The Harry W. Bass, Jr. Collection - Part I



Compound Interest, Treasury Notes - Lots 97-112


Compound Interest

Treasury Notes

Compound Interest Treasury Notes, today an exceedingly rare class of currency from a numismatic standpoint, were created in the middle of the Civil War. Public confidence in paper money was quite low, and by offering interest, large denomination notes circulated more readily than they would have without this provision. Such notes were issued in denominations from $10 through $1,000. Each note had an expiration date, at which time the full amount would be paid by the Treasury. Meanwhile, notes increased in theoretical value as they were held and passed from hand to hand.

For the Compound Interest Treasury Notes authorized on March 3, 1863, interest ceased on June 10, 1867, and for those authorized on June 30, 1864, interest stopped being paid as of May 15, 1868. Most were redeemed at or near their expiration, with the result that by January 1, 1885, just $208,350 remained outstanding.

If there was ever was a "dream note" series, the Compound Interest Treasury Notes would be a candidate for such. All are rare, some are very rare, others are extremely rare, and just about any or all are virtually impossible to find! Even a single note would be a highlight in an advanced collection. Remarkably and memorably, the Bass Collection offers examples of multiple denominations, the $10, $20, $50, and $100. Significantly, the Grinnell Collection offered $10, $20, and $50, but did not have a $100 note.

While this series is not as extensive as the Demand Note sequence (varieties were not made with various city names for Treasury depositories), in their own right the Compound Interest Notes are similarly situated as being among the foremost American classics in the currency series. Many if not most collections do not have even a single note.

The bronzed overprints or surcharges on these notes are rather "tender" (not legal, but from a tactile viewpoint), and we encourage the few other holders of such notes to consider contacting the CGA organization to preserve them in Mylar holders.

 

Very Rare F-190 $10

Compound Interest Treasury Note

Only 14 Specimens Known

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97     $10 F-190. Compound Interest Treasury Note. Act of 1863. Overprint of June 10, 1864. Chittenden-Spinner. Serial: 7369. Very Fine-30 (CGA). Some light flaking of the surcharge is noted at the creases, but it is mostly rich olive green. As noted, several creases are present, indicative of some circulation, but there are no visible problems. The face margins are complete with the lower right corner noticeably tight. The back is off center and very slightly off the bottom edge of the note. The corresponding area of the next note is just slightly visible at the top edge. Very pleasing for the grade, boasting good color on both sides. Of the 14 examples listed in the Gengerke census, this is one of the finest. A landmark opportunity.

From the Robert F. Schermerhorn Collection.

 

Important High-Grade F-191a $20

Compound Interest Treasury Note

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98     $20 F-191a. Compound Interest Treasury Note. Act of 1864. Overprint of August 15, 1864. Colby-Spinner. Serial: 52683. Extremely Fine-40 (CGA). Solid golden green surcharge with minimal flaking. One vertical crease at the center and a couple of light folds are visible under close inspection. A scattering of tiny pinholes is noted toward the left end. Well centered, with decent margins all around, those on the back being especially wide. While a handful of these are known to exist, this is certainly an important example in terms of grade; few rate so high. From an aesthetic viewpoint, this is the finest-issued Interest Bearing Note in the sale. A scarcely encountered and highly desirable type note worthy of careful consideration.

The vignette at the left is a beautiful allegory of Victory, that at the lower center is of a mortar firing. At the right is featured the portrait of President Lincoln. This is a somewhat unusual instance of depicting a living American on a note. The strangest use of a living person's portrait was that of Spencer M. Clark on a 5¢ Fractional Currency note.

From the Robert F. Schermerhorn Collection.

 

Rarely Offered F-192b $50

Compound Interest Treasury Note

Only 12 Known

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99     $50 F-192b. Compound Interest Treasury Note. Act of 1864. Overprint of December 15, 1864. Colby-Spinner. Serial: 173106. Fine-12 (CGA). A few small edge splits are noted, all seem to have been repaired at one time. A separation has also occurred midway through the vertical center crease, also repaired. Some adhesive residue is visible on the back. Aesthetically pleasing for the grade. Bold olive green surcharges. Just 12 examples are reported extant in the Gengerke census. Of the three Friedberg varieties representing this design type, this is essentially the only collectible one; the others, F-192 and F-192a, are nearly unique, and unknown respectively.

