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BruceWyman78 Show full post »
 
BruceWyman78
And then there's the compound interest notes, which are another thing.

All of this is pretty much news to me. You seem to be quite an expert on interest bearing notes, are they sort of your specialty? I guess Friedberg saw that the seven-thirties are the same shape and size as paper money and have currency-like design patterns, and applied "it looks like a duck, walks like a duck" reasoning. I thought I read somewhere though that the interest rate was made 7.30%, or one cent per $50 per day, to make interest calculation easy so the notes could pass in commerce. Do other, more recent authors, like Chambliss and Hessler, omit the seven-thirties or put them in an appendix, or does everyone just follow Friedberg now and call them IBNs?

So given that my strip of coupons may be the only confirmed examples of the type, where does that leave them in terms of numismatic importance? If they're worth even 10% of an Fr. 203 note, I'd be pretty thrilled. 
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BruceWyman78
One other thing. You said that "Only Fr. 203,4,5 and 6 have (coupons of) this nature (and, indeed, not even all of them)". Why wouldn't all of them have coupons? I have seen a late printed archive proof of 206 without coupons, but I don't know if that's because it never had any, or just that the BEP didn't still have the plate for them by the 1890s. Any actual proofs of 205 and 206 floating around? If this strip was from an issued one of those instead of a 203, it'd probably be worth six figures... but I'll take what I'm given.

Edit: Found this... be still my heart. Funny how the coupon looks almost exactly like mine, despite the 204 coupon looking very different. https://auctions.stacksbowers.com/lots/view/3-BG8NR/friedberg-205-w-3970-1863-500-interest-bearing-note-pcgs-currency-very-choice-new-64-face-and-back-proof
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YoungCollector

Do other, more recent authors, like Chambliss and Hessler, omit the seven-thirties or put them in an appendix, or does everyone just follow Friedberg now and call them IBNs?
 


Everyone copies Friedberg.

Your strip is of great numismatic importance because, for example, it has that date stamp and pp's on the coupons - things we might not otherwise know.  As to dollar value?  All I can say is "one bid increment above the under-bidder".  Numismatic importance and value to collectors are two different things.
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YoungCollector
One other thing. You said that "Only Fr. 203,4,5 and 6 have (coupons of) this nature (and, indeed, not even all of them)". Why wouldn't all of them have coupons?


There was a lot of debate over the two year legal tenders.  Coupons for such a short note were a drag - note that 202a does not have coupons - and they interfered with using the note as currency.  On the other hand the banks HATED not having coupons because the bean counters were very aware that they weren't getting "interest on the interest".   In the end the two years were issued both ways.  The three year compounds were an attempt at a compromise solution.

I like to study the financial history of the United States.  The story of all these civil war instruments was a real time laboratory for understanding the evolution of investment banking out of commercial banking.  During the civil war the existence of the Union was never in question - and six percent gold bonds should have sold well.  But honest Abe and Chase messed it all up.  It took until 1879 to fix things.
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BruceWyman78
I was thinking a similar thing about value. I've seen unique and unusual items described on Heritage and such as "worth whatever it takes to bring it home tonight" or similar. One such note, I believe, brought $114,000 on a 15k estimate, so they really weren't kidding. This is an item that I certainly think would do better on Heritage or SB than Ebay (where I got it), but also feels like it could go for 10,000 one day and 1,000 the next, depending entirely on who's in the room that day. Either way, I don't plan on selling it.

Interesting that they were released both with and without coupons. I guess that would make my piece more properly Fr. 203a, because it necessarily comes from the with coupons version. Any info on what the print runs were for each? I did a little looking into surviving examples, and here's the S/Ns I've found. By appearance alone, I would estimate that all are the no coupons variety:

10174 (Joel R. Anderson)
20575 ("finest known", per Heritage)
26198 (mentioned in Stacks-Bowers sale of Taylor note)
29419 (Taylor Family)
32596 (Smithsonian)

That leaves just two that I can't trace. No coupons on any of the 5, and don't appear to have had them. It looks like the Anderson note, which last sold for $186,000 (!) on Stacks-Bowers, is about to come back up on Heritage. The Anderson listing on SB states that 136,000 were printed of the no coupons, so would that mean the with coupons print run was significantly less?. 

I also did a little examining of issue dates, which are stamped in red on the note. All pictured notes seem to have April and May dates, including the Anderson which is 1,000 serial numbers below mine. That doesn't line up with the hypothesized January date here. Does that mean it's more likely a June redemption, or even a June issue date? If they were still issuing in June, though, coupon 1 would have been immediately mature.
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YoungCollector
I was thinking a similar thing about value. I've seen unique and unusual items described on Heritage and such as "worth whatever it takes to bring it home tonight" or similar. One such note, I believe, brought $114,000 on a 15k estimate, so they really weren't kidding. This is an item that I certainly think would do better on Heritage or SB than Ebay (where I got it), but also feels like it could go for 10,000 one day and 1,000 the next, depending entirely on who's in the room that day. Either way, I don't plan on selling it.

