MARKET REVIEW
We have had another amazing year! Collectors and dealers of fifty years ago would never, in their wildest imaginations, have dreamed of today?s marketplace. They would undoubtedly be pleased to see the widespread interest in their hobby. Paper money has become a premier collectible, and prices continue to spiral upward. Paper money shows and Internet sales have been well attended. Collector interest is spreading into areas that in the past have remained relatively quiet. In essence, we have had another banner year!
Internet sales are brisk, and the number of notes sold on-line last year probably exceeded one million! E-bay handled over a quarter million by itself. Translated into dollars, that?s probably about 80 million dollars in on-line transactions. Paper money auctions held in conjunction with major shows have been well attended and have produced stellar results. At the January CAA (Currency Auctions of America), a new all-time record was set when an 1882 $1,000 (Fr#1218d) bill in About New Condition brought $935,000. Len Glaser of California verified that sales in their three auctions exceeded $10 million during the past year. When asked for his opinion regarding the future, he stated ?We see another banner year ahead with continued growth in the collecting fraternity and increasing activity, as well as prices, in the entire field of collectible currency.?? I agree.
The advent of Internet auctions has created a greater exposure to the paper money field than any other single event in the history of our nation. As a collector, the opportunity to find specialized material has radically increased, but so has the competition for that material. Where one could previously find a ?sleeper,?? now often results in intense competition for the same note. An example of that was an obsolete note we offered on Sabine Parish, LA. The note had fallen apart, and the pieces were glued on to heavy paper backing. We opened the note at $1 and although rare, we were amazed when the bidding reached $41. You can imagine our surprise when it closed at $481. In years past we would have gladly sold the note locally for $5 due to lack of interest.
We found the following activity during the year:
Large-Size Type Notes (1861?1923): Large-size notes are, without doubt, the most beautiful and historical remnants of a time in our history that has been long forgotten. Notes such as the 1901 $10 Bison depicting Lewis & Clark, and the 1899 $5 that bears the portrait of Chief Running Antelope, depict 1800s life on the western plains. The Rainbow series of 1869 or the Educational series of 1896 showcase the engraver?s art. This has been and continues to be the premier area of paper money collecting. With the two major census?s available today, we know with relative security what is and isn?t available. The rarer notes (above $3,000) are much sought after regardless of grade. The middle-priced notes (ranging from $600 up) are also heavily sought after, but due to availability, the buyer knows that if the price sounds high, he will soon see another priced closer to his wallet. The lesser notes (below $600) are readily available unless they are of such superb quality that another similar note may not appear for several months. With the current prices on rare-type notes, it requires deep pockets to put together an extensive collection. It is, however, worthy of a rewarding lifetime pursuit.
Small-Size Type Notes (1928?present): Major growth continues in this area of collecting. Many of the notes previously thought to be relatively common have been found to be quite scarce. Notes such as $1 1928 and $2 1928B Red Seals are seldom encountered at auction. Although Hawaii overprint notes are always available, this is not true of the $5, $10, or $20 in really nice Gem CU condition. As such, they command a staggering premium when auctioned. Other areas of high interest are low serial numbers and star notes. Both of these areas have strong collector backing. With the release of the ?new?? currency the demand for older small-size issues has radically increased, and from all appearances will continue to do so. There are still many bargains to be found, and this is one of the areas that new collectors continue to embrace. Look for dwindling availability and increasing prices and pressure.
Fractional Notes (1861?1923): In a single word: hot. Interest has been increasing by leaps and bounds with corresponding prices. Of all the paper money fields, fractionals have shown the greatest rise in interest. This is still an area where relatively rare notes can still be purchased at bargain prices. Notes with a known census of fewer than twenty may still be found in the $200?$1,000 range. During the past year, I have seen sales of all but perhaps three or four of the rarer Friedberg numbers. Proofs and specimens of these early notes have come under strong collector pressure, and prices on both have recently more than doubled. Understandably, the availability of these notes is decidedly limited. In general, the future of the fractional field appears to be quite positive. A fractional denomination set requires six (3c, 5c, 10c, 15c, 25c, 50c) and a type set contains twenty-three. Both collections are easily obtainable.
National Notes (1865?1928): Major changes have occurred in this field. In the past, notes were collected with a theme in mind. Themes included county, state, or geographic area, and state capitols. Now there is a new breed of collector. He is best described as a ?trophy hunter.?? If the note is rare enough, than state, etc., is of little importance. Aside from the changes, this area of collecting is hot and should remain so.
Error Notes (All): This field has stablized, and current levels should remain static for a while. The exception to this is the more exotic errors that are seldom seen and that can bring phenomenal prices from the ?right?? buyer. Bank tellers routinely find a variety of errors due to the poor quality control in the Fed. Notes that would not escape detection twenty years ago are now routinely passed into the public sector.
Obsolete Notes (Private issues 1800?1877): Also referred to as ?broken bank?? notes, as most of the issuing banks went under many years ago. These notes issued by private banks give us some of the prettiest notes ever engraved. Various themes are used by collectors, and one of the more popular is Denominational (a multitude of interesting notes such as 121/2 c, 70c, 90c, $1.25, $3, $6, $7, $300, etc., are available). Other popular themes include a 50-state collection, local towns, or specializing in particular engravers or printers. Prices have risen radically, and items that went begging at $8 just three years ago are now commanding $30?$35. The basis for collecting is usually geographic, and when a rare note appears from one of the more popular areas, it often results in a bidding war. A resurgence in Nebraska notes is no exception. Other hot areas are Florida, Minnesota, and Texas.
Depression Scrip (1907 and 1933): After being in the doldrums for a few years, interest has been on the rise. Some states have virtually no obsolete issues aside from those put out in the Panic of ?07 or the Depression of the mid 1930s. When the banks closed in 1933, several firms issued scrip that was honored by the local bank as currency of the realm. Some western states such as Oregon, Washington, Idaho, Arizona, and New Mexico are collectible only because of these issues. Bargains are definitely available for under $20. Expect this area to radically expand over the next ten years.
Colonial Notes (1690?1799): This area continues ?slow, but steady. Although relatively unattractive when compared to other notes, they are nonetheless historical in content. They were first issued by individual colonies and then after 1776 by states with the approval of the Federal government. Various printers include Benjamin Franklin and Paul Revere. The notes are hand-signed, and several famous dignitaries are represented, including signers of the Declaration of Independence.
MPCs (1947?1973): Military Payment Certificates are avidly collected by a relatively smaller number of enthusiasts. These are very colorful examples of our country?s military scrip. Notes are found in 5c, 10c, 25c, 50c, $1, $5, $10, and $20 denominations. They were issued and used by our armed services as currency in localized areas during times of conflict, often to transcend the sale of U.S. dollars on the black market, as MPCs were only redeemable on military bases. Rare notes or those in top condition find eager homes, while circulated or common notes often go begging.
Related Areas: Early or western checks or drafts are quite collectible and have matured into a field of their own. Pretty vignettes and historical pieces are more commonly seen then one might expect. We recently purchased a piece issued in 1870 by the Sutler (authorized store) at Fort Bridger, Wyoming Territory, signed by the company commander and issued to a 2nd Cavalry trooper for a reasonable price. Checks signed by famous persons are also of interest.
Whether it?s history, the thrill of discovery, a positive investment, or collecting gorgeous engravings of the distant past, the hobby of collectible currency truly has something for everyone. We?ve been at it for thirty-four years and have yet to tire of the surprise of something new and different. What better way to stay involved with the history of a nation than through its money?