From the Robert F. Schermerhorn Collection. Formerly in the possession of F.C.C. Boyd, New Netherlands Coin Co., and Robert Friedberg.

 

Very Rare F-193b $100

Compound Interest Treasury Note

Just 11 Known

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100     $100 F-193b. Compound Interest Treasury Note. Act of 1864. Overprint of August 1, 1865. Colby-Spinner. Serial: 88745. Fine-12. Restored (CGA). Much of the original surcharge has flaked away leaving the letters a mottled olive green and yellow. Some of the weaker points in the body of the note have separated, though no pieces are missing. Slightly faded from years of handling, but still a respectable example of a very rare note. Only 11 specimens are currently known, not surprising as most were certainly redeemed. Three years after their issue, they were worth a handsome $19.40 profit to the bearer, no small sum in the 1860s.

From the Robert F. Schermerhorn Collection. Formerly in the possession of F.C.C. Boyd, New Netherlands Coin Co., Robert Friedberg, and Harold S. Bareford.

 

Interest-Bearing Notes

Issued under the Act of March 3, 1863, Interest-Bearing notes were to be issued for one year at an interest rate of 5%. March 3 was a memorable day in 1863, and at the same time Congress passed a resolution to acquire title to the former Clark, Gruber & Co. private mint in Denver, and to establish the Carson City Mint (which opened years later in 1870). The Act is best remembered as the genesis of the Fractional Currency notes, which replaced the earlier Postage Currency notes. For good measure, Montana Territory was established on the same day.

Interest-Bearing Notes were issued with one-year, two-year, and three-year maturities. As of July 1, 1864, the amount of $153,471,450 in this notes was in the hands of the public. Nearly all were redeemed at their expiration, with the result that by July 1, 1868, only $555,492 worth remained in circulation, a figure that dropped to $68,685 by January 1, 1885.

Denominations issued were as follows:

One-Year Notes: $10, $20, $50, $100, $500, $1000, and $5000 (no examples of the three larger denominations are known today). As of January 1, 1885, an estimated $38,685 worth remained outstanding.

Two-Year Notes: $50, $100, $500, and $1000 (no examples of the two larger denominations are known today). As of January 1, 1885, an estimated $30,000 worth remained outstanding.

Three-Year Notes: $50, $100, $500, $1000, and $5000 (no examples of the three larger denominations are known today).

The Bass Collection of Interest-Bearing notes is of incredible, indeed legendary importance, including as it does two of the highest denomination known ($100) and also notes with the original coupons attached. These are rarities that few advanced professional dealers have ever seen, and which have been absent in nearly every collection of currency ever to cross the auction block.

 

Desirable $10 F-196a Interest-Bearing

One-Year Note

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101     $10 F-196a. Interest-Bearing Note. One Year. Act of 1863. Chittenden-Spinner. Serial: 107512. Very Fine-25 (CGA). The paper retains nice body commensurate with the grade. Signs of wear consist primarily of numerous creases through the body of the note, though none of these are particularly severe. A few short edge splits are noted, though these are mostly in the margins and do not interfere with the aesthetic appeal. Several small pinholes are also visible under proper lighting.

Two varieties are known to exist, the rare one with the American Bank Note Company imprint, and this more available type with the imprint of the Bureau of Engraving and Printing. However, by any reckoning F-196a is a scarce issue with just over two dozen examples known.

From the Robert F. Schermerhorn Collection.

 

Seldom-Offered $20 F-197a Interest-Bearing

One-Year Note

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102     $20 F-197a. Interest-Bearing Note. One Year. Act of 1863. Chittenden-Spinner. Serial: 117158. Very Fine-25 (CGA). Lovely for the grade with just a number of fine creases visible through the body of the note. Significant crispness still remains. The top margin is trimmed just slightly into the design border, while the other margins are complete on both sides. The lower left corner of the face is slightly clipped, but this is such a tiny area that it just barely touches the design border. This note has clearly been well cared for much of its life.

