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The IBNS Introduction to Banknote Collecting

The IBNS Introduction to Banknote Collecting

THE IBNS INTRODUCTIONINTRODUC TO & COLLECTING

Prepared by members of the International Note Society. © 2018 e International Bank Note Society.

www.theIBNS.org Table of Contents

Introduction 3 e Banknote 4 What is a Banknote? 4 Other Instruments 6 What is ? 9 Features of a Banknote 10 Why are Banknotes Interesting? 13 How is a Banknote Manufactured? 15 Essays, Trials, Proofs and Specimens 22 Collecting Banknotes 23 Catalogues 23 Types and Varieties 24 Grading Banknotes 26 30 What to Collect? 31 How to Build a Collection 32 What Condition to Buy 32 ird-Party Grading 33 Processed Notes 33 Collectors and Investors 34 How to Store a Collection 34 e Equipment a Collector should Own 35 Disposing of your Collection 36 Join the IBNS 36

2 e IBNS Introduction to Banknotes & Banknote Collecting Introduction

his guide is an introduction for people pursuing an in T banknotes and gives the beginner a description of the banknote, its various features and how banknotes are manufactured. Included in this guide is an outline of aspects to be considered when building a collection of banknotes. While there are many numismatic organizations throughout the world, the International Bank Note Society (IBNS) is the premier organization for people interested in banknotes of the world. Membership of the Society includes collectors, banknote dealers, auction houses, libraries, numismatic publishers and institutions. Membership in the IBNS has numerous benets, principally bringing together people with a common interest in banknotes. One of the main benets of membership is receiving the quarterly IBNS Journal—a full colour, 80- magazine with articles on banknotes and covering aspects of the Society’s activities. A web site at www.theIBNS.org oers information on banknotes, the Society’s activities and the Society’s members. A forum on the website is available for members to discuss matters and ask questions. e IBNS Directory lists all members of the Society, usually with their contact details and their collecting ; with the Directory distributed to all members. Two annual postal bid auctions are also available for members to sell and buy banknotes. To gain the most from an interest in banknotes, membership of the IBNS is recommended. Once a collection has commenced, the new collector will nd answers to further questions by contacting fellow collectors, reading specialist publications, or obtaining general publications on and banknotes. Reference to this guide may also prompt collectors to nd out a little more about the banknotes they already possess. We certainly hope your interest in banknotes continues for many years.

e IBNS Introduction to Banknotes & Banknote Collecting 3 What is a Banknote?

oday, the term “banknote” or “bank note” is used to T generally describe paper issued by various authorities around the world, but banknotes are not always issued by banks.

“Paper money” is another term commonly used to describe banknotes, as this term does not limit items to articles issued by banks, but it also includes items that are not made of paper. In some countries “” refers to paper money, but this term usually refers to ocially issued notes. (Another denition of “currency” is “ at which is current as a ; the circulating medium (whether or notes); the money of a country in actual use.” Oxford English Dictionary (OED)) So, despite perceived inaccuracies, the term “banknote” is commonly used to refer to paper money in its various forms. In most countries banknotes are issued by a , supervised by the government. In some places, banknotes are not issued by a bank, but are issued directly by the government, such as in the British dependencies St. Helena and the Falkland Islands. Similarly, in some countries, banknotes have been issued by the treasury of a government and not by a central bank, but they are nevertheless still regarded as banknotes. Originally, banknotes were issued by private banks and governments issued only coins. ere remain several places in the world where private banks continue to issue banknotes for general circulation, rather than be issued by the government—this still occurs in , and . e earliest banknotes were one of a number of paper money instruments used by individuals and companies to engage in transactions, all of which represented a promise to pay a certain amount of money specied on the banknote, at a certain point in time, and some of which were made payable to the bearer (the person holding the paper money) and some that were payable to a particular person. The Banknote

A modern banknote from , issued by a central bank—the National Bank of Ethiopia.

4 e IBNS Introduction to Banknotes & Banknote Collecting is banknote, a post note, was issued by a private company and was payable to an individual, (or order) aer a specied period, in this case aer 45 days. It was not payable “on demand” as is the case with most banknotes. e particular features of a banknote, over other types of paper money, is it was usually payable to the bearer and usually payable on demand. Originally, a banknote was “A given by a , payable at a xed date to a specied payee.” (OED) Later, a banknote became “A piece of paper money of a xed , circulating as currency.” (OED) While most types of banknotes now e Royal is one of three private banks to issue banknotes have all details printed during their in Scotland. Although authorized to circulate, the notes issued by the Scottish manufacture, originally they were banks are not legal tender. handwritten, and then partially printed as “forms” to be completed by hand at the time of issue. e items to be completed varied, but usually consisted of the date, the serial number and the signatures. Banknote forms that are not completed are known as “remainders” and modern banknotes that have never been issued can also be referred to as remainders.

Above: is banknote was prepared for the state of Biafra, which seceded from in the late 1960s. is note has no serial numbers, was never issued, and is thus regarded as a “remainder.” Typically, modern banknotes without serial numbers, or signatures, and sometimes the date – items oen added aer the of the note – are considered remainders.

Le: is is a privately issued note for seven shillings. e was prepared for the Ballindalloch Works, and promised to pay one (21 shillings) if three of the notes were presented. Most of the form is printed, but several areas of the form had to be completed by hand—the date, the serial number, the signature and the name of the clerk who entered the note into a register.

e IBNS Introduction to Banknotes & Banknote Collecting 5 Other Paper Instruments

A hand-written bill from Scotland, ther types of nancial Note (or Note of hand): A written dated 1757. O instruments associated with promise to pay a certain sum at a paper money are: specied time. (OED) Bill (or Bill of Exchange): A written Bank post bill: Originally a order by the writer or “drawer” to promissory note intended to be the “drawee” (the person to whom conveyed to its recipient by mail, but it is addressed) to pay a certain sum later used as post-dated bills, or post on a given date to the “drawee” or notes, and were payable at a future to a third person named in the bill, date; i.e. post dated. known as the “payee”. (OED)

A Bank Post Bill issued by Beresford’s Bank, Ireland.

6 e IBNS Introduction to Banknotes & Banknote Collecting (check): A written order (on a printed form or otherwise) to a banker by a person having money in the banker’s hands, directing him to pay, on presentation, to bearer or to a person named the sum of money stated therein. (OED) of credit: A letter or document, especially one issued by a bank or other nancial organization, authorizing a named person to draw money to a specied amount from the issuer’s agents or business associates in another place. (OED) Circular note: A letter of credit addressed by a banker (e.g. in ) to several bankers in other countries, in favour of a certain person named therein, usually a person on a tour.

Above: A specimen letter of credit issued by “Skiensordens Kreditbank” in , for the provisioning of a ship.

Le: A cheque drawn on the Cairo branch of Barclays Bank (Dominion, Colonial and Overseas).

Le: A specimen Circular Note (Billet de Change Circulaire) prepared for e City Bank, Limited, London.

e IBNS Introduction to Banknotes & Banknote Collecting 7 Travellers Cheque: A cheque for Bearer : An unregistered Private Issues: While most one of several specied amounts security the title to which is vested banknotes are ocial issues, by a of money, that can be cashed at a in its possessor and is transferred government or by a central bank, bank in most countries, or used in by simple delivery. So bearer , there are many private banknote for , on the holder’s bearer , bearer . (OED) issues. Some of these were issued endorsement against his original by owners of factories or by store signature. (OED) merchants, but there have famously been individuals who have attempted to issue their own banknotes. Fantasy Issues: Because of the general interest in banknotes, it is now common for people and companies to produce banknotes which have no , but which imitate banknotes. Some of these are very professionally manufactured and some are poorly produced. : Also described as “emergency money”, “,” “” or A specimen travellers cheque for two pounds, issued by the District Bank, “necessity money”. Notgeld is Manchester, England. typically issued during and aer wars and economic upheavals, due to the lack of sucient ocial currency, or high ination, or the disappearance of coinage. Notgeld has been issued by local town authorities, , chambers of commerce, goldsmiths, militias, railroads, charitable organizations, asylums, factories, stores, co- operatives, corporations, private banks, occupying military forces, and others. Most Notgeld served as “small change” to replace coinage, A private note issued by the Chief Treasury of Wales, established by eccentric Welshman, which tends to disappear in times of Richard Williams. nancial crisis; but occasionally it served as the primary currency. : A substitute for legal tender, issued for limited circulation. Issue might occur in a closed environment, such as on a ship, a “company town” or in a camp. Scrip can also be a substitute for legal tender when none is available; issued by companies that run out of , or by governments during a budget impasse. A fantasy issue for the Chatham Islands. is is one of several issues which were ultimately banned by the government of because they purported to be legal tender on the Islands, which they were not.

