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 Replies: 22 / Views: 4,189 |
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Pillar of the Community
United States
3323 Posts |
So, is this note still considered legal tender? Can I "spend it" for $10K? Reason I'm asking is that the auction house estimates that it will sell for about $8,900...   Edited to add reverse "Nummi rari mira sunt, si sumptus ferre potes." - Christophorus filius Scotiae
Edited by Bump111
04/01/2021 1:49 pm
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Pillar of the Community
 Canada
5394 Posts |
No you can't spend it for 10K .
Do a quick Google search on this issue .
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Pillar of the Community
United States
7273 Posts |
These are all canceled. They are one of the few if only note that sells below face value. Still cool to own. You can find these for $4000-$7000 depending on condition. People usually over pay at auctions.
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Bedrock of the Community
United States
94367 Posts |
You can read the word "Cancelled" on the front of the note.
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Pillar of the Community
United States
7273 Posts |
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Moderator
United States
188052 Posts |
Quote:
Reason I'm asking is that the auction house estimates that it will sell for about $8,900... Quote:
You can read the word "Cancelled" on the front of the note.  |
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Pillar of the Community
United States
800 Posts |
Quote:
Can I "spend it" for $10K?
Reason I'm asking is that the auction house estimates that it will sell for about $8,900... I think that you've answered your own question!  |
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Bedrock of the Community
Australia
21786 Posts |
Auction prices for high denomination bills are what they are due collector supply and demand.
If high denomination bills (as pictured above), sell for considerably less than their face value, it is obvious that such bills have been demonetized - no longer legal tender.
In addition, the gold backing for lots of Notes issued around the World was withdrawn by the Governments that issued them during the early 1930's, irrespective of if the Note may have been officially cancelled or not.
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Bedrock of the Community
United States
94367 Posts |
I believe this is the only denomination of gold certificate that has been cancelled - all others are still legal tender and worth face value as I recall.
Edited by Coinfrog
04/01/2021 6:17 pm
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Valued Member
United States
143 Posts |
An $1,100 profit would be a nice swing if you could just trade it for FV....but still a cool note!
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Pillar of the Community
 United States
3323 Posts |
Thanks everyone for the info. An interesting note.
"Nummi rari mira sunt, si sumptus ferre potes." - Christophorus filius Scotiae
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Pillar of the Community
United States
992 Posts |
I recently passed on a graded one for $2800.
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Pillar of the Community
United States
691 Posts |
I find the obligation on the front of this certificate interesting. Note that it states "... Payable in GOLD COIN in his office to the order of Federal Reserve Bank of N.Y. [illegible, or?] Federal Reserve Agent at N.Y., New York, April [illegible] 1919." On the back is what appears to be two indorsements (yes, that is spelled correctly). The first is too faded for me to make out. Perhaps it is an indorsement by the Federal Reserve agent when it was transferred to the Bank of Montreal. The second indorsement is by the Bank of Montreal. I presume this was made when the Bank of Montreal redeemed the note from the Assistant Treasurer of the United States.
The "payable .. to the order of" language and the indorsements on the back suggest this certificate functioned more as a check-like negotiable instrument than it did as ordinary currency. Does anyone have any knowledge of how these certificates actually functioned in commerce?
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Pillar of the Community
United States
691 Posts |
Also, I do not see any statement on the certificate that states it is to be considered "legal tender." Was it ever actually "legal tender" even before it was cancelled?
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Pillar of the Community
United States
691 Posts |
I see that several posters have referred to the item in the OP as a "note." Strictly speaking it is a "certificate" and not a "note." Have you ever noticed that the more modern silver certificates never have the word "note" anywhere on them?
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Pillar of the Community
United States
7273 Posts |
These certificates where used for inter banking transfers. For example you need to move $10000 in gold coin, it's much easier using an inter bank transfer certificate rather than moving the actual coin.
They were not "technically" legal tender for the average person to use (10000 was A LOT of money in the 1890-1910). These are like the 1934 $100000 GC.
Read this that I posted a few months ago:
"
In the case of the gold certificates, the US Treasury is acting as nothing more than a safe deposit box. They take double eagles (or other gold), lock them up in a vault, and have the BEP print up a gold certificate which they spend. If anyone shows up to redeem, then gold is drawn from the certified stock and paid out. The number of gold certificates is exactly equal to the amount of gold stockpiled and held against them. There was, in theory, no way for a gold certificate to go bad.
Federal reserve notes rely on fractional reserve banking. The federal reserve might hold bonds, commercial paper, gold - lots of different things and - against that collateral - the federal reserve issues federal reserve notes. The US Treasury guarantees the performance of the fed in gold and if you show up and demand gold they will pay you in gold (from a small pool of gold held for just this purpose) and submit a request for payment to the treasury from the fed. The fed can then either cough up gold to the treasury, or the treasury might accept other collateral. However, via this mechanism the circulating balance of federal reserve obligations can greatly exceed the amount of the gold available to redeem all of them at once. If too many people show up with FRN's to redeem for gold it is possible for the fed to fail.
I will also note that the promises printed on these notes are just very terse summaries of what the underlying laws actually say. Oh - and the laws can be changed at any time. The U.S. had a heck of a time figuring out how to default on those gold certificates ... but it was no problem devaluing the FRN's ..."
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Replies: 22 / Views: 4,189 |
Posted 04/01/2021 2:03 pm