Similar to the note offered above, this issue is found in two varieties, one by the American Bank Note Company, and this more available variety with the imprint of the Bureau of Engraving and Printing. An important note, one of only 22 reported survivors; precious few grade finer than this specimen. Off the market for many years, this high-grade note is a nice opportunity for the advanced collector.

From the Robert F. Schermerhorn Collection.

 

Extremely Rare $50 Interest-Bearing

One-Year Note

One of Three Known Specimens

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103     $50 F-198. Interest-Bearing Note. One Year. Act of 1863. Chittenden-Spinner. Serial: 38161. Good-4. Tape Repaired (CGA). Heavily worn with significant roughness in the margins including missing pieces. The note was at one time completely separated through the center, but all major damage was repaired long ago with a number of stamp hinges affixed to the back. Some light rust spots are also noted on the face. The present example admittedly has the lowest grade of those known, though considering that there are only three reported in the census, the grade could be considered next to negligible importance. When, if ever, will another example be offered to the present generation of collectors?

More about Albert A. Grinnell: Although Grinnell is mentioned in the general introduction to the Bass Collection of currency, a few other comments may be of interest:

In November 1937, Grinnell's article, "United States Paper Money from a Collector's Viewpoint," saw print in The Numismatist. The writer found currency to be interesting for three reasons: Beauty and character of engraving, variety of specimens issued, and historical and educational value. Grinnell went on to give an overview of different series, such as Coin Notes, Gold Certificates, Silver Certificates, National Bank Notes, and others. Although Grinnell was a scholar par excellence, very little of this was translated into the auction descriptions of his notes by dealer Barney Bluestone, 1944-1946. However, this was in the era of the "keep it simple" style of cataloguing, a format that developed the first significant crack in its facade in 1952 with John J. Ford, Jr.'s descriptions (mostly of coins) in the 1952 ANA Sale. It certainly is unfortunate for all of us that the experiences of Grinnell and most others have been lost to history.

In 1940, an account of what happened at the ANA Convention on August 25th included this:

"When the members arose Sunday morning it was raining, but some of the Detroiters said it would clear by noon. At 3:30 it was still raining, and at that hour the party boarded buses and private cars for the Detroit Golf Club, where we were the guests at a complimentary dinner given by A.A. Grinnell, a member of the Detroit Coin Club and one of our best-known collectors. At each place had been placed an aluminum token struck for Mr. Grinnell for the occasion. The obverse bore the bust of Lincoln. The reverse read: 'Life Member No. 20, ANA Albert A. Grinnell, Numismatist, 1515 Woodward Avenue, Detroit, Michigan.' The dinner was one of the most enjoyable features of the entire convention, and Mr. Grinnell was congratulated on all sides for being an ideal host."

Mehl's sale of Grinnell's coins on June 15, 1943, included a complete spread of four 1879-1880 $4 gold stellas (one of two such sets owned by Grinnell), an impressive addition to any sale, then or now. Grinnell's beautiful Fractional Currency notes were sold, and some selections from his large-size notes. As related earlier, the sale had its problems, and Grinnell defected to Bluestone for the consignment of the rest of his collection. Perhaps Mehl could have done a better job (it would have been hard for him to have done worse).

Some correspondence between Grinnell and Walter A. Nichols, whose collection we sold in the 1980s, was loaned by us to the Bank Note Reporter for possible use as "fillers" from time to time. Many interesting snippets are therein.

From the Robert F. Schermerhorn Collection. Formerly offered in Barney Bluestone's sale of November 1944, Lot 228, where it was purchased for $125. Thereafter in the possession of F.C.C. Boyd, New Netherlands Coin Co., and Robert Friedberg.

