The 1861 $5 Demand Note is widely considered one of the rarest and most valuable $5 bills, with one exceptional example selling for $38,400. Its historical significance and limited survival rate contribute to its extraordinary rarity.
The Historic 1861 $5 Demand Note
Issued during the tumultuous early years of the American Civil War, the 1861 $5 Demand Notes were among the first paper currencies printed by the U.S. government that did not bear interest. These notes were unique because they were redeemable for coinage on demand at various U.S. Treasury offices, a feature that gave them their name.
Key Features Making it Rare:
- Early Issue: As one of the earliest forms of federal paper money, many were redeemed or lost over time, leading to very few surviving examples in good condition.
- Production Process: Produced by the American Bank Note Company using a patented steel plate process, these notes showcased advanced printing techniques for their time, making them harder to counterfeit but also potentially limited in initial production volume.
- Historical Context: The era of their issuance, marked by national uncertainty, meant that many notes faced heavy use or destruction, further reducing their numbers.
| Feature | Detail |
|---|---|
| Year of Issue | 1861 |
| Denomination | $5 |
| Type of Note | Demand Note |
| Printer | American Bank Note Company |
| Printing Method | Patented steel plate process |
| Notable Sale Price | $38,400 (for an exceptionally preserved example) |
| Historical Context | Issued during the early U.S. Civil War, redeemable for coinage on demand |
Factors Contributing to a Bill's Rarity
While the 1861 $5 Demand Note stands out, several general factors contribute to the rarity and value of any banknote:
- Low Survival Rate: Bills that were heavily circulated, destroyed, or redeemed are rarer.
- Historical Significance: Notes tied to pivotal moments in history often command higher value due to their importance.
- Errors and Varieties: Printing errors, unique serial numbers (like low serials or solid serials), or specific plate varieties can make a common bill exceptionally rare.
- Condition (Grade): The state of preservation is crucial. A note in "Uncirculated" condition is significantly rarer and more valuable than one in "Good" condition.
- Short Print Runs: If only a small number of notes were ever printed for a specific series or issue, they naturally become rarer.
Collectors often seek out notes that combine these attributes, especially those with both historical significance and impeccable preservation. The market for such rare currency can be quite competitive, driving up prices for the most coveted examples.
