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Use Knowledge to Hunt for Bargains
By Bill Brandimore, Bank Note Reporter
March 25, 2013

This article was originally printed in Bank Note Reporter.
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Prices seem stable with some small movements up and down as seems natural. Large-size type notes continue to dominate the market. Small-size has been a bit erratic as there are bargains in relation to prices in the Federal Reserve Note area. I suspect the issue is demand from collectors, because supplies of scarce FRNs are not large. Many of the early FRN notes are very sparse. This includes the 1928 and 1934 series notes. The astute hunter might secure bargains in star replacement notes and mule notes if there is not sufficient competition or recognition. I see this area as full of opportunity for future price growth. Familiarize yourself with scarce issues and watch for them and buy them when you can.

Fractional Currency notes seem to be gaining a bit, especially those that collectors know are difficult to find in really high grades. Recently some of the Second Issue notes are up. This is an issue fraught with poor margins due to sheets being hand cut by scissors at the time of issue. Catalogers are noting the real scarcity of notes with good margins, as for example, the KL-3242/F-1289 25-cent Second Issue note with back overprints of T-1/1863.

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Typically Second Issue overprints are poorly printed and hard to read. When clear, along with decent margins, collectors pay high premiums for these elusive notes. Third-party grading seems to be making considerable inroads in the Fractional area, overcoming reluctance by collectors to accept this system of evaluation. This attitude is enhanced, of course, by collectors frequently finding their notes lacking when they send them in for grading themselves. It appears that Heritage is now only offering third-party graded notes in their paper currency auctions. This eliminates claims of incorrect grading after purchase, particularly by mail bidders.

I still recommend buying the note not the holder, but the large number of “net” or “apparent” grades on holders underscores the many notes out there that have been repaired or improved by unscrupulous sellers. If you are buying an expensive note it only makes sense to buy one that is already graded by a third party. This goes a long way in avoiding buyer’s remorse. I recently sold some raw coins I had purchased some time ago and while I did make a very small net gain in value, the problems my coins displayed kept my gain relatively small. The money I reinvest will go into properly graded paper money.

Colonial notes remain a good bargain and obsolete notes are also showing signs of more interest by the collector base. Obsolete notes, generally issued prior to the U.S. Civil War, can be collected in the same manner as National Bank Notes, with a focus on collecting notes issued by banks from your home town, state or a specific locality. There are lots of books available to guide you in these areas. Keep your library in mind as you collect, as knowledge provides formidable armor as you spend your hard earned money.

World bank notes are perhaps the most growth oriented among currency collectibles. As the rest of the world has gotten richer over the past generation, collectors have plowed large sums into collectible paper money. Lyn Knight and Heritage are offering frequent world currency selections in their auctions and many of these notes are now third-party graded. Check this area out if you’re looking for something new.

Email me with your questions or comments at

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