Antique 1927 Big Four Railroad Bond 🚂 Blue, Series E 4.5%, Cleveland Cincinnati Chicago St Louis $1000

What Did a Big Four Gold Coupon Pay? 🚂 Every Coupon on This Bond Promised $22.50 in Gold Coin. A $22.50 Gold Coupon Went to the Supreme Court.

Size: 15" x 10" ~ little to slight wear.

Each interest coupon printed for this bond promises the bearer "Twenty-Two and 50/100 Dollars, gold coin of the United States of America." In 1935 a $22.50 railroad bond coupon carrying the same kind of gold promise was the heart of Norman v. Baltimore & Ohio Railroad, the lead case of the Supreme Court's Gold Clause Cases. Its holder wanted $38.10 for it, the value of the promised gold after Washington revalued the metal. The Court, five votes to four, told him $22.50 in ordinary dollars would do.

This is a Big Four bond: a Cleveland, Cincinnati, Chicago and St. Louis Railway Company Refunding and Improvement Mortgage Bond, Series E, 4½%, $1,000, dated the first day of July, 1927 and due July 1, 1977. It promised its principal "in gold coin of the United States of America of or equal to the standard of weight and fineness as it existed on the first day of July, 1919." Six years after the date on its face, Congress cancelled that promise. By the time its due date came around, the railroad that issued it had been swallowed by Penn Central, and Penn Central had gone through the biggest bankruptcy in American history up to that time.

📜 What Is Printed on It

The face is engraved by the American Bank Note Company, whose imprint runs along the bottom margin. A wide blue border of engraved flower heads frames the sheet, and a blue "UNITED STATES OF AMERICA" banner arches over a black steel-engraved vignette. In it, a steam locomotive pulls a passenger train around a curve and out from under a stone overpass, trailing white smoke, while a second locomotive crosses the overpass above. A signal mast with semaphore arms stands beside the track with a figure at its foot, and more figures work along the grassy embankment. "SERIES E" and "4½%" stand on either side of the vignette, "$1000." sits in blue shields at left and right, and the railway's full name runs across the sheet in shadowed black capitals over "RAILWAY COMPANY" and "REFUNDING AND IMPROVEMENT MORTGAGE BOND. DUE JULY 1, 1977."

Below that, the promise itself is set in engraved script. The company, "a corporation of the States of Ohio and Indiana," will pay the bearer, or the registered holder, one thousand dollars at its office or agency in the Borough of Manhattan, with interest at 4½ percent a year on the first of January and the first of July, on surrender of the coupons. At the lower left the railway's corporate seal is embossed into the paper, lettered CLEVELAND, CINCINNATI, CHICAGO & ST. LOUIS RAILWAY CO. SEAL. The bond is signed for the company by its Vice-President and attested by its Assistant Secretary, and it closes "Dated the first day of July, 1927."

Turn it over and a narrow title panel repeats the series, the rate, the amount and the due date, adds "Principal and interest payable in the Borough of Manhattan, The City of New York," and carries the Trustee's Certificate signed for Guaranty Trust Company of New York. Under it runs one line of small type: "The U.S. Revenue tax on this bond has been paid by stamps affixed to the mortgage under which it is issued." The rest of the back is a registration table headed "NOTICE: NO WRITING ON THIS BOND EXCEPT BY AN OFFICER OR AGENT OF THE COMPANY," beside a tall engraved blue ornament.

✂️ The Coupons

Each coupon is a small engraved note of its own: a steam train in mountain country at the left with "AMERICAN BANK NOTE CO." under it, and the promise to pay the bearer $22.50 in gold coin, "being six months' interest then due," on a stated first of January or first of July, "unless said bond shall have been called for previous redemption." Each carries the engraved facsimile signature of the General Treasurer, just as the bond's text says it will. There were one hundred of them, one for every half-year from January 1928 to July 1977.

The sheets in this group differ in how many coupons they still carry. One photographed sheet keeps a strip running from coupon 86, July 1970, to coupon 100, July 1977; another has none left at all. On the first one, every coupon up to January 1970 had already been cut away. Penn Central, which held the Big Four's lines by then, filed for bankruptcy on June 21, 1970.

🛤️ The Big Four

The Cleveland, Cincinnati, Chicago and St. Louis Railway was formed on June 30, 1889, by merging the Cleveland, Columbus, Cincinnati and Indianapolis Railway, the Cincinnati, Indianapolis, St. Louis and Chicago Railway, and the Indianapolis and St. Louis Railway. In 1890 it took control of the old Indiana, Bloomington and Western. Four cities in the corporate name gave it the name everyone actually used: the Big Four. Its territory ran across Ohio, Indiana, Illinois and Michigan, and by the end of 1925 it reported 2,391 route miles and 4,608 miles of track.

Its president from the start was Melville E. Ingalls. Born in Harrison, Maine in 1842, he worked the family farm, was teaching school at sixteen, and graduated from Harvard Law School in 1863. He built a practice in railroad and corporate law in Boston, came to Cincinnati in November 1870 to head the Indianapolis, Cincinnati and Lafayette Railroad, and was elected president of the new Big Four in 1889. He held the job until 1905, as the New York Central moved in; the Central acquired the Big Four in 1906 and ran it as a separate company until around 1930. Ingalls left Cincinnati a landmark that still stands: the fifteen-story Ingalls Building, finished in 1903 and counted as the world's first reinforced-concrete skyscraper.

