A Classic American Rarity

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Large Size Type Notes > Legal Tender

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Fr. 186d $1,000 1863
Grade: Ch. AU    

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When the United States government passed the necessary Acts of Congress, in 1862 and 1863, to issue a Federal currency legal tender notes were the best obligation that was acceptable to bankers and the first issue was virtually entirely held by banks to exchange for 6% bonds in five years. That obligation changed a year later, eliminating their exchange value and allowing them to circulate. Most were exchanged for the earlier issue that bore a different obligation. In the Knox reference “United States Notes” it states a total of 450 million were issued. The $20,287 was issued or 20,287 notes that number includes both 1862 and 1863 issues. It was the desire of most politicians at the time to eliminate the use of paper currency after the Civil War. Following the end of the war Secretary McCulloch expressed concern that legal tender notes were war measures and should not remain in force any longer than necessary to return to the gold standard. Congress authorized a reduction to begin within six months after passage of the Act, note to exceed 10 million and four million per month following. The legal tender notes were reduced from 449 million to 356 million by December 31, 1867 and during the following year further reductions were prohibited. In 1874 a limit of 382 million was placed on legal tender notes. I believe this type to be of greater historical significance than any issue of United States federal currency. The fact that it is the FINEST KNOWN, or equal to it, makes a great case for this being the most important type note in existence today. Three notes are known today in private hands and the Treasury Department has the other known example. The earliest example known is one in fine condition that has the 1862 date and second obligation. Both notes with the 1863 date are within three serial numbers of each other and they grade very comparably. This note has an illustrious pedigree: It was the Limpert illustration and was part of the James M. Wade Collection; from there it continued to L.S. Werner, Amon Carter, Jim Thompson, Hickman-Oakes, Lyn F. Knight, and Frank Levitan and on to a private collector. This note has a beautiful, subdued toned quality to the paper that enhances the strong images in color and design. The centering is quite nice and the note appears to have never circulated (big surprise!). Somewhere along the line it acquired a corner tip fold of minor consideration. It has big, full margins, closer at the bottom right than anywhere. The sale of this note was the highest price ever paid for a piece of United States currency when it sold as Lot 104 in the Levitan Collection at $451,000. The record did not hold up when two collectors faced off during the battle for the Grand Watermelon, also in the Levitan Collection, which brought $792,000. I expect there is an excellent opportunity to see a new world record when the hammer falls tonight. The central vignette is that of Robert Morris who was a signer of the Declaration of Independence and Superintendent of Finance from 1781 to 1784. He was also the founder of The Bank of North America.

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