Cancelled 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. 

This is the original third and final promissory note issued by the New York Yankees for the purchase of Babe Ruth's contract in 1919, which was payable on November 1, 1922. Incredibly, as explained in the accompanying one-page typed signed letter, dated July 6, 1921, from Yankees owner T. L. Huston to Yankees general manager Ed Barrow, it was mistakenly cancelled due to a misunderstanding between Barrow and the bank. As one can plainly see, Barrow has cancelled the note by tearing away nearly all of both Ruppert's and Huston's signatures along the front base, and also crossed out their signatures on the reverse, along with the endorsement of Boston owner Harry Frazee.

In his letter, Huston instructs Barrow to have an identical promissory note drawn up, which he, Ruppert, and Frazee would sign, and which would then be held in the Yankees' safe. That replacement note, which became the note of record to complete the sale of Babe Ruth's contract, just recently sold in Leland's Spring Classic auction (Lot 746), where it realized $64,000. Both the promissory note and the Huston letter have been encapsulated by PSA, with all the respective signatures certified as authentic. The promissory note reads in part "On November 1st, 1922, We promise to pay to the order of The Boston American League Baseball Club Twenty Five Thousand Dollars and 00/100 at Federal Trust Company. Boston. Massachusetts. With interest at 6% per annum. American League Base Ball Club of New York." The note (7.75x3.25") displays the aforementioned tears along the base, a smaller edge tear, two paperclip impressions in the upper left corner, light toning, a staple hole and a vertical fold. The letter (8.5x11") displays two horizontal folds, a paperclip impression and several moderate creases. 

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 Lannin 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 Lannin, 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 too 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 our 2023 Spring and Summer Classic auctions by the original purchaser, making this just the third time since 1919 that these historically significant documents will have traded hands.