1869 $2.00 Note

The 1869 $2.00 Note, or Fr. 42 Rainbow Note, depicts our nation’s third President, Thomas Jefferson, the United States Capitol, and is part of the 1869 Rainbow Notes series, the most colorful notes ever issued by the United States. Exceptional quality Rainbow deuces command big bucks in type-note oriented markets.

Background
Aesthetics aside, the Rainbow deuce is a special note because it is the earliest federal paper money issue that a collector can expect to acquire that depicts the completed U.S. Capitol, and also the first U.S. Legal Tender Note to show this major U.S. emblem with Crawford’s Statue of Freedom in place, the way we know this gleaming white marble edifice today.

History
It may be hard to believe but our magnificent U.S. Capitol building took 70 years (1793-1863) to complete. It’s location atop Jenkins Hill (now Capitol Hill) was selected as the most prominent vista in the district, rising 88 feet above the Potomac River, a location also within a mile of the White House. George Washington laid its cornerstone Sept. 18, 1793. The Senate wing was completed in 1800, and the House Wing 11 years later. The original dome was finished in 1818.

During the 1850s the Capitol’s design was modified and the building was greatly expanded. This necessitated a more grandiose dome to keep the beautiful symmetry of its lines. This new cast iron dome covered an expanse of 100 feet, and Congress commissioned sculptor Thomas Crawford to provide a large figure representing “Freedom” for the top.

Crawford pursued his important commission with vigor. His full size model was completed on Oct. 3, 1855, but it wasn’t until the middle of the Civil War that the casting of his immense bronze was returned from an Italian foundry and installed as it appears today. In the meantime, as collectors know, the figure itself was selected to grace the face of our $5 Demand Notes in 1861, and Series 1862-1863 $5 Legal Tender greenbacks.

A domeless U.S. Capitol had been popular on state chartered bank notes before the Civil War. On Dec. 2, 1863, placement of Crawford’s 19-foot six-inch statue “Freedom” was accomplished. To mark this auspicious event, bank note engraver James Smillie created a new vignette of the imposing completed edifice. Smillie’s vignette was chosen as an end panel adornment for First Charter $1000 National Bank Notes, the highest denomination authorized. The first $1000 Nationals were delivered to the Comptroller of the Currency for issue to the Fourth National Bank (charter no. 290) and Ninth National Bank (charter no. 387) beginning Nov. 28, 1864. Only 36 banks issued these high power notes (Fr. 465), and only about 5,800 of them were issued through 1885. Few among the public ever saw these notes, and although 21 of them remain unredeemed on the Treasury’s books, no known example exists, so collectors can only dream of owning one.

On the other hand a much larger, brighter and more exciting U.S. Capitol vignette engraved by Louis Delnoce and William Chorlton is the centerpiece of the large size $2 Legal Tender Note series, commencing with Series 1869 Fr. 42 Rainbow Note shown.

Collecting
Rainbow notes are delightful to own, deriving their sobriquette from the green and blue and red hues they display over their entire surface on face. The paper is really tinted blue, and one of its bright red serial numbers is positioned on top a dark green panel to thwart photographic counterfeiters. Until the modern colorized Federal Reserve Notes, “Rainbows” were regarded as the most colorful U.S. federal paper money. In addition bright red and blue jute fibers in the paper, which served as a counterfeit deterrent, add visual interest.

Accompanying its wonderful depiction of a bustling U.S. Capitol scene with a horse-drawn tram, coach, and pedestrians, the $2 legal tender has an engraved portrait of Thomas Jefferson by James Smillie. As can be seen, the Fr. 42 also has a large red Treasury Seal and bright red serial numbers. The note bears the facsimile signatures of Register of the Treasury John Allison and U.S. Treasurer F.E. Spinner.

Nearly 25 million of these Rainbow deuces were printed. Estimates of those that survive are in the $1,500-$2,500 range.

Catalog values of this one-series note type (the back design was changed with Series 1874) range from under $600 in Very Good to $9,000-$10,000 in Choice Unc. Collectors would be wise to purchase the best grade, brightest note with the most eye appeal they can afford, as such notes will always be in demand.

The Rainbow deuce is a one note type for which catalog values sometimes “go out the window,” when exceptional notes appear because the coloration of some examples would put a peacock to shame. In 2005 a superb Gem CU example of Fr. 42 brought $12,650 at auction.

Recent prices have gone sky high from there. A Superb Gem New 68PPQ sold for $40,250 in January 2006. This note is believed by many experts to be the top of the heap for Rainbow deuces. One longtime, well-heeled type note collector spent 30 years but never found a Rainbow deuce “which met his standards,” causing a well-known currency dealer to wryly comment that the frustrated collector never met up with this note. Other near-top end Rainbow deuces also exist. A Gem New 66PPQ note brought $27,600 at auction in fall 2006. Another (a different example) of similar quality fetched $23,500 in early 2007.

This same face design appeared on successive large size $2 legal tenders, Series 1874-Series 1917, minus their peacock splendor so there’s a Capitol note within the budget range of any collector. A well circulated Series 1917 note (Fr. 57-60) can be obtained for less than a hundred bucks. At the other end of the spectrum, in 2005 the rare Series 1878 $2 note (Fr. 49) realized $16,100 at auction.