8 e IBNS Introduction to Banknotes & Banknote Collecting What is Legal e status of a banknote generally goes through Tender? three phases: 1. Banknotes become legal hese days, most ocially issued banknotes in a country are considered tender on being issued. T legal tender. Under the laws of a country the circulating banknotes and coins are usually declared to be legal tender for all , both public and 2. Once the banknote is no private. is means people must accept the banknotes and coins in payment longer in use, generally for goods and services. Public debts are those incurred by the government because a new issue of and its agencies, and private debts are between individuals or companies. banknotes replaces an In the law declaring legal tender, restrictions may be imposed. Oen, small earlier issue, they lose denomination coins and banknotes are declared legal tender up to a certain their legal tender status. amount; for example, a 1-cent might be legal tender up to 1 dollar— ese banknotes can meaning if someone wants to pay a 2-dollar with more than 100 1-cent be redeemed at banks coins, the person receiving the payment is not legally obliged to accept the for the new legal tender payment. Laws on legal tender vary from country to country and in times banknotes, and sometimes, of emergency, particularly during war time or during the conversion of a currency, there may be more than one currency declared legal tender in a oen for a period of country or territory. many years, they can be redeemed at the central bank that issued the banknotes.

3. e banknotes are demonetized. is means they completely lose their value and can no longer be redeemed anywhere. Although not commonly used, declarations of legal tender appear on banknotes from is usually happens the USA (above) and (below). aer many years, but sometimes it happens quickly, especially if there is a civil war or if there has been widespread of the note issue. In some countries, the banknotes are never demonetized and their value can always be redeemed by the issuing authority.

e IBNS Introduction to Banknotes & Banknote Collecting 9 Features of a Banknote e banknotes of the Bahrain Currency Board used Arabic text on the front of the note and English text on the back of the note. anknotes have a front and Banknotes throughout the world B a back. Various terms have common features, although are used to refer to the front not every banknote has each of the following features. and back of a banknote, with no terms being universally Name of the issuing authority: recognized; the front is also e name of the issuing authority, usually the central bank of a country, known as the obverse or face, generally appears at the top on the and the back is also known front of the note. Sometimes the as the reverse. While older name is also on the back of the note, banknotes were uniface, having frequently in English if the name of only a printed front and a blank the issuing authority is not rendered Although the banknotes of many countries back, all modern banknotes are in English on the front. have the name of the issuing authority in two languages, (see above) uses printed on the front and the Denomination: e denomination its four national languages on its notes (two back. of the note is always on the note, on the front and two on the back): German, almost universally in numerals and Romansh, French and Italian. oen written in text. Where more than one language is used in the areas where the note circulates, the denomination is oen presented in multiple styles of numerals and sometimes in multiple languages. Promise to pay: When banknotes were rst issued, there was usually a phrase written on the banknote with a promise to pay the bearer the value of the note on demand. is was at a time when banknotes were backed by coins, usually made of or . For many years, banknotes have no longer been backed by coins and are now regarded as “at money,” that is, the value of the note is decreed by law, and the promise to pay does not exist Banknotes in Cambodia declare their denomination in Khmer numerals and western numerals. on most modern banknotes. Date of issue: Frequently a date of issue is included on the banknote, but many modern issues do not include a date. Sometimes the date of issue is a complete date—with day, month and year—and sometimes just the year. In some countries the date is given according to more than one calendar, such as in Muslim countries where the Hejira calendar In the 1960s and 70s Pakistan used Bengali, Arabic and Western Numerals on its banknotes. is used. Sometimes the date is hidden in the serial number.

10 e IBNS Introduction to Banknotes & Banknote Collecting Date of law authorizing issue: e signature, and oen two. Modern Although not commonly used on modern law authorizing the issue of the banknotes usually have one or two banknotes, the promise to pay the bearer on demand was usually found on older banknote is occasionally referred signatures, although throughout banknotes, such as the note from Sierra to on the banknote and this oen history as many as 14 signatures Leone (above). e promise still exists on includes the date of the law. is date have appeared on a banknote. some modern banknotes, as on the note from Guernsey (below). should not be confused with the date Typically, the signature of the head of issue. of the issuing authority appears Series number: In numbering on the banknote, but the title of banknotes, a series number is oen the signatories varies greatly, from assigned, usually in a one- or two- a member of the sta of a bank, character format using either letters such as the Chief Cashier on the or numerals, or a mix of letters banknotes issued by the Bank of and numbers. In some cases serial England, to the leader of the country numbers are not used on banknotes, issuing the banknote, such as the with only a series number used. is President on the banknotes issued usually occurs in emergency issues in the and the sultans or on notes with very little value. of Oman and who sign the notes issued in their countries. Serial numbers: Banknotes have carried serial numbers since Illustrations: e earliest banknotes banknotes were rst used. e carried no illustrations, but from serial numbers originally allowed early times vignettes began to appear sta in the bank to match an issued on banknotes. Over time, the size note against a counterfoil from of the vignettes grew to become a which the note was cut, or match dominant feature of a banknote. the note against a ledger in which Now, illustrations commonly issued notes were recorded— appear on the back of banknotes allowing verication of the note’s as well as on the front. e subject Above: Examples of dates depicted on issue. Today, banknotes almost of the illustrations oen tells much banknotes: (top) day, month and year on about the history and culture of the a banknote from Brunei, (centre) month universally carry one serial number and year on a banknote from , and usually a repetition of the serial country in which the banknotes are and (bottom) year only on a banknote number; although banknotes have issued. from Norway. been known to repeat up to six serial numbers. Sometimes serial numbers are presented in more than one character set; and if this is done, it is usually once with a Latin On this banknote from Bahamas, the series e year in two calendars – Gregorian and is identied by a year. Hejeira – appears in Arabic numerals on character set and once with a non- banknotes issued in Oman. Latin character set, such as Arabic, Bengali, Hebrew, Urdu, et cetera. In modern banknotes it is common to nd non-Latin character sets used for all repetitions of a serial number. On the note from the series number e date of the law authorizing the issue of Signatures: Banknotes, from their is two letters and a number, and there is no the note; on a banknote from Bolivia. inception, usually carried at least one serial number.

e IBNS Introduction to Banknotes & Banknote Collecting 11 Security features: e earliest banknotes carried very few security features, but today there are many types of security features, all designed to make counterfeiting of banknotes more dicult. See the e ocial most likely to sign a banknote is the governor of the central bank, as seen in the “Security Features” section for more image at top le from a banknote issued in Barbados. e signature at the top right is of the details. Sultan of Brunei, the , on a banknote issued in Brunei. e banknote issued by Guinea-Bissau (below) was rst issued with three signatories, but was Warning to counterfeiters: On soon re-issued with the titles, and signatures, of two signatories changing. ( e font for the some banknotes, a warning to serial number also changes.) counterfeiters is included. It is a section of text, sometimes referring to a law and sometimes stating the penalty for counterfeiting. Occasionally a banknote will carry the copyright symbol (©) and who is claiming copyright. is is not specically aimed at forgers, although copying the note adds to their crime, but is aimed at protecting the design from being used on items such as tea towels and mugs.

