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ACCent: The Monthly Newsletter of the Anchorage Coin Club

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Volume 26, Number 1

 

January 2013

 

January Membership Meeting

 
Wed., January 2, 2013

Central Lutheran Church, 15th & Cordova

7:00 PM


   

MEMBERSHIP NEWS

December 13th Anchorage Coin Club
Christmas Party

    The Christmas Party was a potluck event in which club members brought various dishes. Lots of food with members showing up starting at 6 PM. Turkey, Ham, all sorts of desserts/salads, mash potatoes, and a variety of hors d'oeuvres.

Dinner started around 6:30 PM. During the dinner, door prizes were distributed to all members in attendance.

Following the dinner, the final raffle prizes for the year was drawn:

First Prize: 1926 $ 2 & 1/2 U.S. Gold Indian PCGS AU55 won by Maribel Nakata.

Second Prize: 1899 U.S. Silver Certificate (Black Eagle) PCGS F12 won by Loren Lucason's mother (Annia).

Third Prize: 1944-S Mercury Dime Certified ICG MS-65 won by Susan Woods.

    We then moved to the main event of the evening, the club's annual Christmas Auction. A number of auction lots were moved that evening.... with the auction ending around 9 PM.

A fine time was had by all.... Merry Christmas and a Happy New Year.

December 19th Board Meeting

   

Meeting called to order at 6:30 PM by club president Carl Mujagic. Meeting held at the Yamato Ya Japanese Restaurant located near the University Center.

Report by Treasurer Stan Mead:

Stan has already paid for use of the Central Lutheran Church for next year's meetings ($330).

Stan has also renewed the club's liability insurance for next year ($320). We should expect to see the insurance policy mailed in the next week or so.

Report by Secretary Larry Nakata:

Paperwork for club shows during the Fur Rendezvous (late Feb/early March) has been submitted. Club qualified for non-profit status and will have a free posting in the Fur Rondy Guide. Saved us $300 by being non-profit.

Fur Rondy guide will come out in the Anchorage Daily News next year.

Coin Shows will be on Feb 24th / 25th and on March 2nd/3rd at the University Center.

Discussion by board on doing an ad in the Fur Rondy guide like last year.

Carl will look into the ad and get back with board on costs.

Cost of a table will be a onetime charge of $40 for both weekends.

Moneys will be used for advertising.

Interested members should contact Carl (#561-2275) to reserve tables.

    Board then reviewed the member submissions for the obverse design of the coin club's 25th Year Commemorative set. Winning submission was chosen. Carl will get with Mike Robuck at the Alaska Mint on cost for the die and cost for the coin sets (such as a three coin numbered set) and individual coins (silver-bronze-copper nickel-copper). Timeline is to see if we can get our coin sets by the March membership meeting. Once costs are determined orders can be taken for coin sets/coins commemorating the club's 25th year anniversary.

Board then discussed and decided upon revisions to our coin club's raffle for 2013:

We are going to monthly raffles with the target audience being our coin club members. Tickets will be same as before ($5 /each). Raffle for the month will be a one or two coin lot posted on the club's newsletter. For club's January 2nd meeting, there will be a two coin raffle lot:

        1857 Flying Eagle Cent VG 10

        1867 Shield Nickel F15 / VF20.

Carl will have the coins at his place of business (Carl's). Members can buy tickets at any time. Otherwise, main focus will be the coin club members attending the club meetings each month.

Board meeting adjourned at 8:10 am....... Larry Nakata/Secretary.

 

The History of Confederate Money
By Larry Nakata (Life Member #3)

    February, 1861 saw the beginning of the Confederate government. The immediate problem facing the new government was the disorder and chaos that resulted in it's monetary and economic system.

    Going into 1861, the South's economy was not in the best of shape. The South, being primarily agriculture based, relied on its state banking houses and a barter/credit system (in rural areas) with each Southern state in charge of it's destiny. State Bank notes (the paper currency of it's day) and US coinage were the monies used for circulation in the South's economy at that time. By the beginning of the Civil War, the State Bank Note systems in the North and South were in need of revamping in order to financially support their respective war efforts.

    This article covers how the South addressed this problem. I will not cover the efforts made by the North since that is an article in itself. On that subject I will only say the North and South took very different paths in how they addressed their monetary policies.