 

Extremely Rare $100 F-199 Interest-Bearing

One-Year Note

One of Three Specimens Known

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104     $100 F-199. Interest-Bearing Note. One Year. Act of 1863. Chittenden-Spinner. Serial: 834. Very Fine-20 (CGA). Well centered with full margins. The colors remain strong for the grade. Some light soiling of the paper is noted from handling over the decades, but this is to be expected. A small pinhole is noted in the upper right corner of the face. A rarity of the highest order, and in a very respectable grade, as are each of the three known pieces reported in the Gengerke census. The quality of these notes is probably due to the fact that the higher denomination notes were worth so much that anyone possessing one would store it in a box or safe location, rather than carry it around.

From the Robert F. Schermerhorn Collection.

 

Very Rare $50 F-203 Interest-Bearing

Two-Year Note

Only Seven Specimens Known

Friedberg Plate Note

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105     $50 F-203. Interest-Bearing Note. Two Year. Act of 1863. Chittenden-Spinner. Serial: 10174. Very Fine-30 (CGA). Signs of light circulation include a number of creases and some evidence of counting smudges at the right end of the face. The right margin is very tight but does not touch the design border. The other margins are full. Nice color remains for the grade assigned. One of only seven notes known to have survived, thus an extreme rarity. Of the reported survivors, one is permanently impounded in the Smithsonian Institution leaving only six for the present generation of collectors. None of those reported have coupons remaining. The present example has the distinction of being the current Friedberg plate note.

From the Robert F. Schermerhorn Collection.

 

Superb Proof $100

Interest-Bearing Note

Face Design

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106     $100 Interest-Bearing Note. Uniface Proof of face design with attached coupons. Type of F-204. Hessler-204/1143. Two Year. Act of 1863. Chittenden-Spinner. Serial: Blank. Choice Crisp Uncirculated. The Hessler reference lists and illustrates this type printed with plate letter B, the specimen offered here is plate A. Four cancellation holes in the body of the note, two at each signature position. Three coupons are attached, each with two cancellation holes in Chittenden's signature. Printed on heavy fibered white paper. Two punctures are noted near the left end, probably the result of a stick pin or staple. Fresh, bright, and crisp. A beautiful Proof of this exceedingly rare design.

Upon inspection this lovely Proof note yields many interesting details, and some of them are shared herewith:

There are three scenic vignettes on the note. At the left is the allegorical representation of Science(?) and Mechanics per popular wisdom, but "Science" is really "Agriculture" and is surrounded with such items as a small hand scythe, an ear of coin, and a pumpkin. Perhaps, as numismatists like nicknames, this could be called the "Pumpkin Note." (We are reminded of another note nickname that surely Dan Quayle would appreciate, this not found on national currency however, the "Sweet Potatoe Supper [or Dinner] Note"; yes, in this context, numismatists have long spelled it this way.)

At the center is the Treasury Building in Washington, in the Greek Revival style. Horses and a carriage are in front, and a two-story residence(?) is seen to the right.

At the lower right is an absolutely huge cannon. During the general era of the 1840s to the 1860s there was much experimentation which such devices, and the names of Wiard, Columbiad, Parrott, Rodman, and, simply, "Great Gun," are familiar to military historians. In one particularly unfortunate incident, on February 20, 1844, President Tyler and other dignitaries were on board the steam frigate Princeton on the Potomac River to see the action of a powerful new gun, the Peacemaker, which could fire a 212-pound load the remarkable distance of three miles. Without warning, the gun exploded on deck, and eight people were killed, including the secretary of state. Some gun names were translated into trade names for products in the private sector, including Great Gun Bitters (by Bininger of New York City) and the Peacemaker series of kitchen stoves (some of which are depicted on Civil War store cards, as are Peacemaker cannons).

The value of the note is given as: "LEGAL TENDER FOR ONE HUNDRED DOLLARS Two Years after date. With interest at five per cent per annum payable semi-annually." The coupons, of which there are three, are each good for $2.50 and bear the printed signature of Chittenden, register of the Treasury.

From the Robert F. Schermerhorn Collection.

