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Stack’s Bowers and Ponterio   |   The August 2018 ANA Auction   |   23 August 2018 Sort by Lot-NumberSort by Estimate
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Session 4, Lot 2001

Estimate: 20'000 USD   |   Starting price: 12'000 USD Price realized: 38'400 USD
Demand Note
Finest PCGS Graded Fr. 1 $5 Demand Note

Friedberg 1 (W-608). 1861 $5 Demand Note. PCGS Currency About New 50.
Offered is a worthy example of one our nation's first "Greenbacks." This 1861 $5 Demand Note was produced by the American Bank Note Company using a patented steel plate process developed over decades of producing bank notes for state chartered banks. The statue pictured at left on the face is Freedom, by Thomas Crawford, which sits atop the United States Capitol. Founding father Alexander Hamilton is portrayed in the bottom right corner on the face.

These Demand Notes were the first widely circulated, federally issued notes since the Continental Currency notes of the late 18th century. Each example is hand signed by two Treasury officials for the register of the Treasury and treasurer of the United States. Early examples of these Demand Notes had "for the" written on the signature lines, while later versions had "for the" printed. This example is of the latter variety and was payable at the New York Treasury Office. Other offices for which Demand Notes were payable included Philadelphia, Boston, Cincinnati and St. Louis. The presently offered piece is sharply printed on creamy white paper. Three full margins are found on the face while the cut touches the design slightly on the right edge of the face printing. The intricately printed back displays vivid green inks and marvelous detail. This is the finest example graded by PCGS Currency and one of the single finest examples of this incredibly important type.

Details of Demand Notes

The Act of July 17, 1861, amended on August 5, authorized a new $250 million loan, comprising mostly Interest-Bearing Notes and bonds, but also including $50 million in currency to be known as Demand Notes, a new series.

In contrast to Interest-Bearing Notes, Demand Notes were made in lower denominations for widespread popular distribution. As these bore no interest they were in effect a free loan to the government. The $5 (as here), $10, and $20 values gave them wide appeal.

Plates were engraved and notes were printed by the American Bank Note Company in New York City under a contract signed on July 25, 1861. The Act of August 5, 1861, added details, including convertibility, if desired by the holder, of the Demand Notes into long-term bonds paying 6% annual interest.

The backs of Demand Notes were printed in green ink, quickly giving rise to the term greenback, although this was more widely applied to the later Legal Tender Notes issued in far greater quantities. Today in popular parlance, green is the "color of money." The Demand Notes do not bear the Treasury Seal, as there was no requirement for this in the amended legislation of August 5, 1861.

The first Demand Notes were paid out in August 1861 and used to pay government salaries in Washington. Soon thereafter, notes were given to Union soldiers, defense contractors, and others to whom the government was obligated. This form of payment was not welcomed by the recipients, who preferred "hard money" in the form of coins. At the time silver and gold coins were readily available, a situation that would continue until late December when gold coins began to be hoarded and could be purchased only at a premium, followed by the disappearance of silver coins in the late spring of 1862.

PCGS Population: 1, none finer.
From Currency Auctions of America's sale of May 1991, lot 463; Spink America's sale of May 1995, lot 157; Lyn Knight's sale of August 2005, lot 1000.

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