So in 1927 the Big Four was a New York Central property still borrowing under its own name, and the bond's own text shows how far its credit reached. The 1919 mortgage behind it, made on June 27, 1919 to Guaranty Trust Company of New York and Frank L. Littleton of Indianapolis as trustees, also secured on equal terms the company's "Four Per Cent Twenty Year European Loan of 1910," with fifty million francs of it outstanding, and its "Twenty-Year Four and One-Half Per Cent Gold Debentures of 1911," with $5,000,000 outstanding. A railroad of Ohio and Indiana had gone to Europe for money and borrowed in francs.

🪙 The Gold Clause, Broken

The gold wording was protection, not decoration. A lender handing over money for fifty years wanted to be repaid in money worth as much as the money lent, so long bonds of the era promised gold coin of a fixed weight and fineness, here the standard of July 1, 1919. Then came the Depression. On June 5, 1933, Congress passed a joint resolution declaring gold clauses in public and private contracts void; such debts could be paid in any legal tender, dollar for dollar. In January 1934 the government revalued gold from $20.67 to $35 an ounce, and bondholders did the arithmetic. A $22.50 gold coupon now represented $38.10 worth of gold.

The Baltimore & Ohio bondholder in Norman sued for exactly that difference. On February 18, 1935, the Supreme Court ruled against him, 5 to 4. Chief Justice Charles Evans Hughes wrote for the majority, joined by Justices Brandeis, Stone, Roberts and Cardozo. Justice James C. McReynolds led the four dissenters, arguing that the gold clauses were binding contracts and that tearing them up would wreck faith in the government's own obligations. From that day a gold coupon like the ones on this bond was worth its face in ordinary dollars and nothing more.

Congress amended the resolution in 1977 so that gold clauses could be enforced again in private obligations made after that date. 1977 was the year this bond came due.

The bond also spelled out an early exit. The railway reserved the right to redeem all of Series E together on any interest day at 105 percent of face value from July 1, 1947 to January 1, 1967, at 102 percent from July 1, 1967 to January 1, 1972, and at face value from July 1, 1972 to January 1, 1977, on seventy-five days' published notice.

🌉 What Became of the Big Four

In 1968 the New York Central merged with its old rival the Pennsylvania Railroad to form Penn Central, and the Big Four's lines went with it. On June 21, 1970, Penn Central filed for bankruptcy. With $4.6 billion in assets it was the largest corporate failure in the country's history to that point, and within days it froze the commercial paper market and pushed the Federal Reserve into standing behind non-bank borrowers for the first time since 1933. In 1976 many of the old Big Four lines went into the government-sponsored Conrail, which was privatized in 1987 and bought by CSX and Norfolk Southern in 1997. The date engraved across this bond, July 1, 1977, arrived a year into the Conrail era.

The railroad's best-known survivor is the Big Four Bridge over the Ohio River between Louisville, Kentucky and Jeffersonville, Indiana, a 2,525-foot through-truss completed in 1895 and named for the railroad. It was rebuilt in 1929 for heavier loads, carried trains until 1969, and then lost its approach ramps and stood for years as "the Bridge That Goes Nowhere." Louisville opened it to walkers from the Kentucky side in 2013, the Indiana approach was finished in 2014, and today it glows at night under more than $2 million worth of LED lights.

🏛️ The Engravers

The American Bank Note Company of New York engraved paper money, postage stamps and securities for governments and corporations. Its method was steel-plate intaglio: the design is cut by hand into steel, the plate is inked and wiped, and the paper is forced into the cut lines under heavy pressure, leaving ink standing up off the sheet in lines too fine to copy easily. That is why the smoke in this vignette, the flower heads in the border and the loops of the blue ornament on the back are all built from hundreds of engraved lines rather than flat color.

🔎 Size and Condition

The bond measures 15 x 10 inches. It is a 1927 financial document that was folded and handled in its working life, and it is offered as pictured, so please look through every photo. Coupon strips vary from sheet to sheet.

The back prints its own instruction — NO WRITING ON THIS BOND EXCEPT BY AN OFFICER OR AGENT OF THE COMPANY — and officers and agents duly wrote on it. Read whatever you find there the same way: registration entries in ink, transfer-agent and registrar stamps, revenue and documentary tax stamps, the punch or cut that cancelled it at redemption, and staple holes from being bound into a file. Expect financial writings, markings, stamps, hole punches and staple holes as part of the life of the instrument. They are the record of a bond that moved through the financial system, not flaws in it. Seals belong on that list too: a corporate seal embossed straight into the paper, a wafer seal, and the signature-guarantee patch a bank or broker laid across an endorsement and then signed over the top of.

🚂 About these

It can't be cashed - it came due in 1977 - so its value now is as railroad and money history: a Big Four bond whose gold-coin promise the government broke. The supply is finite - the Big Four is long gone, nobody's issuing these bonds again, and once these last ones are framed, they'll be very difficult to acquire.