Fr. 485, 1882 $5 "Brown Back" National Bank Note, Creede Colorado, Ch. 4716, VF35 PPQ PCGS
Serial number 1, a discovery note (previously unreported)!
Prior to the American Civil War, state banks issued their own (unsecured) banknotes which often resulted in financial disaster. In 1863, During the Civil War, the National Banking Act established a system of National Banks which were empowered to issue National Bank Notes subject to federal oversight. The chartering of banks and administrative control over the issuance of National Bank Notes were the responsibility of the Office of the Comptroller of the Currency. National Bank Notes are comprised of six very distinct series: 1) Original Series, 2) Series of 1875, 3) Series of 1882, 4) Series of 1902, and 5 & 6 (Small Size) Series of 1929-Type One and Type Two. These series are often grouped into Charter Periods with Charter numbers on the notes; The First Charter, Original Series and Series 1875, Second Charter, Series of 1882; Third Charter, Series of 1902; and Small Size. The Terms of a Charter Period and Charter Number refer to the issuing authority of each particular bank. The National Currency Act of 1863 provided that banks (organized under its provisions) be chartered as National Banks for a period of 20 years. The first National Bank Notes were originally authorized by an Act of Congress Feb. 25, 1863. Their issue peaked in 1933, when about $900 million of these notes were in circulation. Issue ceased in 1935, when the bonds backing the notes were redeemed and the notes were recalled. By 1960 the volume of nationals reported in circulation had shrunk to approximately $50 million. Through the years, many notes have been lost or destroyed. It's very rare to see one in circulation today, unless one is spent when a collector dies and relatives don't understand its collector value.
One such National Bank Note, Series of 1882, is presented in this lot from the First National Bank of Creede, Colorado. The town of Creede is the county seat of, and the only incorporated municipality in Mineral County, Colorado. The town population was only 290 at the 2010 census. Creede was the last silver boom town in Colorado in the 19th century. The town leapt from a population of 600 in 1889 to more than 10,000 people in December 1891 due to rich mineral discoveries in nearby Willow Creek Canyon in 1889. The Creede mines operated continuously from 1890 until 1985. Creede's boom lasted until 1893, only one year after the First National Bank was opened, when the silver panic hit all of the silver mining towns in Colorado. The price of silver plummeted and most of the silver mines were closed. Creede never became a ghost town, although the boom was over and its population declined. After 1900, Creede stayed alive by relying increasingly on lead and zinc mining. Today, Creede remains a beautiful tourist location deep in the San Juan mountains in Southwest Colorado.
This note represents an unbelievable find for collectors. The First National Bank of Creede, Colorado was chartered March 29, 1892, the date of issue on this note, and only existed until December 31, 1895 when it was liquidated as a result of the aforementioned silver crash in 1893. This is the only known example of any National Bank Note from Creede, it presents with bank serial number 1 and is accompanied with a paper envelope stating: "FIRST BILL ISSUED AT THE FIRST NATIONAL BANK OF CREEDE. SIGNED BY JOHN MCDONOUGH PR J.W. MERRITT CASHIER." All currency from this bank, Charter 4716, was issued as $5 notes in vertical sheets containing four subjects. As of 1910, only $255 face value (total) was still outstanding making this issue virtually unobtainable, even then. This note displays bright, original paper and inks and is wonderfully centered, obviously carefully cut from the flagship sheet of currency issued to the bank. The signatures of McDonough (President) and Merritt (Cashier) are clear and evenly impressed. Visually, this note appears somewhat finer than the VF35 PPQ designation by PCGS with only signs of light handling and minor creasing. A personal examination is recommended. Collectors and connoisseurs alike will pay close attention as this note crosses the auction block.
Provenance Note: This note descended in the family of James Birss, who came to America from Scotland in 1891, lived in Washington DC and then settled in Santa Barbara, CA. He was manager of the Johnson Fruit Company (later Sunkist), and was on the board of Citizens Savings and Loan in Santa Barbara. To our knowledge, the Birss Family did not have any connection to Creede, CO or to the bank itself. One can only speculate how the note came to be in the Birss Family except as a random and very fortuitous accident of history. (About Uncirculated)