Thoughts from a weekend club coin show

Our local coin club held it’s bi-annual coin show this past weekend.  I love attending club coin shows because they bring together both local dealers as well as dealers from out of town.  The dealers usually bring coins, paper money, and other items of interest different from what you see in the local dealers’ shops.  Coin shows also bring out some of the vest pocket dealers and club members who set up a table with their personal inventories and collections.  With the diversity of dealers and numismatic items, coin shows provide the opportunity to do comparison pricing and to observe both the market and the hobby in this area of the country.

Curiously, in addition to the usual older collectors who have been involved in collecting and numismatics for many years, there were many young collectors.  Age-wise, these collectors were 18 years old and younger.  Most were actively looking at both U.S. and foreign coins and paper currency.  Most of the sales to these younger collectors appeared to be $25 or less.  When I spoke with a few, most said they had specific collecting interests.  I spoke with quite a few who were collectors of Lincoln cents, buffalo nickels, and mercury dimes.  Most were looking to fill holes in their collection books.  In terms of passion for the hobby, they were just as strong as the older collectors.

I also observed a fair number of what I call ethnic collectors who were collecting the coins or paper money from their home countries.  Our area – Southwestern U.S. – is home to a significant number of recent arrivals from Latin America and eastern Europe.  These collectors were asking about coins and paper money from countries such as Mexico, Guatemala, El Salvador, and Nicaragua.  In my conversations with a few, the common theme was that they wanted some of the history and heritage they had seen when they were younger.  They wanted to own these items now that they can afford these coins and paper currency.  Revolutionary Mexico paper and coins (to the extent they could be found) were popular.

Dealers with reasonable prices did very, very well in sales over the weekend show.  Dealers who price their coins reasonably and are willing to work with collectors had the highest sales.  Speaking with several, many had sales of over $20,000.  Based on the high number of collectors I saw perusing their tables at any given time, I could pretty much predict who had the highest sales.  On the other end, there was the group of what I call “last dollar dealers”, whose prices tend to be set at nosebleed levels based on my previous dealings.  These dealers grudgingly give $10 off on a $600 coin set which was set at 50% over market.

I attend coin shows to do business – to buy, sell and, in rare cases, trade.  I can’t tell you how much collectors and other dealers appreciate the reasonable dealers with reasonable prices.  To the “last dollar dealers”, here’s a word from a seasoned coin show patron – “while you might have nice coins and notes, if I wanted to go to a coin or paper money museum, I’d go to a museum and not a coin show”.  To my amusement, these “last dollar dealers” complain, saying they made few sales and otherwise complain about the show in general and those attending.  If I thought it would do any good, I’d tell these “last dollar dealers” to reassess their nosebleed prices and improve their crappy and arrogant attitudes.  As it stands, why would anyone want to buy from these dealers.

To end this blog on a positive note, club coin shows are a favorite of mine, and I try to support club shows in our region whenever possible.  Please do the same for club shows in your area to keep this historical and engaging discipline and hobby alive and thriving.

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Everything You Want To Know About Republic of Poland 1920’s and 1930’s U.S. Dollar Gold Bonds

We receive calls or emails a few times a month from those who have found a Republic of Poland Gold Bond usually issued in the 1920’s or 1930’s. These folks are asking where they can cash them in or the status of these bonds.. Usually the calls originate because they have seen these bonds on our website or they have called some other entity, including the Treasury Department or congressional offices and those offices have in turn referred them to us. In hopes of answering the majority of questions we’ve received about Republic of Poland Gold Bonds issued during the 1920’s and 1930’s, and not the current Republic of Poland post 1990/1991, we do this blog post.

First, let’s define the Republic of Poland Bonds to which we are referring in this blog. These bonds are usually referred to as “Republic of Poland U.S. Dollar Gold Bonds” of various issue dates through the 1920’s and even into the 1930’s. The most common Polish bond we are asked about is the 1920 issue “20 Year Republic of Poland 6% $50 U.S. Dollar Gold Bond” due in 1940. Usually the $50 denomination is the most common, but we have found these bonds in denominations of $100, $500 and $1000, though such higher denominations are far less common than the $50 bond. The $500 and $1000 bonds were issued in 1925 and had a 25-year term. These bonds are much more scarce. Other far less common bonds were those issued into the late 1920’s and mid-1930’s.

The 1920 bonds appear to have been marketed to the Polish American community and sold through a variety of agents and banks, primarily in the Polish communities in the U.S.   The bonds’ lead underwriter and servicer was National City Bank of New York, now Citibank. So these bonds had a good measure of credibility when issued. One can only speculate as to the purpose of these bonds, but the new Republic of Poland had just emerged after the carnage of World War I and in turn the Polish-Soviet War of 1919-1920. This new Republic of Poland, technically referred to as the Second Republic of Poland, was likely in need of an influx of capital for rebuilding and for civil improvements after the wars. By this time, after the migrations of the late 1800’s and early 1900’s, the Polish American community had gained a footing in America and had obtained some wealth, which the Republic of Poland had hoped to tap by issuing these bonds.

