Fr. CS-1 Montgomery $1000 Note

One of the great rarities in American numismatics is the Montgomery $1000 Confederate note, the only note of that denomination issued by the rebels (Fr. CS-1 Montgomery $1000 Note) with “MONTGOMERY” on its face. This note transcends currency collecting. Because of their origin, “Montgomeries” interest economists, historians and Civil War buffs too in trying to make sense of the failure of the “War for Southern Independence.”

Specifications

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History
The Permanent Confederate Constitution, adopted March 11, 1861, empowered the Confederate Congress to borrow money just like the Federal Constitution, after which it was patterned. Borrowing money proved problematical, so the Confederate Treasury resorted to the printing press to finance its war effort.

The burden of this indebtedness has led historians to conclude that finances were the greatest single weakness of the Confederacy. One of the principal proponents of this view is numismatist Dr. Douglas Ball, whose greatest work is pointedly entitled “Financial Failure and Confederate Defeat.”

Although the Civil War demanded unprecedented expenditures, at the outset neither party expected a long drawn out and very expensive conflict. A study of the Confederate leadership's attitude, Clifford Dowdey’s “Experiment in Rebellion” said, "For wealth, with lovely impracticality, these leaders assumed the manner of a dollar-rich power and relied on the one thing they had nothing of -- money.”

By the end of the conflict, the Rebels had buried themselves under an unprecedented pile of trash paper. That was a disaster for the faithful, but has proven to be a great boon for collectors of these Rebel promises to pay.

Without an indigenous bank note industry at the beginning of the war, the Confederacy turned elsewhere when the first million dollars in Confederate Treasury Notes was authorized by the Confederate Congress on March 9, 1861, two days before adoption of its Permanent Constitution.

Initially Secretary of the Treasury Christopher G. Memminger commissioned a Southerner, Gazaway B. Lamar, then president of the Bank of the Republic in New York City, to procure notes there.

Lamar contracted with National Bank Note Co. for notes in denominations of $50, $100, $500 and $1000. These notes arrived at the Confederate capital on April 2, 1861. War broke out almost immediately, and a second shipment of notes was confiscated by the North as “contraband of war,” according to Memminger biographer Henry D. Capers.

Background
These Montgomery notes were well engraved and printed on the best bank note paper by the National Bank Note Company. The thousand depicts John C. Calhoun at left and Andy Jackson at right. Notes were printed in sheets of four. All thousands bear plate letter “A” with hand-written dates.

Only 607 of the $1000 notes were issued. These were bearer instruments with interest at the rate of 3.65% per year. In the case of the $1000 note, this breaks down to 10 cents/day.

Because they were interest-bearing notes, they were not really intended to circulate hand to hand, but to be “put back” as a patriotic act. When transferred, notes were to be endorsed on back, and then cancelled when finally paid into the general treasury. However, some cancelled Montgomeries evidently survived, since they remain in collectors’ hands today!

Before notes could be issued, they needed to be cut from sheets, numbered and dated by Confederate Treasury clerks. They were then signed by CSA Register Alexander B. Clitherall and Treasurer Edward C. Elmore.

These first Montgomery $1000 notes were issued on April 25, 1861. That same day ironically Federal authorities seized the Montgomery note printing plates at the National Bank Note Co. back in New York City.

Notes were paid out only sporadically to meet demands on the Treasury. The largest batch of Montgomery $1000s was issued on May 28, 1861. On that day alone 300 notes numbered 70-369 were paid out because the Confederate capital was in the process of being moved from the “Deep South” closer to the battlefronts in Virginia.

By the first day of summer, June 21, 1861, the CSA Treasury paid out the last of its $50s and $100s. The last of the Montgomery $1000s was paid out on June 24, 1861. The $500s lasted another month before they too were all gone on July 23rd.

In the meantime, cut off from its northern bank note supplier, CSA officials contracted with a Richmond lithographer Hoyer & Ludwig for $20 million worth of non-interesting bearing notes authorized on May 16, 1861. The CSA Congress also authorized another million dollars in interest bearing notes on August 3rd, 1861, to replace retired Montgomery notes. These were supplied by the New Orleans branch of the American Bank Note Co. under the imprint of the “Southern Bank Note Co.” Signifying the Confederate capital’s removal to Richmond, Va., these notes bear “RICHMOND” instead of “MONTGOMERY” prominently on their faces.

Collecting
During the war, Confederate note issues proliferated. As the volume grew and the fortunes of war turned against the South, the value of its currency depreciated. Finally, as the “Lost Cause” wound down, its currency plunged to zero. At the end it became worthless to its final holder.

Not so for collectors, however. Montgomery notes were recognized as great rarities from the end of the war, especially among curious collectors “up Nawth.” The first public sale of a rare Montgomery $1000 note was Dec. 19, 1865, at the princely sum of $4.75.

Times have changed since then. Today a total of 115 different $1000 Montgomeries are known. The note shown was originally paid out on June 24th, 1861. It was redeemed at Savanna, GA, with the bearer credited for 425 days interest totalling $42.50.

Montgomery notes today bring out fat wallets. It has been that way for generations. In 1961 at the beginning of the Civil War Centennial, CSA currency authority Phil Chase recommended these rare Montgomeries as a great investment. Value of the $1000 at the time was $175 in Good to $750 in Unc. Today, a very high grade Montgomery $1000 can bring $50,000 or more.

For a note worth nothing when the Confederacy capitulated in 1865 that’s saying something.