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ACCent: The Monthly Newsletter of the Anchorage Coin Club

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Membership Meeting 1st Wed. each month, 7 PM, Central Lutheran Church, 15th and Cordova

Vol. 23  No. 9


NEXT MEMBERSHIP MEETING SEPTEMBER 1st:
A.N.A. in BOSTON


PAPER GOLD
by Larry Nakata life member #3

 

    In the history of US paper currency, there were two categories of gold currency issued.

One was the US Gold Certificate

The second was the National Gold Bank Note.

 

    Gold Certificates were first authorized by Congress under die Act of 1863. Congress did this with the intent of reassuring the US public that the federal government was not intending to replace all US money with what the public "affectionately" called greenbacks (paper currency).

    1863 was a time in the Civil War when there was a serious scarcity of coinage due to hoarding of coins. The US public had a distrust of paper currency that resulted in this situation. Under the Act of 1863, these Gold Certificates were US notes that could be redeemed (on demand) with their equivalent value in gold coin.

    Because of the shortage of coinage during the Civil War, these Gold Certificates were not issued until 1865 (towards the end of the Civil War when coinage was more readily available).

    These early Gold Certificate notes were hand issued with the depositor's name on the Gold Certificate. A depositor would deposit gold coin and get these certificates in exchange. Only that depositor could redeem such a certificate. In essence it was a convenient form of transporting money without risk of being robbed of your gold coins.

    By 1882, the nature of the Gold Certificate would change in which these notes would be payable to bearer on demand. It could now be used by anyone and redeemed for gold coinage. From that point on, with the exception of the 1888, 1900, and 1934 Series, Gold Certificates were payable to the bearer on demand.

Two types of Gold Certificates were issued from 1865-1934:

Large size Gold Certificates (1865-1922) of which there were 9 issues.

Small size Gold Certificates (1928-1934) of which there were 3 issues.

    These Gold Certificates were issued in denominations of $10, $20, $50, $100, $500, $1000, $5000, and $10,000. The exception was the Series of 1934 which was released as a $100,000 denomination with restricted use for currency transactions between Federal Reserve Banks only.

    Two other series (1888 and 1890) were also restricted series. Like the Series of 1934, these particular Gold Certificates were restricted for use by only certain gold depositors (such as banks).

    By the start of the Depression (in 1929), Gold had fallen into disfavor with governments around the world. The Federal Reserve refused to support the liquidity of these failed banks. With these banks going under (and lots of them) this resulted in massive deflation.... a condition in which not enough money is circulating in the economy. Note: That is why there was a rise in Depression Script during that time.

    The Gold Standard and Gold, itself, came under attack as one of die culprits that caused this world-wide depression.

    As a result, Congress gave President Franklin Roosevelt sweeping powers in addressing this economic crisis. President Roosevelt subsequently had Congress pass the Gold Reserve Act of 1933 in which all gold coinage, gold bullion, and Gold paper currency were to be surrendered and redeemed with US currency and coinage other than gold. Such Gold would be held by the US Treasury.

President Wilson on the $100,000 bill

President Wilson on the $100,000 bill

    Only the Federal Reserve Banks were allowed to use the Series 1934 $100,000 Gold Certificates, but redeemable in gold rather than gold coin. This change in wording allowed President Roosevelt to then control all of the gold in the United States and set the value of gold against the US dollar. President Roosevelt would eventually set the value of gold at $35/troy ounce where it would remain until the 1970s.

    This resulted in a situation where it was illegal to possess Gold Certificates from 1933. Yet people held onto these notes. You just couldn't spend it since Gold Certificates were, in effect, demonetized.

    Eventually, ownership of gold bullion, gold coinage, and Gold Certificates would be relaxed by the Act of 1964. Under this act, Gold Certificates were again made legal tender...but only at the face value of the currency...and could no longer be redeemed for gold coin. Certain issues, such as the 1888, 1900, and 1934 Series remained demonetized under the Act of 1964... since they were not intended for public use.

    The Gold Standard eventually faded away and today sees our US currency backed by the good graces of our federal government and the Federal Reserve system.

    In the history of US Paper Currency, there is a second category of US gold currency called the "National Gold Bank Note". Under the Currency Act of 1870, National Gold Bank Notes were authorized. It was a short lived series that lasted 1870-1878. Like the Gold Certificate, the National Gold Bank Note was redeemable in gold coin on demand.

    National Gold Bank Notes were, in effect, a form of federal currency in which one of 10 chartered Gold Banks in the US could have its name printed on the National Gold Bank Note. It was a good form of advertising that also reflected the stability of that bank.

    Such Gold Banks were required to deposit bonds with the US Treasury. These banks could then only issue National Gold Bank Notes equivalent to 80% of what they deposited with the US Treasury. Additionally, these banks had to have gold coinage in their vaults equal to 24% of the value of the notes issued. These were very strict terms. National Gold Bank Notes were issued in denominations ranging from $5 to $500 during their time. From 1870- 1878 about 197,000 of these notes were issued. Not very many. For the collector, you'll find that Gold Certificates and National Gold Bank Notes are not easy to find. That is because most of the notes were destroyed in 1933. If you can afford to buy one...hold onto it. It will only go up in value. You'll probably find these notes in lower denominations in low grades. That's because these lower denomination notes were heavily circulated. Higher grade specimens command very high prices. You need only look up their value in any coin magazine.

Higher denomination gold notes are even tougher to find since they were probably redeemed back in 1933.

