Neil S Berman
Expert Numismatist & Rare Coin & Currency Dealer
Perspectives on Collecting Paper Money: American Currency
Collectors Market Watch, By Neil S. Berman, 2/26/08
The history of modern American paper money begins in early 1861, when the United States Government found itself without the cash in coin on hand needed to fight the Civil War. Amazingly, the first purchases of supplies and equipment for the US military were made by involuntary seizure, with IOUs, and by the promises to pay later of upstanding private citizens and soldiers.
Accordingly, Congress passed the Act of July 17th, 1861 permitting the Treasury to print and issue sixty million dollars worth of paper money, an enormous amount of money at the time. These first notes were known as Demand Notes, and were backed on by user’s faith in the US Government. They were printed on paper, actually high quality rag bond, which is almost cloth, and actually signed by hand in ink.
They were soon followed in 1862 by Legal Tender Notes (with Red Treasury Seals), which were “legal tender for all debts private and public”. In 1878 those were followed by Silver certificates first with red seals and later with blue seals), which were paper dollars exchangeable for silver dollars on demand.
National Bank Notes, like the one illustrated here, were issued by the individual banks chartered by the US Treasury which printed the notes for the bank. Each bank could issue up to 90 percent of the value of the US Government Bonds that they deposited with the Treasurer of the US as collateral. Needless to say there are several hundreds of banks that were chartered, each with a different name, charter number, and because these notes were issued between 1863 and 1935, numerous combinations of types, sizes and denominations exist. It is in this series that many of the great rarities of the currency collecting market occur.
Following Nationals, Federal Reserve Notes were issued from 1913 until today, which were unsecured paper. The last of the major types are gold certificates (with gold seals), which were issued between 1882 and 1922, and were paper dollars convertible to gold dollars.
This extremely rare uncut sheet of First Charter National Bank Notes is remarkable for several reasons. First is that survived at all, and then survived uncut. Next because it was issued in 1866 by the First National Bank of Helena, in Montana Territory, before Montana became a state. So it is rare as an uncut sheet, as a Montana National Note, rare as a Territorial Bank Note, and rare because that bank that issued it was small and issued few notes to begin with.
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