Above: A vignette from an Australian Bank Post Bill, typical of nineteenth century vignettes.

Above: e claim to copyright on a German banknote.

Warnings to counterfeiters on banknotes from (top) and .

12 e IBNS Introduction to Banknotes & Banknote Collecting is image, aer a painting by John Trumbull, shows the presentation of the of America’s declaration of independence by its draers, a famous historical event, depicted on a banknote issued in the United States of America. Why are Banknotes Interesting?

here are many reasons why banknotes are interesting and Teach person may develop an interest in banknotes for a dierent reason. Some of the common reasons banknotes are of interest are listed here.

A Record of Culture: e banknotes of many countries carry images relating to the culture of the country of issue. For example, an issue of notes might carry the fauna and ora of the nation; the notes might display portraits of famous people; and important monuments or buildings may be depicted. By understanding why these images are used, much is learnt of the country of issue.

e banknotes of Iraq are a good example of being able to follow its modern history. From the top, we have a Currency Board issue with King Faisal I; then a World War II emergency issue with King Faisal II; a National Bank issue; a Central Bank issue follwing the formation of the republic; a modern Central e back of this two-dollar note from Belize shows the “Mayan Ruins of Belize” and Mayan Bank issue; an emergency issue, depicting patterns are incorporated in the design of the note, all depicting the important cultural Saddam Hussein, following the First Gulf heritage of the nation. Additionally, the native ora and fauna of Belize are depicted in a War; and a note issued by the Central Bank panel towards the le. us aspects of the country’s culture are portrayed on the banknote. following the overthrow of Saddam Hussein.

e IBNS Introduction to Banknotes & Banknote Collecting 13 A Record of History: While e Beauty of a Banknote: aspects of a nation’s history might Banknotes are frequently small be depicted on a banknote, such works of art. Some people collect as famous battles, famous treaties, banknotes just because they are and famous events, it is more oen beautiful items, highlighting the the change in the banknotes over skills of the artists and engravers a course of time that portrays who created the work. Some people aspects of a country’s history. For assemble a banknote collection example, a colony may develop into based on the engraver who created a nation, and then undergo political the artwork on a banknote. upheavals, sometimes leading emes: Many people collect to a new nation or a short-lived banknotes along a particular theme, secession. ese events can be seen such as butteries on banknotes or in the banknotes, reecting the bridges on banknotes. Others might changes in the country. Sometimes collect banknotes with musical an issue of banknotes causes themes or animal themes. Some controversy itself, or specic events people collect banknotes of countries are linked to an issue of banknotes, that no longer exist and some collect and the story behind these issues or banknotes used by occupying events can be more interesting and armies. ere are many themes from exciting than any or movie. which to choose and each can be a source of interest to the collector.

Beauty is in the eye of the beholder, but above are some banknotes which are works of art in their own right—from , and e Bahamas. e third banknote could also be a target of people Some collecting themes are: Queen Elizabeth II on banknotes (top), who collect sh depicted on banknotes. scientists on banknotes (middle), and castles on banknotes.

14 e IBNS Introduction to Banknotes & Banknote Collecting How is a Banknote Manufactured?

here are two basic processes to manufacturing a banknote: T the manufacture of the banknote material and the printing of the material.

e Banknote Material Banknotes have historically been made of paper, but the manufacture of the paper has varied over the centuries. e earliest known banknotes are Chinese banknotes that were printed on paper manufactured from the bark of mulberry trees—which made grey or purple paper. In the western world, paper was made from cotton or ax, or a mixture of these bres. e paper was thus of high quality, enabling the banknotes to circulate for a long period without deteriorating. Paper manufactured from timber is not as strong or as durable as paper manufactured A banknote manufactured from ; issued in the Khorezmian People’s Soviet Republic in from cotton and ax, but it has been 1920. used for banknotes—usually for emergency issues. In recent years banknotes have been made from . e rst plastic banknotes were manufactured of Bradvek™ by Bradbury Wilkinson and Company, utilizing a product usually sold as ™. A polymer developed for Note Printing Australia is now used by many note issuing authorities. Banknotes have also been manufactured from other materials, such as silk, but these are considered oddities and such materials have not generally been used. Notgeld (emergency money) issued by the Lautawerk factory in Lauta (Germany), manufactured from aluminium foil.

e IBNS Introduction to Banknotes & Banknote Collecting 15 Printing Lithographic printing was developed in 1796 and originally used a type of Printing on banknotes mostly follows stone as the printing surface; this was one of three principal methods, but etched to generate the area holding usually a mix of these methods is the water. Modern lithography used. e three printing methods are: uses a polymer coating applied to a relief, lithography, and intaglio. metal or plastic surface and only the Relief printing: e text or image to polymer surface holds the ink to be be printed is created as a raised area printed. that is inked and applied to the paper. Oset printing transfers (or osets) is type of printing was used in the image from a printing plate to many ways by the printing industry a rubber roller that then applies over many centuries. Block printing, the ink to the paper. In modern letterpress and stereotype printing are printing, one or more printing plates all types of relief printing. Banknotes A diagram illustrating the oset printing are commonly prepared to use the process. (Courtesy Wikimedia Commons.) have infrequently used this style lithographic process. Most modern of printing but the early Chinese banknotes use the lithographic banknotes and the banknotes of Tibet and oset processes to print the were printed using relief printing. background of the banknote and Serial numbers, however, have sometimes these processes are used almost universally been printed on to manufacture the entire banknote. banknotes by relief printing. Intaglio printing: e image to be Lithography and Oset: Using applied to the paper is etched onto a lithography, the printing surface or metal plate that then has ink applied A banknote for 3 taels, issued by the Khotan printing plate is treated to create to it before it is wiped clean. Aer District Administration in around two textures, one that absorbs water being wiped clean, the ink remains 1935–36. It is block printed, which is a type of in the etched areas and when paper relief printing. and one that holds the oil-based ink. When the ink is applied to the whole is applied to the printing plate under Below le: Detail of a 500-franc note of the printing surface, the areas that hold high pressure the ink is transferred Comoros, manufactured with intaglio printing. the water repel the ink and only the to the paper. Below right: e same note was later issued with lithographic printing. surface that holds the ink transfers an e etching is achieved in one of two Note the at colour. image to the paper. ways and sometimes a combination of these methods is used.

16 e IBNS Introduction to Banknotes & Banknote Collecting e rst method is to use tools to colours to be printed in one pass of Varieties of security thread engrave the design directly onto the the printing press. printing plate. e second method sees the printing plate covered in Security Features a “ground” and the designer then Because of the problem of forgery draws the design in the ground. A typical windowed or segmented security over many years, much attention thread. e plate is subjected to acid, which has been given to security features etches the plate where the ground that impede the successful imitation has been removed. of banknotes. e security required for banknotes, along with e intaglio method was generally A wide windowed security thread used from the introduction of certicates, bonds and passports, with micro-printing. banknotes in the late has led to companies specializing in and remains in use today. However, and, as the methods of utilizing this process develops over the years, there have have developed signicantly over been increased and innovative Detail of a security thread using the the years. Many modern banknotes features added to banknotes to deter MOTION technology. use intaglio printing for the counterfeiting attempts. While there principal design elements, with are specic security features that lithographic and oset printing for can be clearly identied, there are many aspects of security not always the background. Detail of a RollingStar® security thread, apparent; these include the colour N.B. Sometimes a banknote is developed by Louisenthal. and features of the ink—including printed with its background using ink that can hold a magnetic lithographic and oset printing eld and inks that uoresce— methods and the principal design and patterns used on banknote features use intaglio printing. en designs—that cause photocopies of Detail of the RollingStar® Cube security a later issue of the banknote is made banknotes to be rendered useless and thread, developed by Louisenthal. by using only lithographic and oset soware packages that do not allow printing. erefore collectors need printing of scanned images. In older to know the dierence between the banknotes, sometimes intentional type of printing on the banknotes. Micro printing of “ Bank” on an mistakes were made so the errors otherwise clear security thread. • Lithographic and oset printing looked like poor printing, so when renders sharp borders and edges on the features were perfectly rendered a printed line or a printed shape in a forgery, they could be identied. • Intaglio printing shows, under Each year new security devices are magnication, lines and edges to added to banknotes throughout the be “furry.” Additionally, intaglio world, as security printers attempt printing usually has a gloss nish, to introduce a feature that gives as opposed to the dull nish to them a marketing advantage. Details lithographic and oset printing. or summaries of these features are commonly published on the Internet Colour and for people interested in security Most early banknotes were printed features, there is an amazing array in black ink and in only one of features to discover. Although colour. Two-colour printing was not comprehensive, the following introduced in the 1820s, by using security features are identied, multiple printing processes, and particularly as changes to these the complexity of colour printing items can determine a variety of a progressed over the years. Modern banknote. printing techniques allow multiple

