Old paper money collecting is risky, but fun

Andrew Leckey

August 13, 1993|By Andrew Leckey

Collecting money is a valued hobby of millions of Americans.

However, collecting older, finely engraved paper money as a hobby and investment, while definitely on the rise, involves a considerably more finite group of people.

These individuals are well aware that the most collectible examples of paper money have doubled in value in the past several years.

For example, a large-size 1901 U.S. $10 note featuring likenesses of a buffalo and explorers Lewis and Clark sold for $800 in 1986. Today, in uncirculated (mint) condition, it sells for $1,100 to $1,600.

This can also be a highly volatile market. That same note, you see, had sold for $1,400 in 1980, a period in which collectible paper currencies became oversold amid euphoria over gold and silver and fear of inflation. A dramatic collapse in paper money prices followed in the period between 1982 and 1984.

Those old large-size bills, incidentally, measure 7 1/2 inches by 3 1/4 inches.

"The past decade, the paper money market has outperformed just about every other collectible, with the best prices generally paid for collections that were assembled with historical insight by their owners,"said Fred Schwan, publisher of BNR Press, 132 E. Second St., Port Clinton, Ohio 43452, which devotes itself to paper money books and catalogs.

"Getting started, you can have all the fun you can handle for a couple of hundred dollars a year and you'll enjoy making plenty of historical discoveries along the way."

We're not talking about all paper money here, but vintage,

interesting items that are somewhat scarce and therefore worth more than face value.

"There are only five to 10 exam ples of the top collectible note, a $1,000 U.S. Treasury note called the 'grand watermelon' because of the huge melon-like zeros on its back, and its retail value is currently around $100,000," said Steven Feller, editor of the quarterly International Bank Note Society Journal.

Annual membership in the non profit International Bank Society is $17.50, including the journal. Feller's address is 1220 First Ave. N.E., Cedar Rapids, Iowa 52402.

It's a collectible field that truly seeks out quality.

"When you buy a house, the three factors are location, location, location, but when you collect old paper money, it's condition, condition, condition," said Thomas Gittings, senior economist with the Federal Reserve Bank of Chicago.

"There are several levels of uncirculated paper money, but 'choice uncirculated' is the highest one, meaning a bill that is crisp, well-centered, unsoiled and unfolded."

Some U.S. paper money collectors emphasize a certain series of notes. Others put together sets of notes of different denominations from the same time period or collect specimens of every note bearing the signature of a certain secretary of the Treasury.

Paper money with printing errors or eye-catching portraits can -- be more valuable.

The collecting of notes issued by the Confederate States of America during the Civil War is also popular. Many collectors seek out paper money from around the world.

"You can't dwell on the volatility of this market, or the fact prices are going up or down, but just emphasize the enjoyment of collecting," advised Dean Oakes, owner of the mail-order firm Dean Oakes Currency Inc., P.O. Box 1456, Iowa City, Iowa 52244, and a former treasurer of the Society of Paper Money Collectors.

Membership in the Society of Paper Money Collectors is $20 annually, which includes six issues of Paper Money magazine. Copies can be bought individually for $2.75 apiece, plus $1 for shipping and handling. Contact Robert Cochran, organization secretary, P.O. Box 1085, Florissant, Mo. 63031.

For a list of paper currency deal ers, contact the Professional Currency Dealers, P.O. Box 573, Milwaukee, Wis. 53201.

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