The E-Sylum:  Volume 8, Number 23, June 5, 2005, Article 21

LITTLE WRITTEN ON EARLY FEDERAL NOTES AND BONDS

In a follow-up note regarding early U.S. loan notes, Rob Galiette
writes: "Gene Hessler thought that his book on U.S. Loans had
long been forgotten. However, I told him that if he hadn't written
his book there would have been little context for Stack's to
explain and catalog Part VI of the Ford collection.

I had the opportunity before that auction in October to speak
with Jim O'Neal, whose landmark currency collection was
auctioned a few weeks ago by Heritage. Jim described, and
I agreed with him, that many people believe that there were
few if any emissions of Federal notes and bonds between the
early 1790's and 1861, where the Friedberg catalogs, until
recently, began. Perhaps in their minds they envisioned
emissions of obsolete banknotes, but not much else.

For example, U.S. War of 1812 notes were introduced
into Krause-Lemke catalogs a number of years ago (they
weren't in the early editions), and I don't think that they
entered Friedberg until about three editions ago.

The U.S. Government had about $2.5 billion in funded
debt by 1865 according to a reprint of an 1865 Stock
Exchange manual, but few people are familiar with it.
Conversely, there's a large interest and considerable source
material on Confederate bonds and other instruments --
but that's because they were worthless and survived
unredeemed, while U.S. issues typically traded hands
between and among wealthy individuals, institutional
investors and the Federal Government. Thereafter they
were redeemed and destroyed. The public never saw them.
Without Gene's work, Heath's Bond Detector, the Vattemare
albums, and a few other sources there'd be a near sixty-year
void regarding how the Federal Government financed its
operations, industrial development, military actions and
westward expansion, including the first transcontinental
railroad.

A five or ten-dollar note is superficially easy to understand,
but the availability of bonds and other instruments, engraved
in larger format by the same companies and engravers, hold
a lot of financial information and capital formation data that
the Internet makes it easier to unlock. The Bank Note
Reporter has been doing a particularly good job of writing
articles to broaden persons' horizons as regards related
information about stocks, bonds and other financial documents
contemporary to the notes used to purchase them. These
documents are the instruments through which property
actually was held."

  Wayne Homren, Editor

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