Uncirculated currency that circulates too much among collectors

By Scott Hopkins

It was described as a choice wildcat note; a banknote from the 19th century era of free banking in the United States. Apparently the bank issued the notes for a different state than they could be redeemed. The gorgeous intaglio canal image five dollar note could only be redeemed in a small cabin in the woods, one only wildcats could find. If one was so lucky to find it there were no reserves of silver or gold backing the note and the majority of noteholders burned their notes after discovering they would not be redeemed. Here was one in uncirculated condition, signed and issued in a slab. It was about to start its journey to circulation.

After the collector held up the note and described the MS66 beauty he wanted to pass it around and share it with his local coin club colleagues. He was proud of his achievement in adding the wonderful piece of history to his collection and hoping that the other collectors would agree. As the note was passed around collectors concurred that it was a choice example with great art. They loved the story behind it. As the note circulated though that MS66 grade was starting to take a hit.

Unfortunately banknotes and paper money that are graded by professional third party grading companies are not immune to damages, even from light to moderate handling. Unlike coin slabs, the material is much more akin to a coin flip. Thus, the note inside the protective holder is only as protected as the holder itself.

As the note made its way around the club attendees’ one corner of the note began to stand out. Sure, the third party grading service made up its mind that it was a MS66, but if the note ever came up for resale most collectors would agree that it was beginning to take on an AU58 appearance. That corner became the focal point for each thumb and index finger that appreciated the note.

Obviously to the untrained eye the crease that was beginning to form did not detract from the overall appearance of the artwork and surely did not detract from the history of the piece. I had to wonder though if the collector was going to say something when the note made its way back to him.

Should he say anything? Was he inviting this mishandling by letting the note get passed around? Some collectors would not mind such “circulation” if for the purposes of education or the thrill they get from receiving respect from their peers at owning such an incredible banknote.

What it teaches us though is that our collections are finite. Even in the most protective cases, coins and especially paper money do have a lifetime and they will degrade or become circulated or even damaged at some point. This natural attrition will occur with handling, reholdering, temperature, humidity, and eventually the material the metal or in this case paper simply degrades with time.

One has to wonder if the other coin club members were simply being irresponsible. There is a right and a wrong way to hold numismatic collectibles. It’s one of the first things we are taught in the hobby. It’s a golden rule right up there with “buy the book before the coin.” Is it appropriate to remind our colleagues to be careful when handling our precious collections?

I believe there is a time and a place for reminding other collectors and curious parties to be careful. For example, a collectible banknote or paper scrip is quite fragile, much like an ancient coin. When I spend time teaching students at primary schools about coins and incorporating that teaching into the classroom I am selective with what I pass around. If I’m going to pass around a banknote it’s often going to be common, replaceable, and not a high condition rarity. That doesn’t mean the best-of-the-best shouldn’t be appreciated by others. In those cases I hold the note or coin as I pass it around. Those truly interested in further inspection will simply ask, and I gladly reciprocate.  W

Scott M. Hopkins is a researcher, living in the Ottawa area. A professional historian and personal property appraiser,  he works to promote numismatics in classrooms and writes to promote the hobby.

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