What is obsolete currency or broken banknotes?

Prior to the Civil War, no paper currency was issued by the United States government. Paper money was issued by thousands of different banks, companies, merchants, and municipalities. Many of the banks failed or were fraudulent, and their notes became worthless. This is why they are sometimes called "broken" banknotes. Others were redeemed and cancelled. Many were legitimate and survived past the 1860s, and continued to redeem their notes as they were presented. During the mid 1860s, these notes were taxed out of circulation. About the same time the Federal government started to issue paper money. One type of new Federal currency was national banknotes. If a bank wanted to continue to circulate its own currency, it would have to obtain a charter from the Federal government, and also obtain their notes from the government. Some obsolete banknote issuers became national banks and still survive, and all their notes, obsolete and national, are still redeemable. Many merchants, towns, cities, and counties also issued notes in denominations less than $1, and these are called "scrip".

Many people collect obsolete notes from their home state or county. Some collect unusual denominations or notes that depict coins. Others collect by subjects including trains, Indians, or unusual vignettes like whaling scenes or Santa Claus. With thousands of different designs, there are many possibilities. The scenes pictured on this old money give a unique view into the way of life and just what was important to the early Americans who used them.

A Word about "Counterfeit", "Altered" and "Spurious" Notes: These all have specific and different meanings and none of these terms should be confused with "replica", "reproduction" or "reprint" which all refer to modern products. The first three terms all refer to notes that were produced during the early or mid 1800s, and were designed to circulate and pass as genuine issues of these banks. For many banks, all that has survived are counterfeits, spurious, altered or raised notes as all or nearly all of the genuine notes were redeemed. A "counterfeit" is a note, which resembles a design that was actually being circulated by the bank. A "spurious" note bears the title of a legitimate bank but the design is different from any genuine note that the bank issued. "Altered" notes are genuine in that they were printed by a banknote company, but the bank title has been altered from a bank that has failed (and whose note became worthless for redemption) to a bank whose notes were still good. The term "genuine" has a broad definition in that it only means that the notes were printed by a recognized private printer. Many District of Columbia notes, for example, are "genuine", meaning that they were printed by banknote companies, but many banks in Washington, DC were fraudulent and never intended to redeem their notes from the day that they were "issued". Many of these were altered during the 1850s and 60s to solvent banks in other areas in a fraudulent attempt to use this worthless currency. Counterfeit, spurious and altered notes are "genuine" antiques in that they are all 140+ years old, but not genuine products of these banks. The are generally collected along with genuine notes, but collectors are usually not interested in modern "replicas" or "reproductions". "Reprints" are usually modern products, but were printed from the original plates, in limited quantities, and have some collector interest. We don't sell modern replicas or copies and will always identify reprints. We generally don't distinguish between the various contemporary types as long as they were printed and used during the time period shown on the note. Please email if you have questions about a particular note or bank.


A Word about Proofs: A proof is an example of a bank note usually printed by the banknote company prior to the regular press run to print the notes. It is usually printed on a thin, porous paper called "India Paper" which produces a needle sharp impression. These were most often used to obtain approval from the customer (the bank) before the notes were printed. Proofs were also kept by banknote companies for record purposes. While a collector will usually prefer a nice issued note to a proof, sometimes proofs are the only form in which one can obtain certain notes. In some cases all issued notes have been redeemed or destroyed and in other cases, the note was only printed as a proof. All proofs are rare and for most issues fewer than five are exist. Proofs are rare and beautiful and many advanced collectors are starting to appreciate this combination and seek out the dwindling supply of these notes.


Prior to the 1990 sale by Christie's of the Archives of the American Bank Note Company there were perhaps several thousand (at most) proofs in collectors hands. This sale contained approximately 4000 proofs sheets containing about 12,000 to 15,000 proof notes. The sale realized a total of about 3 million dollars with the highest price realized for a unique Kansas sheet at $34,100. The vast majority of these sheets have been cut into individual notes over the past decade. Many sheets were one of a kind and the most "common" notes were represented by not more than a few dozen examples, with many being damaged to some extent. Many of the notes were foolishly stamped on back "Property of the American Bank Note Co." (probably during the early 1980s) on back and this pink stamp has bled through to the face of many of the notes to various degrees. Later reprint proofs do exist as these were made for internal use or as part of recent "limited edition" sets sold during the 1970s-90s by American Bank Note. These are generally printed directly on heavier white card. Some are falsely stamped "Property of the American Banknote Co." on back in an ink with a darker reddish color than the original India paper proofs.


Please email me at sellitstore@optonline.net if you have any questions about proofs. -Russell Kaye