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ACCent: The Monthly Newsletter of the Anchorage Coin Club
|Volume 9, Number 8||
|August Membership Meeting|
|Wed., August 7, 1996||Central Lutheran Church||
7:30 PM Meeting
The club's August newsletter is being mailed a bit early this month as your chief editor will be going on vacation for a couple of weeks to do some fishing. As a result, this month's newsletter will not have the YN Corner, The President's Message, or the minutes of our July Board meeting. We'll make it up next month.
We want to remind our YNs that there will be no YN meeting held for the month of August. We hope that all of you YNs are enjoying this beautiful Alaskan summer.
Our coin club will have it's next regular membership meeting Wednesday August 7th. Featured will be a presentation by members Mike Orr and (our Prez.) Mike Greer on "Coin Grading / Part III". Part III will talk about the differences in the various mint state (i.e. uncirculated) grades of coins. We had a good turnout at our July membership meeting and hope to see you members at this third and final presentation of Coin Grading.
Schedule of Events of the Month of August:
1. Monthly Membership Meeting: August 7th (Wednesday) at 7:30 PM at the Central Lutheran Church. Club members and general public welcomed. Presentation: "Coin Grading Part III".
2. There will be no YN meeting for the month of August.
3. Anchorage Coin Club Board Meeting: August 21st (Wednesday) at 7:00 PM at the Central Lutheran Church.
July 3rd Membership Meeting
Since our Prez., Mike Greer, was not able to make the meeting (because he's on vacation) our Vice President Ann Brown chaired the July membership meeting. Ann informed the membership of a possibility of J.T. Stanton not being able to attend our September seminar Should that event occur, Bill Fivaz will substitute as our seminar instructor. Ann also asked that those members who are attending the September seminar make arrangements with either Mike Greer or Robert Hall to pay their seminar fees.
Member Loren Lucason gave an updated report on the club's future coin shows. Loren is working with club members Ben Guild and Brad Webb on organizing shows for the months of October and November. They are presently negotiating with shopping malls in Anchorage for acceptable dates for these shows. More information to follow as they formalize these plans.
National Bank Note, Series of 1875, First Charter Period
As there was no further old or new business to discuss, member Lam Nakata subsequently gave a presentation on "Coin Grading Part III". Larry's presentation discussed difference between AU (about uncirculated) and BU (uncirculated) coins......the key difference being wear on the high spots of the coin. Larry also discussed methods used by people to make an AU coin look like a BU coin. Among such methods used are whizzing, cleaning or chemical treatment of coins, and artificial toning. Larry concluded his talk with a VHS tape on toning and distinguishing the differences between natural and artificial toning.
The door prize (First Issue 1976 Bicentennial $2 bill in special holder) was won by Loren Lucason. The membership prize (a 1974 Proof Set) was won by our newest club member and YN, Jack Bohannon.
Raffle tickets are still available for the club's raffle coin, an ANACS 1972 doubled die Lincoln cent MS-62 RB. Tickets are $5 per ticket and will be available at our club's August membership meeting. (Editors Comment: It's a nice coin.....).
The membership meeting concluded at 9 PM.
Editors Final Items
Last month, our president (Mike Greer) introduced a new contest amongst our club members for best Numismatic article. We hope to see your articles in the coming months. Articles will accordingly be printed in the club's monthly newsletter
Mike Greer also encouraged our YNs to come up with articles on their favorite coins. Mike has promised a very nice prize to the YN with the best article. YN Corey Rennell submitted the first article at our July membership meeting. Your editors would like to see articles from our YNs. These articles will be published in upcoming newsletters... with our membership deciding the best article.
THE EVOLUTION OF U.S. PAPER CURRENCY
by Larry Nakata (Member #41)
I gave a presentation last year to our coin club and kept promising to follow up with an article on the evolution of U.S. paper currency. When I researched it's history. I found that it's evolution was influenced by the American public's distrust of paper currency, by the role of States Rights vs. the power of the Federal Government, the Civil War, and finally private interests. It's history spans from the introduction of Continental Currency to the present Federal Reserve Notes we see today.
Prior to Continental Currency, private bank notes, colonial paper money, and Bank of England notes were primarily used in this country. With the start of the Revolutionary War, our Continental Congress tried to finance the war with this Continental Currency. Each state was allowed to print it's own currency with an initial exchange rate of one Spanish milled dollar for each Continental Dollar.
Widespread counterfeiting by the British and the priming of excessive amounts of Continental Currency resulted in a devaluation by 1787 of $250 paper for SI of coin. By this time. Continental Currency became worthless to the point where the American public became distrustful of paper currency. As a result, coins were to become the primary currency of choice until the start of the Civil War.
