When we report on sales of particular notes, we normally confine ourselves to published auction records, as they are the only observable and verifiable source.
Particularly when it comes to great rarities, we infrequently have the opportunity to observe or report on a private sale. However, when we hear of the sale of two of the most legendary pieces of large-size paper money extant in the same transaction, it bears comment. The fact that the two notes are both high-denomination “Rainbow notes” demands elaboration.
These so-called “Rainbow notes” are among the most popular large-size type notes. The nickname of these Series 1869 United States notes came about because of the notable and distinct bluish ink tint on the face of the notes. A concentration of colored threads in the paper was augmented by an abundance of green and red inks used throughout the design, giving the notes a “rainbow” look.
These notes were issued in denominations of $1, $2, $5, $10, $20, $50, $100, $500 and $1,000, and it is a rare auction in which the lower group of denominations are not well-represented. The scenario is quite different, however, for $50 notes and higher denominations. Fewer than 70 of the $50 notes are known, with fewer than 30 $100 notes, four of the $500 notes and two of the $1,000 notes in existence.
When paper money dealer Sergio Sanchez of Miami advised that he had brokered the private sale of a $500 note and $1,000 note in the same transaction, the paper money fraternity took notice.
Both pieces can be traced back to the collection of the legendary Fort Worth, Texas collector Amon G. Carter. The $500 note (cataloged as Friedberg 184 in Paper Money of the United States by Arthur L. and Ira S. Friedberg), has a vignette of a bust of John Quincy Adams on the face. The note sold is recorded as being in Extremely Fine condition.
Two of the other three known $500 notes are impounded in government collections, one at the Smithsonian Institution and the other at the Federal Reserve Bank of Chicago.
The $1,000 note (F-186-f) has a vignette of a bust of DeWitt Clinton in an unusual pose holding his hand to his head. The other example of the note is held in the collection of the Federal Reserve Bank of Chicago.
As for the one just sold, a record exists of it before Carter owned it, when it appeared as Lot 180 in Part I of the auction of the Albert A. Grinnell Collection (arguably the greatest private paper money collection of all time) on Nov. 25, 1944. There the cataloger classified the note as “strictly fine” with a few pinholes that did not impact its appearance. At that 1944 auction, the note sold for $1,135 (this is not a typo — that is $135 over face value) and significantly under the estimate of $1,200. It was the second highest price of the day, and it is said that not more than half a dozen bidders attended.
We will never see the likes of the Grinnell Collection and its auction again. Grinnell bought many of his notes during the Great Depression. The dispersal of his paper money holdings totaled nearly 6,000 lots in seven auctions from Nov. 25, 1944, to Nov. 30, 1946. The total prices realized for all seven auctions was a quarter of a million dollars.