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ACCent: The Monthly Newsletter of the Anchorage Coin Club

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Volume 19, Number 4

April 2006

September Membership Meeting
Wed., April 5th, 2006 Central Lutheran Church

7:15 PM Meeting


 

FROM THE EDITORS

    With the Cottonwood Creek Mall Coin Show in Wasilla occurring this weekend (Saturday, March 18th and Sunday, March 19th), your editors want to get this newsletter out in time. It is the first coin show of the year. With these longer daylight hours in Anchorage….take a couple of hours this weekend, have a nice drive to Wasilla, and enjoy the show.

Our membership meeting on March 1st was also our club’s election of new board officers. Congratulations and thanks go to the following club members for volunteering their time:

That evening, Larry Nakata gave a great presentation on the subject of “Obsolete U.S. Bank Notes”.  For those of you who were not able to attend the meeting, Larry Nakata has followed up with an article in this month’s newsletter.

The door prize, a 1969 U.S. Mint Proof Set, was won by member Howard Wright.

The membership prize, a U.S. Commemorative Quarter collection book “Salute to the USA” was won by Stan Mead, who then gave the book to YN Matthew Isada.

Our next meeting will be on Wednesday, April 5th at the Central Lutheran Church. Because of Lent activities at the Church that evening, we have been requested to move our coin club meeting to the Narthex area of the church (located across the hallway from the main assembly hall). Meeting time at 7:15 PM.

Our April 5th meeting will also see the winning ticket drawn on our club’s raffle coin, a 1918-S Liberty Standing Quarter in AU condition. Final tickets will be available at the April 5th ($5/ticket or 5 tickets/$20).

Hope to see a bunch of you at the Cottonwood Creek Mall Coin Show and at our April 5th club meeting…..Your Editors.

 

1777 Continental Currency $30 Obverse

 

MEMBERSHIP NEWS

 

Schedule of Events for the Month of April

  1. Monthly Membership and YN Meeting: April 5th (Wednesday) at 7:15 PM at the Central Lutheran Church (Narthex area). This will be a “potluck dish” event. Bring a dish to the meeting.  There will also be an bullet auction of no more than 15 numismatic lots. Members, YNs, and general public welcomed.
  2. Anchorage Coin Club Board Meeting:  April 19th (Wednesday) at 7:00 PM at the New Cauldron Restaurant located at the University Center. Club members welcomed.  

FROM YOUR CHIEF EDITOR:  Last month, we featured an article on the subject of “Grading Coins”….specifically Early American Copper coins. What you saw was one perspective on this subject of grading. There are others. In the coming months, it is our intent to feature more articles to better inform our newer members. Proper grading of coins is important. Part of being with a coin club is to know how to grade coins…..

 

1834 Bank of the United States $5 Note 

1834 Bank of the United States $5 Note

 

U.S. OBSOLETE BANK NOTES
By Larry Nakata (Life Member #3)

    Last year, I gave a presentation on the subject of “The History of U.S. Paper Currency”.  In this article I want to follow-up on one aspect of U.S. paper currency…namely, the subject of obsolete U.S. paper currency.

What is obsolete U.S. paper currency? My answer: It is older U.S. paper currency that has been demonetized and can no longer be exchanged for what we use today.

Such obsolete currency existed in the period prior to the U.S. Civil War. At that time our country’s monetary policy   (when it came to paper currency) was one of deregulation.

Use of paper money really begins in Colonial times….prior to the creation of the United States. In colonial times, there was not sufficient coinage to satisfy the needs of the American colonies.

In 1690, Massachusetts issued paper money to fund their military expeditions into Canada. Other colonies would soon follow suit. These forms of money were called “Bills of Credit”….and were called such to appease the mother country (England). The rationale was that these “bills of credit” were treated as a loan used for a specific public purpose. It was a quaint way of getting around the mother country’s rules.

With the coming of the French and Indian Wars in the mid 18th century, more and more of these “Bills of Credit” would circulate throughout the colonies. The effect of having this paper currency was that it helped stimulate the economies of the colonies. Such currency could be exchanged for coins (when coins were available).

With the conclusion of the French and Indian Wars, England took measures to repress any further issuance of these “Bills of Credit” in 1764. Such measures resulted in an adverse effect on the economies of the colonies. This was viewed a meddling in the economic affairs of the colonies and would prove to be one of causes for the Revolutionary War. In fact, on the eve of the Revolutionary War, Alexander Hamilton (who would become the first Secretary of Treasury for the United States) estimated that the money supply in America was 1/4th coin and 3/4th paper money.

During the Revolutionary War, our Continental Congress would issue Continental Currency used to fund the war effort. Each state was asked to issue such currency and to support it. Some did…some didn’t. Still…some $241 million of continental currency was issued during the war. The public’s faith in such currency would decline as the currency exchange rate changed from 1-1, to 40-1, and later to 250-1….as the war years progressed.

Aggravating this problem were two developments as the war progressed:

By the end of the Revolutionary War, the failure of Continental Currency would undermine any attempts to issue a national paper currency system in the United States.

The State Bank Note system then became the prevailing system used until the Civil War.

 

1856 Valley Bank of Maryland $5 State Bank Note

The Constitution of the United States proved to be a dilemma in terms of monetary policy for paper currency. On one hand it allowed each state the right to have local banks issue their own paper currency. Yet, on the other hand, the Constitution also allowed for the Federal Government to establish a National Bank that would act as a repository for federal funds and act as the Federal government’s fiscal agent.

