The elevated starting price of $270,000 certainly had an impact on
the number of participating bidders at the Stack’s Bowers Galleries
auction of a unique $500 interest-bearing note on Nov. 5, but when the
hammer finally fell with a winning price of $352,500 including the
17.5 percent buyer’s fee, it was the most a third-party graded note of
this currency category had ever sold for at public auction. The lot
was bought on the floor by a dealer bidding on behalf of a client.
The sale of the note, an issue under the Act of June 30, 1864, and
cataloged as Friedberg 212b in Paper Money of the United States,
marked the first time it had ever appeared at public auction, and its
price is also the first ever recorded for the issue. It was given a
grade of Very Fine 25 Net by Paper Money Guaranty, with the “Net”
referring to some restorations and ink lightening.
Until the discovery of this note, the $500 denomination had been
unknown in any private or government institution collections,
including those of the Bureau of Engraving and Printing, Federal
Reserve System, Smithsonian Institution, and Bureau of Public Debt.
Track and Price records only two higher sales prices for
interest-bearing notes, which are the most infrequently seen type of
large-size paper money, and both are for the same example of an 1861
$50 issue (F-202a). In 2001 it is listed as selling for $605,000 in
Very Fine, when the market was at an apex. When it was sold again in
2005, the price was $368,000.
A 2005 auction by Heritage of a pair of interest-bearing notes saw
both approach the price of the item just sold: a price of $299,000 was
set for an 1863 $100 issue (F-204) called Choice Very Fine by its
seller; and in the same sale, an identical price of $299,000 was
realized for an 1861 $500 note (F-209) also graded Choice Very Fine.