Large Treasury Notes enjoy a storied history during some of America’s most important crises. Therefore, they can be a pleasure to collect--if you can get your hands on one. A Treasury Note was a sort of short-term debt instrument used by the United States between 1812 and 1865. Because the U.S. lacked federalized paper money or a central bank, the government relied on these notes to obtain funds during periods of economic crises such as wars or recession. Their primary function was not for circulation, but for funding federal initiatives such as the War of 1812 and the Civil War. They were, however, sometimes used as legal tender at the time. They were generally of a denomination of $50 or greater which was a very significant sum. As high priced, interest-bearing instruments like U.S. Bonds, they were generally purchased by wealthy investors who hoped to cash in when the economic crisis was averted. The purchaser’s name was written on the front of the note, making each note completely unique. They were sometimes used to pay taxes or purchase public property. In every case, once the crisis associated with their issuance was averted, they quickly disappeared from the financial system. Therefore, Treasury Notes are highly collectible, rare documents that are extremely interesting to collect and trade.
A brief history of the Treasury Note proves illustrative. When the War of 1812 was declared, the U.S. Government used its authority to issue $37 million dollars worth of short-term debt in the form of these Treasury Notes until 1815. They were issued sporadically until the Civil War ended when they became obsolete by law, replaced by U.S. Bonds. Large Treasury Notes were again issued during the financial panic of 1837 until their conclusion in 1843. During the Mexican American War, the notes were revived for a short period between 1846 to 1847. Ten years would lapse before the United States would again issue Treasury Notes during the panic of 1857 ending their run in 1860. This pattern continued through the most difficult crisis-- the Civil War. Early Civil War notes were authorized by the Morrill Tariff Act of 1861 and continued in various designs and denominations through 1865. Civil War notes were issued in denominations of $50, $100, $500, $1,000 and $5,000. These notes looked very similar to the legal tender currency widely used at that time, though they were offered in much larger denominations than widely used in circulation. Though the purchasers of 1864 and 1865 issues believed their notes could be redeemed in gold, the government reserved the right to pay the interest in either United States Notes OR gold. Therefore, the public began to distrust the value of Treasury Notes and quickly traded them in for face value in other currency. Therefore, few of these specimens survive today. Clearly, Treasury Notes are associated with a fascinating history, making them very interesting to collect and valuable to traders around the world.
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