e IBNS Introduction to Banknotes & Banknote Collecting 17 Security bres: Banknotes can have coloured bres embedded in their paper, introduced at the time of paper manufacture. e bres are either evenly spread over the paper or they are formed in a strip at a certain section of the paper. Frequently these coloured bres uoresce under light. Variations on the inclusion of coloured bres in the paper, are the inclusion of small coloured strips with writing on them or planchettes—small metal, plastic or paper discs—embedded in the paper. Security threads: is is perhaps the most wide spread of modern security features and a feature that has been adeptly modied over many years. Initially, the security thread was a simple metal thread embedded in the paper and was, to some extent, a modication of embedded security Above: A traditional and an Watermark: were used bres. From this simple thread, we electrotype watermark (partially covered by in paper manufacture long before now see threads that appear to weave the serial number) on an Italian banknote. the issue of the rst banknotes. e in and out of the paper, threads (A perfect registration device of stylized with micro-printing on them, thin leaves is at the lower le.) watermark is introduced during the threads, wide threads, threads manufacture of the paper and was with iridescent eects, and threads originally produced by raised images that have optical eects showing in the paper moulds that impressed movement of images. the image of the watermark into the Embossing: e traditional , aecting the moisture levels in feature of using a blind stamp for the paper during the drying process. embossing paper is now largely out Watermarks with shadows are of use, although it is occasionally achieved by distorting the screen on Detail from an Argentinian banknote showing found in modern banknotes. Tactile (above) colour bres embedded in the which the paper pulp is laid, creating features are now being embossed on banknote and (below) the same detail when dierent thicknesses of paper that banknotes to assist sight-impaired the note is submitted to ultraviolet light. dry unevenly. Early watermarks for people, but this is not intended as a banknotes were specically designed security feature. to suit individual notes. is practice is still wide spread, but with the use of sheets of paper to print banknotes, watermarks can be evenly distributed over the entire sheet, or by producing a continuous (or banded) watermark. Watermarks are usually, but not universally, found in a white or lightly coloured area of the banknote. Electrotype watermark: Similar to a traditional watermark, but the image is created by a at metal device, or Embossing (front and back) on an Iraqi wires, spot welded to the screen on banknote. Embossing was used on many early Planchettes embedded in a Canadian banknote. which the paper is laid. banknotes and sometimes to ax a duty stamp.

18 e IBNS Introduction to Banknotes & Banknote Collecting Serial numbers: Although necessary for practical purposes, serial numbers have commonly been used as a security device by: using fonts not available to the public, printing serial numbers vertically and horizontally, printing the characters in ascending sizes, printing the numbers in dierent character sets, printing Perfect registration device: Because Above: ree images showing a perfect them with uorescing inks, and even modern banknotes are printed on registration device on a 5-afghani banknote printing a single serial number in from Afghanistan. e rst image shows the the front and back at the same time, printing on the front, the second shows the dierent colours. images on the front and back can image on the back, and the third shows an be perfectly aligned, or perfectly Arabic 5 when the images are combined by holding the note to the light. registered. is allows a partial image to be printed on the front of the note and a partial image on the back, and when the banknote is held to the light the two partial images form a single crisp image. Fluorescent devices: e use of uorescent inks is widespread in modern banknotes. Commonly used for coloured inks and in serial numbers that uoresce under ultra- violet light, there are oen devices printed on the banknote that are not apparent in normal light, but that become apparent when submitted to ultraviolet light. Detail of a Danish 1000-kroner viewed in Micro-printing: To the naked eye normal light (above) and the same detail when submitted to ultraviolet light (below); micro-printing looks like a line where a uorescent device of a man on a or a pattern on the banknote, but horse becomes apparent, as well the serial when magnied it can be clearly number and signatures uorescing. read. Most attempts to photocopy or photograph the note will not succeed in copying the micro-printing with the necessary clarity. Micro-printing is almost exclusively executed with intaglio printing. While micro- Sample variations in serial numbers, showing printing usually appears with the (from the top): the serial number in two character sets; each serial number in dierent words printed in intaglio ink, it also colours; one serial number printed in two appears where the background is the colours; a serial number where two colours intaglio ink and the micro-printing are used, but the colours are spread across the numerals; Arabic prex and numerals; is the absence of ink. Arabic prex with western numerals; Bengali Commonly, micro-printing consists prex and numerals; Bengali prex and western numerals; a serial number with no of a word or phrase repeated many apparent prex; two letters in the prex; three times, but sometimes it is a length of letters in the prex, a fractional prex; two text, such as a poem. vertical serial numbers; a letter as a prex and numerals in ascending size; a letter as a sux, Latent images: ese are used in with the numerals in ascending size; and a banknotes where intaglio printing serial number with the date embedded, that is, the rst two numerals “17”identify the date of is used. Within a pattern of intaglio manufacture: 2017. printing is an image, commonly the

e IBNS Introduction to Banknotes & Banknote Collecting 19 Above: Micro printing on a 10- note, showing three lines of EURO in Latin and Greek characters. In the top le and top right of the image the number “10” is formed repeatedly by the absence of ink.

e latent image (above) of “100” (in Bengali numerals), shows how the image is created by Le: Detail from a Brazilian 10-reais note, lines of intaglio ink being printed in two directions. Below is a latent image of “BNA” from a showing the use of SPARK Origin™ colour- banknote issued by the Banco Nacional de Angola. shiing ink. Right: Detail from an Australian 5-dollar note showing the rolling colour eect.

denomination as numerals or the intaglio ink. Devices printed on initials of the name of the bank, that banknotes continue to improve, can be seen only if the banknote is such as the introduction of reective turned and viewed at a low angle, images that can display two images, across the note. depending on the angle the device is Under magnication, lines at the viewed. vertical and horizontal can be seen Colour-shiing Inks: Many devices to form the latent image. On some on modern banknotes contain high-denomination notes, a double colour-shiing inks. SPARK™ e EURion Constellation of small circles is latent image is used, so when viewed are one of the pre- recognized by modern devices to inhibit or from one angle an image appears, eminent colour-shiing technologies limit the copying of a banknotes. but at a dierent angle another image used on banknotes. appears. Anti-reproduction patterns: To counter the advantage of See-through panels: e Because it is so easy to scan the a clear window on polymer notes, manufacturers introduction of polymer banknotes image of a banknote, then print it, of paper notes created saw the innovation of clear windows, technology companies have co- banknote paper with holes which has been copied in paper operated with security printers in in them, then covered them with plastic strips, creating a banknotes by the application of clear recognizing patterns on banknotes clear window. ese became strips of a plastic over holes in the which allow copying devices (such known as “hybrid” notes, banknotes. as ) and soware (such as seen on this detail in a banknote from Bermuda. Variable devices: Many high- as scanning programs) to reject or denomination notes carry a foil limit options in images being copied. device that has peculiar features. e most common pattern used to ese range from an incised foil identify a banknote is the EURion swatch which reects an iridescent Constellation of small circles (also light, to holograms with images called Omron rings). showing depth. ere are also inks In conclusion, this overview of that change colour when viewed security features, although limited from dierent angles and these in its scope, shows the continued are usually printed as a swatch of development of security features

20 e IBNS Introduction to Banknotes & Banknote Collecting and, for the collector, highlights the need to be able to identify changes in security features to identify dierent varieties of banknotes. Perhaps unsurprisingly, while catalogues will dierentiate varieties according to changes in some security devices, others are not recorded. For example, there are few varieties of banknotes dened by the change in uorescent features on a banknote. So a collector should always take time to investigate the features of a banknote as there are many uncatalogued varieties in some areas TM of collecting. A Kinegram from a German 200-mark note.

