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Glossary of Paper Currency

We thank our friends at WPWM for their contributions to this article.

ABOUT UNCIRCULATED (AU) - Also called ALMOST UNCIRCULATED. This is one light fold in an otherwise unworn note.

ATTRIBUTION - Identifying a note by country, when it was made, who signed the note, who is portrayed on the design, etc.

BACK - The reverse side of a note, opposite the front.

BANK NOTE - Paper currency issued by a bank, both governmental or private. However, commonly used synonymously for paper money, regardless of issued by a bank or not.

BILL - Derived from the American Bill of Exchange, bill is a colloquialism used for money.

BOGUS NOTE - A Fantasy Note that was never issued as real money.

BORDER - The edge or margin of a note.

BOURSE - The place where dealers of a particular asset gather to buy and sell.

BROKEN BANK NOTES - A broken or obsolete bank note is one issued from a defunct or broken bank that is no longer capable of fulfilling its obligations. Banking failure was especially noticeable in small town, ill-managed institutions throughout the 19th century and again during The Great Depression of the late 1920's and early thirties.

BULLION - Gold or silver historically used as a guarantee or back the value of paper money.

BUREAU OF ENGRAVING AND PRINTING - The locations of where our currency is made, Washington, D.C., and Fort Worth, Texas.

CENTER - The middle of a note.

CENTRAL BANK - A National Government bank as opposed to a private or commercial bank.

CHOICE - Noted as CH, Choice refers to a standard slightly better than the grade assigned.

COIN NOTE - Also U.S. Treasury Note minted from 1890 to 1891. Redeemable for gold or silver at the Treasury's option.

COLONIAL CURRENCY - Pre-Revolutionary War American paper currency.

COMMERCIAL BANK - A private bank as opposed to a central or government bank.

COMPOUND INTEREST NOTE - A note paying face value plus a fixed stated interest rate that was compounded.

CONDITION - Refers to the state of preservation or grade of a note.

CONTINENTAL CURRENCY - Issued by Continental Congress (1775- 1779) for the American Revolution.

CONVERTIBILITY - The ability of a note to be converted into something else, e.g., gold, silver coinage or bullion.

COPY - A facsimile or replica of money that is so obvious that it is not meant to be construed as counterfeit.

CORNER - A reference to one of the four areas of angulation or corners of a note.

COUNTERFEIT - Bogus currency that is meant to be passed as real.

CREASE - A permanent line or fold on currency.

CRISP UNCIRCULATED - A new note with no creases, wear or other defacement.

CURRENCY - Paper money.

CUT CANCEL - A slit in a note made for the purposes of cancellation.

CUT NOTE - An officially quartered note done to create paper fractional currency during a shortage of small coin change.

DAMAGING THINS - A term denoting a thin point on a note due to excessive rubbing.

DATE - The year on a note. This often refers to the series and not the actual date of minting.

DEMAND NOTE - First issued in 1861, this was the first U.S. Federal currency made during the Civil War. Also called the greenback.

DEMONETIZATION - The official act of declaring a note to be without value.

DENOMINATION - The face value of a note.

DESIGN - A term meaning the printed part of a note.

DIE - The metal engraved plate upon which a note is created.

DOUBLE NOTE - Refers to a note printed on the back of a Broken Bank Note. This was done by the South in the Civil War due to the shortage of paper.

EDUCATIONAL NOTES - The design themes on Silver Certificate Notes issued in 1896.

ENGRAVING - Engraving of currency dies is a reverse process where grooves are scraped into metal plates by the use of sharp instruments. Ink was then smeared over the traditional copper plates. With the excess being removed, only the ink in the groves remained. Pressed against a sheet of moistened paper, the ink in the groves transferred across giving a clear impression of the image being sought.

ERROR AND FREAK NOTES - This refers to currency that was made in error or made imperfect by accident.

EXTREMELY FINE - Noted at either EF or XF, Extremely Fine relates to the condition of a note usually having either one major crease or three minor folds.

