Paper Money

Paper Money Market Analysis: Memphis site of paper money’s ‘annual physical’

If the paper money market could undergo an “annual physical,” this year’s “checkup” would be the International Paper Money Show, scheduled for June 14 to 16 in Memphis, Tenn., its site since inception in 1977.

Collectors and dealers are hoping the results of the annual checkup will reveal a market that continues to be healthy and is getting stronger.

One of the “test results” to watch for is the outcome of the four sessions of auctions to be conducted by Lyn Knight Currency Auctions.

The U.S. and world notes offered in these auctions represent the realistic base for diverse and moderately priced items that keep the market humming.

Of special interest is a collection of 171 large-size underappreciated and often overlooked Federal Reserve notes and Federal Reserve Bank notes.

These are perfect examples of the concept that first appearances can be deceiving when looking at a market. The two series combined use about one-third (or 427) of the total 1,225 numbers assigned to large-size notes in the standard reference Paper Money of the United States by Arthur L. Friedberg and Ira S. Friedberg. With the number of notes listed and the amounts reportedly printed of each, it is sometimes shocking to see the prices these Federal Reserve notes reach.

But the number of issues and the amount printed are misleading indicators. Vast amounts of these notes were turned in and destroyed, and only by a study of the census figures of notes reported do we know that they exist today in very limited quantities.

This is particularly true of Series 1914 Federal Reserve notes bearing red Treasury seals. Among the nearly four dozen such notes to be offered in Memphis, fewer than 100 known are of the vast majority.
Of the $50 and $100 denominations of this type offered, only one note has a surviving population of more than two dozen. In the higher grades, they are actually elusive.

Forty Red Seal Series 1914 Federal Reserve notes of all denominations appear in the auction, and not one of them grades Uncirculated — explaining why prices turn heads on those rare occasions when they appear for sale.

It also explains why, for this series, grade rarity is so pronounced. Just over half the Series 1914 $50 and $100 Federal Reserve notes were graded Very Fine or less, and another nine were in the About Uncirculated range.

Buyers must take into account not only condition but also competition from the growing number of collectors for the category, boosting prices further.

Of the four $100 notes offered, two, those printed for the Philadelphia and Minneapolis Federal Reserve Banks (F-1074b and F-1080b), are instructive.

The Philadelphia note is graded choice AU by the auction firm without third-party grading and was estimated at $10,000 or more, consistent with recent sales. Of the 24 known, however, five are in this grade or better. The Minneapolis note is graded only Very Fine 30 but its estimate was $12,500 to $25,000. This is because records show only one piece in better condition, an Extremely Fine 40 example that sold for more than $18,000 several years ago.

Recently, lower quality Very Fine notes have sold in the $7,000 range. ¦

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