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Press Release - November 3, 1999

Heritage Auction To Offer Gene Wolfe's Civil War Rarities: When Stamps & Coins Were Confused by the Constitution

Dallas, Texas: Stamps used as coins. Stamps used as paper money. Silver coins to be used to redeem stamps used as paper money. Tin trial-strikings of silver coins to be used to redeem stamps used as paper money. Trial-strikings of silver coins to be used to redeem stamps used as paper money that are dated 1863 but that were actually struck in 1869. And the whole affair less-or-more legal. Sounds confusing, and it was. But the Civil War was a turbulent time for everyone, when states rights and federalism -- when stamps, coins, and currency -- became issues that defied simple Constitutional solutions. It was also the darkest hour of the Union.

Heritage Numismatic Auctions will be selling Gene Wolfe's Collection of U.S. Pattern Postage Currency Coins at its January 2000 Signature Sale, held as the official auction of the convention of the Florida United Numismatists. The FUN auction will be held January 5-7 in Orlando, Florida.

Wolfe's U.S. Pattern Postage Currency Coins are some of the rarest items of Nineteenth Century coinage, and this is the greatest collection of these Civil War era artifacts ever assembled. Wolfe pursued these rarities for nearly fifty years. Each of these patterns is rare, some incredibly so. His achievement in procuring 32 different trial-strikings takes on even greater significance when considered in the context of their overall rarity: over the last decade, fewer than eighty pieces in total have appeared in the marketplace. Pedigrees include great numismatic collections like Woodin, Newcomer, Boyd, and the Palace Collection of King Farouk of Egypt (Farouk previously held the world's largest collection of these patterns, with 25 total pieces including duplicates).

A reference book, United States Pattern Postage Currency Coins, authored by David Cassel, is expected to be released about the time of the FUN sale, and will include research on the coins contained in the Wolfe Collection.

Full-color images of every single-coin lot in the FUN Signature Sale can be found on the Heritage website, www.heritagecoin.com starting in mid-December. Highlights of Gene Wolfe's Collection of U.S. Pattern Postage Currency Coins will be posted on the Heritage Website November 5th.

Photography can also be obtained by contacting Cathy Hadd.

Background:
1861 was the darkest year in the history of the Union. The first shots of the Civil War were fired on Fort Sumter on April 12th, and the Union was facing both a military and a financial crisis. Revenues from the Southern States were lost at the same time that vast sums needed to be found and spent to raise and equip an army. The creditworthiness of the Union had never been lower.

As gold and silver coins disappeared from circulation, it seemed that the federal government must turn again to the printing press for financing, as it had during the Revolutionary War. But the Constitution of the United States was curiously ambiguous on the question of issuing paper money. Article I - Section 8 gives the federal government the right only to coin money, and makes no mention of paper currency. Section 10 prohibited the states from issuing "bills of credit." The tenth and final Amendment in the Bill of Rights provided only a little guidance: "The powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people." The right to issue paper money is NOT delegated to the United States, and it is prohibited by it to the states, so it must reside in the people. For more than six decades, that was the practical solution as well; during the first half of the Nineteenth Century, paper money was primarily issued by private banks and financial corporations chartered by the individual states.

Regardless of either the Constitution or precedence, the federal government needed to finance the war, and the printing press was the most expedient means. The war economy needed a circulating medium, the war effort needed a spendable medium. A clever bureaucrat read his Constitution carefully, and realized that Article 1 - Section 8, while quiet on currency, specifically directed the government to establish a postal system ñ and with that derived the authority to print and issue postal stamps. With a little stretch of both imagination and paper, the first "Postage Currency" was issued in 1862 in 5¢, 10¢, 25¢, and 50¢ denominations. Paper bearing an image of a stamp is a stamp, even if it functions as paper money - and after all, these did bear the label "Postage Currency." While this technicality made the issue legal, the financing needs of the Union were so great that even this pretense of printing stamps on the notes was discarded later during the war. On the private front, merchants even ended up encasing stamps in small brass holders with mica windows to serve as coins.

By 1876, the Federal government had issued nearly $369 million of what had come to be renamed Fractional Currency (because it was issued in the fractional-dollar amounts of 3¢, 5¢, 10¢, 15¢, 25¢, and 50¢). Congressional Acts in 1875 & 1876 called for the redemption of these notes with silver coins. At least some of the impetus for this redemption came from the western silver mining interests, whose push for the free coinage of silver would come to dominate politics at the end of the century. (This was two decades before William Jennings Bryan's impassioned "Cross of Gold" speech in 1896, but the issue was already influencing politics.) The government seriously considered whether they wanted to accomplish the redemption of all of this dubious currency by issuing a special class of silver coins.

Foreseeing the need for such redemption, the U.S. Mint began to prepare patterns (pre-production, experimental samples or trial-strikings) of various designs for special postage currency coins. Such patterns were struck (or at least dated) in 1863, 1864, 1868, 1869, 1870, 1871, 1874, 1875, 1877, and 1879. All of the patterns were struck in the 10¢ denomination, but a few surviving examples are found in such diverse metals and alloys as tin, tin-copper, copper, aluminum, aluminum-silver, billion, cupro-nickel, silver-nickel -- and some even in silver!

The Treasury ultimately discarded the notion of issuing special coins to redeem Fractional Currency, and instead relied upon the minting of regular coinage to remove the paper from circulation. While most of these notes were redeemed, the currency floodgates had been opened, and would never again be closed. Paper money issued on the faith and credit of the United States of America - sometimes redeemable in silver and gold, and sometimes not - would become one of the most visible signs of the power of our Federal government; known, respected, and valued around the world. But it all started here, when stamps and coins became so confused.

Consignments for Heritage's FUN Signature Sale are being accepted through November 15 and for the FUN Bullet Auction through December 27. For more information on consigning, please contact the Heritage Consignor Hotline at 1-800-US COINS (800-872-6467) Ext. 222.

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