The Wonderful World of National Bank Notes

It seems appropriate that our first blog post should be about the greatest numismatic collectible, national banknotes.

The History of National Currency:  Between 1863 and 1935 any bank in the United States or its territories could issue its own currency, provided that it was a national bank.  There were lots of requirements to become a national bank.  These usually corresponded to the size of the city and capitalization of the bank.  National banks were generally considered more secure and prestigious than state banks.  Records show that 12,635 national banks issued paper money during the 72 year national currency era.

Value of National Currency:  The four main factors that affect the value of national bank notes are the bank rarity (number of notes known to exist), the type of note (blue seal, red seal, first charter, etc), the bank serial number, and the condition.  We could talk for hours about why some notes are worth more than others.  If you would like to learn more about the value of your banknote, then just contact us directly at MGarrett@ManifestAuctions.com

What Makes National Bank Notes So Fun To Collect?

Anticipation:  This is a somewhat difficult concept to explain in writing, but I will do my best.  Let’s say you collect Beatles posters from the 1960s.  If you are very lucky then you might have record of every venue and date at which The Beatles performed during the 60s.  You could make a list of all of those events and try to find a poster advertising each performance.  However, you would never know if posters were printed to advertise every concert, and you would definitely never know how many posters were printed.  So you could essentially spend fifty years collecting and you would never know if you had all the posters and if your collection was complete.  The opposite is true with national bank notes.  We know every national bank that printed currency.  We also know what types and denominations were printed.  And we actually have record of quantities printed.  This may seem unimportant, but all of that data sets the stage of anticipation for the next great discovery.  Every collector has a white whale.  We know that XYZ printed 2,000 1902 red seals, but none have been found yet.  Some collectors have to wait decades before filling that one last hole.  Long story short, it is very easy to systematically collect national bank notes and know with certainty when you have accomplished your collecting goals.  Very few other areas of collectibles are like that.

Multitude of Ways to Collect:  We know hundreds of collectors, and it is very rare that the collecting interests and goals of collectors overlap.  For example, some people only collect notes from a certain state.  Others focus on a single town.  Some people only want notes from state capitols.  It is not unusual to see collectors that want to buy a specific type of note from every state.  You can spend $10,000 and have a historic and focused collection; or you can spend ten million dollars and have a collection that is equally historic.  The beauty of it is that there is no right or wrong way to collect, even if you are on a budget.

Portability:  The list of great collectibles that are a nightmare to transport pretty much includes 95% of the antique field.  We are talking art, furniture, classic cars, glass, pottery; the list goes on and on.  When it comes to national bank notes though, you can literally hold a ten million dollar collection in one hand.  You can safely and securely mail them throughout the country.  You can store a collection of hundreds of notes in a safety deposit box that costs $50 a year to rent.  The ease of storage and transportation is pretty tough to beat.  We should also mention that you aren’t paying yearly taxes to own your collection.  That is always a bonus.

New Hobby:  We know that art has been collected for centuries, and that coin collecting is the hobby of kings.  Where does national bank note collecting fit in?  Surprisingly, there was basically absolutely no collector value for antique paper money until about 1945.  This is when the first significant auction occurred.  Notes that are worth $10,000 today were selling for 10-30% over their face value.  In the 1950s and 1960s a few coin dealers started advertising for paper money.  The first useful publication for national bank notes came out in the 1980s.  That is when national bank notes could finally be collected systematically with some confidence in the rarity of what you were buying.  If you took 100 numismatists in a room, probably only a handful would know much about national bank notes, and only one or two might collect them.  You can spend $500,000 and put together a very impressive and important national banknote collection.  Spending that kind of money in the coin or art world would still leave you as just another insignificant collector.  Simply put, there is still a lot of room for the market to advance.

There are plenty of other reasons to collect.  If you are into local history then there probably is nothing else more geographically or regionally important than the local money issued by your hometown bank that is signed by its most prominent former residents.

Please let us know if we can ever help you with your collecting or selling needs.  MGarrett@ManifestAuctions.com