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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

September 2012

Vol. 25  No. 9


The History of US Gold Paper Currency
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 the Act of 1863. I believe 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.

Ten Thousand Note


    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 depositors 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 with no 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 was 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 only with restricted use of currency transactions between Federal Reserve Banks.

    I earlier stated that 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 the 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 the 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 other US currency and coinage (other than gold). Such Gold would be held by the US Treasury.

    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 Nakata


August 1st Membership Meeting

Door Prize: 2009-D Lincoln Cent- Log Cabin Issue INB Graded Brilliant Uncirculated. Membership Prize: 2005-D Jefferson Nickel- Ocean View Issue INB Graded Gem Brilliant Uncirculated.

Club President Carl gave an overview of the club's July 7th Summer picnic.

Glen Dean gave an update on the club's School program. With school soon to start, Glen is ready to proceed with presentations. Awaiting calls from school principals to set up a schedule.

Under New Business, Carl is looking at a possible September coin show at the Northway Mall with Excalibur Sports. More to follow.

Carl will be arranging a coin show at the University Center following the release of the permanent dividend checks.

Presentation for the meeting consisted of a grading session by our club members. Final results..... the overall club members did very well.

Following the grading session, the club's monthly coin auction was conducted.

Membership meeting concluded following the coin auction.


August 15th Board Meeting

    As the usual Board meeting place (New Cauldron Restaurant/ University Center) is now closed, the Board met at the Yamato Ya Restaurant just down the road from the University Center. Meeting was subsequently called to order by President Carl at 6:45 PM.

There was no correspondence to review.

    Club President Carl gave an update on the September Coin Show at the Northway Mall. In checking with Excalibur Sports, looks like they have not pursued a Collectables Show for the month of September. They will look into it and get back with Carl. Not looking promising at this point.

    Meantime, Carl has checked with the University Center management on a coin show following the release of the Permanent Dividend checks in October. He should be able to confirm dates by the time of our September 5th membership meeting.

    Glen Dean gave the Board and update. The School Program is ready to go at this time. He is awaiting calls from school principals once school starts. Glen has been stockpiling numismatic materials throughout the Summer for this program (as giveaways to school children). He expects to go though the donated materials in pretty quick order. Will likely need more material as the school year progresses.

    Larry Nakata: Traditionally, the club has conducted their Christmas Party on the 2nd Thursday of December. For this year..... that will be on December 13th. Larry will check with the Central Lutheran Church to secure that date.

    Club's final raffle of the year will be at our club's Christmas Party. Per John Larson, top prize will be a 1926 $2 & 1/2 U.S. Gold Indian PCGS AU55. By the time of our club's September 5th meeting we should have two more raffle coins to add for the drawing. Note: As of the publication of this newsletter, those two additional coins will be:

* 1899 $1 U.S. Silver Certificate (Black Eagle) PCGS F12

* 1944-S Mercury Dime ICG MS65.

    For our club's September 5th meeting, this will be a potluck event in which club members are asked to bring in dishes, salads, and desserts. Carl will be giving a presentation on "U.S. Gold Coinage".

    Next Board meeting on September 19th will be at the Chang Mail Restaurant next to the University Center. Board will then decide which restaurant to hold future Board meetings.

Meeting adjourned at 7:45 PM....... Larry Nakata / Secretary.






List of Coin Lots Submitted by Bill Fivaz for Sept 5th Coin Auction

1. 2009 Proof Lincoln $1 in box Minimum Bid (MB) $35

2. 1986 $1/50c Statue Liberty 2 coin set Proof MB $30

3. 1987 $1 Constitution Proof (box) MB $25

4. 1989 Congress. $1/50c Proof in box MB $30

5. 1978 Kingdom of Jordan 7-pc Proof Set MB $5

6. 1972-S 40% Proof Ike Dollar MB $8

7. 1941-45-S Mercury 10c Set in custom holder Ch/Gem BU (most FSB) MB $300

8. Civil War Token EF/AU MB $25

9. 1914-D Lincoln Cent Good MB $145

10. 1882 Seated Liberty 10c Fine MB $9

11. 1940-S Washington 25c MS-65 MB $35

12. 1925 St. Mt. 50c AU-55 MB $45

13. Hobo Nickel (prob. modern, but nice) MB $50

14. "PJS" Love Token on old Silver Mex. Peso MB $60

15. 1907 (N.P.) $10 Indian Gold AU MB $805

Donation: 1980 Queen Elizabeth .925 Silver Medal (1 oz).




Last: NESINE - pennies plural of penny a name given to the U.S. cent, adopted from the British penny.



    Our 25th anniversary of the Anchorage Coin Club is soon approaching. The club encourages all members to submit designs for our 25th anniversary coin. Designs, drawings, artwork and concepts can be submitted directly to the club. A QUARTER CENTURY COIN!





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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

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Five Indian Obverse


TICKETS: $5 each or 5 for $20.00


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: Loren Lucason