Bank of the United States Notes
However, paper currency was still a necessity in a growing nation's economy. Alexander Hamilton, upon becoming Secretary of the Treasury, took steps to stabilize the situation. Alexander Hamilton did two things:
He convinced Congress to have the federal government assume all of the Revolutionary War debts incurred by the individual states, and
He pushed and got a charter for a central banking system centered around the Bank of the United States. It received it's charter in 1791.
The Bank of the United States was essentially a private institution which served as the country's central bank and was allowed to issue paper currency in it's day. The role of the bank proved beneficial in that it rendered financial assistance to the government, exerted influence in the general economy, and acted as a moderating force during a period of time in the country's history which saw tremendous & precarious expansion of the country's economy. For example, it refrained from calling in loans from state banks when such a move would have created financial chaos. There was even recognition b\ foreign countries of the Bank of the United States role as the central bank that served this country.
However, the 19th Century saw the issue of States Rights vs. Centralized Federal Government becoming a political problem. This issue would result in the demise of the Bank of the United States when President Andrew Jackson revoked the bank's charter in 1832.
State Bank Notes
State banks, which were state chartered private banks, essentially competed with the Bank of the United States through the early 19th Century. The demise of the Bank of the United States resulted in the rise of" the State Bank Note system.
State Bank Note of New Jersey
Problems subsequently resulted from the minimum regulation exerted on state banks by the federal government and the states themselves. These state chartered banks were allowed to print their own paper currency, backed by the bank's assets. Bank failures became very common because of excessive speculation. This reinforced the American public's distrust of paper currency. This subsequently contributed to severe inflation which precipitated a series of economic crises for the United States. This was to continue right up to the start of the Civil War.
The Civil War
The Civil War marked a significant change in the direction of U.S. Paper Currency. By the start of the Civil War the economies of the North and South were in a state of financial chaos. The need for financing the Civil War effort with stable paper currency became a priority for both the North and the South. Keep in mind that during this lime, there was a problem with the hoarding of coins, necessitating the need for a stable paper currency.
In the case of the South, paper currency consisted of Confederate paper money issued by the Richmond based government and by the "sovereign states" of the Confederacy. This currency quickly replaced the State Bank Notes of the South. The Confederacy backed this currency with cotton bales stored in southern ports. However, as the Civil War dragged on, the Confederate currency became worthless and a situation evolved much like the fiasco of Continental Currency,
The North, on the other hand, had one thing going in their favor: An individual named Samuel P. Chase, Secretary of the Treasury. Chase understood that something needed to he done about the Slate Bank Note System. Chase did two things:
He made all of the State Banks in the North buy U.S. government bonds and had these banks deposit the bonds with the U.S. Treasury. He then limited each bank to circulate paper currency equivalent to no more than 90% of the amount in bonds on deposit with the U.S. Treasury. In one felt swoop Chase imposed a 10% federal tax on the entire Northern economy and put immediate controls on the State Banking system.
Secondly, as the Civil War progressed. Chase initiated a series of governmental policies which would result in the U S. Treasury consolidating the money supply into a uniform standard. By 1866, the federal government attained a monopoly on issuance of paper currency that was to be printed by the Bureau of Engraving and Printing. This resulted in an end to the State Bank Note System
The result of the Civil War was the rise of Federal Currency, which is the type of paper currency that prevails today. From it's inception in 1861. there were approximately 12 different types of Federal notes that evolved. Much of these notes were politically motivated.
The first of these was the National Bank Note. From 1863 through 1929. banks were allowed to print their bank name on this type of Federal currency that was printed by the Bureau of Engraving and Printing. The amount of such notes circulated by the banks was again limited to no more than 90% of the amount of government bonds on deposit with the U.S. Treasury. This was a carryover from the days of the State Bank Note System - but with federal controls by the Dept. of Treasury. These National Bank Notes would eventually evolve into the Federal Reserve Notes we see today.
Other types of politically motivated Federal currency would be the Silver Certificates and Gold Notes. During the 19th Century, gold and silver mining interests exerted their influence on American coinage by trying to impose either a gold or silver standard on the U.S. coinage. This type of political pressure saw the rise of the Silver Certificate and various Gold Notes into federal paper currency. Such currency was redeemable in the equivalent gold or silver coinage of it's day. This was such a contentious issue that there was even the introduction of the Treasury (or Coin Notes) where the Secretary of the Treasury could decide which redeemable medium of exchange could be used. President Franklin Roosevelt essentially nationalized the sold supply in 1933 resulting in the demise of the Gold Notes.