Above: A holographic patch on an Albanian note. Right: An incised foil strip with variable images on a note from Botswana. Far right: A series of variable devices in a transparent window on a note from Australia.

e IBNS Introduction to Banknotes & Banknote Collecting 21 Essays, Trials, Proofs and Specimens

uring the design and Proofs are generated for the approval D production processes of of the issuing authority. manufacturing a banknote, several Specimen notes are usually the nal artefacts can be generated, before the design, overprinted for distribution circulating banknote is produced. to banks and institutions to show An essay (“essai”) or trial is any what a new banknote looks like. piece generated during the design Specimen notes are also produced as phase, leading to the nal banknote. presentation pieces. When compared to the nal Facsimile notes (sometimes called banknote, there might be signicant “pulls”) are items printed from the variation and the essay may bear no original printing plates, or copies resemblance to the nal issue. using modern technology, usually Colour trials typically have the nal produced many years aer the design, but varying colours. ese original notes were issued. are generated to show the issuing authority possible colour choices.

e three Bank of Scotland notes illustrated above show the issued note (top le), a colour trial with the blue and brown colours reversed (top right), and a similar colour trial with blue margins (bottom le). e Bank sought the colour trials in the early 1960s due to criticism in identifying the reduced-size banknotes they had issued. Bottom right: An essay or trial piece prepared for Ethiopia. is design was never adopted.

22 e IBNS Introduction to Banknotes & Banknote Collecting Catalogues

henever a collector some address one country, some W contemplates starting a address old issues, and some address collection, acquiring a catalogue a theme, such as banknote errors or specic to one’s collecting interest replacement notes. (Replacement is highly recommended – dare notes are banknotes that are we say essential! ere are many inserted into bundles of notes to catalogues describing and recording replace banknotes damaged during banknotes, usually ascribing a production; ensuring the rst and numbering system to the notes last serial numbers in a bundle of and giving estimated values for banknotes indicate a sequential 100 the notes in one or more grades of banknotes. Replacement notes are condition. Catalogues are available usually identied by special serial that cover the world of banknotes, numbers.)

e serial number of a replacement note from New Zealand, identied by the asterisk.

A serial number from a replacement note issued in Botswana. Prexes on replacement notes commonly use “Z” or an asterisk. Collecting Banknotes

e IBNS Introduction to Banknotes & Banknote Collecting 23 Types and Varieties

anknotes are usually catalogued Types B by types and varieties, and Type banknotes are generally these are the way in which banknotes determined by the design of the are sold and collected. Not every banknote, taking into account the collector wants to collect every principal features of a banknote. e variety, but for someone who features that generally determine a specializes in a series of banknotes, type are: the aim is usually to collect every variety. A “type” note is a specic • e denomination design for which there may be several • A new design varieties. Usually the dierences • A change in issuing authority between types and varieties are • e name of the currency unit straightforward, but occasionally • Size of the note one source will designate a banknote a “type” while another source will • A major change of colours designate it a “variety.” As long as collectors can determine the dierences to their own satisfaction, they can collect the banknotes as they wish.

e banknote above was issued by Pakistan prior to the civil war, which led to East Pakistan becoming Bangladesh; while the note below was issued aer the civil war. Only the colour changed, making a new “type” of the note.

24 e IBNS Introduction to Banknotes & Banknote Collecting Varieties Varieties are usually determined by the following features: • Minor adjustment to the design • With and without the name of a designer or engraver • A change of printer • A note with or without the printer’s imprint; the printer’s imprint being the name of the printer, which was commonly printed in the lower margin (front e Algerian note above was initially issued with a windowed (segmented) security thread; or back) on older banknotes and then reissued with a foil strip, causing two varieties of the banknote. is occasionally found on modern banknotes. • A change in the printing – usually from partial lithography and partial intaglio to all lithography • A change in signatory • A change to the title of a signatory • A change in date • A change in the style of the serial numbers • A change in the serial number font • A change to the security features e backs of these two ten-dollar notes from New Zealand show minor variations to the • A minor variation to colours colour, with the rst (top) note having a blue-green back and the second (lower) note a predominantly blue back. e front of each note is the same, but the change to the back While these lists are not exhaustive, creates two “varieties.” they contain the principal determi- nants of types and varieties.

e printer’s imprint from four issues of the Bolivian 20-bolivanos banknote, showing dierent imprints (and slight changes of colour). At top is “TDLR” ( omas ), then “F.C. Oberthur”, then “CBN” (Canadian Bank Note), and nally “Oberthur Fiduciaire” (the new name of the former F.C. Oberthur). Each printer’s imprint is a “variety” of the banknote.

ree dates used on a 25,000-dinar note from Iraq. e banknotes are identical, except for the dates which are in the Gregorian and Hejira calendars, from the top, 2010 – 1431, 2008 – 1429, and 2006 – 1427. Each note is a “variety.”

e IBNS Introduction to Banknotes & Banknote Collecting 25 Grading Banknotes

rading banknotes is important for the collector, It is important to understand that the following terms G as the grade, the rarity, the , and are grading terms and not absolute terms. Many the demand for a banknote determine its price. A collectors misunderstand the term “Uncirculated,” summary of the International Bank Note Society’s mistakenly believing the term can be used only if grades for banknotes is listed below, but the full the note has never entered circulation. A bank note grading standard, with the introduction, can be found can enter circulation and still be in “Uncirculated” on the Society’s web site. One of the skills a collector condition. As we do not think of a note graded “Good” must acquire is to grade a banknote correctly. While as a note that is not evil, on the same theme, do not many people can disagree on the grade of a banknote, confuse the use of the grading term Uncirculated with collectors must part with their money in the assurance the identication of a note that has never circulated. they know what they are buying, no matter what grade a seller has ascribed to a banknote.

Standard International Grading Terminology and Abbreviations

Terms Uncirculated About Uncirculated Extremely Fine Very Fine Fine Very Good Good Fair Poor

Abbreviations UNC AU or aUNC EF or XF VF F VG G Fair PR

26 e IBNS Introduction to Banknotes & Banknote Collecting UNCIRCULATED ABOUT UNCIRCULATED EXTREMELY FINE (UNC) (AU or aUNC) (EF or XF) A perfectly preserved note, never A virtually perfect note, with some A very attractive note, with light mishandled by the issuing authority, minor handling. May show evidence handling. May have a maximum a bank teller, the public or a of bank counting folds at a corner of three light folds or one strong collector. Paper is clean and rm, or one light fold through the centre, crease. Paper is clean and bright without discoloration. Corners but not both. An AU note cannot be with original sheen. Corners may are sharp and square, without any creased, a crease being a hard fold show only the slightest evidence of evidence of rounding. (Rounded that has usually “broken” the surface rounding. ere may also be the corners are oen a tell-tale sign of a note. Paper is clean and bright slightest sign of wear where a fold of a cleaned or “doctored” note.) with original sheen. Corners are not meets the edge. An uncirculated note will have its rounded. original natural sheen.

