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Red is the seal color of U.S. Notes

Forming an interesting small-size U.S. paper money collection is certainly not a difficult task, but you would never know it if you talked only to coin collectors.

You see, coin collectors often get a panicked look in their eye when you mention paper money. Some genuinely have no interest in it and would prefer to talk about coins for that reason.

However, many coin collectors seem to think that collecting paper money is somehow more expensive than it really is. This is because we all grew up using coins as small change and paper money was for more expensive purchases.

By definition in this system, paper money is more expensive.

But put those old notions aside. The relationships dictated by where they fall on the denomination scale are broken when it comes to collecting notes. Then the prices, as with coins, are dictated by how many survive and how many collectors want them.
As a general rule, survival rates for notes are far lower than for coins. Most collectible notes are scarcer than most coins, but because there are far fewer paper money collectors than coin collectors, prices are very reasonable, especially in circulated grades.

If you are looking for an interesting paper collection that combines difficult and also relatively available notes with interesting stories than the small-size United States Note might well be an ideal collection to consider as it can be completed by most at least in circulated grades, but remains a very interesting collection in terms of the notes and their stories.

Standard Guide to Small-Size U.S. Paper Money

Great color photos! Easy identification! Current market prices!

Small-size notes are current notes of the United States. The size reduction occurred in 1929, but few are alive today who remember that. Naturally enough, the notes that pre-date that size change are called large-size notes. They were the norm from their time of introduction in 1861 until 1929.

United States Notes are a particular type. Nowadays, all you see are Federal Reserve Notes with a green Treasury seal. For U.S. Notes, the seals and serial numbers were red rather than green.

These notes were a direct obligation of the U.S. Treasury rather than the Federal Reserve though the designs overall were very similar.

Realistically, although there have been times when a small-size United States Note collection was less expensive, now is perhaps one of the best times to consider starting a small-size United States Note collection for the simple reason that we are now fairly secure in terms of supplies of various small-size United States Notes. That has not always been the case and that is one of many interesting stories about United States Notes.

The small-size United States Note back in the 1950s and 1960s was in a confusing position with the general public. As the United States Note was not being produced in many denominations it was seen as slightly scarce. With the main denomination in many minds being the $2, the United States Note had a way of attracting attention when one was received in change, but it was the denomination rather than the color of the seal that was being noticed.

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In the late 1960s as the public began to hoard Silver Certificates as the government silver policies were changing, many people simply lumped the United States Note and especially the $2 in their hoards along with Silver Certificates. In fact, there was no reason to be hoarding Silver Certificates and United States Notes, but that did not seem to matter to many at the time as they simply realized that any notes with either the blue seals and serial numbers of Silver Certificates or the red seals and serial numbers of United States Notes were becoming tough to find in circulation. That was reason enough for many to hoard both and as a result of those many hoards put together at the time there was real uncertainty as to just what the supplies of United States Notes might be like in future years when the hoards were dispersed. That uncertainty probably caused prices to remain low and interest as well as no one wants an unexpected surprise when thanks to a hoard a note they thought was scarce suddenly becomes regularly available and that cloud hung over the market for United States Notes as having been hoarded there was perhaps a misguided but very real concern nonetheless that at some point numbers of new United States Notes might appear on the market.

Being involved in the hoarding of the 1960s is really only one of many interesting stories surrounding small-size United States Notes and such stories help to make a collection all the more interesting as few small-size notes have had as many unusual and diverse events over the years as small-size United States Notes.

To have a somewhat unusual and even confused history in small-size is unusual for United States Notes as the United States Note has an important place in the history of the United States dating back to the Civil War. In that dark time, the government was in a very difficult position as the Civil War even in its early days was clearly going to be a much more difficult challenge than any had felt when the first shots were fired. The idea in the North of a short march to Richmond and a rapid end to the conflict had probably been eliminated with the rout of Union forces at Bull Run and that meant some serious considerations as to how to fight and finance a much larger war than anyone had expected.

