 FR.379a : $ 1.53M
1891 FR.379c : $ 2.6M
Please watch the videos shared by Heritage :
1896 The Proof Sheets of the Educational Series
2011 SOLD 1.26 M$ including premium
On August 17, 2011, Stack's Bowers sold for $ 1.26 million including premium one of the most unusual sets of US bank notes. I had commented before the sale: Prestigious issue, full set, first copies, uncut, not circulated. All the qualities are in place for expecting $ 1M on this lot.
Here is the rest of my article of 2011:
The series of Silver Certificates of 1896, known as the Educational Series, is often considered as the most artistic engraving in the history of American paper money. It was issued in three denominations, $ 1, 2 and 5, by the Treasury.
On the observe, the $ 1 note shows History educating a youth at Washington DC. The $ 2 is devoted to Science: Electricity and Steam are two children looked favorably by the elder figures of Commerce and Manufacture. For $ 5, America dominates the World with the help of Electricity. The back is devoted to portraits of famous American people, two for each value.
The head of the Bureau of Printing and Engraving received an authorization from his administration to keep the first sheet of each of the three values, each sheet including the serial numbers 1 to 4 of these editions. He did not cut them, and had them bound along with a short explanatory typewritten text in a thin book of tall folio size, 20 x 34 cm.
After 2011, this volume has been reworked. The sheets of bank notes have been professionally removed from the book and analyzed by PMG (Paper Money Guaranty) which graded them AU55 (About uncirculated).
The complete set is coming back to auction in one lot estimated $ 1.5 million for sale in Chicago on August 7, again by Stack's Bowers. It is illustrated in the release shared by CoinWeek.
POST 2014 SALE COMMENT
Unsold. It was not a good idea to break up the document and increase the price.