VERY FINE (VF) FINE (F) VERY GOOD (VG) An attractive note, but with more A note that shows considerable A well-used note, abused but still evidence of handling and wear. circulation with many folds, intact. Corners may have much May have a number of folds both creases and wrinkling. Paper is wear and rounding, tiny nicks, vertically and horizontally. Paper not excessively dirty, but may have tears may extend into the design, may have minimal dirt, or possible some soness. Edges may show some discoloration may be present, colour smudging. Paper itself is still much handling with minor tears staining may have occurred, and relatively crisp and not oppy. ere in the border area. Tears may not a small hole may be seen at centre are no tears into the border area, extend into the design. ere will be from excessive folding. Staple and although the edges do show slight no centre hole because of folding. pinholes are usually present, and wear. Corners also show wear but Colours are clear but not bright. the note itself is quite limp but NO not full rounding. A staple hole or two would not be pieces of the note can be missing. considered unusual wear in a Fine A note in VG condition may still note. Overall appearance is still on have an overall not-unattractive the desirable side. appearance.

GOOD (G) FAIR (Fair) POOR (PR) A well-worn and heavily used note. A totally limp, dirty and very well A “rag” with severe damage because Normal damage from prolonged used note. Larger pieces may be of wear, staining, pieces missing, circulation will include strong half torn o or missing, beside grati, larger holes. May have tape multiple folds and creases, stains, the defects mentioned under the holding pieces of the note together. pinholes, and/or staple holes, dirt, Good category. Tears will be larger, Trimming may have taken place to discoloration, edge tears, centre obscured portions of the note will be remove rough edges. A Poor note is hole, rounded corners and an overall bigger. desirable only as a “ller” or when unattractive appearance. No large such note is the only one known of pieces of the note may be missing. that particular issue. Grati are commonly seen on notes in Good condition.

e IBNS Introduction to Banknotes & Banknote Collecting 27 e notes below are appropriately graded, but any graded note has several features which contribute PAPER NOTES to its grade and the notes below may not have every possible attribute which determines a grade. For example, a note with a stain will be graded VG, but a VG note might not have a stain.

UNCIRCULATED (UNC) ABOUT UNCIRCULATED EXTREMELY FINE (AU or aUNC) (EF or XF)

VERY FINE (VF) FINE (F) VERY GOOD (VG)

GOOD (G) FAIR (Fair) POOR (PR)

28 e IBNS Introduction to Banknotes & Banknote Collecting e IBNS Grading Standards were drawn up for paper notes and the attributes they describe do not suit polymer notes perfectly. e polymer notes below are graded to reect the IBNS grades POLYMER NOTES for paper notes.

UNCIRCULATED (UNC) ABOUT UNCIRCULATED EXTREMELY FINE (AU or aUNC) (EF or XF) SPECIMEN SPECIMEN SPECIMEN SPECIMEN SPECIMEN SPECIMEN SPECIMEN SPECIMEN SPECIMEN SPECIMEN SPECIMEN SPECIMEN

VERY FINE (VF) FINE (F) VERY GOOD (VG) SPECIMEN SPECIMEN SPECIMEN SPECIMEN SPECIMEN SPECIMEN SPECIMEN SPECIMEN SPECIMEN SPECIMEN SPECIMEN SPECIMEN

GOOD (G) FAIR (Fair) POOR (PR) SPECIMEN SPECIMEN SPECIMEN SPECIMEN SPECIMEN SPECIMEN SPECIMEN SPECIMEN e Canadian Banknotes reproduced with the permission of the Bank of Canada. e IBNS Introduction to Banknotes & Banknote Collecting 29 Forgeries

rom the time printers In the world of today, forgeries F commenced manufacturing continue to be produced to defraud banknotes until the current day, issuing authorities, but there are forgeries have been executed. ere now forgeries being produced is a saying “What one man can make, specically to fool collectors. Many Above: A fraudulent inkjet “” (top) another can copy!” To overcome notes with on them are applied to raise the value of the underlying this, various measures have been being counterfeited by obtaining the military note. e L extending under the le taken by banknote manufacturers to cheaper original notes and adding arm of the Y in ONLY could be done only digitally, not with conventional printing type. make it more dicult for their notes false overprints. Sometimes spurious to be counterfeited. is has led to overprints are being created and sold the creation of specialist security as uncatalogued varieties. People printers. also go to the extent of printing However, even with specialist notes that look exactly like the techniques, forgers have continued to original notes, and while they are ply their . e types of forgers sometimes sold as replicas, they are vary. While it is common to think oen bought as originals. is can of criminal gangs and individuals be done because the technology creating forgeries, sometimes used to manufacture notes many governments forge the banknotes years ago has long been superseded Above: Inkjet printing. Note the stair steps on the by modern technology; and if you diagonals and curves. Digital processes do not of their enemies—the French under always handle angles well. Note also the le arm forged the banknotes of don’t have an original note against of the Y extending into the L’s space at right. Russia, and during World War II the which a replica can be compared, Below: Genuine (letterpress) printing. No stair a collector may not realize the steps, and the arm of the Y does not extend into Germans forged the banknotes of the right side of the photograph. the . Some forgeries deception. However, there are people are done on a small scale, such as who assemble collections of forgeries creating an individual note, some and it is a recognized collecting forgers seek to generate a large theme; although collectors should be amount of banknotes, and sometimes aware it is illegal, in some countries, security printers have been to possess forged banknotes of any unwittingly tricked into producing country. very large orders of banknotes that are passed to criminal elements.

Genuine note Fraudulent note

Evenly spaced Arabic letters precede the serial number on the A modern fraudulent note printed by a legitimate security printer genuine note. for a cartel representing itself as an oce of the Bahrain government.

30 e IBNS Introduction to Banknotes & Banknote Collecting Below: A Military Payment Certicate (MPC) used on the military bases of the United States of America. is type of banknote is one of What to Collect? many to stir interest in collectors of banknotes associated with the military. here are more collecting T interests in the world of banknotes than can possibly be imagined. Oen, it is a specic theme or interest that attracts a collector to banknotes in the rst place. For instance, a collector might become interested in the banknotes of his own country, or of a country once visited. is can lead to the commencement of a collection. However, when various aspects of banknotes are investigated and e possibilities are almost endless; discovered, a range of collecting start on one subject and you may interests is opened up. soon nd you are collecting two Some of the common collecting or three subjects, or, on the other interests of banknote collectors are: hand, becoming a specialist in a very narrow subject. Some collectors have • Specic countries said they collect every country of the • Specic banks world! • A theme, such as insects on In deciding what to collect, you must banknotes, or ships, music, also consider your budget. If you medicine, et cetera have limited funds to spend on your • Commemorative banknotes, collection, then limit your spending. However there are still many areas of issued to commemorate specic is error was caused by a fold in the paper, collecting that are cheap. Sometimes aer the banknote sheets were printed but events a limited budget means collecting before the serial numbers were printed and • Ination money banknotes in lower grades. the sheets guillotined. is creates a “ap.” • Military currency • Banknotes used in military occupations • One note from every country in the world • Error notes – notes that were manufactured with mistakes A note issued by during its occupation of is error was caused by a crease in the • Items related to banknotes – such Albania, during World War II. is note is of paper before the banknote was printed. as , traveller’s cheques, interest to collectors of occupation currency. Opening the creased paper, a white “gutter” private note issues, bills of is apparent. exchange, shares and bonds, merchant notes, letters of credit, IOUs, banking ephemera, et cetera • Notes with a specic date on them or issued in a certain year; as ere are a number of cases of hyperination A commemorative banknote issued by collectors might have an interest over the years and one of the most recent was to mark the total eclipse of the in that year. For example, it might in Zimbabwe, where ination was so rampant, sun in 1999. be their birth year or notes that the Reserve Bank of Zimbabwe had to issue banknotes for one hundred trillion dollars. carry their birth date Many collectors specialize in ination issues.