The situation was made all the more difficult by a variety of factors. In the early months of the war, the branch mints in Dahlonega, Ga., Charlotte, N.C., and New Orleans, La., would fall into the hands of state and Confederate forces. Also now well behind enemy lines were the remaining gold reserves in Georgia and North Carolina and while the gold in California was far greater in quantity, it was 3,000 miles from Philadelphia and virtually none of the 3,000 miles was easily crossed. Something had to be done not only to finance the war, but also to keep commerce from falling into a barter system as there was already evidence of a coin shortage in the early months of the war resulting in the use of tokens, postage stamps and just about anything else people could agree had value.

The ever expanding war required paper money to help finance it. Getting the public to accept bank notes, however, was a very real problem as the experiences of the past were no help. In fact, if anything the public distrust of any paper obligations was well-founded as there were still stories about what had happened with Continental Currency and other issues of the Revolution and many were old enough to have experienced problems with issues of private banks and others that in many cases had become worthless. With such a history of bad experiences, getting the public to accept any notes was going to be a challenge.

The United States Note was far from a sure thing in terms of public acceptance and there were serious legal challenges as well as some who would not accept the first United States Notes. It probably did not help that faith that the government would survive the Civil War was not at particularly high levels. Despite the problems, however, United States Notes first issued in 1862 were generally accepted at least in part because the people at the time really had very little choice. By the time the first United States Notes appeared in circulation there were not many alternatives as gold and silver were basically gone and even copper-nickel cents were missing.

It might have been a case where something was better than nothing, but the United States Notes as well as other issues did circulate and over time over many years they earned the trust of many.

Even by the time of the change to small-size notes in 1929, the United States Note already had a rich history. In fact, as large-size note collectors know there had been some truly fascinating and popular United States Notes such as the Series 1901 Bison $10 note featuring a vignette of an animal alleged to be the famous Black Diamond who was also claimed to be the model for the Buffalo nickel. Whether the real Black Diamond was in fact the model for either cannot really be proven, but the animal flanked by explorers Merriwether Lewis and William Clark has made the Bison note a popular one with a demand that outpaces supply, keeping prices especially in upper grades rising. There were other lesser known but interesting United States Notes such as the Series 1869 $20 where the numeral 20 is repeated 105 times while the Roman Numeral XX is added a mere 103 times.

Certainly large-size United States Notes make for an interesting and fascinating collection, too, but the problem for many collectors is that they are also very tough. While a type note might be available especially in lower grades, if you want crisp uncirculated notes and especially in upper denominations a large-size United States Note collection is a very difficult and costly undertaking. If you want a more complete collection, the United States Notes where that is possible are the small-size notes that first appeared in 1929.

The change to small-size notes had been a slow process stretching back to the final days of the Taft administration when the Secretary of the Treasury had ordered a study on the potential savings to be realized by a change to small-size notes. The report, which favored the idea of a size change, was not acted on as the administration was leaving office and no new administration was going to introduce itself to the American people by promptly reducing the size of bank notes.

In fact with coin design changes and the advent of the Federal Reserve System in 1913, it could be fairly said that the new officials had good reasons for putting the bank note size change idea on a back burner. Then World War I started in Europe in 1914, the United States entered the conflict in 1917 and assorted other matters kept the issue of the size of American paper money on the back burner.

Finally in the mid-1920s a new Secretary of the Treasury, Andrew Mellon, was ready to take on the idea of the size reduction. Moreover, Mellon had actually already reached a conclusion as his committee was not appointed to simply study whether it was a good idea or not but rather to study how the change should be carried out. When that committee reported back Andrew Mellon ordered the size change, which would be ready at the start of 1929. In the event, the small-size notes were released July 10, 1929.

As it turned out, the change to a smaller size was not the only change. In fact it had been evolving in the final years of large-size notes, but with the first small-size notes it became policy that the designs of different types of notes of the same denomination would be basically the same. That had not been the case in large-size era where a $5 National Bank Note would be very different from a $ Coin Note or $5 Federal Reserve Note of the same denomination. Certainly there would be different wording, but now in small-size all notes of the same denomination regardless of type would have basically the same designs although the color of the serial numbers and Treasury seal would be different. In the case of the United States Note the serial numbers and seal would be red.