Silver Certificates continued to be honored up unlit 1964, when the Federal Reserve Notes (hacked by the good graces of our federal government and it's assets) evolved as the present form of paper currency.......
1. "Paper Money of the United States - 13th Edition" by Robert Friedberg c. 1992
2. "The Comprehensive Catalog of U.S. Paper Money - 5th Edition" by Gene Hessler c. 1992
3. "Standard Catalog of U.S. Obsolete Bank Notes 1782-1866" by James A. Haxby c. 1988
4 "Standard Catalog of United States Paper Money - 11th Edition" by Chester K. Krause and Robert F. Lemke c. 1992
5. "Official 1996 Blackbook - Price Guide of United States Paper Money" by Marc Hudgeons c. 1995
"SURFING THE INTERNET"
"SURFING THE INTERNET"
Your editors searched the Internet for a follow up article on paper currency. We came across this WEB Page that covered grading of paper currency. From: "Paper Money Collecting FAQ for rec.collecting.paper-money". http://world.std.com/~giese/pfaq.html
HOW DO YOU GRADE THE CONDITION OF PAPER MONEY?
The condition of a note is critical to it's value. Lowering the grade of a note one notch can decrease it's value by 1/3 or even 1/2. An expensive note which falls between two categories might be worth a thousand dollars more in the higher category than the lower one. Thus it's often important to be more precise than using a limited number of categories. But here's a general guideline. Note that many dealers have slightly different grading systems, especially with various sub-grades of uncirculated. There is no official system of grading, unfortunately. But these are pretty much universally accepted. I've received a lot of input and tried to hammer out the best descriptions for each category:
Crisp Uncirculated, UNC or CU: This means absolutely not the slightest sign of any handling or wear or folding or *anything*. Some people use additional grades to distinguish qualities such as perfect centering or other printing characteristics. Certainly a note which has centering problems which are visible from a distance of one meter (3 feet) should have this included in the condition description.
Almost Uncirculated (or About Uncirculated), AU: This means there is a slightly detectable imperfection such as a counting fold on one comer or slightest fold in the center (nothing which breaks the surface of the paper) or a pinhole. At first glance it looks like an UNC note.
Extremely Fine, EF or XF: Generally three light folds or one strong fold which breaks the surface. There may be slight rounding at the comers.
Very Fine, VF: May have several folds although the note is still crisp and has a minimum of dirt. There may be minor tears or very small holes but nothing which distracts from the overall appearance of the note. Take an uncirculated note and crumple it once in your hand, then flatten it oat: this is a Very Fine note. Repeal the crumpling and it's still pretty much a VF note.
National Bank Note / 1920-1921 / 3rd Charter Period
Fine, F: A circulated note where individual folds and creases may no longer be visible. To distinguish this from a VF note, when inspecting a Fine note, it clearly does not look like a note which has merely been crumpled a few times. It doesn't have the crispness and brightness of a VF note. No tears may extend into the printing. This is your average in-the-wallet note.
Very Good, VG: Tears and small holes can be present. This note is not crisp at all. This is your lower quality in-the-wallet note. Lots of people on the 'Net don't realize that a note in "very good" condition is really pretty lousy.
Good, G: Small pieces missing, graffiti. A worn out note.
Fair: Major tears, etc. A badly worn out note
Poor: Even Worse...
To grade a note precisely, it can help to hold the note about 20 cm (7 inches) under a strong light source (use the same source for comparing notes) and on top of a white paper and use a 3x or 4x power magnifying glass. Make sure your hands are clean before handling a note This method will show a lot of minor imperfections which are not normally visible.
Note that notes from many countries have standard features which exist for even Uncirculated notes. Some notes from Bangladesh, Bhutan, Burma / Myanmar, India, and Pakistan are only found with staple holes where staples are always used to hold packs of notes together. Most dealers list Uncirculated notes of this type as having the usual staple holes (often abbreviated as uSH-UNC). Also, some notes printed in France (for about 15 different countries) have a slight crinkle effect
While browsing the ANA's WEB Page (http://www.money.org), we came across two interesting articles that were featured in June's "ANA's Money Talks". These articles are interesting tidbits of information:
THE BUFFALO NICKEL MODELS
by Thomas S. LaMarre
Transcript No. 963 / June 12th, 1996
It isn't often that a coin receives fan mail. But back in 1913, the Treasury Department received hundreds of letters from people who wanted to know the identity of the Native American on the new nickel.