    The immediate problem facing the South was what to do about the coinage situation. To Southern politicians it made no sense to have US coinage circulating in the South's economy when a state of war existed with the North. There were 3 mints still active in the South: New Orleans, Charlotte, and Dahlonega. The problem was that coins of all descriptions were being hoarded by the Southern public and there was only a small amount of bullion owned by the Confederacy for mintage of new coins. This bullion was necessary as payment to foreign countries for needed supplies used in the war effort.

    There was an attempt in the beginning of the war to try and mint Confederate coinage. In April of 1861, some 4 pattern specimens of the Confederate half dollar were made out of the New Orleans mint. The obverse design resembled the same design used on the North's Liberty Seated half dollar. Only the reverse differed on the half dollar. The Confederate half dollar never saw any mintage as a decision was made by the Confederate government to use it's available bullion as payment to foreign countries. As a result, the policy throughout the war was to regulate the value of available foreign and US coinage within the Confederacy.

Confederate 50 cents / 1861

Confederate 50 cents / 1861

    The Confederate government also attempted to commission a one-cent piece early in the Civil War. Twelve pattern specimens were struck by a gentleman named Robert Lovett Jr. of the firm "Bailey and Co." out of Philadelphia. For reasons that are obvious, these pattern coins were never delivered to the South. It is believed the dies were hidden during the war since Confederate one cent pieces began resurfacing in 1874... some 9 years after the conclusion of the war.

    With Confederate coinage non-existent, the monetary policies then focused on the use of paper currency. Up to this time, State Bank notes prevailed as the currency of it's day. The need for an interstate currency was quickly recognized as a necessity for the South's economy. Such currency would be the exchange standard used between banks and states in the Confederacy.

    The first Confederate notes issued were interest bearing Treasury Notes that were printed in denominations of $50, $100, $500. and $1000. These notes could be retired at the end of one year...probably in anticipation of an early end to the Civil War. While not intended for public circulation (since they were essentially bonds used to pay debts owed by the Confederate government), these notes nonetheless proved to be very successful and popular. This led the Confederate Congress to pass legislation that permitted non-interest bearing Confederate Treasury Notes in denominations of $5 and above. These types of Treasury notes were to become the medium of exchange standard for the South. By April, 1862 lack of coinage caused the printing of notes below $5 denominations to be authorized by the Confederate Congress.

The beauty was that:

no interest needed to be paid,

the money could be used easily by the public,

these notes could be used to pay government debt,

they could be exchanged for specie (i.e., paper currency redeemable in gold and silver) and State Bank notes, and... more importantly...

the principal on these Treasury Notes was not due until a successful conclusion of the Civil War by the South.

    The Southern banks and general public readily accepted these Confederate bills at first... perhaps out of patriotism for the Southern cause. The fact that these bills could be exchanged for State Bank Notes allowed for the continuation of the State Bank Note system in the South until the end of the Civil War. The Confederate paper money soon established itself as virtually legal tender.

State Bank Note / Virginia / 1861

State Bank Note / Virginia / 1861

    As the Civil War dragged on, this Confederate currency saw a deterioration process occur. After all, this was currency created by the will of the Confederate government and backed only by it's people's faith in that government.

    Several incidents occurred which undermined the effectiveness of Confederate currency.

    First was the failure of the Confederate government to make this currency legal tender. For reasons that still remain unclear, the Confederate government chose to make it's currency a voluntary standard in the South. Legal tender status would have made acceptance compulsory and thus allow the Confederate government more flexibility in influencing better monetary policy in the South.

    Second, the Confederate government failed to control the amount of State Bank Notes that circulated in the Southern economy. The high quantity of such notes slowly undermined the value of Confederate currency.

    Third, various states within the Confederacy saw fit to issue their own brand of Treasury Notes that essentially competed with Confederate currency. These State Treasury Notes were intended to meet their respective war debt obligations and did not circulate outside the boundaries of that state. Nonetheless, this added more paper currency into the South's economy.

    All of these factors combined to create a situation where an abundance of paper currency flooded the South. Rising costs associated with a prolonged war, declining purchasing power of the currency, and continued hoarding practices by the public ultimately created a vicious cycle in which more paper currency had to be printed by the Confederate government to keep the South's economy afloat. Hyperinflation soon resulted. By March, 1863 the Confederate government was printing $50 million in Treasury notes a month to meet expenses. Something needed to be done to bring back order to this situation.