Most of the 1920 issue bonds were $50 denomination, which indicates that these bonds were target marketed to the Polish American community and individuals rather than institutions or wealthy investors. Thinking about it, there are a lot more customers for a $50 bond than for a $1000 bond, especially considering how much $50, let alone $1000, was worth in the 1920’s. That, in part, explains why these bonds are so common, especially in the Chicago, Milwaukee and New York City areas. These $50 bonds came with coupons attached and when you see them today, the coupons still attached are usually clipped until the 1939 and later coupons. In 1939, as a result of World War II, interest payments were stopped and payment of the $50 principal amount of the bonds was impossible.

The post World War II period was not much better as Poland was devastated by the war and creeping communist government takeover meant that there were no resources and no resolve to deal with Poland’s pre-war debt. The bonds languished and while there was some attempt to demand payment on the Polish bonds due in 1950, nothing happened. This continued until the mid 1970’s when the new Gierek led Polish government re-entered western capital markets and borrowed substantial sums to modernize Polish infrastructure and industry. In order to access western capital markets, the then Polish People’s Republic had to deal with the prior government’s outstanding debt

In July 1973, the communist government of Poland, The Polish People’s Republic, made an offer of settlement on Republic of Poland bonds as well as bonds issued by some local governments in Poland.

Poland Bond JPEGs Combined

The bonds included in the settlement were the following:

  • 7% City of Warsaw Gold Bond Loan of 1928, and 4.5 Per Cent City of Warsaw Assented Sinking Fund External Bonds, due 1958;
  • 7% Province of Silesia External Gold Bond Loan of 1928, and 4.5 Per Cent Province of Silesia Assented Sinking Fund External Bonds, due 1958;
  • National Economic Bank 7% Mortgage Gold Bond Loan (II issue P.Z. (I) of 1928, dated 1930, (Interest rate 4.5%);
  • Land Mortgage Bank of Warsaw Guaranteed First Mortgage 8% Loan of 1924. (Interest rate 4.5%);
  • Republic of Poland 7% Stabilization Loan of 1927, and 4.5 Per Cent Republic of Poland Assented External Sinking Fund Bonds due 1968;
  • The Republic of Poland 3% Dollar Funding Bonds Stabilization Loan Series due 1956;
  • Republic of Poland twenty Year 6% US Dollar Gold Loan of 1920 and 4.5 Per Cent Assented Sinking Fund External Bonds due 1958;
  • Republic of Poland 8% External Sinking Fund Gold Dollar Bond Loan of 1925 and 4.5 Per Cent Assented External Sinking Fund Bonds due 1963.

The settlement offer ran for an original period of July 1, 1973 to June 30, 1975 but was subsequently extended to July 16, 1975. The settlement provided for payment of about 40% on the principal amount of the bond for those bonds tendered including payment of a small amount of interest and a deduction of ½ of 1% of the bond’s face value as compensation to The Foreign Bondholder’s Protective Council, Inc. as a contribution towards its expenses. Apparently, The Foreign Bondholder’s Protective Council, Inc. was integral in the negotiation of the settlement with the then Polish government. Payment of the settlement amount to bondholders was to be made during a period from July 1976 to July 1977.

The payment agents for these bonds were essentially the banks or brokerages originally listed on these bonds or their successors and included:

  • First National City Bank of New York;
  • Irving Trust Company;
  • Dillon Read and Company: and
  • First National Bank of Chicago

First National Bank of Chicago had no role originally in the issuance or sale of any of these bonds but appears to have been added due to Chicago’s large Polish American population and consequent large holdings of these Polish bonds in the Chicago area.

The settlement made clear that only the bonds tendered by July 1, 1975 (later extended to July 16, 1975) would be paid out and this was a final settlement offer. If not taken, the bonds would become, from a financial instrument perspective, worthless. There is some indication that the tender was extended to July 16, 1977, but even in that event, almost 40 years have passed since the tender deadline.

So in a word, as a financial instrument, these bonds are essentially worthless. The settlement made during the 1970’s was termed a final settlement and seems to extinguish any value for these bonds as a financial instrument. As a historical or collector’s item, these bonds do have some value and receive some collector interest here in the United States, but especially in Poland. Collector’s values for these bonds vary upon the issuer and the denomination, with the higher denomination bonds garnering higher prices.

Do you have an old Polish bond of one of the varieties listed above or another old U.S., Canada, Cuba, Newfoundland, China or other foreign bond or stock certificate and unsure of it’s validity or value? Email us and send a scan of the bond or stock. We purchase these collector’s instruments and know collectors interested in purchasing these bonds and stock certificates.  Contact us at santafeworldcurrency@gmail.com!

