COMPOUND INTEREST TREASURY NOTES

These notes are really Legal Tender circulating notes, which for a period of three years, bore interest at six per cent, that was compounded twice a year.

The Acts of Congress of March 3, 1863 and June 30,1864 authorized the issue by the Treasury Department of these notes. It should be noted that the time of issue was late in the Civil War when the financial position of the Treasury was precarious and the country was almost bankrupt because of the cost of carrying on the war. Money was very rare and the issue of these Compound Interest Treasury Notes was an attempt to alleviate this pressing problem.

They were issued in denominations of 10, 20, 50, 100, 500 and 1,000 Dollars, and were legal tender at their face value. The date of issue is printed in red on each note and the full interest was payable only at the end of the three year period after date of issue.

The reverse of each denomination shows in tabular form what the interest and redemption value was at the end of each six month period for the three years.

For the redemption value of each denomination, please see the text.

The obverse of each note is surcharged in large gold letters with “Compound Interest Treasury Note” and the numerals of the denomination.

All notes of this issue are very rare today and are seldom seen. The 50 and 100 Dollar notes are of extraordinary rarity. Also, all denominations are extremely rare in really choice condition.

The obligation on these Compound Interest Treasury Notes is as follows, “Three years after date the United States will pay the bearer...... dollars with interest at the rate of six per cent compounded semi-annually ... By Act of Congress, this note is a legal tender for...... dollars but bears interest at six per cent compounded every six months though payable only at maturity as follows ... This sum $...... will be paid the holder for principal and interest at maturity of note three years from date.”