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Collect Paper Money for Fun and Profit

Paper money is an exciting collectible. The value of paper money to collectors is much more than its face value printed on the paper. Collectors value paper money for its historical value, outstanding engravings, colors and art. Paper money is a kind of negotiable instrument, a promissory note made by a bank payable to the bearer on demand, used as money. We refer to paper money as a bill, a banknote, currency or simply a note. The study and collecting of paper money and all substitutes for money is called notaphily, whether the money is printed on paper, plastic, cloth, wood, or leather. Notaphily is to paper money collecting as numismatics is to coin collecting and philately is to stamp collecting.

How to Start Collecting Paper Money

Treasury or Coin Notes Series 1891
There is much help for collectors of paper money. The connectivity of the Internet has made buying, selling and collecting easier. And reliable price guides have been compiled. The most effective way to get paper money is not through general circulation, but through dealers, collectors, auctions, and shows. You'll find information in periodicals, reference books and collecting associations. The Professional Currency Dealers Association PCDA, is a trade association of about 125 national dealers who buy and sell paper money. The International Bank Note Society publishes a quarterly journal. The Society of Paper Money Collectors SPMC is a national group of collectors both expert and novice that provides information, research and promotion. The society publishes an award-winning bi-monthly journal Paper Money, and sponsors paper money shows around the country.

How Collectors Date Paper Money

Fractional Paper Money
First Issue 25 Cents
The date that appears on all United States paper money is the year when the engraving design was first approved. For example, all $1 United States Notes of Series 1880 were printed from 1880 until 1917. These bills all have the date 1880, and are identified as the 1880 Series, even though they could have been printed anytime over 37 years. On notes since 1928, a letter is added to the series number whenever a small change in the design is made. For example, you might see a $1 bill in Series 2003A.

Large Size Notes were issued from 1861-1929. The dimensions of these notes are larger than the paper money we use now, and had room for the attractive engraved designs that are popular with collectors.

Small Size Notes were issued from 1928 to the present. Their smaller size was expected to reduce printing costs.

Condition Affects Collectible Paper Money

The condition of paper money is critical when collecting, A bill may have creases, fold or wrinkled. It may be discolored or the ink color washed out. There may be foxing, tiny brownish-red spots caused by lice attacking the paper. Holes are also possible, as money was often impaled on a spike in a business office. There may be stains, missing pieces and tears. All these imperfections devalue the note. Unlike other collectibles, the value of the note does not increase if you have the defects repaired professionally. The condition of a note is classified as UNC Uncirculated if it is a crisp fresh note in uncirculated bank condition. There are six other condition grades, depending on the wear and imperfections of the bill. The One Dollar United States Note Series 1928 is worth $300 in Very Fine condition, and $8,000 in Uncirculated condition.

How to Store Collectible Paper Money

Mylar holders, made of an inert plastic, have been tested and approved for long-term storage. Other types of plastic sleeves or bags release acids and gases which will affect the paper money. Paper money should be stored or displayed away from direct sunlight, to avoid fading. Repairs should be made only with products that are stable. Adhesive tape and other plastic tapes will leave permanent stains on notes.

Types of United States Paper Money for Collectors

Small Size Paper Money
Collector's Reference
Here are the types of United States paper money
to collect, listed in order of issue. Usually the name of the note is printed on it. As a collector you may also want to look at Confederate States of America money, and world paper money.
  • Demand Notes 1861 only
  • United States Notes 1862-1923
  • National Bank Notes 1863-1929
  • Silver Certificates 1880-1953
  • Refunding Certificates 1879
  • Gold Certificates 1907-1928
  • Treasury or Coin Notes 1890-1891
  • Federal Reserve Notes 1914-present
  • Federal Reserve Bank Notes 1915-1929
Colonial Notes were issued from 1690 to 1799. Despite their age and scarcity, they are not valuable to collectors of United States paper money.

Demand Notes are the first official circulating paper money of the United States, issued in 1861 during the Civil War, because of the shortage of coins. Before this, all money was in coinage. Each Demand Note was signed by hand by employees of the Treasury Department. Demand Notes are particularly desirable for collectors of paper money.

United States Notes, also called Legal Tender Notes, were issued from 1862 to 1923. They were printed Large Size, and come in denominations of $1, $2, $5, $10, $20, $50, $100, $500, $1,000, $5,000 and $10,000.

National Bank Notes are the largest group of notes for collecting. They were issued from 1863 to 1929 by more than 14,000 banks in all parts of the country. The National Banking Act of 1863 allowed chartered banks to issue and circulate their own currency. Banks could issue notes in value up to 90% of the value of the bonds they deposited with the government. This bond deposit system encouraged public confidence for a time, until the financial crash of 1929 put an end to National Bank Notes. You can collect this paper money by state, county or theme, and there is a wide range of prices.

National Gold Bank Notes are National Bank Notes issued by California banks and redeemable in gold coins at the bank. After the discovery of gold in California, gold coins were plentiful and in wide use. Because of the inconvenience of conducting business in gold coins, California banks received permission to issue National Gold Bank Notes as paper money in exchange for gold coins. These notes are printed on gold-colored paper.

Fractional Paper Money
Fifty Cents in 1875, Worth $100
Fractional Currency issued from 1862 to 1876 is also known as Postage Currency or Postal Currency. Because coins were so scarce during and after the Civil War, paper money was issued with face values from three cents to fifty cents. This is an interesting and inexpensive area for new collectors of paper money.

Refunding Certificates were paper money established by Congress in 1879 that paid interest at 4% annually. Refunding Certificates were created to encourage saving and were discontinued in 1907. A $10 Refunding Certificate can be redeemed today for $21.30, including interest. Or you can sell an Uncirculated Refunding Certificate in the collector markets for $14,000.