You'd better be willing to pay very high prices for these higher denomination notes.

Overall, a nice series....expensive to collect.

-Larry

 

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If you spent $2000 to travel 3000 miles to find the perfect '32-S to match your quarter set...

You are probably a numismatist...

And you should belong to the Anchorage Coin Club.

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August 4th
Membership Meeting

   

    Club president Tim Burke thanked all who helped make the coin club's July Summer picnic a success.

    Coin Show on August 14th - 15th (Sat/Sun) at the University Center. Need for volunteers to come on Friday (August 13th) after work 5:30 PM - 6:30 PM to help setup. Tables will be $10/table. Cases will be made available.

Presentation by Larry Nakata on the subject of "The History of U.S. Gold Paper Currency".

Following presentation, monthly coin bullet auction. Meeting adjourned following coin auction.

 

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MISNUMICAT JUMBLE

RABBER_________________

Last: TRISMUCKS - MISSTRUCK: A coin that did not go through the press properly.

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August 18th Board Meeting

   Board meeting held at the New Cauldron Restaurant. Called to order at 6:30 PM by club president Tim Burke.

    Results of August 14th - 15th Coin Show at the University Center was first subject of discussion. Attendance was not as good as the Fur Rondy Coin Show. Mid-May to June was discussed as a better time frame to conduct a Summer Coin Show. Advertising may be the key as well. Better signage outside the University Center advertising a coin show was also discussed. Board approved funding to make two such signs for the next show.

    Next coin show tentatively set for October 9th - 10th (the weekend following release of the Permanent Dividend). Tim Burke indicated that the Sears Mall may not be possible for those dates. Idea was to tie in with the organizer of the Collectables Show planned for those dates. Organizer cannot secure Sears Mall. Tim will talk to organizer to see if he would like to have it at the University Center instead. If so, we'll have free advertising.

    For September 1st club meeting, Stan Mead will talk to us about his experience at the ANA Numismatic Convention just recently held in Boston, Massachusetts.

Members are asked to bring politick dishes to our September 1st meeting.

    Final item discussed was the club's coin cases and wooden tables. Three of the coin cases look marginal and will be sold as donation lots to members willing to fix up those cases for themselves. Now that the club has a number of plastic tables for coin shows, Board decided to donate the heavier wooden tables to the Salvation Army.

As there was no further business to discuss, the meeting adjourned at 7:30 PM..... Larry Nakata/Secretary.

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BULLET AUCTION LOTS

From Bill Fivaz:

1. Set of clips (5c, Silver lOc, 25c, 25c)

2. 1962 Proof Set with "Blue" 5c & Frosted 25c

3.1954-P Jefferson 5c ANACS MS-65, Choice Toning

4. 1986-S Statue of Liberty Silver $1 Proof

5. 1884-CCGSA Morgan Dollar MS-63

6. 1938-D Walking Half Dollar VF

7. 1999 OHNS Token-struck on Jefferson 5c

8. 2000 OHNS Silver Token (rev)

9. 2008-P Bald Eagle $1 Frosted BU

10. 1981-S Proof Set- ALL COINS TYPE 2 "S" (EX. RARE) MB $250

From Tim Burke:

11. Fifteen BU Lincoln Cents ('55-D, '57, '57-D, '58-D, '59-D, '60, '60 Proof, '61, '61-D, '62, '62-D, '63, '63-D,'64-D,'79-D) MB $5

12. Five BU Washington Silver Quarters ('61, '61-D, '62 Red Toned, '62-D, '63) MB $5

13. 1884 BU Morgan Silver Dollar MBS20

14. 2010 BU Silver American Eagle MB $15

15. 1907-S Barber 50c G/VG Donation Coin From Stan Mead

16. Book: "Standing Liberty Quarters" by J.H. Cline signed by the author! Donation Lot

17. Books: catalogs from Boston A.N.A. and August issue of Coinage Magazine. Donation Lot

 

 

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MEMBERSHIP APPLICATION

NAME:_____________________________________________________

ADDRESS :_________________________________________________

CITY:________________________ STATE:_______ ZIP:___________

TELEPHONE (HOME):________________________________

                (BUSINESS):________________________________

DUES: Regular; Full membership for those living in Anchorage $25

          Sponsored membership - first year $15

          Senior, Handicap, & Associates outside Anchorage area $10

          Junior; those under the age of 17 $5

          Life membership $250

Send application and dues to :

Anchorage Coin Club
P.O. Box 230169
Anchorage, Alaska 99523

E-mail Address: coinclub@pobox.alaska.net

 

 

 


 

ANCHORAGE COIN CLUB
RAFFLE PRIZES:

 

*1922 Gold Certificate graded VF-25

*1902 Bison Note in VF

*1884-CC GSA Dollar NGC graded MS-62

THREE OF THE BEST PRIZES WE HAVE EVER HAD

TICKETS: $5 each or 5 for $20

SECOND AND THIRD PRIZE SAME TICKET


ANCHORAGE COIN CLUB OFFICERS:

President: Tim Burke

Vice President: Carl

Secretary: Larry Nakata

Treasurer: Stan Mead

Board Member: John Larson

Board Member: Robert

ACCent Editor: Loren Lucason

        ------------------

#1 Robert Hall: 479-715-6841

#91 Mike Orr: themoneymerchant.com

#110 Bill Fivaz: e-mail feev@webtv.net

#210 Tom Cederlind: tomcederlind.com