e IBNS Introduction to Banknotes & Banknote Collecting 31 How to Build a Collection

any people start a collection lot. is can mean the one note you Other collectors: Once you have with a specic objective in are seeking for your collection is in a determined the objective of your Mmind, while others pick up a few lot of, say, six banknotes. Should you collection, you can identify other banknotes here and there before want the specic note, you have to collectors with similar interests. e deciding on an area of interest. Once an buy the whole lot, which can make best way to do this is by becoming a objective is determined, the collection auctions a bit daunting. Don’t forget, member of the IBNS and identifying starts. Banknotes can be obtained from there is usually a buyer’s premium collectors with similar interests. numerous sources, with the following added to the hammer price. Visit the country: If you have the being the principal sources. On-line sites: ere are many on-line opportunity, you may visit the Banknote dealers: ere are many sites where a collector can purchase countries that issue banknotes you professional and part-time banknote banknotes. ese sites can belong collect. However, before you visit, dealers who will oer notes to to a dealer, an auction house, or a you should determine whether collectors. Some dealers specialize in general site that oers many types of the issuing authority oers to sell the stock they sell, while others oer items for sale, including banknotes. notes to members of the public, general banknotes of the world. Most Some sellers on the general sites oer particularly in uncirculated reputable dealers in world banknotes, expert presentation with accurate condition. Sadly, many issuing that is, banknotes of many countries, grades and descriptions. Some sellers authorities do not oer this service. are members of the International oer a limited degree of expertise and If the central bank does sell Bank Note Society and their contact the banknotes are oen described or banknotes to the public, they usually details are on the IBNS web site. graded inaccurately. sell the currently circulating notes and not varieties; for example, not Auction houses: ere are quite a few Collector fairs: ere are local date or signature varieties. Also keep auction houses that have dedicated and international collector fairs, in mind, in some countries there auction sales for banknotes, and where dealers who oer banknotes are restrictions on taking currency other auction houses that have a attend. Oen, dealers who sell out of the country; the restriction section for banknotes in their auction banknotes also sell coins or stamps might limit the person leaving the sales. Most auction houses have an and so collector fairs with dealers country to a specic sum, or it might online presence and many auction oering these collectables are worth be a total restriction on removing houses advertise in the IBNS Journal. attending. ere are only a couple of currency from the country. It’s best Auctions frequently combine notes international collector fairs where to check before you travel! into one lot, as auction houses seek only banknotes are sold and these are to have a minimum value for each advertised in the IBNS Journal. What Condition to Buy

hen buying a banknote, a lower grade note as a “ller” for between dealers, or by looking at you must be aware of the your collection until you can obtain prices realized at auctions, which Wdierence in price that is determined one in higher grade. Some collectors many auction houses present on- by condition. A banknote in prefer to purchase only uncirculated line. Many people judge the value of Uncirculated condition might be notes, but this becomes impractical a note by its catalogue value, but this signicantly more expensive than a when attempting to acquire certain is not always reliable. If checking a note in, say, Very Fine condition. If banknotes, either because they are so catalogue value, it is best to use an you are collecting modern banknotes, rare in very high condition or they up-to-date catalogue specializing in it is wise and practical to purchase are so expensive. the area you collect. If you decide notes in Uncirculated condition, When purchasing a banknote, you to pay more than the market value, as the premium should not be very should always know what price is because you believe the catalogue signicant. If the notes you seek are reasonable to pay for a note. You prices are inaccurate, or because older notes, it becomes more dicult should generally not pay above you have not seen the banknote to obtain notes in high grades, and if market value, but you should know available anywhere else, or because you are having diculty in obtaining what the market value is. is can you desperately want the item – this a certain note, it is worth obtaining be achieved by comparing prices should be an informed decision.

32 e IBNS Introduction to Banknotes & Banknote Collecting Third-Party Grading

hen you purchase a banknote, identied, graded, and “slabbed” of a “slabbed” note will achieve especially at a distance, how in archival plastic. is process is a higher price if the work of the Wcan you be sure the banknote is in the intended to eliminate subjective grading company is respected.Some condition described by a dealer or opinions of a note’s grade, but a collectors, aer buying a “slabbed” an auction house? Reputable dealers collector should have the condence note, will remove it from the slab and and auction houses will ascribe the to agree or disagree with the grade place it in an album or a sleeve. correct condition, although everyone assigned by the third-party grading In the end, the more you can learn makes mistakes. Should a mistake service. about banknotes, the more condent be made, these dealers and auction Not everyone likes this development you can be in determining whether houses will usually accept the note as: the slab makes it dicult for to purchase slabbed banknotes and when returned in the condition it others to grade the note; there may whether you take the to use was bought. Make sure you know the be dierences between the grading the services oered by third-party terms of sale. standards used by the third-party grading companies. In an eort to remove any ambiguity grading services; and it turns a note It should also be remembered, the in the grade of a banknote, third- into an investment commodity various TPGs do not use the IBNS party grading (TPG) services have rather than an object to be collected. grading standards; so if you are been established. Assessment by a third-party grading buying a note graded by a TPG, check service may mean the future sale For a fee, a collector can have notes the descriptions of their grades. Processed Notes

ecause banknotes increase in as an eraser to remove pencil marks. the back of the note, especially if value as their grade improves, While removing dirt from a banknote the fold marks have attracted dirt, Bmany people are tempted to process by non-destructive methods is not which is more dicult to remove banknotes to achieve a higher grade. always frowned upon, invariably, in than other surface dirt. eoretically, a note that is in, say, some minor way, it will aect the Trimming: Banknotes that have seen Very Fine condition, can never quality of the banknote. circulation might develop small tears improve on that condition, but steps Washing: To clean a note in a liquid or nicks in the edges of the note. By are taken by some people to make solvent is now commonly done, but not using a sharp knife and a straight it appear in a higher grade. While condoned by most collectors. Washed edge, the small tears and nicks can there is always debate on the various banknotes were once identied by their be removed or reduced by cutting processes to “improve” a banknote, odour, with chemicals being detected; o a small part of the edge of the processing or “doctoring” banknotes but the people who wash banknotes note, but the banknote becomes is generally frowned upon by the have improved their techniques, so smaller as the edge(s) are trimmed. collector community. now there is little or no odour to a In this case, look for sharp edges that Reputable dealers will always washed banknote. Washing notes are not consistent with the general advertise processed notes as such. removes much of the dirt and oen the condition of the note. If in doubt, try Sometimes dealers don’t advertise banknotes are pressed or ironed aer matching the note against another this fact. is might be due to their washing. Washed banknotes can mostly of the same type to see if it is a wishing to misrepresent the note, or be identied by: dierent size. Remember that normal it may be because they are not aware manufacturing variances can create the note is processed. In the end, you • e very ne lines of creasing on dierences of up to 2mm between the collector must learn to identify the notes, which cannot be removed two notes of the same variety. and which can be seen under a processed notes and buy them, or not, Repairing: For more expensive as you see t. good light or by looking across the note at a low angle (in a good light) notes, some people employ professional paper restorers to repair Some of the activities people undertake • If there are ink marks on the note, the banknote paper. Repairs usually to “improve” a banknote are: the ink lines are no longer crisp, mean mending a tear or lling a but have become blurred while Cleaning: Banknotes, by circulating, hole in the paper. If a tear has been being washed attract dirt. is may be ordinary grit repaired it is oen very dicult to and grime, it might be ink or pencil • Have a look at the back of the note. identify if it is expertly done. If a hole marks, or other substances. Dirt can If the note has been folded, the fold in the paper is lled, the ink of the be removed by various means, such marks will be more apparent on printing is usually missing.

e IBNS Introduction to Banknotes & Banknote Collecting 33 Collectors and Investors

If, as a collector, you purchase a When the number of people wanting ost people who purchase banknote for, say, $20, you can the note exceeds 15, the price of banknotes are collectors, M expect to sell it for $10 to $15. the note increases and the investors but because money can be made However, ination and demand can move in. While this is inevitable, it is from buying and selling banknotes, push the price up, particularly for simply a hurdle the collector faces. In the hobby has attracted investors. banknotes with a higher retail price. the end, every collector likes to make is is to the detriment of collectors money when a collection is sold, and has led to the rise in value of If there are, say, 15 known examples but it can be frustrating while still some banknotes, oen beyond the of a specic note in a high condition, collecting if a collector is competing reach of many collectors. Like any the price of the note will remain low against investors. commodity, there is a retail price and while there are fewer than 15 people a wholesale price. seeking to acquire the banknote.

