HERITAGE: FEDERAL RESERVE NOTE PROOFS

This article from Intelligent Collector discusses Heritage's upcoming sale of the U.S.'s first Federal Reserve Note proofs at their upcoming FUN U.S. Currency Signature Auction. -Garrett

It has been said that the most passionate collectors are those who collect what they loved when they were younger. To those, it often is less about acquiring items of financial value and more about chasing the items that captured their fascination in years past.

Consider the case of Charlton Buckley. At the age of 12, the former San Francisco-area businessman began collecting coins; shortly thereafter, his numismatic interests spread to paper money as he developed an appetite for National Bank notes, large and small, large size U.S. notes and fractional currency. By the mid-1970s, he had built an extraordinary trove of California Nationals and notes, including California Gold Bank Notes. The collection reached into Federal Reserve Notes, both large and small, and was easily one of the foremost collections ever assembled.

The result of the lifelong passion is a trove now known as The Charlton Buckley Collection, of which 393 lots will be offered January 14-17 in Heritage's FUN US Currency Signature® Auction.

Charlton Buckley's Federal Reserve Note Proof Archive, available in Heritage's January 14-17 FUN US Currency Signature® Auction, includes the $5,000 and $10,000 denominations, two elusive trophies that catapult Buckley's assemblage into the annals of legendary numismatic collections.

Included in the collection is America's Inaugural Federal Reserve Note Proof Archive, which offers a singular opportunity for the most serious collectors and once belonged to Albert Grinnell. Grinnell's collection was believed to be one of the finest and most complete ever assembled, and he considered this set the "Crowning Masterpiece" of his collection.

The offering comprises both face and back Proofs of Series 1914 and 1918 Federal Reserve notes of each denomination. Heritage has sold framed presentation sets of Federal Reserve notes before, selections that included $5, $10, $20, $50 and $100 denominations. What makes this an extraordinary numismatic treasure is the fact that it also includes the $500, $1,000, $5,000 and $10,000 denominations.

On December 23, 1913, President Woodrow Wilson signed into law the Federal Reserve Act, a bill that transformed the American monetary system and paved the way for a new banknote design. Several design prototypes were considered before a final selection was made the following fall, the Proofs printed from the actual currency plates onto cardstock, and the Treasury seal and solid zero serial numbers glued on by hand. The 1916 Annual Report of the Bureau of Engraving and Printing described two sets of the $5 to $100 denominations, but additional sets of Series 1914 Proofs are known to have been presented by Secretary of the Treasury William G. McAdoo to select officials in the latter part of the year. To provide a secure transfer of large amounts of cash between banks, the 1918 Federal Reserve Notes were printed only in $500, $1,000, $5,000 and $10,000 denominations – elusive trophies that are included in the set offered in this auction. It is the last two notes in this set that catapult Buckley's Federal Reserve Note collection into the annals of legendary numismatic collections.

The $5,000 Proof from Buckley's Federal Reserve Note Proof Archive

"Within a few years, by 1926, rules for handling Proofs required that they were destroyed after use to prevent any Proofs from being distributed outside the Bureau of Engraving and Printing," says Dustin Johnston, Vice President of Numismatics at Heritage Auctions. "Specimens were still printed and distributed, but the Proofs in this set very well might be the last Proofs that made it out of the Bureau, since none of the Series 1923 notes in Proof form are known to exist."

Grinnell most likely acquired this set, with its 18 uniface Proofs, from one of his many contacts within the Treasury Department. His appearance in the set's provenance automatically boosts value and interest, given the track record of other items once held in his collection that have generated seven-figure results, including a Grand Watermelon, which currently tops the list of most expensive banknotes ever sold at auction after realizing $3,290,000 in Heritage's 2014 FUN US Currency Signature® Auction in 2014.

"The 1918 $5,000 and $10,000 Proofs are unique in any form in private hands," Johnston says. "In other words, collectors have exactly one opportunity to acquire either one, and that opportunity is this incredible set."