Gold Certificate Series 1923
Large Size

Gold Certificate Series 1923
Large Size, Reverse
Gold Certificates are paper notes issued by the Treasury Department until 1928. They were backed by gold coins held by the Government. The Act of March 3, 1863 authorized the Gold Certificates. These notes are interesting because their reverse is a brilliant golden orange, symbolic of the gold coin they represent. The certificate says "This certifies that there have been deposited in the Treasury of the United States of America Ten Dollars in gold coin payable to the bearer on demand."

Silver Certificates were authorized as paper money in 1878, redeemable in silver dollars or bullion held in government vaults. After their printing was discontinued, Silver Certificates were redeemable until 1968. They are still legal tender. A Ten Dollar Silver Certificate Series 1886 in Uncirculated condition is worth $8200.

Broken Bank Notes are notes issued by any bank that became insolvent. The bank was literally a "broken" bank that could not redeem its own paper money. During the 19th century, bank failures were common, especially among the small banks of the west and southwest. A small bank could become insolvent if the farms or businesses of the town failed.

Wildcat Notes are the bank notes issued by wildcat banks before the Civil War, when swindlers would set up banks, issue bank notes as paper money and leave town suddenly without redeeming their bank notes.

Printing Error Gutter Fold
Collectors Value $100
Error Notes, from 1862 to the present, include paper money with a variety of unusual and curious printing errors, mostly in small size currency. Major errors such as multiple printings, mismatched serial numbers, inverted printing and double denominations are in great demand among collectors of paper money.

Obsolete Notes from 1800 to 1877 have been a good investment for collectors. Because the major banks were 2,000 miles away on the east coast, small western banks issued their own paper money. Obsolete Notes are historically significant because they were only issued by local banks, businesses and the Mormon Church. Paper money was generally not trusted in the West during the mid and late 1800s.

Depression Script was issued during financial crises in 1893, 1907 and 1933, by local governments and companies, when bank failures interrupted the supply of paper money. Some of these notes were called Clearing House Certificates, Cashier's Checks or Payroll Checks. Script was intended to circulate as money. During the Panic of 1907, banks closed on "holidays" that lasted up to 50 days. Still low-priced, depression script is a good way for the beginning collector to get into the field of paper money.

Military Payment Certificates were issued from 1947 to 1973 for the use of military personnel in foreign countries. They could be used as paper money only on military locations and avoided the black market in American dollars.

Warrants, Bounties and Bills of Exchange were used from 1845 to 1920. A Bill of Exchange was like a travelers check, but it was issued in triplicate and each copy was sent separately. Because of the dangers from Indians, stage coach robbers and fires, it was hoped that at least one of the three copies of the Bill of Exchange would arrive at its destination.

Federal Reserve Bank Notes were paper money issued by Federal Reserve Banks for a short time in 1915 and 1918. They were secured by bonds the bank deposited with the government, and were, in fact, obligations of the U.S. Government.

Federal Reserve Notes are the paper money we currently use. The Federal Reserve Act of 1913 authorized them to be released through the twelve Federal Reserve Banks. Until 1934 you could redeem them for gold at the U.S. Treasury. You can see the words Federal Reserve Note at the top of each bill. The twelve Federal Reserve Banks are designated by a number and the corresponding letter of the alphabet. For example, Boston is 1-A, New York is 2-B, Philadelphia is 3-C, and so on to San Francisco, 12-L. After the Panic of 1907, the Federal Reserve System was created by Congress in 1913 to prevent bank failures. Its purpose is to see that the economy has enough currency and coin for its needs.

Paper Money for Collectors
How Paper Money Is Printed

Fractional Paper Money
All U.S. paper money is engraved. In engraving, the artist design is cut into a steel plate. Then ink is spread over the surface and worked into the design. After the surface ink is wiped off, the engraving plate is pressed against a sheet of damp paper, and the image is transferred to the paper. Modern presses at the Bureau of Engraving and Printing make this a high-volume operation.

Presently, currency is printed 32 notes on a single large sheet. Printing the money is done in three passes, the first pass to print the back, the second pass to print the face, and the third pass to add the Federal Reserve seal, the Federal Reserve district number four times, the Treasury Seal and the serial number twice. Then the sheets are cut apart into bills.

Paper Money for Collectors
The Information on a Dollar Bill

Whose picture is on the $1 bill? George Washington. On the $2 bill? Thomas Jefferson. On the $5 bill? Abraham Lincoln. On the $10 bill? Alexander Hamilton. On the $20 bill? Andrew Jackson. On the $50 bill? Ulysses Grant. On the $100 bill? Benjamin Franklin. On the $500 bill? William McKinley. On the $1000 bill? Grover Cleveland. On the $5000 bill? James Madison. On the $10,000 bill? Salmon P. Chase, Secretary of the Treasury under Lincoln. On the $100,000 bill? Woodrow Wilson.

Serial Number The serial number is the control number on all paper money, shown twice on the face of the bill in green. Every bill in a series has a unique serial number, as a printing control and as a deterrent to counterfeiters.

Signatures Every paper bill has two signatures of Treasury Department officials. From 1862 to 1923 the signers were the Treasurer and the Register. After that, the Treasurer and the Secretary of the Treasury were signers. The "series" date on the bills didn't change unless the engraving plates changed. But the signers of the bills changed more often, so collectors try to find a bill with every unique set of signatures from one series.

The Treasury Seal appears on all United States paper money since 1862. The original seal with a Latin inscription was used until 1968. Since then the inscription on the Treasury Seal is in English.

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