 

Unique $50 F-207 Interest-Bearing

Three-Year Note

Act of 1861

Two Coupons Attached

Samuel Colt's Note

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107     $50 F-207. Interest-Bearing Note. Three Year. Act of 1861. Serial: 4048. Very Fine-25 (CGA). A delightful note for the grade, having the appearance of a choice VF note, but downgraded somewhat due to a couple of small splits in the edge. In general, excellent color remains and the note retains a generous amount of crispness, but some unfortunate light water staining has occurred. Printed in green and black ink on white paper. The serial number is printed on the note twice. Two of the original interest coupons remain attached at the right end. These both bear the red serial number, and the printed signature of Chittenden. Curiously the note itself does not have Chittenden's signature, as other people, probably Treasury employees, hand signed the note for both the Register of the Treasury and the Treasurer. The note is payable to the order of Samuel Colt, famous munitions supplier. This is the only example currently known to exist.

"Sam. Colt" and details of the note: This beautiful note has the name, "Col. Samuel Colt," entered in ink after the printed inscription, "Promise to pay to the order of." On the reverse, the words "without recourse" are inked in, below which appears the bold personal (presumably) inked signature, "Sam. Colt." Thus, here, indeed, is a remarkable connection between this note and Colt, of Hartford, Connecticut, who at the time was a major supplier of firearms to the United States government. Today, the Connecticut State Library and Museum (home of the J.C. Mitchelson coin collection) has a special exhibit of Colt memorabilia. Volumes have been written about Colt, and the exploration of such may provide a pleasant diversion for the buyer of this note.

At the center is a stunning vignette of an eagle, a paradigm representation of the National Bird, and one which has few challengers in the federal note series. The eagle is perched on a rocky crag with pines in the background, a scenario which, differently executed, is mentioned in the 1916 Annual Report of the Director of the Mint in connection with the then-new Liberty Walking half dollar (which in no way was patterned after this particular $50 note).

For the register of the Treasury, "Thos. Jones" has signed his name (Jones') in brown ink, while for the treasurer, the inked signature of "Wm James" is found. The two attached coupons each bear the printed signature of F.E. Spinner.

From the Robert F. Schermerhorn Collection.

 

Prohibitively Rare $50 F-212

Interest-Bearing Three-Year Note

Just Six Known

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108     $50 F-212. Interest-Bearing Note. Three Year. Act of 1864. Colby-Spinner. Serial: 154721. Fine-12. Repaired (CGA). Appearance of a Choice Fine note, but closer examination reveals repair work to the face of the note, as well as to the edges where some light splitting has occurred. Remarkably bright for the grade assigned with some very light soiling from use, as well as traces of foxing. Evenly printed with wide margins on both sides. The paper remains reasonably firm with significant body. Aesthetically pleasing regardless of the noted repairs and still an important offering with respect to rarity. The Gengerke census reports a mere six examples known, making this a rarity of high order.

From the Robert F. Schermerhorn Collection. Formerly in the possession of F.C.C. Boyd, New Netherlands Coin Co., and Robert Friedberg. Grinnell had one note (this one?), Lot 230.

 

Finest Known $50

Interest-Bearing Three-Year Note

With Five Coupons Attached

Unique in Private Hands

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109     $50 F-212d. Interest-Bearing Note. Three Year. Act of 1865. Colby-Spinner. Serial: 196081. Very Fine-30 (CGA). Somewhat unevenly centered, but with good margins all around. The paper retains significant body save for a few light creases. Two small pinholes are noted, but these are not significant problems. A delightful note in every respect and recognized as one of the finest of only seven known specimens. It is especially noteworthy that of the known specimens the present piece is one of only two that have their original interest coupons attached, both with all five present. The other such piece is permanently impounded in the Smithsonian Institution, leaving the present specimen the only collectible one with coupons. There may never be another chance for the present generation of collectors to acquire this rarity.

As most numismatists will never have the chance to see this note, some comments may be of interest (the $100 version, described in the following lot, is similar in many respects):

The face depicts at the center a perched eagle, looking toward the viewer's right; this is the famous "jackass" motif that was widely used on federal currency of the era including on certain $10 notes and the well-known Fractional Currency shields.