In fact, there was a more subtle change with the size reduction begun in 1929. That change was with regard to the role to be played by various types of notes. In the case of the Federal Reserve Note, if anything, their role in commerce was expanded. The role of National Bank Notes was declining, anyway, as the system was being phased out and the role of Gold Certificates was left basically unchanged. In the case of the Silver Certificate and the United States Note, their role would basically be reduced while the Federal Reserve Bank Note was not even produced initially. It was an emergency issue.

In large-size over time the United States Note had been produced in denominations of $1-$1,000, but in small-size the denominations were basically limited to $2 and $5 denominations originally. There would later be a $1 and $100 and it appears that a $10 and $20 were considered, but in the case of United States Notes, there was already a limitation to their role as a May 3, 1878 law fixed the outstanding amount of United States Notes at $346,681,016.

In the case of the regular small-size $2 United States Note, the bulk of the notes are available starting with the initial Series 1928 issue. Because paper money dates are not changed ever year, there are only three dates, 1928, 1953 and 1963. Suffix letters are added as names of officials on the notes changed, so you have Series 1928 running to Series 1928G, the 1953 to 1953C and 1963 and 1963A.

The most expensive of the early $2 United States Notes is the Series 1928B with a Woods-Mills signature combination as the Series 1928B had a printing below the 10 million mark and with limited saving by the collectors of the period that makes a Choice CU 63 a tough note with a current price of roughly $1,200. In fine condition it is just $75. Other dates are even cheaper in fine right down to the $7 price of the Series 1953B.

But if you want to collect them in Choice CU 63, they can get expensive. Realistically, however, the bulk of the $2 United States Notes can be found for less than $200 in Choice CU 63, although it should be pointed out that the prices are in most cases solidly higher than they were in the late 1990s suggesting both increased demand as well as the fact that any remaining fears about possible new supplies because of the hoards from the 1960s have disappeared.

The Series 1928B for example was $375 back in 1998 which has given way to its current $1,200 price.

The real hot shots in terms of price increases among small-size notes in recent years have been star replacement notes and that is also the case with $2 United States Note stars. These notes actually have stars at the end of the serial number, indicating that the note it replaced was defective in some way.

In most cases, today’s star replacement note prices are safely at least 100 percent higher than they were in the 1990s with the Series 1928B star easily being the key at $65,000 in Choice CU 63.

While this was most expensive, we have seen any number of Choice CU 63 star $2 United States Notes move to significantly higher prices since the late 1990s. The Series 1928D jumped from $175 to $450 while the Series 1928F star soared from $125 to $600 easily outpacing more expensive Series 1928E in terms of percentages as the Series 1928E rose only from $4,500 to $14,375.

In fact, with the recent increased interest in star replacement notes, it can safely be said that it has really increased $2 United States Note star prices across the board as the only Choice CU 63 stars $2 United States Notes at less than $100 are those from the final Series 1953B and C.

The situation is much tougher in the case of $5 United States Notes. That is a result of a number of factors including the fact that the higher denomination would naturally be saved in smaller quantities. That may seem unusual as the difference in face value between a $5 and $2 is not large, but in the case of saving at the time they were released, which in some cases was during the troubled economic times of the Great Depression and in the hoarding in the 1960s where people routinely saved only smaller denominations, it has made a significant difference.

In the case of regular $5 United States Notes, the Series 1928D with a Julian-Vinson signature combination is the most difficult at a current Choice CU 63 price of $275, which is almost three times its listing back in 1998. Other series have also increased in price over the period making the $5 a tougher denomination at least in CU among the regular notes.

In the case of $5 stars,  the two most difficult are the Series 1928A now at $12,500 in Choice CU 63 and the Series 1928D now at $6,500. What is found in the case of the $5 CU stars is that they are in many cases hundreds of dollars.

Printing of the $2 United States Note ended Aug. 10, 1966 and that was followed by the end of production of the $5 in 1967. The $100 was introduced to carry on with a 1968 printing and another in 1971, but because of the peculiarities of paper money dating, the notes were dated 1966 and 1966A, respectively.