FACE - The front or obverse of a note.

FACE VALUE - The amount of value printed on a note.

FADING - A note that has lost a degree of color.

FAIR - Very worn

FANTASY NOTE - A bogus bill that was never intended for circulation, e.g., Monopoly money.

FEDERAL RESERVE BANK - A district or branch bank of the U.S. Federal Reserve System

FEDERAL RESERVE BANK NOTE - A note issued by a District Bank of the Federal Reserve System. Federal Reserve Bank Notes, like National Bank Notes, were off-set by securities and bonds held by the individual Federal Reserve Banks. As obligations of the Federal Government, these notes were only briefly issued in 1915 and again in 1918.

FEDERAL RESERVE NOTES - Authorized by the Federal reserve Act of December 23, 1913, Federal Reserve Notes were disseminated through all twelve Federal Reserve Banks. Easier to carry than bullion, each note represented gold on deposit with our government and was originally redeemable in gold at the U.S. Treasury or lawful money (coinage) at the Federal Reserve Bank. This ceased in 1934 when the owning of gold bullion was made illegal.

FEDERAL RESERVE SYSTEM - Created in 1913, the Federal Reserve System is a monetary organization that regulates the creation of U.S. currency.

FIAT MONEY - Money that has no gold or silver backing.

FOLD - A light bend in a note. Not to be confused with a crease.

FORGERY - A fraudulently altered genuine document. Often confused with counterfeit.

FOXING - Foxing is a reference to tiny brownish, red dots caused by infestation of lice that attacked the paper fibers of pre-1890 notes.

FRACTIONAL CURRENCY (1862-1876) - Fractional Currency developed during the Civil War as an answer to the shortage of currency caused by public hoarding. Values ranged from 3 to 50 cents and were printed until 1876.

FRAME - The outside border of a note's design.

FRIEDBERG NUMBER (FR#) - The standard reference of currency used throughout the industry when referring to a specific note.

FRONT - The obverse of a note.

GOLD CERTIFICATES - With the increase of gold in America partially brought on by the rush of the mid 1800's, this metal became a prevalent asset for exchange. Due to its weight and difficulty of storage, the government decided to store equal amounts of gold balanced with like values issued in Gold Certificates for public circulation. The first were made available in 1882 and lasted until 1928. With the recall of all gold bullion (not coinage) by the government, in 1933 all certificates were mandated to be returned to the Treasury Department. This included even those notes held in the possession of collectors. This law was reversed in 1964 where Gold Certificates can now be held by collectors but unfortunately cannot be redeemed for the metal it represents.

GOOD - An extremely worn note.

GRADE - The state of preservation or condition.

GREENBACK - A slang term for a U.S. Demand Note of 1861 so called because of the green ink used.

LARGE-SIZE CURRENCY - Generally speaking, large-size currency was the primary tender issued up until 1928. Collectors and investors alike cannot but be overwhelmed by the grand beauty and intricacy these original notes represent. The reduction in size was required both due to the difficulty of carrying larger bills as well as for lessened printing considerations.

NATIONAL BANK NOTES - With the National Banking Act of 1863 during the Civil War, over 14,000 banks were permitted to issue and circulate their own currency. Likewise, printing was also done at the U.S. Government Printing Office. All designs were similar with only the names of the banks, state seals, bank signatures and the bank's charter number creating difference. Every charter bank was given the right to issue currency up to 90 percent of the value of bonds that it held on deposit with the government. With a bond deposit equaling the printed currency, the National Bank Note gradually became accepted by the general public. This era lasted until the stock market crash of 1929 which ruined a vast number of banks and ended the public's confidence in this form of note.

NATIONAL GOLD NOTES - There were two factors that held heavily in the creation of National Gold Notes which originated exclusively from banks in California. As the gold rush of the 1840's bought massive amounts of this metal out of the ground and into barter, it rapidly found its way into coinage. California banks being so inundated with both raw gold and gold coins, it petitioned the government for the authority to issue Gold Notes that could be substituted for the actual coinage. It was on July 12, 1870 that Congress voted giving the right to issue such notes to nine banks in California and Kidder National Gold Bank in Boston. However, while Californians rushed to print this yellowtoned paper, no such effort was ever undertaken by the Boston counterpart.

