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Rare proof $1,000 set to cross block
By Peter Huntoon
April 28, 2014

This article was originally printed in Bank Note Reporter.
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What is this elephant? Philip Weiss Auctions of Lynbrook, N.Y., landed a proof of an Original Series $1,000 face. The wide margin proof is printed on India paper mounted on card stock.

The image, a Chittenden-Spinner from The Fourth National Bank of the City of New York, is flawless and complete.

The piece will be auctioned in May 2014.

Needless to say this is a stellar discovery of the first magnitude.

Proofs of otherwise non-collectible or virtually non-collectible type notes have come into their own during the past few years as sophisticated high-power collectors have come to realize that issued notes of certain types like this are unobtainable.

An excellent recent example is the sale of a $1,000 Series of 1891 Silver Certificate uniface face proof that with the buyer’s premium brought $82,250 at the January 2013 Heritage Florida United Numismatists auction. The only known extant copy of an 1891 $1,000 is Amon Carter’s former note, that was just sold by Heritage at the April 2014 Central States show for $2,585,000.

The only hint that there may be a rival in private hands to the proof shown here comes in the form of a photograph of the only other Original Series $1,000 proof that has been recorded. The potential rival is another proof from the same plate pictured on p. 13 of Limpert’s 1955 second edition of United States Paper Money, Old Series, 1861-1923. The lower right corner of that proof is chewed away and there is an eraser-size hole between the capitol dome and the right border.

Limpert was pretty good about providing attributions for the photos in his book, including a photo for a certified proof of a Series of 1875 $1,000 national credited to the Treasury Department. However there is no governmental, institutional or collector attribution for the Original Series photo. The current whereabouts of that proof is unknown.

So why are both extant proofs from The Fourth National Bank plate? The explanation revolves around the fact that the first $1,000 Original Series face plate was prepared for The Fourth National Bank of New York. It also was the first bank to be sent a shipment of $1,000s from the Comptroller of the Currency’s office, a shipment that went out on Nov. 30, 1864.

The officials at the National Bank Note Co. would have lifted proofs from the plate to send to the Treasury for approval of the finished design.

The Fourth National Bank of the City of New York, charter 290, had the distinction of issuing both $500 and $1,000 Original Series notes. They were printed from one-subject plates. The bank was one of only five banks in the country to utilize a one-subject $1,000 plate.

The bankers received 1,016 of the $500s and 500 $1,000s. No Series of 1875 $500 or $1,000 notes were printed for the bank because stocks of the Original Series were sufficient to see it through its first 20 years of its corporate life.

There is no legal distinction between Original Series and Series of 1875 notes. The difference was who printed them. The Originals were printed by the bank note companies and the 1875s by the Bureau of Engraving and Printing. When the Original Series were in production, the protocol was for the bank note companies to send the incomplete sheets to the BEP for overprinting of the seals and Treasury sheets serial numbers. Then the sheets were sent to the Comptroller of the Currency who issued them to the banks.

A grand total of 7,454 Original Series and Series of 1875 $1,000 National Bank Notes was delivered to 37 issuing banks in five states between Nov. 30, 1864 and July 30, 1884.

 

Only 36 banks received Original Series $1,000 nationals, totaling 5,818 pieces. It is no surprise that 17 of them were in New York City.

The other 1,636 $1,000s were Series of 1875 issued to eight banks.

The term “issued” is a bit of a semantic reach when it comes to the $500 and $1000 nationals. Those notes didn’t circulate owing to their huge purchasing power. At best they were passed around through clearing houses to settle big balances. No one was carrying them around in their wallets. Most sat unused in the banks of issue.

One thousand dollars in 1864 money had the purchasing power of well in excess of $100,000 in today’s dollars.

The Fourth National Bank of New York issued every Original Series denomination that was available. The simple explanation for this is that the bankers did not have to pay for Original Series plates, so they ordered a few of everything.

Besides, there was raw power on display if you had $500s and $1,000s, even if they didn’t reach the street. Your fellow bankers knew about them, just like trophy wives today, and those were the people you were trying to impress.

The Fourth National Bank was no slacker. Its circulation was just under $3 million in the early 1870s when its circulation peaked. It took a lot of notes, no matter the denomination, to support that number.

The accompanying graph illustrates the reality of the $1,000 nationals. Demand on the part of the bankers for the notes peaked in 1866, less than three years after national bank currency originated. There were 4,221 of them outstanding on Oct. 31 of that year.

The whole concept of National Bank Notes was still new then, but the high denomination notes proved to be all but useless in commerce. Consequently the number outstanding contracted drastically to a token one-fifth of the 1866 high by the end of 1871 and continued to decline.

No new plates with $1,000s were ordered between 1867 and late 1870. Of the four plates with $1000 plates ordered thereafter, one was for The Kidder National Gold Bank of Boston. None of Kidder notes ever got out of the bank.

Several banks that used the high denominations continued to receive them in periodic shipments from the Comptroller long after 1866. However, a measure of the lack of their utility is reflected in the fact that the entire $500 and $1,000 issuance for 25 banks was sent in a single initial shipment. Those bankers never went back for more.

The last $1,000 was sent to The National Bank of Commerce, Boston, charter 554, on July 30, 1884, in a shipment of Series of 1875 500-1,000 sheets.

The demise of the $500 and $1,000 National Bank Notes occurred in 1885, the result of a convergence of three factors. (1) Several of the issuing banks went out of business. (2) The two surviving national gold bank users converted to regular national bank status under the provisions of the Act of Feb. 14, 1880, and elected not to use high denominations thereafter. (3) The remaining issuing banks were extended before 1886, and began receiving Series of 1882 Brown Backs.

However, no $500 or $1,000 notes were made in the 1882 series because those denominations had been demonstrated to be useless.

In 1938, the last year records were kept, there were 21 $1,000s counted as outstanding by the Treasury Department. One should have shown up by now.

Of all the possible unreported type notes, there is no question that a $1,000 national is the most eagerly sought.

It appears that the closest we are ever going to come to seeing one is standing before you in the form of this proof. I anticipate that it is going to be all knees and elbows when this baby crosses the block.

People have queried me about what it will bring. How high is the sky? Do you think my crystal ball is clearer than yours?

For auction information, go to www.weissauctions.com.



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