It’s been 40 years since an unprecedented flood of Federal Reserve
note errors began pouring into circulation.
The errors showed the overprinted elements — green serial numbers
and Treasury shield, and black Federal Reserve seal and numbers —
upside down on large numbers of notes. Reports of the first examples
of the inverted overprint errors came in late October 1976 from
Philadelphia professional numismatist Harry J. Forman who discovered a
30-note sequence of misprinted Series $1 Federal Reserve notes.
On the error notes, the overprinted elements, from the third
printing step of note production (or overprinting, as the step is also
called), are upside down in relation to the note elements printed
during the first two stages of printing.
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Such errors were not unknown before 1976. What was remarkable,
however, was the number of inverted overprint errors entering
circulation; hundreds of different notes were confirmed as being
found, and while that number was small in comparison to the millions
of notes printed in the series, the population of the errors was the
largest ever cataloged.
Coin World began reporting on the inverted overprint errors in
the Nov. 17, 1976, issue. Reports continued for months as the number
of error notes collectors discovered continued to climb amid the
Today, collectors should reasonably expect to pay more than $500 for
a Crisp Uncirculated example of one of the error $1 notes.
The Series 1974 notes were printed at the Bureau of Engraving and
Printing’s only paper money printing facility at the time, in
Washington, D.C. The Fort Worth, Texas, satellite printing plant
wasn’t brought into production until 1995.
How did the inverted overprint errors happen?
The BEP’s assistant director for operations at the time the Series
1974 notes were being printed, E.J. Prescott, said that, when the
errors were printed, the BEP was conducting experiments with the note
inspection equipment in connection with its Currency Overprinting
Processing Equipment. Changes in procedure during the experimentation
factored into producing the rash of errors. According to the BEP, the
resulting notes were due to human error “almost exclusively.”
During the experimentation, printed notes were being mechanically
moved for inspection instead of being manually retrieved for
examination for anomalies that would require their removal from
progress toward distribution. This interruption in the usual process
apparently played a significant role in creating the errors.
The inverted overprint error notes occurred when 16-subject half
sheets were turned the wrong direction before insertion into the
overprinting equipment. All of the overprinting elements were thus
inverted from their normal positioning.
A misstep in process
BEP officials were unaware of any problems resulting from their
experimentation until officials were notified of the error notes
already having entered commerce. Officials quickly recognized that the
errors were not an isolated incident but indicated a repeating
sequence of production problems.
When the Series 1974 notes were printed, the production of U.S.
paper money was accomplished in several separate steps (three
involving printing). Today’s notes require more steps because of
anti-counterfeiting and other security devices incorporated into the
notes since the 1990s.
The backs and faces of Series 1974 notes were produced using the
intaglio printing process, using engraved plates on which the
lettering and devices are incused and reversed. During the printing
process, ink is rolled onto the plates, filling the recesses of the
design. The resultant printing will feel raised to the touch.
On the first pass through an intaglio printing press, the backs of
the notes were printed first with a single color of ink (which, for
Series 1974 notes, was green). The back-printed sheets were stacked
and the ink was allowed to cure for 48 hours before the sheets were
returned to the press for the second printing pass.
During the second pass through the printing press, the elements of
the note’s face were printed in one color of ink (which, for these
notes, was black). Elements added during this second printing, the
primary devices, include the portrait vignette, scrollwork and
additional border design features. Again, the notes were stacked and
allowed 48 hours for the black ink to dry properly.
The 32-subject notes were then cut down to 16-subject sheets and
trimmed for placement into the BEP’s COPE press. This equipment would
apply the two-color printing to add, in green, the unique serial
numbers along with the Treasury Department seal; and in black, the
specific Federal Reserve District seal (12 Federal Reserve Districts
exist) and the numerical designation for the individual Federal
This printing stage is when stacks of the half sheets were inverted
from their normal orientation.
The same half sheets of notes were used for all Federal Reserve
Districts. When a particular district’s order was completed,
technicians would swap out the elements of the COPE press that
identified the issuing district before beginning production for
another district. If production of one district’s notes was printed on
the inverted half sheets and the error not caught during any manual
inspection process, inverted half sheets remained in the supply line
for use (and apparently were used) to print notes for a new district,
resulting in the inverted overprinting for that district’s notes as well.
Once the overprinting was completed, the overprinted notes were cut
down into single notes for strapping in quantities of 100 notes per
strap, with the straps then put into shrink-wrapped 4,000 notes “bricks.”
Discovering the error notes
Forman, a dealer in Philadelphia, located his 30-note sequence of
error notes in a brick of 4,000 Series 1974 $1 Federal Reserve notes
bearing the C seal designation for the Philadelphia Federal Reserve District.
