By Steve Carr
If you are new to collecting currency, there are a few differences in the terminology between coins and paper money. For example, the front of a coin is called the obverse and the back is the reverse. With paper money, the front is called the face while the back is called the back.
Another difference is that unlike coins, paper money is not always printed in the year it is dated (ok – some coins were also struck in a different year that is on the coin). Paper money is dated using a series date. The series denotes the year the design was first used. In large size notes, this series remained the same throughout the printing of the notes of this type. With the introduction of small size notes in 1928, the series date often remained the same through the life of the design., but was followed by a letter (A, B, C, etc) when one of the signatures on the note changed. If both the signers changed, a new series date was used.
Paper money is also less durable. The average life of a coin is about twenty to thirty years. A $1 note has an average life of 18 months! Since it less durable, the number of survivors are fewer with paper money than with coins. Most older United States coins have a survival rate of 1-3%, or one to three coins for every 100 minted. With currency, most series have a survival rate of one note for every 30,000 printed. Fortunately for collectors, enough survive for our hobby.
Grading paper money can be simple. Most notes are graded using fewer grades. Of course, currency is graded by TPG (third party grader) and these graders use more precise grades. For example, most collectors of currency are satisfied if a note is graded Very Fine. A TPG will further refine the grade to a VF 20 or VF30, whatever they feel the correct VF grade for the note.
The highest grades are for notes that have not circulated. These notes are UNC (uncirculated) and have no bends, folds, or smudges. The terms “crisp unc” usually equates to a grade of MS 62-MS 64 and “gem unc” refers to notes that usually grade MS 65 – MS 66. Centering and embossing are the most important factors when assigning an uncirculated grade.
An About Uncirculated (AU) note can have up to three light bends or a single light fold, which does not break the design of the paper. The note must have decent centering for this grade.
An XF (Extra Fine) note can have several folds, but should have no marks. A VF (Very Fine) note can have a few more folds and possibly a little dirt, but the paper has to be firm. You can test this by holding the center of a note on one finger and letting it dangle. The paper should sag, but it will still show some rigidity..
Notes grading VF or better must have crisp paper.
Most collectors prefer notes that are at least VF in condition. They have a great look note and all of it is still there! But sometimes a VF note is not available, or isn’t known to exist. In that case, the collector must settle for a lesser grade not.
A note in F (Fine) grade will have multiple folds and will usually be darker in color. There may have some pinholes or small edge splits in a note of this grade. There may be some writing on the note, the inks may be a little duller, and the paper will not have much body.
A note graded VG (Very Good) will have some obvious problems. There will be multiple folds, some small edge splits or tears, and probably pinholes. The paper will be very limp. There should be no big missing pieces on a note of this grade.
A note is considered G (Good) if it has all the “problems” of a VG note, but may have a larger portion missing, more edge splits, or more holes,
There are two grades below G, Fr (Fair) and Pr (Poor). Notes in this condition are separated by how much damage there is on the note. A note in two piece, for example, will grade Pr while a Fr, note may be in one piece, with pieces missing. Collectors usually are not interested in notes in these grades, especially if a note in a better grade is available. But sometimes a note in this condition is the only one available. This is especially true when collecting National Bank Notes.
I want to wish everyone a Happy Holidays. May Santa (or someone else) give you a numismatic treasure this year.