REFUNDING CERTIFICATES - The Refunding Certificate is a cross-variation between a bond and a security. Issued by Congressional Act in 1879, these ten dollar notes could be spent or traded as normal currency while drawing interest at 4 percent per annum. While continuing until 1907, the Refunding Certificate served three important functions. First, the percentage given encouraged saving and thereby lessened the threat of national inflation. Second, since previous bank failures still created mistrust of that system, the Refunding Certificate was a method of saving that was private and did not rely on the solvency of a local financial institution. And third, due to uneven distribution of banks throughout the U.S., Refunding Certificates served as a savings instrument for the populace who lived in remote areas.

RIPPLE EFFECT - This is the gentle, wavy appearance that appears due to moisture absorption or unstable chemicals used in the note's manufacture.

SERIAL NUMBER - The serial number is a control or tracking device on all U.S. paper currency. It is located below the left center or above the right center on each bill. No two bills are alike and serve not only as an aid in counting but as a device to minimize counterfeiting.

SIGNATURES - Beginning in 1861, the signature was originally placed on bills as a deterrent to counterfeiting and as a symbol of authorization. The assumption was made that a hand signature was more difficult to copy than an engraving and could be easily detected. From 1862 to 1923, two signers were required, the Treasurer and the Register or those who signed in their stead.

SILVER CERTIFICATES - As America's economy expanded in the late 1870's trade demand outpaced the supply of silver coinage. In 1878 the government authorized Silver Certificates as relief for silver coinage. Redeemable in silver until June 24, 1968, redemption in all forms was ended. The notes, while still legal tender are now worth only their face value.

STAR NOTES - Star Notes refers to those United States Notes, Gold Certificates and Silver Certificates that have a star or asterisk in front of the serial number. Federal Reserve Notes and Federal Reserve Bank Notes have it at the end of the serial number. The purpose of Star Notes refers to those United States Notes, Gold Certificates and Silver Certificates that have a star or asterisk in front of the serial number. Federal Reserve Notes and Federal Reserve Bank Notes have it at the end of the serial number. The purpose of a Star Note is as a replacement for a mutilated or unfit issue which must be replaced. To substitute the damaged note with another of the same serial identification number would border on the impossible. Star Note substitution represents the most practical method where each displaced bill is replaced with a working counterpart. However, large stars after the serial number on the 1869, 1890 and 1891 series of Treasury Notes do not signify replacement currency, yet are still referred to as Star Notes.

TREASURY OR COIN NOTES - Begun in 1890 and ended in 1891, Treasury Notes were authorized by Washington as redeemable paper for silver or gold coinage. Never attaining popularity, its life was short lived.

UNITED STATES NOTES - Begun on March 10, 1862, United States Notes also referred to as Legal Tender Notes were the second major variety of U.S. paper currency. Up until 1923, these five varieties of notes represented a vast, artistic display of motifs and themes. Denominations were in the form of $1, $2, $5, $10, $20, $50, $100, $500, $1,000, $5,000 and $10,000. Not only were the likenesses of presidents represented, but other government officials as well such as Lewis and Clark, Salmon P. Chase (Lincoln's Secretary of Treasury), Daniel Webster, etc.

WILDCAT NOTES - Disreputable con artists of the 1800's often moved from town to town, normally in the Southwestern part of the United States, establishing unauthorized or wildcat banks. Issuing their own currency without Federal backing, the currency was most often not worth more than the paper on which it was printed. After taking in sizable deposits, the owners of the banks fled into the night simply to establish a carbon copy operation in another location.

Last Updated: Thursday, January 30 2014 @ 04:02 PM EST|Hits: 12,012 View Printable Version

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