The note is dated Washington, July 15, 1865, and bears the printed signatures of Colby and Spinner. Vertically along the top margin above the eagle is the inscription INTEREST ONE CENT PER DAY. At the left border is the overprint in three lines, in crimson ink: "The Government reserves the right of / paying in COIN, the interest on this Note / at the rate of six per cent. per annum." A little arithmetic reveals that interest at 1¢ per day would equal $3.65 per year, or more than 6%. However, the government offered the sweetener that at the 6% rate it might pay in all-important "COIN." Reflecting this, each of the coupons on the right, numbered 1, 2, 3, 4, 5 in their progression toward the body of the note, bears the overprint "SIX PER CENT GOLD OPTION," reflecting not only payment in coin, but in gold coin. Of course, the word "OPTION" is significant. Each coupon also bears the same serial number as the note, the printed signature of Spinner, and at each side, the fraction 1 82-1/2/100, representing the interest at 1¢ per day.

The back states this: "AT MATURITY, Convertible at the option of the holder, into Bonds redeemable at the pleasure of the Government at any time after five years, and payable twenty years from July 15th 1868 with interest at Six per cent per annum, payable semi annually in COIN."

On the back, the coupon area is imprinted with a very large and ornate "FIFTY DOLLARS" within two intersecting circles, which, of course, would gradually disappear as the coupons were redeemed.

From the Robert F. Schermerhorn Collection. Formerly in Barney Bluestone's sale of November 1944, Grinnell Collection, Lot 44. Thereafter in the possession of F.C.C. Boyd, New Netherlands Coin Co., Robert Friedberg, and Amon Carter, Jr.

 

Extremely Important F-212e $100 Interest-Bearing Note

Unique with Five Coupons Attached

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110     $100 F-212e. Interest-Bearing Note. Three Year. Act of 1865. Colby-Spinner. Serial: 194009. Good-6. Damaged (CGA). Paper quality of a finer note, but mishandling over the decades has resulted in some damage to the margins. A piece has become separated just above General Winfield Scott's portrait, and then reattached with a hinge on the back side. Other hinges have been used to repair small splits in the margins, some extending into the design. Even taking into consideration these problems, the note is reasonably attractive. The paper is somewhat limp, but more a result of the thin paper and creases than any heavy circulation, which these notes really didn't experience.

It is remarkable that this $100 note has survived at all, especially with all five original coupons attached. These coupons were each worth one interest payment, the final payment being presented to the bearer upon presentation of the note itself. Regarding the rarity of the note, only three specimens are known to exist, and while the present piece is certainly not the finest, it is the most "original" considering that all five coupons remain attached. One of the other two pieces is permanently impounded in the National Numismatic Collection in the Smithsonian. This has one coupon attached. The second note, the Amon Carter specimen, has three remaining coupons. It is doubtful that the present specimen was held on to by some individual as a memento, as the face value of such a note represented great buying power at the time of issue. It is far more likely that it was hidden away, and through some misfortune for the owner, forgotten. Today, we greatly appreciate the fact that it has survived, an emotion which will certainly be clearly quantified when this rarity crosses the auction block.

As most numismatists will never have the chance to see this note, some comments may be of interest. It is seen that the note is similar in many particulars to the $50 described in the preceding lot:

The face depicts at the center the portrait of General Winfield Scott, in full military uniform and, in keeping with the code of the office, of rather stern mien. The note is dated Washington, July 15, 1865, and bears the printed signatures of Colby and Spinner. Vertically along the left margin is the inscription INTEREST TWO CENTS PER DAY. To the left of Scott's vignette is the vertical overprint in three lines, in crimson ink: "The Government reserves the right of / paying in COIN, the interest on this Note / at the rate of six per cent. per annum." A little arithmetic reveals that interest at 2¢ per day would equal $7.30 per year, or more than 6%. However, the government offered the sweetener that at the 6% rate it might pay in all-important "COIN." Reflecting this each of the coupons on the right, numbered 1, 2, 3, 4, 5 in their progression toward the body of the note, bears the overprint "SIX PER CENT GOLD OPTION," reflecting not only payment in coin, but in gold coin. Of course, the word "OPTION" is all important. Each coupon also bears the same serial number as the note, the printed signature of Spinner, and at each side, the fraction 3 65/100, representing the interest at 2¢ per day.