It was in 1911 that sculptor James Earl Fraser began designing the "Buffalo" nickel. Fraser said the portrait on the "head's" side was a composite of three American Indians - Iron Tail, Big Tree, and Two Moons.
Fraser had the opportunity to study and photograph them when they stopped off in New York on their way to Washington to visit President Theodore Roosevelt. By borrowing features from each individual, Fraser was able to sketch the "ideal" portrait for the nickel.
The model for the "tail's" side of the coin was none other than Black Diamond, the most contrary animal in New York's Bronx Zoo. He was born of stock donated by the Barnum and Bailey Circus. In his prime, his coat was unusually dark, and he weighed more than 1500 pounds.
Fraser stood for hours, trying to catch his form and mood in clay. But Black Diamond stubbornly refused to show his side view, and faced the artist most of the time. Only by bribing a zoo attendant to distract the animal was Fraser finally able to capture the likeness he wanted.
President William Howard Taft approved the art work, and the first "Buffalo" nickels were produced in 1913. Two Moons died in 1917, and Iron Tail, and Big Tree in the 1920s. In the 1960s, a second Big Tree appeared at com shows and claimed to be the Native American on the nickel. Although he claimed to have celebrated his 100th birthday in 1962, later records indicated he was actually only 87.
GOLD COINAGE WEIGHT REDUCED
by Bill Jones
Transcript No. 975 / June 28th, 1996
He was known as "Old Hickory", and he was our first populist President. Andrew Jackson was elected when many citizens were getting the right to vote for the first time. His commitment to small farmers and working people was the guiding principle of his Democratic Party.
Jackson distrusted paper money and legal documents because he'd been financially ruined by a broken contract in his younger days. He believed the government could bring economic prosperity to the working classes by issuing low denomination gold coins in large quantities. To do this, Congress passed a law to reduce the weight of the gold coins issued in the early 1830s.
The early U.S. gold coins were issued from 1795 to mid-1834, and they contained more gold than their face value. Few were ever used in circulation. Instead, many were exported and melted down. As a result, all U.S. gold coins made before 1834 are rare today.
One of Jackson's most important allies, Senator Thomas Benton, proposed reducing the weight of all U.S. gold coins by six percent. On this date in 1834, Jackson signed Benton's bill into law....and by the end of the year, the Mint had issued more than 750,000 $2 & 1/2 and $5 gold pieces. This topped the number of gold coins issued during several years combined.
Not everyone was pleased with Jackson's gold coins. When the country suffered an economic depression in 1837, some blamed the lighter gold coins. Derisive terms such as "mini drop", "Benton's currency", and "fiscal experiment" appeared on political tokens of the period.
But ultimately, Jackson's policy was vindicated. The gold coin weight standards he established have remained in effect to the present day.
MY FAVORITE ANCIENT:
ATHENIAN OWL TETRADRACHM
by Loren Lucason (Member #97)
Athens reached a peak as a city-state in the 5th century B.C. With over 150 cities and colonies paying tribute (taxes), Athens was getting rich fast.
In 449 B.C. a decree was passed requiring all silver coins to be minted in Athens according to Attic standard weights. The silver was sent to Athens, the coins were minted, a percentage was trimmed off the top and the rest was sent back. This helped trade by standardizing coinage throughout the Athenian Empire.
Also in 449 B.C. money was transferred to the Athenian treasury totaling 30 million drachm. This money was used for city improvements and the construction of the Acropolis and the Parthenon.
The two events led to the largest single issue of coins in history up to that point. The coins were minted in 1/2, 1, 1&1/2 obol and 1/2, 1, and 4 drachma. The most common denomination was the 4 drachma or tetradrachm.
The tetradrachm featured Athena in a crested helmet on the obverse and an owl with an olive twig behind it's head on the reverse. It is rare to find a full crest on Athena's helmet and often the beak is worn off the owl although the flan is very thick and the designs are very high relief.
This is an important coin in early Greek history and represents a turning point in use of coinage.
Membership meeting - First Wednesday of the month, 7:30 PM
E-Board meeting - Third Wednesday of the month, 7:00 PM
Meetings held at the Central Lutheran Church, at the corner of 15th and Cordova
Loren Lucason Eves: 272-3700
V. President- Ann Brown Days: 563-6708
Treasurer- Robert Hall Eves: 561-8343
Secretary- Scott Hornal Eves: 243-0149
Loren Lucason Eves: 272-3700
Board of Directors
Eves: 2 58-9100
John Larson- Eves: 276-3292
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,