Promissory note in the amount $20,000, issued by Boston Red Sox owner Harry Frazee to The Royal Bank of Canada on June 28, 1920, signed three times by Frazee, twice by New York Yankees owner Jacob Ruppert, and once by New York Yankees co-owner T. L. Huston. Encapsulated by PSA, with each of the signatures certified as “Authentic.” According to the terms of the note, Frazee is to repay the Bank of Canada $20,000, plus six percent interest per annum, in ninety days.

This note has great historical significance because as collateral for the loan, Frazee puts up one of the $25,000 promissory notes he received from the New York Yankees as part of the purchase price for Babe Ruth’s contract three months prior. Frazee has signed the one-page document three times in blue fountain pen; once on the front in acceptance of the main terms of the loan, and twice on the reverse, in acceptance of additional terms. The note has also been signed on the reverse twice in black fountain pen by Yankees owner Jacob Ruppert and once in green fountain pen by Yankees co-owner T. L. Huston. (The signatures average 8/10.) The note (8.5x11”) displays two horizontal folds, a few light creases, and several light pencil notations. In Very Good condition overall.

Accompanying the note are several related documents (5): two file-copy letters (dated 6/26/20 and 6/29/20, respectively) representing correspondence from the Boston Red Sox to the Royal Bank of Canada concerning the note; two letters (dated 6/25/20 and 6/30/20, respectively) from the Royal Bank of Canada to T. L. Huston of the New York Yankees; and a small June 23, 1920, calendar page with handwritten pencil notes by a member of the Boston Red Sox front office. 

To fully understand the material in this collection we must go back nearly six months. Harry Frazee sold Babe Ruth's contract to the Yankees on December 26, 1919, because he was in desperate need of cash. He owed $262,000 on an outstanding note to former Boston Red Sox owner Joseph Lanin, from whom he purchased the club, he needed to contribute $100,000 in cash equity for a theater he was purchasing, and his most recent theatrical productions were in the red. Even after the sale of Ruth's contract to the Yankees for $100,000 and a $300,000 loan on December 26, 1919, Frazee was still strapped for cash.

One of Frazee's problems centered around still unsettled issues with his original Fenway Park mortgage. Until that matter was settled he could not avail himself of the Yankees $300,000 loan (Fenway Park was listed as collateral for the loan). Also, the $100,000 that Frazee received from the Yankees was not in one lump sum. Frazee agreed to take $25,000 in cash, with the remainder to be paid in three notes of $25,000, each coming due, respectively, on November 1st over the next three years. The initial $25,000 that he received in cash was not nearly sufficient to cover his debts. Faced with this mounting financial pressure, Frazee immediately began borrowing money, using the three Yankees notes as collateral for his loans.

The New York Yankees owners Jacob Ruppert and T. L. Huston, as issuers of the original note, were instrumental in helping Frazee secure his loan from the Royal Bank of Canada. They were also responsible for paying the 6% interest per annum on the note, which is why their signatures appear on this note. The Frazee promissory note offered here was the third loan issued by the Royal Bank of Canada using the Yankees November 1, 1921, note as collateral. The first was issued on December 29, 1919, and the second was on March 27th. The note of June 28, 1920, agreement was in essence, a renewal of those prior agreements, except that the loan amount was reduced to $20,000 from $25,000.

These documents, 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 these documents, as well as every other "sale of Ruth" document featured this and our previous auction, originates.