Interesting that they were released both with and without coupons. I guess that would make my piece more properly Fr. 203a, because it necessarily comes from the with coupons version. Any info on what the print runs were for each? I did a little looking into surviving examples, and here's the S/Ns I've found. By appearance alone, I would estimate that all are the no coupons variety:

10174 (Joel R. Anderson)
20575 ("finest known", per Heritage)
26198 (mentioned in Stacks-Bowers sale of Taylor note)
29419 (Taylor Family)
32596 (Smithsonian)

That leaves just two that I can't trace. No coupons on any of the 5, and don't appear to have had them. It looks like the Anderson note, which last sold for $186,000 (!) on Stacks-Bowers, is about to come back up on Heritage. The Anderson listing on SB states that 136,000 were printed of the no coupons, so would that mean the with coupons print run was significantly less?. 

I also did a little examining of issue dates, which are stamped in red on the note. All pictured notes seem to have April and May dates, including the Anderson which is 1,000 serial numbers below mine. That doesn't line up with the hypothesized January date here. Does that mean it's more likely a June redemption, or even a June issue date? If they were still issuing in June, though, coupon 1 would have been immediately mature.


if you just wish to sell - ask for PM’s and let Dustin at heritage know ...
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BruceWyman78
Not planning to sell it at this time.

What do you think about the issue dates? Is it relevant that the Anderson note is numbered 1000 lower than mine, but was issued April 1?
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YoungCollector
Not planning to sell it at this time.

What do you think about the issue dates? Is it relevant that the Anderson note is numbered 1000 lower than mine, but was issued April 1?


so - this is a good question - did they start renumbering between coupons and non coupons?   We may never know 
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YoungCollector


10174 (Joel R. Anderson)
20575 ("finest known", per Heritage)
26198 (mentioned in Stacks-Bowers sale of Taylor note)
29419 (Taylor Family)
32596 (Smithsonian)


There are also:
12114 - limited information, just "Lyn Knight 6/87"
20569 - no coupons, auction appearances in the 40's 60's and 80's

10174 was issued without coupons
So I am going to assume that started renumbering from 1 when they dropped the coupons.

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YoungCollector
https://babel.hathitrust.org/cgi/pt?id=nyp.33433023171832&view=1up&seq=11   

Note the comment on page 113 about the coupon varieties of these notes being withdrawn, destroyed and replaced with compound interest notes.
Your strip may indeed be from such a note.

See also here:

https://archive.org/details/historyofgreenba00mitcrich

Pages 123, 124, 126 and 174-176

If your note is stamped Jun 29, 1864 it was probably exchanged.
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YoungCollector
and a final observation - in June of 1864 the coupon varieties of these notes paid their interest and were a legal tender at face value ... as they were five percent interest if held but could be used to buy six percent interest bonds at face value that summer - it does not take a banker to figure out they were mostly turned in to buy the compounds - such was the fate of this note

the non-coupon varieties had already accumulated at few percent of interest, but were not redeemable for more than face - so these notes are overwhelmingly those which survived 
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BruceWyman78
This is some excellent detective work!

So that's all 7 SNs accounted for. If there is one with coupons, it would have to be the Knight note. But no one has seen it in decades, so we won't know until it reappears. If it is a coupon note and fairly nice, I wouldn't be surprised to see it approach half a million at auction, given the Anderson note realizing $186,000.

Thanks for the book links; this is great stuff for a coin and currency geek like me. So it seems the print run of the coupon notes was actually much higher, $150 million compared to $16.5 million of non-coupons. However, due to the government recall and destruction of the coupon notes, their effective mintage was reduced to a much lower level, similar to most 1820s and 1930s gold coins. Almost all of them were gone before they ever matured, replaced in commerce by the CINs, while the non-coupon IBNs were left to circulate normally. I would definitely find it likely that the note my coupons came from was redeemed in such a fashion, and the coupons somehow survived. I think I might've stumbled on something really special. It certainly has a more fascinating history to dig into than almost any other piece of US paper. It almost feels like none are even supposed to exist today, and the fact that one survived would come as quite a surprise to Chase and friends.
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GregAlex
I'll name-drop a reference that I think would be useful in this research: Hessler's "An Illustrated History of U.S. Loans, 1775-1898." It's a tough book to find, but he lists Civil War Treasury Notes and Compound Interest Notes, along with the bonds. Data includes amounts printed, issued, outstanding, and currently known. Published in 1988. BUT...no info on coupons. 😕
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YoungCollector
Hessler's data largely came from this book:

https://www.google.com/books/edition/History_of_the_Currency_of_the_Country_a/mNVpeCVxlOIC?hl=en&gbpv=0

But it contains nothing we don't know
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YoungCollector
 It certainly has a more fascinating history to dig into than almost any other piece of US paper. It almost feels like none are even supposed to exist today, and the fact that one survived would come as quite a surprise to Chase and friends.


Yep!
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