As we head into the final quarter of the year, the paper money market appears firm. It is important to see if the momentum started at the ANA convention continues, and the good news is that and all indications point positively. The Heritage auction conducted in conjunction with the Long Beach Expo sold nearly $5 million worth of U.S. and world paper money. The breakdown is $3.95 million of U.S. currency and $1.04 million of world currency. It was not all that long ago that a million-dollar sale of just 1,559 lots of world currency would have been highly unlikely. World paper is certainly a growth area and a steadily increasing collector base and the demand for certified high grade notes are the main contributors for these gains.

The U.S. portion of the Heritage sale was led by a quartet of six-figure notes: two large size and two small size. The sale-topper was a series 1891 $100 silver certificate -- graded XF45EPQ by PMG -- which crossed the block at $152,750. At this same price was a series 1928 $5,000 Federal Reserve note with a low serial number and graded by PMG AU55. The most visually impressive of the top four was the series 1863 $100 Legal Tender, the “Spread Eagle” note. This specimen is graded VF30 by PCGS, with the important PPQ designation, not often seen on circulated notes. This beauty sold for $135,125.

Another very interesting section of the Heritage sale was the Richard Merlau collection of large size errors, part one. This collection featured 32 notes with various printing errors, and the catalog makes for some good reading. The highlights include a series 1907 $5 Woodchopper with a large fold over error in Very Fine which brought $10,575; two different $10 Bison notes with inverted backs, one with the Speelman-White signature combination ($7,050) and the other with the Elliot-White combo ($3,525); a gem series 1917 Legal Tender with an inverted back at $3,055. There were additional types with inverted backs, along with butterfly folds, and gutter folds.

While the overwhelming majority of the notes in the sale found willing buyers, the price discrepancies between notes in the same certified grade with and without a superior paper quality designation are increasing. Similar to what we have been experiencing in the U.S. coin market, the spread between “premium” notes and average quality notes with the same technical grade leads to a two-tier market. For example, let’s compare two series 1869 $1 Legal Tender notes (Fr.-18) sold this year. The first, graded PCGS CU64 without no PPQ, sold in January for $2,468. In the recent Long Beach sale, a PMG CU64EPQ brought $4,465. Both notes exhibited pleasant eye appeal but the quality qualifier played a role in the higher realization.

Looking forward, Stacks Bowers will be conducting their traditional U.S. currency sale in conjunction with the Baltimore Expo in early November. Overseas, Spink will conduct their annual fall banknotes sale in early October, with a multitude of rare world paper up for grabs.

The note in focus this month is at first glance the most common of all large size type notes. The series 1923 $1 silver certificate is usually one of the first notes a young or new collector acquires when beginning a set of large size notes. However, the Friedberg-239 Woods-Tate variety of the type is significantly more scarce in high grade than its brethren. PMG has graded only 27 Gem-65 notes, compared to 674 of the other two Fr. numbers of the type, 31 Gem-66s compared to 473, and just 5 Gem-67s compared to 48. This rarity factor of nearly 19x would suggest the Fr.-239 may be undervalued in these grades. In the Heritage Long Beach sale lot #19029 was an example graded CU67EPQ (pictured) which realized a healthy $3,995.