Paper Money

Unique 1864 $500 interest-bearing note hits six figures in auction

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.

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