In the case of other denominations the story of the small-size United States Note gets very interesting and in some cases mysterious. It is clear that sometime around 1933 there were plans to issue other denominations of United States Notes. Of course that time was the worst period of the Great Depression and it is very possible that officials were seeking any way they could issue more notes without causing problems with the gold and silver reserves as the amount of cash in circulation had already increased dramatically, but at the same time there had been an alarming gold drain. The United States Note did not require gold backing and this would have potentially have seemed promising were it not for that 1878 limitation on the amount outstanding.

What we know is that in 1933 $10 and $20 United States Notes were exhibited at the Chicago World’s Fair. At about the same time a rather peculiar printing of 1,872,012 $1 Series 1928 United States Notes was finished, yet only 5,000 of the total was released into circulation. It was a very strange combination of events.

Probably the best guess at explaining the situation and what happened later with the $1 United States Note printing is that the new officials of the Roosevelt administration in their attempt to find ways to inject additional money into the system probably looked first at the United States Note. The printing of the $1 was already under way and the $10 and $20 were in the planning stages when those officials probably discovered the 1878 law and realized that the United States Note was not an option after all unless that old law was changed.

At that point they probably decided it was easier to simply pass a new authorization of emergency Federal Reserve Bank Notes, which were obligations solely of the Federal Reserve Bank that issued them, unlike the Federal Reserve Notes., which were obligations of the entire system. Federal Reserve Bank Notes also had relaxed collateral requirements. Moreover, as it turned out, printing those Federal Reserve Bank Notes was much quicker than entirely new United States Note printings would have been.
It is not entirely clear why the printing of the $1 United States Note stopped at just 1,872,012 as certainly they were not a serious problem in terms of limitations on the amount that could be issued. Of course, they were also not much help when it came to increasing the money supply, so the printing remains something of a mystery. What is also mysterious is why 5,000 were released into circulation around Washington, D.C. at the time while the others were not released until 1948 and 1949 and then in Puerto Rico.

The situation leaves us with a small printing of under 2 million Series 1928 $1 United States Notes with a Woods-Woodin signature combination. The notes are naturally difficult thanks to that low printing, but they can be even tougher than the printing would suggest as with the vast majority being released in Puerto Rico which was a relatively poor island at the time with very few collectors there were very few saved. That makes a Choice CU 63 $550 today.

The release in Puerto Rico figures prominently in the fact that star replacement notes are extremely tough and virtually unknown in Choice CU 63 as it appears that the stars were all released in Puerto Rico where few survived, which is why a star even in fine currently is priced at $3,750 while a Choice CU 63 is $25,000. In fact, either is probably a very good deal as there are an estimated 30  Series 1928 $1 United States Note stars known to exist and of that number only a couple would qualify as Choice CU 63.

Just to make matters even tougher, the Series 1928 $1 United States Note is a note that has a reputation of being poorly centered and that means that a well-centered example can be expected to command a premium price.

The Series 1928 $1 United States Note remains a note with a very interesting story and that certainly does not hurt its price. What must also be remembered is that it is a key type note as there are no other $1 small-size United States Notes and with the lack of examples in upper grades, that keeps the existing supply under constant pressure from both United States Note and type collectors. An example in fine is $125.

The final denomination of small-size U.S. Note was the $100, which were produced for the Series 1966 and 1966A. This was another case of the old law still playing a role in seeing that there were some United States Notes if not in circulation at least in reserve. Relatively few notes from either series ever managed to reach circulation and  while there was a discussion at one time of making the notes available to collectors, it was decided that would not be done, leaving the notes a relatively difficult group as a high denomination that basically never circulated in any numbers. As a result, the Series 1966 currently lists for $350 in Choice CU 63 while a Series 1966 star replacement note is $1,300 in the same grade. In the case of the tougher Series 1966A where no stars were ever available, a regular Choice CU 63 is $600.

Whatever choices you make in assembling a collection of small-size United States Notes, the fact is that the notes are interesting and in some cases tough. Even with limited denominations, it is certainly a collection with many interesting notes and with virtually all available at least in circulated grades including star replacement notes. It can be as large or as small a collection as your budget and patience will allow.

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