As noted in my previous article, state chartered banks that issued their own paper currency frequently failed, leaving the holders of that currency with worthless paper. This created many financial hardships. With the advent of the Civil War, the U.S. Government was in desperate need of funds to finance the war effort. The only answer to the problem was the printing and placing in circulation of paper money, some sixty million dollars worth to be exact. Also at that time the government stopped payment in gold and silver, meaning these notes could not be converted into coin. The public was forced to accept these notes on the faith that the money would be good (just like today). This effort ultimately proved successful. The result was that by 1866 most state banks stopped issuing their own currency and used only U.S. government printed currency, thus avoiding the question of whether the state bank notes were still good, or was the bank “broke”. An interesting side note is that every piece of currency issued by the U.S. government since 1861 is still redeemable by the government at its’ face value (or higher with certain interest bearing notes). However the collector value of these notes greatly exceeds the face value, so one would be foolhardy to cash them in at a bank.
In my opinion, the notes printed by the U.S. government in the period from 1861 to the 1920s represent so of the finest examples of die engraving we have ever accomplished. Many of these notes were printed in multicolor, adding to their attractiveness. While meant as an effort to discourage counterfeiting, the result is some of the most beautiful works of art imaginable. It’s hard to chose favorites, but some of my personal favorites are the Educational series of Silver Certificates issued in 1896. The $1 note shows a depiction of allegorical figures representing history instructing youth; the $2 note with figures of science presenting steam and electricity to commerce and manufacture; and a $5 note with an allegorical group showing electricity as the dominate force in the world. Pretty heady stuff!
Two other favorites of mine are the $5 Silver Certificate note printed in 1899 picturing the Sioux Indian, Chief Onepapa and the $10 Legal Tender note picturing a bison between explorers Lewis and Clark.
Notes issued during this period were issued with different backing and guarantees from the government and for different purposes. They all had their purposed noted in their title such as Silver Certificate and Gold Certificate with could be redeemed at a bank for silver or gold coin respectively or interest bearing notes which were redeemed for a premium over their face value.
Notes issued prior to 1905 are the hardest to find in decent condition, the exception being the $1 Silver Certificate series 1899 picturing Grant and Lincoln on either side of an eagle with spread wings. This note is readily available at modest prices. The higher the denomination (face value), the higher the collector value. The reason being they were printed in smaller quantities. In some cases notes of very high denomination, ($500 and $1000) although known to have been printed, no examples are known to exist. Sometimes these notes are found not in old collections but forgotten in safe deposit boxes or safes and even sometimes inside books used as a hiding place. They were placed there for safe keeping, not as a collection. But with their owner either forgetting about them or unexpectedly passing away, they were left to be discovered by someone else at a later time. Even today notes are found in this fashion.
Douglas Keefe is the president of Beachcomber Coins, Inc. He and his wife Linda operate Beachcomber Coins and Collectibles in the Shore Mall as well as satellite offices in both Brigantine and Absecon. Between them they have over 70 years experience in the coin and precious metals business. They are members of The American Numismatic Association, The Industry Council of Tangible Assets, The Numismatic Guarantee Corporation and the Professional Coin Grading Service.