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    In Superb Grade and Very Rare Fr. $5 1861 St. Louis Demand Note
    Originally From the Colonel Green Estate

    United States of America - Fr. 5 $5 1861 St. Louis Demand Note. PCGS Extremely Fine 40 Apparent.
    All Demand Notes are rare, but the St. Louis Demand notes are the rarest in the series. There are ten examples of the St. Louis $5 Fr. 5 Demand Note currently listed on the census. This note was from the first material Eric P. Newman ever acquired from the "Colonel" Green Estate. It was among a $1,200 purchase of Missouri paper money (Eric had to borrow $600 as he hadn't yet entered into his partnership with B.G. Johnson.) Amazingly, this purchase included four St. Louis $5 Demand Notes. The present example is the finest of the four and has been in the Newman Collection for over 75 years. It is listed on Eric's original typed inventory (included in this sale catalog) along with the $10 St. Louis Fr. 10 Demand Note (obtained from Wismer in 1939) we sold in Newman Part VIII in for $168,000.

    Listing of the Four St. Louis $5 Demand Notes from Eric's First Purchase from the Green Estate.

    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 76,000 $5 St. Louis notes were printed.

    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 FIVE pattern border and a green guilloche with a large "5" in the center; the intricate green security back has the title on a banner over a large FIVE, with FIVE DOLLARS arcing upwards below, and "5" numerals at the ends. The left end of the face shows the Freedom statue that crowns the dome of the U.S. Capitol. The right end shows a portrait of Alexander Hamilton below a "5" die. Plate B. No. 43970. Hand signed, with the words "for the" under the signature blocks engraved on the plate.

    Noted with a "Small Edge Split at Left," otherwise a magnificent example. This is clearly among the top three examples, likely has the finest appearance, and its pedigree is illustrious. A rarity and an undervalued type compared to many in the Federal series. This will be a highlight in any Federal currency collection.

    Ex: "Colonel" E.H.R. Green; Green Estate; Eric P. Newman Numismatic Education Society.
    Ex: Eric P. Newman Numismatic Education Society

    Auction Info

    Auction Dates
    November, 2018
    7th-10th Wednesday-Saturday
    Bids + Registered Phone Bidders: 18
    Lot Tracking Activity: N/A
    Page Views: 2,429

    Buyer's Premium per Lot:
    20% of the successful bid (minimum $19) per lot.

    Truth Seeker: The Life of Eric P. Newman (softcover)
    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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