    By early 1864, monetary reform changes occurred. In an effort to reduce the paper currency supply in the South, the Confederate Congress acted by forcing a redemption of it's older Treasury Notes in exchange for government bonds (without loss of value). After July, 1864 any remaining Treasury Notes could only be exchanged for new issue notes at a rate of $3 in old bills for $2 in new bills.

    This monetary reform measure proved too late in coming. By this time the public's faith in Confederate government currency had eroded. The South was clearly losing the war. Inflation continued even with the new currency. In January, 1861 the exchange rate was $1.05 in Confederate currency to $1 in gold. By the conclusion of the Civil War in 1865, the exchange rate deteriorated to $1200 in Confederate currency to $1 in gold. By this time, trade and barter had become the principal means of economic transactions in the South.

    There were hopes following the Civil War that the victorious US Federal Government would honor some percentage of Confederate currency in exchange. As a result, large amounts of Confederate-currency continued to kept in attics and storage... even after the notes were demonetized.

    So much for the history. For the collector one must ask the question as to what is collectable in terms of Confederate moneys.

    First there is the half dollar coin. Only 4 pattern specimens were ever struck of the half dollar. A number of restrikes were later made following the Civil War using the reverse die. These are very collectable.

    Even more difficult to collect are the one cent pieces. Only 12 original patterns were struck. Restrikes of the cent were made in copper, gold, and silver around 1873 from the hidden dies. Only 74 restrikes were ever made...so forget any thought of collecting one cent pieces.

    There were a number of tokens that circulated in the South's economy during the Civil War. These tokens were intended to be used as substitutes for the lack of available coinage. These are certainly collectable.

    Finally, there is a multitude of Southern paper currency that is very much collectable. Lots of Confederate currency is available at very reasonable prices. A collector can put together a very nice set that is very affordable. There are lots of Southern State Bank Notes and State Treasury Notes that are also very reasonable in price.

So take your pick on what you wish to collect. Confederate moneys are certainly very rich in history......

References:

1. "Graybacks and Gold: Confederate Monetary Policy" by James F. Morgan c. 1985

2. "A Guide to US Coins / 50th Edition - 1997" by R. S. Yeoman

3. Article: "A Confederate Cent Spent In a Tavern" by Q. David Bowers. The Numismatist / January 1998.

4. "1997 Blackbook Price Guide of US Paper Money" 29th Edition by Marc Hudgeons.

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A NOTE FROM THE PRESIDENT

Happy New Year! I hope everyone had a real enjoyable 2012 and that everyone has an even better 2013. The December Christmas party went very well. A very special thanks to everyone that donated time, food and materials to the Club. The auctions seem to be a success with many great deals.

There are lots of great things coming up for the Club like the Fur Rondy coin show and its 25th anniversary. Stay tuned for more information on the commemorative coin sets.

The Club still needs a volunteer to assist with the newsletter, Facebook page updates and articles. I personally do not have the time. Please help the Club in any way you can. As always we encourage all positive feedback, ideas, articles and materials to be submitted for the newsletter.

Your Friend in Numismatics, Carl

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MEMBERSHIP DUES:

          $25 / Year Regular Membership

          $10 / Year Youngsters & School Aged Kids up to Grade 12

          $10 / Year for Seniors, Handicapped Members,
                    and Associate Members Living Outside Anchorage

Send application and dues to :

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


 

ANCHORAGE COIN CLUB MONTHLY RAFFLE

Tickets $5 each, 5 tickets for $20, or 11 tickets for $40.
Purchase at the January membership meeting

1857 Flying Eagle Cent VG 10

1867 Shield Nickel F15/VF20

Drawing will be at our Jan 2nd membership meeting


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ANCHORAGE COIN CLUB OFFICERS:

President: Carl Mujagic

Vice President: Robert Hughes

Secretary: Larry Nakata

Treasurer: Stan Mead

Board Seat #1: Loren Lucason

Board Seat #2: John Larson

Board Seat #3: Tim Burke

ACCent Editor: Carl Mujagic