Exceedingly Rare and the Finest Known Fr. 10 $10 1861 St. Louis Demand Note Acquired from D. C. Wismer in 1939-Its First Public Auction Appearance
United States of America - Fr. 10 $10 1861 St. Louis Demand Note
PCGS Very Fine 30.
In 1861, under the direction of Secretary of the Treasury Salmon P. Chase, the federal government issued the first paper money of the United States, the Demand Notes, in order to meet the expenses of the Civil War. He said, "I was compelled to use some expedients for payment of the Army & Navy, or see the defeat of all our efforts to save the integrity of the Republic." (The Salmon P. Chase Papers, Kent State University Press, 1889). The acts of July 7, 1861 and August 5, 1861, authorized an emission of $60,000,000 of notes; they were not legal tender and were not interest-bearing. The notes were printed in $5, $10, and $20 denominations from five Assistant Treasurer locations: New York, Philadelphia, Boston, Cincinnati, and St. Louis. Although the notes have the "on demand ... Promise to pay to the Bearer," the obligation does not specify payment in gold. However, Chase's circular sent to the Assistant Treasurers regarding the aforementioned acts stated:
These notes are intended to furnish a current medium of payment, exchange, and remittance, being at all times convertible into coin at the option of the holder, at the place where made payable, and everywhere receivable for public dues. They must be always equivalent to gold, and often and for many purposes more convenient and valuable.
But the Treasury was low on gold supplies, and Lieutenant-General Scott on September 8, 1861, announced that the current method of paying the troops "in coin" would be partially supplanted by the Demand Notes, which were "as good as gold at all banks and government offices throughout the United States." In addition to paying the troops, these notes were also used to pay the salaries of some government employees. As gold supplies further dwindled, Chase ordered the specie payments suspended, and on December 28, 1861, it was no longer possible for note-holders to receive gold on demand, making the notes unpopular with most of the public, but not with the importers.
The Treasury needed to continue issuing notes, but without the promise of payment in gold or acceptance as the equivalent of gold. In 1862, the Legal Tender Notes were introduced. They quickly depreciated versus gold (in 1864, it would take more than $2.50 of those notes to purchase $1 in gold). That meant that Demand Notes, which were on par with gold, were much more valuable than the Legal Tender Notes, particularly to importers who used them for customs duties requiring payment in gold.
Only $53,000 of the issued $60,000,000 (less than one percent of the total issued) in Demand Notes are still outstanding, with the majority redeemed or destroyed during the war. Most were issued from the New York, Philadelphia, and Boston locations. Far fewer were issued from Cincinnati, and the fewest from St. Louis, the westernmost office of the "Assistant Treasurer of the U.S.," as observed on the lower left corner tablet on the note's face. Only 48,000 $10 St. Louis notes were printed, with this No. 47760 example, the highest serial number of the four known, virtually the end of the print run.
Finely engraved and printed at the American Bank Note Co. New-York, the Demand Notes bear a striking resemblance to later Obsolete banknotes printed by the firm. The Federal Government contracted this work to the ABN prior to the organization and formation of our own Bureau of Engraving and Printing. The ABN used state-of-the-art anti-counterfeiting devices: the face shows intricate bordering with a repeating "X" pattern, a green guilloche, and green oval "10" dies; the intricate green security back has the title across the center over a large "X" flanked by "10" numerals. At the far upper left of the face is a portrait of then-living Abraham Lincoln (preceding the act forbidding living persons on American currency). The image, based on a photograph by C.S. German in early 1861, was engraved by Frederick Girsch for the ABN. At top center, an eagle is between the color dies. At the right end, a female allegory of Art stands in a stately fashion. Plate D. No. 47760. Hand signed, with engraved "For the" on the plate.
All Demand Notes are rare, but with only four examples known, the Fr. 10 is one of the rarest Federal type notes in existence. Eric P. Newman acquired this museum-caliber treasure privately from Obsolete currency legend David C. Wismer in July 1939 for $125.00. According to a letter from Wismer, three "prominent" collectors "were on [his] trail," wishing to obtain this exceedingly rare and important note -- by far the finest of only four known. Of the other three, one is in the American Numismatic Association's Money Museum. The other two are closely held in private collections, cherished by their owners. There are four examples known as enumerated in the Gengerke and Track & Price censuses.
Census of known Fr. 10 $10 St. Louis Demand Notes
1. No. 31133: ANA Money Museum. PMG Good 6.
2. No. 35202 Plate B: Private Collection; Ex: Harry W. Bass, Jr. Collection Sale, Bowers & Merena, May 1999. Lot 15. Sold as CGA Very Good-8, Tape Repaired at $46,000; Robert F. Schermerhorn Collection.
3. No. 41122: Private Collection; Ex: Hickman & Oakes September 1989 Sale. Impaired Very Good at $24,000 in its first auction appearance.
4. No. 47760 Plate D: The present example, Ex: D. C. Wismer obtained from a "wealthy Baltimore banker" at $125.00; prior pedigree unknown. PCGS Very Fine 30 and the finest known by far.
In addition to the above, there is the unique Fr. 10a (with "for the" handwritten rather than engraved on the plate); sold in our 2011 FUN auction, that example realized $109,250. While admittedly unique, that specimen was a repaired Very Good. The Newman example is a solid, problem-free Very Fine -- an amazing grade for any Demand Note, most of which have numerous condition faults. Only some light, even wear can be seen on close examination; there are no faults, repairs, or restorations. It is a bright, well-margined note with vibrant colors and bold signatures. Placing an estimate on such an important and exceedingly rare example of one of the earliest issues of circulating United States paper money is a bit of a challenge. The tape-repaired Very Good Fr. 10 in the Bowers and Merena sale of the Harry J. Bass, Jr. collection in May of 1999 realized $46,000. This offering stands head and shoulders above that note and the example sold by Hickman & Oakes in 1989. Certainly, this merits strong six-figure consideration.
It is fascinating to observe that it took 78 years from leaving the treasurer's office to return to its deserving St. Louis destination in the Newman Collection and a second 78-year span to come to auction today. This is the ultimate trophy note from one of the greatest paper money collections ever formed. A historic pedigree chain continues to the next caretaker of this most impressive American currency note.
Ex: Privately, from an Unnamed "Wealthy Baltimore Banker"; D. C. Wismer, July 11, 1939 (as invoiced) at $125.00; Eric P. Newman Numismatic Education Society.
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A powerful and intimidating dealer of the 1960s, backed by important colleagues, was accused of selling fraudulent gold coins and ingots to unsuspecting numismatists. Who would go up against a man like that and, over the course of decades, prove the fraud? Who would expose a widely respected scholar as a thief, then doggedly pursue recovery of coins that the scholar had stolen from an embarrassed numismatic organization, all over the objections of influential collectors who had bought coins with clouded titles? Eric P. Newman would - and did. Reserve your copy today.
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