5 Shilling loss, or Bargain?

Discussion in 'Banknotes' started by JulieW, Nov 18, 2017.

  1. JulieW

    JulieW Well-Known Member Silver Stacker

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    “Back after World War I, the price of silver was going very high, there was a lot of instability around, and the government was even thinking about reducing the silver standard in coins.”
    The Australian government, fearing five-shilling coins would become increasingly scarce as consumers hoarded them for the silver they contained, prepared the five-shilling banknotes, and more than one million were printed.

    “But when the price of silver stabilised, they burned them in 1922, destroyed the whole printing,” Mr Noble said. The four surviving notes don’t have serial numbers but do have signatures, suggesting they were legally held by C.J. Cerutty as items to show to politicians, VIPs or the royal family.

    [​IMG]
    It’s one of only four known to exist.

    Mr Noble said the circumstances surrounding the five-shilling note were “unprecedented”.

    “The only other time they destroyed a lot of notes [was when] they destroyed 1000-pound notes in the 1960s, which they were holding as currency [to be used] between the official banks,” he said. “This is the only issue I know of that was printed and made ready for distribution.”

    Unfortunately for the seller, he looks set to make an eye-watering loss. The note was purchased a number of years ago for more than $300,000 from Albany-based dealer The Rare Coin Company, which collapsed in 2013.

    The West Australian reported many of its investors were retirees who accumulated coins and notes using self-managed superannuation funds (SMSF).

    Changes to SMSF rules around art and collectibles which came into effect last year caused a massive sell-off in 2015 and 2016. The changes required regulator valuations, external third-party storage and higher insurance costs.

    “There was a boom when superannuation was allowed,” said Mr Noble. “For your own private super, people could buy things, and some people did, [but they] didn’t know what they were buying. I guess he’s not smiling about it, that’s for sure.”

    The auction is expected to attract between 50-100 bidders on each of the four days, together with thousands of international bidders through the online portal.

    Other highlights include a rare gold sovereign issued in 1926 from the Sydney Mint, estimated at $45,000, a 10-pound banknote from 1925 — the only one to ever be offered at auction — estimated at $40,000, and a rare 1820 convict token used as an identity pass at the Richmond General Penitentiary in Ireland, built as an alternative to transportation to Tasmania.

    “I’m excited about that,” Mr Noble said. “It’s never been seen by anyone in Australia or the UK.”

    http://www.news.com.au/finance/supe...n/news-story/c3fbcf832a6809067b71d10b8bfa9928
     
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  2. ozcopper

    ozcopper Well-Known Member Silver Stacker

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    I was just looking at the status international auction results online from yesterdays auction. It looks like the numismatic world is going through the same slump that the bullion world is going through. Maybe collectors have also dumped real coins for bitcoins also.

    Look how many 1923 half pennies didn't sell!!!

    https://www.statusint.com/subcategory_coins.php
     
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  3. Acorn

    Acorn Active Member

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    Hmmmm, we only had 5 shilling coins in 1937 & 1938.
     
  4. bja

    bja Member Silver Stacker

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    Lack of sales at Status is more likely unrealistic pricing. The coin and stamp market are running hot for quality items - notes are also picking up
     
  5. argento

    argento Well-Known Member Silver Stacker

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    You are spot on regarding 37/38 Crown...the article is a little misleading.
    There was talk about releasing a 5 shilling coin but that was scrapped due to the increase in silver price , so they wanted to come up with an alternative...hence the 5 shilling note ...which as we all know was also scrapped.
     
  6. JulieW

    JulieW Well-Known Member Silver Stacker

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    I saw Crowns in our change in the early Sixties but very rarely. They'd pretty much disappeared from my family's purse by the time the 50c arrived. Never saw a Five Shilling note lol

    p.s. crowns were rare enough that they were pointed out and circulated to us kids if they showed up.
     
  7. goldpelican

    goldpelican Administrator Staff Member

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    My understanding was that The Rare Coin Company was offering guaranteed buyback prices good for 12 months, and that a flood of customers demanding they made good on the buyback guarantee pushed the business under. Not a bad business model - you could almost think of it as taking a $300,000 interest free loan from a customer's SMSF where you supplied them with a (say) $150,000 piece of collateral that you told them was worth $300,000. Best case scenario the customer never called on the guarantee and you booked a huge profit, worst case was that they asked for their funds to be returned and you repaid the interest free loan you had used in the meantime for business capital. Sounds like the theory didn't work out well in practice, and the managing director was jailed earlier in 2018 for several years on fraud charges.

    https://www.perthnow.com.au/news/wa...g-director-stole-from-investors-ng-b88735580z
     
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