Notaphily, the study and collection of paper money (i.e. banknotes), does not typically receive the same attention as its two closely related cousins, philately (stamp collecting) and numismatics (coin collecting).
When an old banknote realizes a seven-figure hammer price at auction, however, the broader hobby does begin to take notice!
First and foremost, the condition of an otherwise rare collectible matters a great deal—not just to collectors themselves but also to high-net-worth investors.
You might consider this as an added layer of rarity. Most antiques are going to exhibit some wear and tear, so the best-preserved specimens are scarce and highly desirable.
The most prominent item up for sale at a major auction of paper money last week was not only in pristine condition. It's in fact the finest known example of an 1890 $1,000 Treasury note referred to as a "Grand Watermelon" type. The nickname presumably refers to the note's green and pink colors.
This particular type of $1,000 note has been voted by currency collectors as the single greatest banknote in American history.
Star of the Show
The auction at which this note sold was the third portion of the massive Joel R. Anderson Collection of banknotes. With a final price of over $2 million, the 1890 Grand Watermelon represented nearly a quarter of the total sale price of all items up for auction that evening.
Much of the paper money that sold at the event was considerably rare, ranking among just a handful of known examples. This naturally led to exceptionally high bids. The fourth leg of the Anderson Collection will be sold in February. To date, the first three sales have brought in over $26 million combined.
This same Grand Watermelon banknote was actually the first U.S. paper currency to realize over $1 million back in 2005, the last time it came up for sale. You can find more reporting on it at CoinWeek.
In fact, this particular 1890 $1,000 Grand Watermelon is even more valuable than a peculiar error note of the same denomination from around the same era (1882) that features the misspelled word "thousand" as "thonsand."
The opinions and forecasts herein are provided solely for informational purposes, and should not be used or construed as an offer, solicitation, or recommendation to buy or sell any product.