The most significant commercial event in the world of collectable Paper Money over the past month was the Heritage Central States auction, held in late April. Actually part of a two sale presentation at that convention, one focusing on coins and the other on currency, both, while still significant sales in their own right, were notable for the markedly smaller total prices realized achieved in each when compared with past offerings by the same firm at the CSNS venue. Although in the specialty segments with the most material offered, the sell-through rates ranged from quite respectable, to exceptionally good. The total handle for both sales was somewhat less than half of that achieved at the 2009 Heritage sales in Cincinnati.

     Some observers have noted an increasing level of quality in offerings on the bourse floor at recent shows. This has been attributed to a lessening tendency on the part of sellers to surrender the immediate control of a private sale versus the potential prospects of an auction offering in the face of the recent lowering of auction results.

     Having said that, the sell-through rates of 98% for Obsolete Notes, 82% for Nationals, 96% for Small Size Type and 95% for Large Size Type, would certainly indicate that for the material that was made available by consignors, there remains a consensus as to market levels between sellers and buyers as expressed by these percentages of material offered versus what was actually sold.

LARGE SIZE TYPE NOTES
     Whereas subsequent to the market break that took place roughly two years ago, it would often be a struggle for Large Size Type to reach then current CDN Bid levels at auction; that did not seem to be the case in the Heritage CSNS auction. The Bison offerings in the sale included 13 in the VF selling at very healthy levels. This same pattern was evident throughout the CSNS currency auction, i.e. previously reported levels proving to be more on the conservative than the optimistic side. What might be regarded as real “power” Notes, i.e. material expected to sell in the six-figure range, were absent from the Large Size Type section in Milwaukee. The material that was offered generally sold at levels that can be interpreted as confirming that those waiting for price declines before stepping back into the market will likely find that a disappointing strategy.

SMALL SIZE TYPE NOTES
     The two highest priced items in the CSNS Heritage auction were both in this specialty: a $5,000 1934 FRN certified as PMG XF 45 Net, estimated at $75,000-$90,000 realized $69,000; and a $10,000 1934 FRN certified as PMG XF 40 Net, estimated at $65,000-$85,000, sold for $69,000, as well. Restorations or repairs were mentioned in the descriptions for each Note.

     Considerable demand for exceptional quality in this specialty, even for relatively common material, was demonstrated by the offering of a $1 1928A Silver Certificate certified as PMG Superb Gem 68EPQ. Whereas the lot carried an estimate of $900-$1,200, it sold for $1,840. While this was certainly an exceptional result, in general, the overall realizations in the Small Size Type specialty tended to confirm that prices are no longer moving downward, that there is widespread support at current levels, and that those holding off for lower prices will likely encounter the frustration of having to reenter the marketplace at levels higher than generally prevail today.

FRACTIONAL CURRENCY
     The focus here remains on Notes that are scarce, as well as those of exceptional quality and centering, regardless of how common they may be. The overall supply of Fractional Currency seems larger, however, than the supply of buyers. Because of this, more ordinary material can be difficult to sell at levels that are anything other than considerable discounts. Such common material can often be quite illiquid, with a frustratingly small universe of buyers displaying acquisition interest.

NATIONAL BANK NOTES
     National Bank Notes remain an area where demand can be either quite strong or surprisingly weak, with the issuing bank being of prime importance. While the supply of Notes is quite thin, the supply of buyers in a given geographically based collecting area can be even smaller. In addition, as with any thin market, values are often just as much a function of the resources of the buyers as the underlying scarcity of the material. National Bank Notes simply are not as broadly based a market as Small Size or Large Size Type. This can result in material remaining in a dealer’s inventory for a considerably longer time than items in the aforementioned collecting areas. Inventory turnover is something that dealers acquiring for inventory will take into consideration, as long turnaround times tend to have a depressing effect on prices.

MISCELLANEOUS
     Obsolete Notes continue to attract considerable buyer attention. Once a backwater specialty pursued more by purists than a more generalized demand based collecting area, Obsolete Notes, especially in the wake of the long series of Schingoethe auctions by the former R.M. Smythe & Co., have moved much more into the general collecting arena. Perhaps one of the attractions here is that, except at auction, the majority of the items available come uncertified. These are then being sold into a more traditional collectors’ marketplace where the item, its history and general aesthetics are of more interest to the buyer than a certified grade label.

Reprinted from the No. 6 JUNE 2010 issue of the Currency Dealer Newsletter "the Greensheet"
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