Promissory note in the amount of $25,000, dated December 26, 1919, issued by the New York Yankees to the Boston Red Sox for the purchase of Babe Ruth's contract. Signed on the front and reverse by New York Yankees owners Jacob Ruppert and T. L. Huston, and on the reverse by Boston owner Harry Frazee. PSA has encapsulated the note and certified all the signatures as "Authentic."

The promissory note reads in part "On November 1st, 1921, after date we promise to pay to the order of The Boston American League Baseball Club Twenty Five Thousand  and no/100 Dollars at Federal Trust Company. Boston. Massachusetts. With interest at 6% per annum. American League Baseball Club of New York, Inc." It has been signed on the front and reverse in black fountain pen by New York Yankees owners "T. L. Huston" (as secretary/treasurer) and Jacob Ruppert (as president), and on the reverse in green fountain pen by Boston owner Harry Frazee. (The signatures grade 9/10 overall.) The note (7.75x3") displays a heavy vertical fold, two paperclip impressions in the upper left corner, light toning and a few minor creases. In Very Good condition overall. The note is accompanied by an original handwritten New York Yankees accounting sheet that records the original $25,000 payment to the Red Sox, as well as the dates and amount of the three promissory notes issued at the time. The sheet (8x8"), on lined notebook paper, is heavily toned and displays two horizontal folds, a large tear at the base, and a few edge tears. 

The sale of Ruth, which is universally regarded as the most significant transaction in sports history,  was necessitated by a number of factors, most important of which was Boston owner Harry Frazee's precarious financial footing at the time. Frazee purchased the Red Sox from Joseph Lanin in 1916 for $662,000. $400,000 was paid in cash, with the remaining $262,000 issued in the form of a note due on November 1, 1919. Unfortunately for Frazee, he was severely strapped for cash at the time the note came due. He was able to procure a few brief extensions from Lanin, but by the end of the year he was out of options. With no money to cover the note, he was forced to sell his most valuable asset: Babe Ruth.

The main suitors were the New York  Yankees, with owners Jacob Ruppert and T. L. Huston only to happy to take the budding star off Frazee's hands. The deal was agreed upon on December 26, 1919. The Red Sox received $100,000 for Ruth, with $25,000 paid in cash and the remainder to be paid in yearly installments of $25,000, with each note due on November 1st of 1920, 1921, and 1922, respectively. In addition, the Yankees provided Frazee a loan of $300,000, with Fenway Park issued as collateral. Although the deal was agreed upon on December 26, 1919, it was not announced to the press until January 5, 1920, because the Yankees wanted to wait until they had renegotiated Ruth's contract. Once that was done, the greatest transaction in sports history was completed, and the fortunes of each franchise were reversed almost overnight.

This note, along with nearly every other surviving document relating to the sale of Babe Ruth to the New York Yankees, originates from the estate of Ed Barrow, who was manager of the Boston Red Sox at the time of the transaction, and soon after became the longtime business manager/general manager of the New York Yankees. Many years after Barrow's death, legendary collector Barry Halper purchased his entire business archive from the Barrow family, which included dozens of documents relating to Boston's historic sale of Ruth. (Barry Halper's collection is considered by many to have been the finest private baseball-memorabilia collection ever assembled.) In 1999, Halper sold nearly his entire collection at auction through Sotheby's in New York (the collection was so vast that it took over a week of twice-daily live auctions and three months of weekly internet sales to liquidate it). Lot 560 in the live-auction portion of the sale featured a large collection of documents relating to the sale of Ruth, from which this promissory note, as well as every other "sale of Ruth" document featured in this auction, originates. The entire content of Lot 560 in the 1999 Sotheby's Halper Collection auction has been consigned to this auction by the original purchaser, making this just the third time since 1919 that these historically significant documents will have traded hands. This is one of two of the three original promissory notes issued for the sale of Babe Ruth offered in this auction. The third (which also originates from the Halper Collection) resides in the Baseball Hall of Fame (Link: https://baseballhall.org/discover-more/stories/short-stops/the-deal-that-changed-the-game).