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One-Hundred Dollar Watermelon - In the Top Twenty Percent for Grade of Thirty-Five Known

Fr. 377 $100 1890 Treasury Note PCGS Extremely Fine 45.
Thirty-five examples of this Watermelon Hundred are known, with the great majority grading lower than this lovely PCGS 45. PCGS has graded this and one other 45 with just one 50 above it. PMG has graded a 63, two AUs, and two 45s leaving this note with only seven others tied or above it for this incredibly popular type. The story about United States Treasury Notes begins in the 1870's with monetary policy that greatly affected the use of silver in coinage. First, silver was demonetized in the Coinage Law of 1873. This move was motivated by a Congress that was largely supportive of the Gold Standard. The timing however could not have been worse as a depression in Europe sank its claws into the American economy. Western Senators were hard pressed to take care of their constituency, which was hit hard by falling silver prices in addition to the recession.

Congressman Richard P. Bland and Senator William A. Allison proposed the Bland-Allison Act of 1878. In addition to calling for the Double Standard, it also called for between $2 million and $4 million worth of silver to be purchased by the Treasury each month. Both Morgan Dollars and Silver Certificates were born of this act as it called for the silver to be placed into circulation. Since the law called for excess silver purchases, beyond the needs of the public, the vaults at the Treasury began to fill up with Morgan Dollars.

By 1889, the surplus was in the hundreds of millions of dollars. President William Harrison mentioned in his annual address that $283,539,521 worth of silver dollars sat in the vaults, and more than $6 million of it was not represented by Silver Certificates. At this time silver was worth around 70 cents per ounce, but special interests pushed even harder. The introduction of the Windom Silver Bullion Purchase Act in the House was an attempt to remove all restrictions on the purchase and coining of silver. The act passed on July 14, 1890, called for greatly increased limits as well as introducing the issue of Treasury Notes. The increase called for the purchase of up to 4.5 million ounces of silver each month, or whatever was available on the market. It also introduced Treasury Notes in form of payment for the purchases in denominations of not less than $1 and not more than $1000.

The Act doubled the amount of silver purchased by the government each month. The technical change to Treasury Notes in the act proved fatal for silver. The notes were redeemable in both gold and silver and with silver far below par, the public would be foolish to not choose gold when redeeming their notes. James Nelson Huston, the Treasurer at the time, was a steadfast Republican and hardly the fiscal conservative. The law allowed him to cease the issuance of $1000 and $500 Silver Certificates in favor of Treasury Notes. A total of 16,000 of each of those two denominations were printed, hardly enough to back five months worth of silver purchases.

The favored status of the Treasury notes is evidenced by increased redemption rates. Logically they would have also been favored by those hoarding cash, providing for a slightly larger survival rate to date than silver certificates. The smaller print runs though provided for a very limited number of survivors. With the $500 denomination unknown, and the $1000 denomination exceeding the seven figure mark whenever sold, the $100 denomination is the largest that appears with any regularity at auction. The engraved 100 on the back of the $100 and the 1000 on the $1000 note were executed in such a fashion that the design details and green ink resemble the skin of a watermelon. The aesthetic designs earned them the nickname "Watermelons," most commonly referred to as the "Baby Watermelon" for the $100 note and "Grand Watermelon" for the $1000 note.

Out of the 35 survivors of this Friedberg number, a quarter are permanently impounded in institutional collections or are rumored to exist with just serial numbers and no recorded sales histories. Our most recent sale of a Watermelon Hundred was last January at the FUN show, when a PMG 30 realized $129,250. This PCGS 45 is worlds better and could easily double that realization.

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Auction Dates
January, 2014
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