Fr. 192b $50 1864 Compound Interest Treasury Note PMG Very Fine 30 Net.. ...

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Scarce $50 Compound Interest Note

Fr. 192b $50 1864 Compound Interest Treasury Note PMG Very Fine 30 Net.
Compound Interest Notes were authorized by the Act of March 3, 1863, a tool to raise funds for war efforts which were proving far more costly than original expected. Unlike Demand and Legal Tender Notes, the Compound Interest Notes paid interest at 6% per annum, compounded semiannually for three years from the date of issue. These pieces paid a better interest rate that the Interest Bearing Notes. Hessler and Chambliss, in their tome, The Comprehensive Catalog of United States Paper Money, surmise that these notes were intended to "absorb" the Interest Bearing Notes in circulation. At their peak in 1865, Compound Interest Notes and Interest Bearing Notes, accounted for as much as a third of the total money supply in the United States. Since the interest clock stopped in 1868, few notes were left unredeemed. Any appearance is infrequent, especially for the higher denominations.
The example offered here this evening is a new discovery, previously unknown to currency census takers. Just one note in the census is recorded by serial number in a grade higher than Extremly Fine. That piece has yet to face the scrutiny of today's third party grading services. Neither service has graded anything above the Very Fine 30 level, making this piece one of the finder examples available to collectors. In our 2014 January FUN Signature Auction, we offered a PCGS Very Fine 30 that topped the $140,000 mark. The devices here remain fully detailed, with a deep green printed back design and bright paper. It was very common for the overprint to oxidize over time, usually inconsistently. While there is some oxidization here, it occurred uniformly, resulting in little negative impact to the eye appeal. The aforementioned Very Fine 30 was the only note offered at auction in essentially a decade, leading us to believe there is still a lot of pent up demand for this rare and intriguing Friedberg Number.