Amidst a housing and associated credit market giving signs of being on the verge of a near melt down, world-wide securities market instability and growing concern that if not already here, a recession in all probability soon will be, the marketplace for collectable Paper Money seems to be functioning in a parallel universe, largely immune from trends and uncertainties affecting the larger economy. This is perhaps all the more remark-able when one focuses on the fact that people need houses, appliances, automobiles, credit and fuel, while the collecting and acquisition of rare currency is a totally non-essential activity that no one really needs to engage in.
     Yet despite (or perhaps because of) storm clouds affecting the larger economy, the demand for and prices commanded by most segments of the Paper Money marketplace continue to be under strong upward pressure. The now traditional rare currency auction sponsored by Heritage in con-junction with the Florida United Numismatists Convention was especially robust. “We had a sale grossing in excess of $10,000,000 that on a good stay should have taken in $7,500,000. 66+ items blew the doors off,” said a Heritage representative.
     Overall, material that enjoys scarcity as a major Type or sub-Type is in particular demand, as is upper end Uncalculated material, especially PCGS or PMG certified items carrying grades of “66” or higher. Notes certified by these two firms simply sell for more than Notes of comparable– or identical – quality sold without their imprimatur. Whether this is logical or not is a subject for another discussion, but the simple fact is that it is undeniably true. Any item is worth what the people whose money is chasing after it decide it is worth. The current reality is that the buyers who have decided that “66+” Notes are worth several to many multiples of what they were worth in the past are more comfortable spending the serious dollars by having the additional assurance of certification by one or the other of these firms.

LARGE SIZE TYPE NOTES
     The Large Size Type Notes market remains particularly vigorous, especially in the “66+” levels of the Uncirculated category. Worth mentioning is the $25,300 commanded by the only thus far certified $1 1862Legal Tender PMG Superb Gem Uncirculated 67EPQ in the FUN auction. Also meriting attention is the $29,900 achieved by a PMG Gem Uncirculated 66EPQ $5 1896 Educational. February CDN Bid stands at $16,500 in“65” and $31,000 in “67”. A Fr. 364 PMG Superb Gem Uncirculated 67EPQ$5 1891 Treasury Note sold in the FUN sale for $12,650. A considerably more available major design Type commanding a strong price was a $101907 Gold Certificate in PMG Superb Gem Uncirculated 67EPQ. Although it had a $6,500+ catalog estimate, it sold for $18,400. Overall, it is quite clear that buyers of scarce and better quality material are keeping their own counsel in determining what a fair current market level is for the items they desire. As previously remarked, when what appears to be an outrageously high price level being achieved at auction, it should also be kept in mind that by definition there was an under Bidder willing to pay just below that level, as well.

SMALL SIZE TYPE NOTES
     I remarked relative to Large Size Type Notes that scarcity and quality are the two factors that will likely push an item to what might appear to a casual observer to be a particularly strong price. These two factors are by definition present in low and fancy serials, long an avidly followed sub-specialty within the overall Small Size Type Note field. Such items continue to experience strong demand and upward pressure on prices and command particularly high multiples of a logical price without the added serial number enhancement. While I’ve remarked that PMG and PCGS certified material for higher grade Uncirculated items is far more in evidence in the Large Size than the Small Size Type sections of a major auction offering, a higher percentage than in the past of such items were included in the Heritage FUN offering. It is quite logical to assume that the same additional degree of confidence given to buyers of Large Size Type at the higher price levels might also hold the same appeal for buyers of increasingly pricey upper end Small Size Type as well.

FRACTIONAL CURRENCY
     Very little of the Fractional Currency included in the Orlando FUN auction was sold uncertified. Better Fractional Notes continue to be under upward pressure as value conscious buyers increasingly take note of the fact that items of comparable quality and scarcity to material in the Large and Small Size Type areas continue to be available at lower levels here. Fractional Currency has always seemed to attract a highly informed and knowledgeable population of buyers, rather than speculators chasing the latest “in” area. For certified material to have made the inroads here, evident in the FUN auction, shows that the companies have a product that the public has concluded adds sufficient value to the transaction.

NATIONAL BANK NOTES
     Scarce to rare National Bank Notes continue to redefine price levels with each successive major auction offering. A case in point in the FUN sale is lot 14741, a $20 1902 Date Back, the only known Note from the small community of Maricopa. Estimated at $20,000-$30,000, the California National Bank Note actually sold for $86,250. Another unique Note for the town of issue, a Newman, California 1902 $5 Date Back, was estimated at$20,000-$30,000. It sold for $66,125. While these multiples of the estimates were certainly not achieved across the board, neither are they aberrations. The bottom line is that the prices realized in Orlando clearly demonstrate that demand levels for Nationals have never been higher and that the economic capabilities of the buyers are continuing to push prices to higher and higher levels.

MISCELLANEOUS
     Both Obsolete and Confederate material remain in demand, and both offer areas where the collectors on less than a four figure per item budget can form a meaningful collection without having to compromise the ability to acquire more necessary items such as shelter and transportation. The collecting community will now be able to look forward to the Lyn Knight auction at the March 27-30 Chicago Paper Money Exposition.

Reprinted from the No. 2 FEBRUARY 2008 issue of the Currency Dealer Newsletter "the Greensheet"
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