Better Than Gold

[photo:A Vignette taken from a Civil War Patriotic envelope or cover, issued by Charles Magnus in 1861]

$500 Interest Bearing Note, 1861, Freidberg-209. Image courtesy of Heritage Auctions.

(Littleton Coin Archives)

The vignette at the left is taken from a Civil War "Patriotic" envelope or cover, issued by Charles Magnus in 1861, that I have in our collection of ephemera. Charles Magnus was a publisher, bookseller, map dealer and stationer working in New York City for half a century, beginning in 1850. His series of stationery sheets and matching themed envelopes or "covers" were sold to departing Union Civil War soldiers to write home to loved ones. This cover's vignette illustration depicts a "Knickerbocker" - a nickname indicating an old-time "New Yorker" – with $10 to $500 Interest Bearing Notes spread out on the table, the phrase "Better than Gold" on the top of the table, and a scroll at the front of the table reading "a 73/10% ...a snug investment." A 73/10% return was indeed a very snug investment, even during that inflationary time of war. This is the highest rate of interest ever paid by the United States government! The Knickerbocker gent holds war news from a loved one: "Good news! John has been promoted a Captain. Lucy is betrothed to a 'Rebel,' but she shall never embrace him until his heart is changed."

Unique to US paper money, all Three Year Notes had five coupons attached when issued. They paid seven and three tenths percent interest. The final and sixth payment would be paid when the actual bank note was surrendered. Thus very few survive for collectors. This is a unique instance amongst United States paper money. See the payment terms for this $500 note across the top of the note above George Washington's portrait: "INTEREST TEN CENTS PER DAY".