Ways to Collect Paper Money

Types of collections

[photo: Type set of Series 1899 $1, $2 and $5 Silver Certificates]

This collection includes a type set of Series 1899 $1, $2 and $5 Silver Certificates.

Prior to the 20th century, paper money's purchasing power was so great few people could afford to set it aside. In the 1820s, Dr. Joshua Cohen was one of the few who assembled a collection of American Revolutionary currency, but overall there was little collecting interest until the first half of the 20th century. Since then, interest in paper money has increased dramatically as more collectors across the nation have discovered the excitement and satisfaction this colorful hobby offers.

There are as many different ways to collect paper money as there are collectors – the way in which you collect depends on your interests and what gives you the most enjoyment within your collecting budget. There are, however, a few "traditional" ways to collect. At first you may pursue a general collection containing a variety of different notes. As you find examples of different notes, you'll notice you're attracted to some more than others.

These may include Legal Tender Notes (also known as United States Notes), Silver Certificates, Gold Certificates, Federal Reserve Bank Notes, or Federal Reserve Notes. These types were all issued in a large 7‑3/8″ x 3‑1/8″ format from 1861 until the 1920s, and in the smaller modern format from 1929 to the present. Before this official U.S. paper money debuted in 1861, currency was issued by private banks (these issues are often called "broken bank notes" if the bank went broke – and many did). National Bank Notes were issued from 1863-1929 by thousands of banks that deposited funds with the U.S. government as security and were granted federal charters to issue U.S. paper money bearing the name of the bank.

You may want to specialize in large- or small-size currency or you may want to assemble a complete set – such as every signature combination of a particular series. Some collectors enjoy owning one of each type of $1 notes, then go after $2, $5 or $10 notes. You might want one example of each Legal Tender Note or Silver Certificate or Federal Reserve Note. Some collectors seek notes with interesting or unusual serial numbers – such as low numbers (A00000035A), the same sequence forward or backward (A12344321A), or presence of the same digit or digits (A56566565A).

Some collectors choose to assemble a set of notes that all portray a related theme – like presidential portraits, military leaders, modes of transportation, or allegorical figures. How to collect paper money is up to you and whichever way you choose, the most important thing is to have fun.

The Friedberg Numbering System

The Friedberg numbering system was developed by Robert Friedberg, an expert on how to collect paper money who introduced the premier standard reference book Paper Money of the United States in 1953. This fully illustrated guide, now in its 19th Edition, is now compiled and authored by the late Robert Friedberg's sons Arthur and Ira.

The system is a shorthand method of identifying a particular currency note based on its design, series and signatures – and each Friedberg number represents a unique combination of these factors. These "catalog numbers" are especially useful in price lists, advertisements and catalogs where space is a premium. A Series 1934A $10 Silver Certificate with Julian-Morgenthau signatures can be identified as simply and briefly as Friedberg #1702.

Determining value

Age does not always make paper money valuable, though it is usually a factor. In fact, some 1861-65 Confederate States of America notes from the Civil War era cost much less than some large-size U.S. notes from the early 1900s. Value, as for most items, is determined by the interrelated factors of scarcity, condition and demand.

For example, if many more notes of an earlier series have been produced than a later one, there may be far more older notes that survive. It also depends on how many of each have been saved and their condition. Condition is important in determining value. An Uncirculated piece may be worth many times more than an average circulated note of the same series and denomination. Demand is also a major factor. Some types of paper money, such as large-size Silver Certificates and Legal Tender Notes, are more popular than others. So, with more collectors seeking the same notes, prices will be affected.

Key Paper Money Issues

[photo: Series 1896 $5 Educational Silver Certificate]

Considered one of the most beautiful currency notes ever issued, the Series 1896 $5 Educational Silver Certificate is highly prized by collectors and commands a premium in any condition.

Like the extra rare or exceptionally low-mintage "Key Dates" of a coin series such as Buffalo nickels or Mercury dimes, there are "Key Issues" in collectible paper money. These may include scarce signature combinations or limited-issue notes from a specific Federal Reserve Bank. Series 1928E $1 Silver Certificates with Julian-Morgenthau signatures are worth about ten times more than Series 1928A $1 Silver Certificates with Woods-Mellon signatures. Series 1929 $5 National Bank Notes inscribed FEDERAL RESERVE BANK OF SAN FRANCISCO are worth thousands of dollars in nicer circulated grades, while notes from several other banks are worth less than $100.

Key issues may also include popular short-lived designs and scarcer Star Notes featuring stars next to their serial numbers. Star Notes, which are replacement notes for those damaged during production or otherwise deemed imperfect, are often worth five to ten times more than their non-star counterpart. Such sought-after designs are the prized "Educational Series" notes issued only as Series 1896 $1, $2 and $5 Silver Certificates, or the eye-catching "Black Eagle" note issued only as a Series 1899 $1 Silver Certificate.

As you learn how to collect paper money, consider purchasing a paper money reference book. You can identify currency notes by such characteristics as denomination, design, type, series and signatures – and you can determine the scarcity and desirability of notes by the listed valuations in popular collecting grades.

Certified Currency Notes

[photo: Choice Uncirculated Hawaii $1 Silver Certificate emergency note]

This Choice Uncirculated Hawaii $1 Silver Certificate "emergency note" is certified by Paper Money Guaranty and sealed in PMG's currency holder.

Many collectible currency notes, as well as coins, have been graded and certified by independent services – and sealed in special holders from the certification service. This gives the non-expert collector assurance of the grade and authenticity of a currency note or coin. Paper money certification is performed by PCGS Currency, Paper Money Guaranty and others.

Each service has its own copyrighted currency holder, which identifies the issue of paper money and assigns a grade (state of preservation) according to each service's grading system. PCGS Currency has an additional designation of "PPQ" (Premium Paper Quality) to distinguish notes deemed to have "outstanding paper quality for the grade." An important lesson as you learn how to collect paper money is that currency notes should not be removed from the sealed holders. Certified notes in holders have greater liquidity in the paper money market and provide assurance to future owners of the notes.

How to choose notes that are right for you

Over the years the Bureau of Engraving and Printing has produced a wide variety of notes and Littleton has archival-quality albums for most. In choosing your notes, consider how much you like the design and history of the note and its popularity. Littleton Coin Company offers a wide selection of U.S. paper money and can help you complete a variety of different collections. You can choose a single denomination or you may wish to work on several at once. Whichever way you choose, once you complete your collection, you'll have a family heirloom that will be treasured for generations to come.

More information on caring for and storing your paper money