So, in 1791, Secretary of Treasury Alexander Hamilton would establish the First Bank of the United States with the authority to issue it’s own paper currency.

This would create an intense rivalry between both banking systems. What was at stake was the power of the Federal Government vs. State Rights in determination of monetary policy.

Foreign countries at that time liked doing business with the First Bank of the United States rather than having to deal with individual state banks. Dealing with one national bank made sense to such foreign countries. States contended that the First Bank of the United States was too conservative in it’s monetary policies thus causing constraints to their respective State economies.

The states lobbied and were successful in 1811 in preventing the renewal of the First Bank of the United States charter….thus forcing it out of operation.

The War of 1812 would result in the creation of the Second Bank of the United States. In order to finance the War of 1812, the United States Government had to establish a national bank that could deal with foreign countries. It was simply a matter that foreign countries liked doing business with one national bank rather than a number of State banks.

After the War of 1812, the Second Bank of the United States would continue until 1836, when President Andrew Jackson would not allow renewal of the charter for the Second Bank of the United States. Thus in 1836, the Bank of the United States would again be forced out of operation.

At this point, the State Bank system would again prevail and be used as the primary paper currency system until the Civil War.

The State Bank system had its problems:

 

1861 Confederate $5 Note

Upon the start of the Civil War, the problem of funding the war effort resulted in the North and South taking measures to issue national paper currency.

The Civil War would thus result in the demise of the State Bank Note system…thus the term Obsolete State Bank Notes.

Federal currency prevails today…and the federal currency from 1862 still remains legal tender so that a $1 note from 1862 can be exchanged for a $1 Federal Reserve Note today (although I doubt a collector would be crazy enough to make such an exchange). All other currencies were rendered obsolete and have been demonetized.

So what is collectable.

If you can find any colonial “Bills of Credit”, they command very high prices. Older notes of this nature are tough to find since paper tends to deteriorate over a 250 year period.

There are lots of Continental Currency still around. Keep in mind that over $241 million of such currency circulated during the Revolutionary War….so there are lots of surviving specimens. The one note I have is about $40 in value.

Bank of the United State notes are very difficult to find. If you find one, better figure on spending quite a bit of money for that specimen. Better figure on spending thousand of dollars for such a note in decent condition.

Since there were thousands of state banks throughout the United States in the first half of the 19th Century, lots of Obsolete State Bank Notes survive today. You can buy a pretty good looking note in the $50 to $100 range.

There is Confederate currency….which was demonetized by the North. Lots of specimens still survive today. It was hoped at the conclusion of the Civil War that the Federal Government in the North would one day allow Confederate currency to be redeemed for federal currency. Confederate currency was thus stashed away in attics in hopes this would happen Such did not occur, but lots of surviving specimens still abound. Like the Obsolete State Bank Notes, you can buy a pretty good looking note int eh $50 to $100 range.

And then….there is the matter of Fractional Currency….but that is another story.

References: 

 

THE OWLS OF ATHENS
By Loren Lucason (Member #97)

    There are ancient Greek coins with finer art but there are none more venerable than the tetradrachm of Athens. Athens was a port city at the crossroads of the ancient western world. The fading Persian empire lay to the south in Asia and the Greek city-states were scattered across the northern Mediterranean. Athens did not have rich soil like the farmlands of Sparta. They survived on the business of trade. They gained control of the rich silver mines of Laurium about 450 B.C. and started issuing large numbers of coins. These coins were not only bigger than others in circulation at that time….they were dependably of high quality metal.

 

Athenian Owl c. 449 BC

Up to the mid 400’s B.C. coins were minted in city-states mainly for local use. There was a weight standard but it was not closely adhered to and the quality of the metals varied. So travelers from another city-state had to go through a money changer to get money to spend in that city-state. Athens set out to make their coins acceptable anywhere in the Mediterranean.

Athena was the patron goddess of Athens. The story goes that she beat out Poseidon to win Athens by creating the olive tree. Thus the Athenian coin that was to be “the money good anywhere” had Athena on the obverse and her favorite bird, the owl, on the reverse. It also had ATH in Greek letters and an olive twig on the reverse. These coins are called “owls” and were among the first to have a full design on both sides as opposed to just a punch mark on the back.

They, indeed, became the most widely accepted money across the Mediterranean. They have been found in archeological sites as far off as Spain. They were issued in denominations ranging from the tiny .09 gram hemitartemorion to the huge 43 gram dekadrachm. By far the easiest to find is the 17 gram tetradrachm. It was a lot of money back then so the tetradrachm was probably convenient for big business deals. I have never seen an Athenian hemitartemorion and the dekadrachms are so rare that they are usually only found in museums.

The coins from before 450 B.C. are crude and lumpy but much rarer so they are sought after and expensive. The ones we are most likely to find were struck between 450 and 410 B.C. They are still lumpy, the headdress on Athena is likely off the flan, but they are of good silver and they are an epitome of early ancient Greek coins. About 160 B.C. Athens started to issue “owls” of a new style. They are broader and flatter however the metal is not as good so they are not sought after as much. The good thing about them is that Athena’s entire headdress is on the coin.

If you want to be considered a collector of ancients, an Owl is a must have coin…..Loren.

 


The Anchorage Coin Club

Club Officers

Board of Directors

Editors

Club Archivist/ Photographer

DUES

To save costs, members not responding to renewal notices within 3 months will be considered inactive.

The Anchorage Coin Club is a non-profit organization formed to provide information, education, and a meeting place for individuals having an interest in numismatics.

Correspondence Address: Anchorage Coin Club, P.O. Box 230169, Anchorage, Alaska 99523