Paper Money

Kagin's offers Anderson's War of 1812 Treasury notes

The first public offering of a unique $10 note is featured in the auction of the Joel R. Anderson Collection of the Treasury Notes of the War of 1812.

Image courtesy of Kagin’s Auctions.

The Joel R. Anderson Collection of the Treasury Notes of the War of 1812, 14 pieces of great rarity, will join Anderson’s collection of large-size United States paper money at the pinnacle of paper money collecting in a March 29 auction. 

The sale, by Kagin’s Auctions, at the American Numismatic Association National Money Show in Pittsburgh, will give collectors a unique chance to acquire remainder, specimen and circulating notes from what Kagin’s presents as the finest collection of one of the most important and challenging series of U.S. bank notes. Some of these notes will probably not be available again for decades.

These Treasury notes are often considered the first circulating United States paper money. As with many currencies, it was born of financial necessity


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Long before the war, the concept of a circulating paper currency was bitterly opposed by Secretary of State Thomas Jefferson, James Madison (who would be president during the War of 1812), and congressmen who recalled the hyperinflationary disaster of Colonial Currency. Its proponents included Alexander Hamilton and the strong financial and banking interests, who would eventually prevail.

The War of 1812 with Great Britain triggered the United States’ first severe financial crisis since the Revolution. As the war dragged on, and it became clear that the usual import tax revenues and loans would not be enough to pay for the conflict, proposals were made for issuing a circulating paper currency — Treasury notes that were “payable to bearer, transferable by delivery and receivable in all payments for public lands and taxes.”

Five acts authorizing interest-bearing notes were passed. The last act of Feb. 24, 1815, included “small” Treasury notes of denominations of $3, $5, $10, $20 and $50. These small notes did not bear interest but, when fully signed, circulated for money. Although they were not given “legal tender” status, they were clearly accepted as such.

The sale’s featured item is the first public offering of a unique $10 note that is now designated Friedberg TN-14b, but will be TN-14c in the next Paper Money of the United States. It was just published in the new Treasury Notes of the War of 1812 by Donald H. Kagin. Kagin says it is considered to be the first circulating bank note of the U.S. government. 

This note was depicted in a line drawing in the 1978 reprint of the 1885 book United States Notes by John Jay Knox. Its whereabouts was unknown for almost four decades, until it resurfaced at a dealer’s table at the Florida United Numismatists 2015 show. The firm estimates it at $150,000 to $250,000.

Contact Kagin’s Auctions or phone the firm at 888-852-4467. 

This article was re-edited on March 21 to clarify that the Founding Fathers’ debate over a circulating paper currency occurred long before the War of 1812.

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