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    Description

    Charleston, SC- Bank of the State of South Carolina Fractional Notes, Including Several Unlisted Varieties. Estimated 324 Pieces.
    The following fractional notes are contained in this lot:
    S473 25¢ April 1, 1861 (20 notes)- Ten of the examples are printed on the backs of notes from the fictitious State Stock Back of Tallahassee, Florida; S475 10¢ July 1, 1861 (7 notes); S476 20¢ July 1, 1861 (10 notes); S477 25¢ July 1, 1861 (10 notes); S478 25¢ July 1, 1861 (57 notes)- Eleven of the examples have blank backs; S479 50¢ July 1, 1861 (10 notes); S480 50¢ Jan. 1, 1862 (15 notes); S481 50¢ Jan. 1, 1962 (15 notes); S482 5¢ Mar. 1, 1862 (4 notes); S483 10¢ Mar.1, 1862 (5 notes); S484, 20¢ Mar. 1, 1862 (10 notes); S485 5¢ June 1862 (10 notes); S486 5¢ June 1862 (5 notes); S490 10¢ June 1862 (3 notes); S494 15¢ June 1862 (5 notes); S495, 15¢ June 1862 (7 notes); S497 15¢ June 1862 (5 notes); S498 25¢ June 1862 (16 notes)- One has a larger "25"; S499 25¢ June 1862 (8 notes); S502 50¢ June 1862 (62 notes)- 24 of the examples have a larger "50" similar to S506; S503 50¢ June 1862 (11 notes)- one of the notes displays an obstruction error at the lower left corner; S506 50¢ June 1862 (9 notes)- 4 of the notes have a smaller "50" similar to S507; S507 50¢ June 1862 (20 notes)- 10 of the notes have a larger "50."

    The notes grade Very Good to Very Fine and have been hammer cancelled. In some cases tears are observed at the cancel. A number of the notes have been rubber-stamped on the back with "DABNEY, MORGAN & CO. vs. The Pres't & Dir's of the BANK of the STATE of SO.CA. PROVED..." A few of the notes are also have oval, rubber-stamped "W.H. GIBBES CANCELED COUNTY TREASURER" notations. This lot is being offered without an estimate. Lot viewing is strongly encouraged due to the quantity and variety of material contained. There will be no returns on this lot for any reason. (Total: 324 notes)


    More Information:

    We are pleased to offer fourteen lots containing a large quantity of notes from the Bank of the State of South Carolina. The lots provide insight into post-Civil War finance in South Carolina as explained below. Included within the material are a number of varieties that are unlisted in Sheheen's South Carolina Obsolete Notes and Scrip. Please see the individual lot descriptions for additional information.

     

    The Bank of the State of South Carolina, wholly owned by the State of South Carolina, was chartered in 1812. It also served as the fiscal agent of the State from its inception until the end of the Civil War in 1865. This was a unique arrangement in the South and the notes were considered State issues because they were fully backed by the State of South Carolina. Due to that fact, the U.S. Supreme Court upheld a decision after the war that the bank could not enter into bankruptcy, but must instead pay off its obligations.

     

    The City of Charleston's downtown district was largely destroyed by a fire in 1838. In order to rebuild, the bank loaned $2,500,000. The money was borrowed on bonds of the State that were guaranteed by the bank and were known as the Fire Loan Bonds and also stock known as the Fire Loan Stock. Dabney, Morgan & Co., a London banking firm, provided the majority of the funds. J.P. Morgan was a partner in the firm.

     

    After the Civil War, numerous court cases were filed and conflicting decrees were issued in an attempt to determine whether the bank's liabilities were liabilities of the state. As previously mentioned, the Supreme Court held that they were.

     

    A majority of the notes in the group lots being offered have oval stamps on the back that read "DABNEY, MORGAN & CO/vs./The Pres't & Dir's of the/BANK of the STATE of SO, CA./PROVED/C.H. SIMONTON, Referee." Some of the stamps list J.F. Ficken as the Referee.

     

    As J.V. Nielsen, Jr. stated in his April, 1955 article, "Post-Confederate Finance in South Carolina," published in The South Carolina Historical Magazine, "Numerous conflicting court decrees were handed down. In one instance, a dividend of 2 per cent was paid by Charles H. Simonton, referee, on certain bills which had been "proved" in a suit brought by Dabney, Morgan & Co. against the President and Directors of the Bank of the State of South Carolina."

     

    A number of the bills also display "CANCELED" stamps on the back from various county treasurers. As Nielsen went on to explain, "In certain instances, the bills were received, by court order, in payment of state taxes by county treasurers. But there apparently was no accurate record of how many bills were outstanding, and it was soon apparent that if they were received for taxes, the state would have no other revenue. Brokers were offering these bills for sale at a discount, so taxpayers could use them and, in effect, get a reduction in taxes thereby. Treasurers soon sought relief and obtained court orders which authorized them to receive them, tie them up in packages and mark them for identification, but not to issue tax receipts for them, pending court orders."

     

    The notes circulated beyond South Carolina as evidenced by the stamped notations seen on at least a few of the bills. A few notes exhibit a round red stamp from "DANIEL, FARNSWORTH & CO. BANKERS, MEMPHIS and a partial Savannah, GA exchange office stamp is seen on the back of one note. As Nielsen explained it, ".South Carolina paper money bore a good reputation in the nation and was accepted at par when emissions of banks from other states were refused or taken only at a discount, often a considerable one."

     

    One additional interesting fact from Nielsen is that the bank's bills were subject to widespread speculation in the 1870's and 1880's. "Capitalists were buying them up where they could be purchased at large enough discounts. They apparently fared better on other Charleston bills than on those of the Bank of the State."



    Auction Info

    Auction Dates
    June, 2010
    17th-21st Thursday-Monday
    Bids + Registered Phone Bidders: 24
    Lot Tracking Activity: N/A
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