The back states this: "AT MATURITY, Convertible at the option of the holder, into Bonds redeemable at the pleasure of the Government at any time after five years, and payable twenty years from July 15th 1868 with interest at Six per cent per annum, payable semi annually in coin." While the $50 described earlier has "COIN" in capitals, on the present note it is in lower case as "coin."

On the back, the coupon area is imprinted with a very large and ornate "C," which, of course, would gradually disappear as the coupons were redeemed.

From the Robert F. Schermerhorn Collection. Formerly in the possession of F.C.C. Boyd, New Netherlands Coin Co., and Robert Friedberg.

 

1879 Refunding Certificates

The story of the 1879 Refunding Certificate, issued only in the $10 denomination, is quite interesting, and reflects the first time that the American public eagerly sought to acquire paper money in preference to coins. Notes totaling $40,012,750 were paid out, including the majority, some $39,398,110 in the fourth quarter of 1879, as long lines of people gathered at Post Office branches and Treasury offices to secure these little "bonds," which offered to pay 4% interest. This offering coincided with the time at which silver coins were aplenty in circulation, and gold coins were just beginning to be seen with frequency at banks. The coin-hoarding era, begun in 1862, was over, and citizens were no longer afraid of paper money.

The Refunding Certificates, when issued, were to bear interest at 4%, indefinitely. In actuality, the accruing of interest was ended by an Act of Congress in 1907. At that time, any outstanding notes had a redemption value of more than twice the $10 face value. It is little wonder that these are scarce today. The obligation on these notes reads as follows:

"This certifies that the sum of Ten Dollars has been deposited with the Treasurer of the United States under Act of February 26th, 1879 convertible with accrued interest at 4 per cent per annum into 4 per cent bonds of the United States issued under the Acts of July 14, 1870 and January 20, 1871 upon presentation at the office of the Treasurer of the U.S. in sums of $50. Or multiples thereof."

Uncle Sam promised to pay the 4% interest seemingly forever, as there was no time limit placed. However, in 1907 Congress put an end to the interest payments (of course no private citizen, then or now, can repudiate financial obligations in the same unfeeling, casual manner).

As it developed, only a few 1879 Refunding Certificates were imprinted with the inscription, "Payable to Order," so few, in fact, that only two are known today, one of which is offered here. Most were of a different inscription, "Payable to Bearer," and even these are elusive (but a few dozen exist, one of which is offered here). Important, is that both reverse designs are totally different in appearance and orientation; thus the "Payable to Order" note is not only a variety, but it is a major design type!

By January 1, 1885, all but $260,000 in face value had been redeemed, and since that time most others have met the same fate.

 

Prohibitively Rare Refunding Certificate

Payable to Order

Just Two Known

Unique in Private Hands

Friedberg Plate Note

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111     $10 F-213. Refunding Certificate. Series of 1879. Payable to order. Gilfillan-Scofield. Serial: A287. About Uncirculated-58 (CGA). One horizontal crease parallel and close to the top margin, otherwise crisp. Four tiny pinholes are noted in the central portion of the note. Printed on fibrous paper watermarked with a repeating script US. This note is inscribed "Payable to Order." Further, the reverse is oriented differently with a different layout of type. Only two of these notes are known to exist, this specimen, the Friedberg plate note, being the only collectible example. The other survivor is canceled and in the possession of the Bureau of Public Debt, Washington D.C. One of the most important notes in this offering, as F-213 has long been a highly regarded, unattainable prize for currency enthusiasts. In contrast several dozen examples are known of the regular "Payable to Bearer" issue.

From the Robert F. Schermerhorn Collection. Formerly in the possession of Robert Friedberg, and James M. Wade.

 

High-Grade Refunding Certificate

Payable to Bearer

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112     $10 F-214. Refunding Certificate. Series of 1879. Payable to bearer. Gilfillan-Scofield. Serial: A94502. About Uncirculated-50 (CGA). A scattering of tiny pinholes at the left center of the face and traces of a light fold at the center. The second and significantly more available variety. In fact, anyone desiring a Refunding Certificate who does not win the previous lot, will have to settle for one of these. Still a scarce type.