1890 $1,000 Grand Watermelon breaks world record at $3.2m

An 1890 $1,000 Grand Watermelon treasury note has sold for $3.2m at Heritage Auctions in Orlando - setting a new world record for a banknote at auction.

The note headlined the FUN Convention Rare Currency Auction on Jannuary 13, achieving an increase of 64.5% on a $2m estimate and smashing the previous record for a banknote, set at $2.5m in April of 2013 for an 1891 Watermelon.

US Treasury note Watermelon
Union general Gordon Meade appears on the front of the note

It last sold at auction in 1970 for $11,000 - corresponding to a 13.8% pa increase. More recently it acheived $2.2m at a private sale at Heritage in 2006.

Famously the note is named for the three zeros on the back that resemble watermelons.

It was produced to allow the bearer to withdraw funds in silver or gold bullion - a move that proved disastrous as the US Treasury experienced a run on gold that led to a major crash in 1893.

US Treasury Grand Watermelon reverse
The zeros on the reverse resemble watermelons, hence the name

Dustin Johnston, director of rare currency at Heritage Auctions, commented: "This note is an icon of American financial history — and is the only known example in private hands — we knew something extraordinary was possible.

"Collectors knew this was not a chance that was going to come around again anytime soon, and they bid accordingly. The result being that this beautiful little piece of paper is now the most valuable of its kind in the world and has a new chapter to add to its legend."

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