Paper Money

Small-size note sets record at $384,000 in Heritage auction

The title of “the United States’ most valuable small-size note” went to a new holder on Sept. 18, when Heritage Auctions sold a $10,000 Series 1934 Federal Reserve note for $384,000, including buyer’s fee, at its currency auction in Dallas. It was estimated to go for $200,000 to $300,000.

All $10,000 notes are rare today. The Treasury Department stopped delivering Series 1934 notes in 1945, and the issuance of them, along with all denomination of $500 and above, was discontinued in 1969. Of the more than 60,000 $10,000 Federal Reserve notes of all series printed in total, not more than a couple of hundred are accounted for today. The overwhelming majority of the known notes bear the “B” designation of the New York Federal Reserve district.

None were ever meant to publicly circulate; they were intended to facilitate cash transactions between banks.

The new record holder is special on two counts. One is that it is in remarkable condition in a grade of Gem Uncirculated 66 with Exceptional Paper Quality assigned by Paper Money Guaranty. This is the highest grade ever assigned by the service to such a note. Dustin Johnston, Heritage director of U.S. Currency, said: “This is easily the best of its kind I have ever seen. This is the finest example ever offered of a perennial trophy note.”

The second factor is that it is not from the New York bank, but rather Kansas City (Friedberg catalog number 2231-J). Just 1,200 of them were printed, tied with the Richmond and Dallas issues for the fewest made. Only seven others are known from Kansas City, and all pale in comparison in grade. Five of them were also graded by PMG in a range from Very Fine 25 to Extremely Fine 40. The two without third-party grades are listed as Very Fine 30 and About Uncirculated 50.

The example just sold, according to Track & Price, was off the public market since Jan. 10, 2004, when it was called Gem Uncirculated 67 by Currency Grading and Authentication Inc. At that sale, Heritage Auctions sold it for $120,750.

Another Series 1934 $10,000 note in the same Sept. 18 auction was issued for the New York bank (F-2231-B) and was a part of the famed Binion Horseshoe Casino display of 100 of them. It realized $144,000 with a PMG grade of Choice Uncirculated 63.

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