Recently, a sharp-eyed Port Jefferson resident sent Patch a tip about some cash that was available online. No. It wasn’t a new get-rich-quick scheme or a super low interest rate loan.
A quick click revealed that it was a collectable ten-dollar bill issued by the First National Bank of Port Jefferson up for auction on eBay. The price to buy it immediately: $4,950.
Bank President Orange T. Fanning probably never thought that one of the ten-dollar bank notes he hand-signed would end up in an auction of any kind much less selling for 495 times its original face value.
Talk about inflation.
But why is there even money out there printed with the name of Port Jefferson’s historic bank?
Turns out that a long time ago, banks issued their own money with the full blessing of the Federal Government.
“From 1863-1935, government-chartered national banks were allowed to issue their own currency backed by securities that the local banks had deposited with the United States Treasury,” replied Ken Brady in an email after we forwarded the eBay item to the official Village historian.
It seems that the money is part of a series of paper currency called National Bank Notes. This is according to Mary Toepfer of Peabody Collectibles.
Toepfer-a rare currency dealer-is the owner of one of the First National Bank of Port Jefferson bank notes we found listed for sale. The other was a five-dollar note adorned with a portrait of President James A. Garfield.
“National Bank Notes were the first attempt this country made to create a national system of standardized currency distributed easily throughout a rapidly expanding nation,” she explained.
Toepfer, who buys her notes at auction from other dealers and collectors, said that during the Civil War in 1863, the Union congress passed the National Currency Act.
“This Act established a system that allowed 'chartered' banks to distribute paper money that was honored anywhere in the country. The chartered banks had to purchase and keep on deposit U.S. bonds at the U.S. Treasury to back the currency they were distributing.” The system she said was precursor to the Federal Reserve of today.
This particular note is from the 1902 series and has a portrait of President William McKinley. On the other side is an allegorical figure representing Liberty and Progress.
Both the bank's cashier and President hand-signed every Port Jefferson note, according to Toepfer.
It was not some turn-of-the-century advertising ploy for banks to name themselves the “First Nation” bank of a particular city. As Toepfer explained, the bank notes and the bank names were intricately tied together.
To be part of the system a bank needed to become chartered after which it had to include the word “National” in its name. The first bank in a city to become chartered could call itself “First National.” If another bank received a charter it called itself the “Second National” and so on.
To make things even more confusing, there was another similarly named bank in Port Jefferson village at the same time.
“The two notes on eBay are for the First National Bank of Port Jefferson, not the Bank of Port Jefferson which was a separate entity,” said Brady in an email.
An article in the Long Islander of Huntington reported that those banks merged in April 1948 and Brookhaven bought the First National Bank’s building on the corner of Main and East Main streets for $70,000. The Town used it over many decades in a variety of capacities including Town police department and a tax receiver’s office before leasing it to the Long Island Music Hall of Fame.
If you think $4,950 is a steep price for a ten-dollar bill, even one that’s over 100-years-old, that’s not even the highest amount these bank notes fetch. The value depends on a few factors including condition of the bill and rarity of the note in circulation.
In the scheme of things First National Bank of Port Jefferson notes are not very rare; at least by the standards of National Bank Notes collectors.
“Banks in small towns or in states that at the time of issue were still considered Indian Territories have the highest values,” Toepfer said.
But even her note is not the highest value Port Jefferson bank note.
The other eBay listing has what is called a series 1882 “brown back” listed for sale for $6,500. (Series of notes were issued based on design.)
“Brown back obviously refers to the color of the reverse design,” said Toepfer, who is not the seller of this other note but admitted that she was impressed with it. “This series design is my favorite.”