Stately One Thousand Dollar 1890 Treasury Note - The Grand WatermelonFr. 379a $1000 1890 Treasury Note PCGS Apparent Extremely Fine 45.
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 set about by a Congress that was largely for 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 allowed 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. Though the notes were introduced to back silver purchases, they were redeemable for both gold and silver specie. As such, they earned the nickname "Coin Notes."
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.
The favored status of the Treasury notes was 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 printed but unissued, $1000 Treasury Notes stand as the pinnacle of the coin and currency numismatic realm. Their story is defined by the same actions that produced the coveted Morgan Silver Dollar and are rarer than the 1804 Dollar and show up at auction with less frequency than even the 1913 Liberty Nickel. Tonight also marks the first time in modern numismatic history that both major design types of the $1000 Treasury Note have been offered at auction.
There are a total of five examples known of this Rosecrans-Huston signed Large Brown Seal 1890 Treasury "Grand Watermelon" $1000. Three of the five known are in government hands, one in the National Numismatic Collection of the Smithsonian Institution and two in the collections of Federal Reserve banks--one in Chicago and the other in San Francisco.
This example, which has the lowest serial number of the five known pieces, is one of two available to collectors. The second privately held example is the Limpert, Friedberg, and Krause-Lemke illustration piece. It was previously owned by F.C.C. Boyd, James Wade, Robert Friedberg, and Amon Carter, Jr. and was sold to its current owner at public auction in October 2005 for $1,092,500...the first note to break the seven figure mark. The currently offered example made its first public appearance in Harmer-Rooke's 1969 Million Dollar sale. It then reappeared in 1983 in the H.I.M. sale at the Memphis show. Since then it had been in an east coast private collection until it was sold privately into the Greensboro Collection.
This design-type has earned the number one position (and the jacket photo) in Q. David Bowers and David Sundman's 100 Greatest American Currency Notes printed in 2006.
All five known examples occupy a twenty point grade range spread. The three government held notes have traditionally been graded VF or XF. The currently offered note resides in a PCGS Extremely Fine 45 Apparent holder and the other privately held note is in a PCGS 50 holder. This note has been assigned the Apparent grade for some expertly executed restorations of the top margin area and a scattering of virtually undetectable closed pinholes. The notes' nickname has been derived from the resemblance of the three large zeros on the back to watermelons. The 1890 $100 Treasury Note has two of these zeros and has always been referred to as the "Watermelon" note. This $1000 has earned the Grand Watermelon moniker. This is the most famous of all US type notes and only three collectors can simultaneously hold this type. This is one of just two 379a's available to collectors and it shares the design with the unique in private hands Small Red Seal 379b.
From The Greensboro Collection Part II
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