In 1891, the U.S. Treasury printed some $1,000 bills, around 1,500 of them. Photo: Reuters
INTERNATIONAL - In 1891, the U.S. Treasury printed some $1,000 bills, around 1,500 of them. Rather than enter mass circulation, though, the silver certificates were primarily used as a sort of proto-wire transfer among banks, says Peter Treglia, the director of currency for Stacks Bowers Galleries, a coin and currency auctioneer.

As a result, the bills never made it into private hands; they never even stayed in banks’ hands for long. “Back then, currency changed so frequently that the 1891 bills only circulated for two to three years,” Treglia says.

One of those $1,000 bills ended up in the Smithsonian. Another remained in a private collection for over 80 years; its first reported sale as a collectible item, rather than a piece of currency, was in the 1970s. The rest, presumably, were lost. (“I’d bet a lot of money that another one of these notes won’t turn up,” Treglia says. “Things are discovered all the time, but not of this magnitude.”)

That single remaining note, dubbed the “Marcy Note” because it features a portrait of U.S. Senator (also secretary of war and governor of New York) William Marcy, is now up for auction with an estimate of $2 million to $3 million.

“When we were brokering the deal, the seller wanted to break the world record,” Treglia says. “But in 2014, another banknote sold for just under $3.3 million, and the current estimate is where we feel the market is.”

The seller is Joel R. Anderson, a noted currency collector who has begun to liquidate his collection. Stacks Bowers has sold $26,184,240 from Anderson’s holdings already.

Finding a Valuation

Treglia says the note was barely considered a collector’s item until recently.

“It would have cost just over face value in the 1940s,” he says. The first recorded price for the note that Treglia could find was in 1985, when it traded hands privately for $25,000. Next, it sold—again privately—for roughly $150,000 in 1992, he says. Its last recorded sale was in 2013, when it sold for $2.6 million.

When it goes up for sale at Stacks Bowers, during an auction that will take place between Feb. 28 and March 3 in Baltimore, it will be the first time it’s ever been sold on the public market.

Given that the free market has never weighed in on the bill’s stated (and very significant) valuation, Treglia acknowledges that there’s a real question as to “how the hell this could be worth that much more in just 15 to 20 years.” The methodology the auction house used, he says, is “quite simple: You just take comparables to other unique items that don’t trade hands that often.”

Using that rationale, there are, in fact, a series of recent sales that would indicate that the Stacks Bowers valuation is within market parameters. A $1,000 treasury note, also made in 1891 and also the only one of its kind outside the Smithsonian, sold for $2.5 million at Heritage Auctions in 2013; two years later, a penny from 1791 sold for $2.9 million in Orlando; and this year, a nickel from 1913 sold for more than $4.5 million.

The Marcy Note’s value does have a floor: Even if every currency collector dropped out of the market, “the bill is still backed by the U.S. government—it’s legal tender,” Treglia says. “You could take it to the bank tomorrow, and technically, you’d be able to get change for it.”

BLOOMBERG