Next topic:  When the US made coins for other countries…

Maybe this bank really wasn’t all that broken…

Part of the “cool” factor of being in the coin and paper currency business is the history of what you come across either at the shop, shows, markets or just out there anywhere. It never seems to fail that at least twice a month, and usually more often, something I come across adds to historical knowledge of someplace or another. It can be right here, some other part of the United States or some other place in this world. It can happen for anyone, you just need to keep your eyes open.

My dad was born and raised in the small corner of Wisconsin so I find myself actively looking for cool and interesting things from his boyhood home. In the past few years, I’ve found a Masonic penny from a no longer existent lodge and a book style bank from a local bank, which again, no one in the area knew about or had seen. I found both these items hundreds of miles away from the area from which they originated, which leads me to wonder how and why they traveled so far. By the way, both items have been donated to the county historical museum back where they originated.

The cool factor in this find was that the Masonic Penny from the forgotten lodge led to more local research about the history of the town, the lodge’s physical location in town, and the time frame the lodge existed. Similarly on the book bank, others have donated early marketing materials of that bank, and thus historical knowledge, albeit in a small way, has advanced.

That’s my lead-in to today’s “cool” historical discussion. A few weeks ago I found a “broken” banknote in a group of fractional currency I purchased. A “broken” banknote is currency issued by banks, small and large, and allegedly, but usually not, backed by assets of the bank. The vast majority of these banks went bust due to any number of reasons, leaving the currency these banks issued, worthless and thus the bank dubbed “broken bank”. (As an aside, we buy these broken banknotes.)  This particular “broken” banknote is in rough shape so I initially focused on the fractional currency.  While working on the fractional currency I found myself coming back to the “broken” banknote as something about it seemed different.

The banknote is for $100 and was issued in 1856 by The Bank of Commerce of Savannah, Georgia.  The banknote had been cut cancelled and not printed on the best of paper.  The denomination is good as $100 denomination broken banknotes are difficult to find.  The other, more interesting thing that catches my attention, is the two lines of red text that bled through to the front of the note, apparently from a stamp on the back.  The stamp on the back alone is not uncommon as often these broken banknotes and similar Confederate notes paid interest, and when interest was paid, the note was stamped on the reverse to indicate that interest had been paid.

Broken Banknote Combined

However, turning the banknote over revealed there had been stamped on the reverse, in red ink, the following text: “OR REDEEMED BY BANK REPUBLIC (SIC) NEW YORK AT ¾ P.CT. DISCOUNT”.

This phrase, inked in red on the reverse of this broken banknote is interesting. The issuing bank –The Bank of Commerce of Savannah, GA – might not have been so broken after all. The Bank of Commerce must have had a relationship with Bank Republic, a major bank at the time in New York City, and that relationship must have been good enough, and Bank of Commerce must have been strong enough, to merit the backing of Bank Republic to accept and pay out on this note $99.25 out of $100.

When I brought this to the attention of the historians in Savannah, they were aware that Savannah’s Bank of Commerce existed then, but they were not aware that the Bank of Commerce had strong ties to a substantial New York bank. This led to discussion and we came to conclusion that Bank of Commerce along with Republic New York were probably working together in financing the cotton trade, both domestic and export, which was then thriving at the port of Savannah. This joint financial endeavor was likely the reason for the additional red inked text on the back of this broken banknote indicating that Republic New York secured the note for $99.25 on the $100. So, maybe Savannah’s Bank of Commerce really wasn’t broken after all.

Got a broken banknote?  We’d love to see it and would be interested in purchasing it if you would like to sell.

Next Blog: Republic of Poland Bonds and everything you want and need to know about yours…and ours.

An Introduction

Part of being a good business is contributing back to our customers, communities and the knowledge base.  We’re a family owned paper money, coin and jewelry business providing collectors and those appreciating nice Southwestern, Native American and other jewelry, quality coins, and paper money at reasonable prices.  We are available through our website, http://www.santafeworldcurrency.com as well as eBay, santafeworldcoins*currency.  Check us out regularly as we have new listings of coins, paper and jewelry coming out all the time.

Part of what we enjoy doing is finding new “old stuff” and bringing this to the attention of historians and those interested.  In the process, regional historians, enthusiasts and others gain, in a small way, knowledge previously unknown.  That’s what makes this business so much fun.  It’s the cool factor with coins and paper money as well as with old pawn jewelry and other items for that matter.  Then that leads to the follow up question, how did that interesting “old stuff” end up here.

The latest cool stuff here includes an obsolete currency-broken bank note from a bank that turned out to be not so broken, a Freeman of London proclamation from the 1600’s and commercial correspondence from Brigham Young.  Found anything cool lately?  We’d love to hear about it.