Forman discovered a sequential run of 30 notes, all with the
inverted overprint error; the notes before and after the sequential
run were normal. The inverted overprint notes carried serial numbers C
99348540 B through C 99348569 B.
Forman’s find indicated that 30 16-subject sheets of the $1 notes
had been turned upside down prior to the COPE overprinting.
A Gem Crisp Uncirculated example of one of Forman’s discovery notes
realized $488.75 in Heritage Auctions’ Jan. 5, 2007, sale.
Additional reports of inverted overprint errors on $1 notes soon
followed Forman’s. A week after Forman’s find, paper money dealer
Harry Jones in Cleveland reported finding another 30-note sequential
run of $1 notes in a 4,000-note brick of notes also bearing the seal
of the Federal Reserve Bank of Philadelphia.
Soon after Jones’ find, 22 $1 inverted overprint error notes bearing
the seal of the Federal Reserve Bank of Kansas City were identified at
a Denver grocery store.
Forman later reported an individual that he knew who had connections
with area banks had secured three 4,000-note bricks of $1 notes,
examining each one individually.
Four examples with an inverted overprint error were discovered in
that 12,000-note acquisition, but were determined to have been caused
by a similar but separate occurrence of an inversion of the sheets
before entering the COPE processing. They were printed bearing the
seal of the Federal Reserve Bank of Philadelphia.
Additional inverted overprint $1 note errors were reported with
Dallas Federal Reserve Bank and Atlanta Federal Reserve Bank seals
that were also from similar but separate instances of an inversion of
sheets before entering COPE processing.
Coverage in the Sept. 1, 1976, Coin World detailed a single COPE
invert overprint error note bearing the Federal Reserve Bank of
Atlanta seal, serial number F 41863880 B, discovered in Louisiana.
Prescott stated in November 1976 that an investigation was launched
into the printing of several hundred notes bearing the inverted
Prescott said that, when the printing errors occurred, automated
note examination equipment being tested was mechanically moving
printed sheets to a note examiner instead of the inspector manually
moving the sheets to the examiner. BEP’s investigation determined the
procedural change resulted in the 16-subject sheets being rotated
before insertion into the COPE press.
In the 1978 edition of the Coin World booklet, Paper Money
Errors, Tom DeLorey and Fred L. Reed explain that the COPE
incorporated built-in sensors to ensure that each step is executed
correctly and to stop the presses when defects are detected.
A photoelectric eye subsequently added to the COPE prohibits
otherwise normal sheets of notes from being inserted upside down or
inverted in the way that created the plethora of inverted overprint errors.
Building a set of inverted overprint notes
Collectors may try to assemble a complete collection of Series 1974
$1 inverted overprint Federal Reserve notes by Federal Reserve
District. Paper money dealer Frederick J. Bart from Executive Currency
in Roseville, Mich., said as inverted overprint errors began to
surface, bearing seals for Federal Reserve Districts other than
Philadelphia, collectors began to assemble collections of Series 1974
$1 Federal Reserve notes representing all 12 districts.
Bart says he still gets requests for notes of individual districts,
but not necessarily a complete set. Examples of inverted overprint
errors are also reported for Series 1974 $5, $10 and $20 Federal
Reserve notes from different Federal Reserve Banks, so collectors
could also consider a denominational inverted overprint error set.
Bart noted that the appearance of the relatively large number of
inverted overprints created quite a stir not only in the collector
community but the public at large. The general media reported the
finds along with the numismatic press, triggering bank tellers and
others to begin looking for the notes in hopes of cashing in on the
numismatic bonanza. One find in particular pointed out the differences
in news coverage between the numismatic press and the
less-knowledgeable general press.
In its Jan. 26, 1977, issue, Coin World staff writer Fred L.
Reed reported a teller at a Massachusetts bank gave up her job rather
than turn over one of the invert error notes. A retailer customer of
the bank reportedly mistakenly included the error in the day’s
deposits. The teller, recognizing the error, exchanged a normal note
for it. The bank customer, though, returned to retrieve the note, but
the teller refused to hand it over. Offered a choice between returning
the note to the customer or losing her job, she chose job loss. Her
decision may have been based on inaccurate reporting in local media of
the note’s value (worth a nice premium, the note was not worth losing
The BEP eventually shut down the flood of errors and, over the
years, improved its inspection processes to make a similar flood less
likely. The notes that entered circulation in 1976 and 1977 remain a
tangible reminder of a time when paper money errors dominated the
pages of Coin World.