How to Store a Collection

here is every chance you will companies. Some companies T end up with a good collection manufacture album pages and aer a number of years, if you individual holders that have acid- remain dedicated to your collection, free backing and archival and it is therefore worth taking care plastic fronts, that are suitable for of the banknotes you purchase. By storing banknotes; however they lack taking care of your banknotes, they the advantage of viewing the front retain their value and if you decide and back of your banknotes. to sell any of your banknotes, you Once in your albums or holders, should achieve a good market price banknotes should be stored away for them. from direct light, and away from e two principal methods of storing heat and moisture. Each element— Banknote album pages come in numerous banknotes in a collection are in light, heat and moisture—aects page sizes and diering numbers of pockets, albums, specically designed for banknotes, with some banknotes sold by a range of manufacturers. banknotes, and in plastic sleeves. changing colour over a period However, of utmost importance of time, especially if they are is the type of plastic in which the subject continuously to light. is banknotes are stored. If a banknote sometimes leads people to think is stored in cheap plastic albums or they have discovered a colour variety sleeves, the notes can deteriorate of a banknote, only to learn it is because the plasticizers attack discolouration due to poor storage. the printing and the paper of the banknote aer a period of time. Inert or archival plastic will protect your banknotes and it is well worth paying the extra money these items cost to maintain your collection. Mylar is the best-known of the archival , with album pages Inert plastic holders are used by many and individual sleeves available collectors to store their banknotes. e holders come in a range of sizes and can be in this product. Archival plastic is stored in le . manufactured by several reputable

34 e IBNS Introduction to Banknotes & Banknote Collecting Equipment a Collector should Own

here are items a banknote viewing notes they wish to purchase, Journals is available for download to T collector should possess. Each of to identify damage not apparent to members and articles covering your the following items may be considered the naked eye. (It may take some collecting interest might be available. by the collector, although each item is experience before damage to a note Subscriptions: ere are many not mandatory: can be identied by use of ultraviolet companies throughout the world that light.) Storage: As indicated in “How to publish numismatic magazines, oen Store a Collection” it is essential Light : For identifying including articles and information on to have the best storage for your watermarks and perfect registration banknotes. ere are also societies collection. Banknote albums with features. Especially useful if you are that provide magazines as part of pages manufactured from inert plastic, photographing the watermark or their membership subscription. By or sleeves manufactured from inert perfect registration feature. subscribing to certain magazines plastic, are the best option. Album and becoming a member of certain Scanner: If you own a computer, pages and holders made from acid- societies you will be in touch consider purchasing a scanner. By free paper and inert plastic covers are with the hobby and possibly with scanning notes you can save them for also an option. your collecting interest. Not every reference, expand the scanned image magazine and not every society will Magnifying glass: Invariably, it is and view detail, forward the scanned meet each individual’s needs, but they necessary to study banknotes closely, image to fellow collectors with whom can be very valuable tools to enhance to check various details, such as you might be discussing aspects of the experience of a collector. micro-printing and dicult-to-read the note, and if you decide to write signatures. For forgery detection, about your banknote, you have an Record of Purchases: When you start magnication of 20x is recommended. image to illustrate your article. (In collecting banknotes, many purchases is will be more powerful than scanning notes, there are some issues will be for small amounts and you you will want to use for every-day of which a person should be aware. might not consider it worthwhile to examination of notes. First, for modern banknotes, some record the price you paid. scanners will not scan the images Ultraviolet (UV) lamp: Ultraviolet As a collection develops, it becomes of a banknote, and some soware light can be used for two purposes. more important. Consider these will not print images of banknotes. First, ultraviolet light allows the examples: collector to view uorescent is is due to security features in • You bought a banknote and now features on the banknotes they some banknotes. Second, in some want to sell it. What price did you collect. is shows many beautiful countries not all illustrations are legal pay, from where did you buy it, features not seen in normal light if they are reproduced at the same and when did you purchase it? and oen a change to features which ratio as the banknote, that is a ratio may determine a variety. Second, of 1:1. Sometimes 1.5 or 0.5 of the • You bought a note in Fine grade ultraviolet light can show the hidden size or similar are required. Similarly, and now want to upgrade to Extra ugly aspects of a banknote. Among photocopies of banknotes are illegal in Fine or Uncirculated. What did professional graders, it is a crucial tool some countries.) you pay for your Fine note, so used to identify stains and foreign Reference : All collectors you can compare what you are substances which are not easily seen should have reference books on the prepared to pay for the better note? by the naked eye. It can also be used banknotes they collect. If you don’t • If you sell part of your collection, to determine if a banknote has been study the subject you collect, you will you might have to pay capital gains washed, pressed, cleaned or repaired. never be a procient collector. e tax, and by recording the purchase Ultraviolet lamps are available in books can be catalogues, histories, or prices and selling prices of your xed or portable formats. Some articles on banknotes. As a member of banknotes, you can correctly collectors take portable lamps when the IBNS, the entire collection of IBNS calculate your capital gain.

e IBNS Introduction to Banknotes & Banknote Collecting 35 Disposing of your Collection

hen the time comes to collection, a dealer might readily each note in your collection to be W dispose all or part of your purchase your collection for a oered separately. You will also wait collection, there are two basic negotiated price. However, if your some time to receive payment, as options: sell or auction. collection covers numerous areas, once the auction house has received Selling a collection is usually done notes of varying grades, and contains your notes, they must be catalogued, by approaching a dealer, perhaps notes of low value, you might the auction must be held, and the dealers from whom you have bought nd it dicult to sell your entire auction house must receive their notes, or perhaps someone who collection, as dealers are interested in payment before they can pay you. purchasing notes they can resell. advertises. You might also have come You might decide to sell your notes across a collector who is interested Auctioning a collection has the through an online website. is will in notes from your collection. advantage of competition, with allow you to have control over your e biggest benet in selling your many buyers being oered notes sales, but you carry the risks and you notes to a dealer is you are paid from your collection. If you auction become the retailer. You must create immediately. e diculty lies in your notes though an auction house, your own lots and you may have selling your complete collection. they will put together lots that have mixed fortunes in disposing of each If you have a strong specialized a minimum value, so don’t expect lot.

Join the IBNS

nyone who collects world banknotes should consider joining the A International Bank Note Society. Membership will provide collectors with: • e IBNS Membership Directory, • Access to the IBNS Panel of published every two years and Experts, to answer questions a containing a list of all members member may have at the time of publication (new • Access to a dispute resolution members being listed in the IBNS process between IBNS members, Journal), and various reference and articles of the Society, such as the Society’s Bylaws and the banknote • Access to our two annual mail-bid grading standards auctions, whereby banknotes can be bought or sold. • e IBNS Journal, a quarterly full- colour magazine containg articles on banknotes, a comprehensive To apply for membership, please list of new issues, Society news, visit the Society’s web site at and more www.theIBNS.org and take the • Access to the members-only area appropriate menu option to apply for of our web site and the very active membership. IBNS forum

36 e IBNS Introduction to Banknotes & Banknote Collecting

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