Paper Money

Monday Morning Brief for March 25, 2019

The discovery that a unique 1847 $500 Treasury note sold at auction in 2016 for $199,750 is a contemporary circulating counterfeit is a fascinating story.

Original images courtesy of Heritage Auctions.

The discovery (reported in the print and digital editions of the April 8 issue) that a unique 1847 $500 Treasury note sold at auction in 2016 for $199,750 is a contemporary circulating counterfeit is a fascinating story.

The story is not so much about experts being fooled by a clever counterfeit — the note is listed in the major reference on the topic, and it was authenticated by Paper Money Guaranty and auctioned in January 2016 by Heritage Auctions — as about knowledge being lost and then refound.

Researcher Nick Bruyer, who wrote the feature article, uncovered contemporary newspaper coverage starting in 1847 in which readers were warned about new counterfeit $500 Treasury notes being found in commerce. One of the earliest accounts noted that Treasury officials had been aware of the fakes for some time but had not had enough information or evidence to take action. One article, dated Dec. 28, 1847, even identified a note that could be the very example auctioned in 2016, although it is possible that multiple fakes bore the same serial number and written endorsement on the back. Similar notes continued to surface into 1849, according to contemporary news accounts.

By the late 1840s, Treasury officials had the face plate used to print the fake notes in hand, along with examples of the note. Eventually, though, the news accounts of the late 1840s were lost or forgotten. The design being listed in a standard reference book by a known expert gave it credibility. 

One of those Treasury-held notes may be the example illustrated by an expert in the field of U.S. paper money, Gene Hessler, in a 1988 book on U.S. loans, the class of currency to which this fake belongs.

In the 2016 auction, the note was described as newly discovered and the sole signed and issued example of a broad class of Treasury notes issued between 1812 and prior to the Civil War. The price of $199,750 was a strong indicator that the market accepted the note as a great and desirable rarity.

This is by no means the sole example of a numismatic item thought genuine but eventually discovered to be a contemporary fake. “Micro O” 1896-O, 1900-O, and 1902-O Morgan dollars, once collected as genuine VAM die varieties, are now known to be contemporary fakes intended to circulate. Despite their status as counterfeits, they are still avidly collected today by collectors aware of their status.

The ability to discover lost knowledge has benefited from the growing resources of old newspapers available online. One can only imagine what else awaits discovery in old news. 

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