The past month saw two significant commercial endeavors in the world of collectable Paper Money: the 24th Annual National and World Paper Money Convention, sponsored by the Professional Currency Dealers Association, and that event’s official auction, cataloged and conducted by Lyn Knight. The bourse at the NWPMC shrank considerably from the year before, with roughly 25% of the 2008 booth holders not returning. The public gate was almost exactly what it had been the year before, topping out at 394, versus just under 410 last year. This figure did not include the estimated 50-75 attendees admitted on the strength of their booth holder credentials at the Silver Dollar and Rare Coin Expo, held in another hall of the St. Charles Convention Center at the same time as the NWPMC. This would yield a final attendance figure that, for the second year in a row, exceeded that of the Chicago Paper Money Expo, an event that in past years had generally outdrawn the NWPMC by a margin of 25%-50% on a consistent basis.
Despite the falloff in booth holders, or perhaps because of it in view of the roughly identical attendance figures compared with the previous year, a considerable number of booth holders expressed the opinion that their final results were surprisingly good. One dealer made the observation, “Prices are down, but for those realistic enough to sell old inventory at current levels and who have what the collectors and other dealers want to buy at these new levels, business can be surprisingly brisk.” Sell-through rates in the Knight auction suggested a mixed market for the different specialty areas represented in the sale in significant numbers: 82% for Small Size Type Notes; 93% for Large Size Type Notes; and 75% for National Bank Notes.

LARGE SIZE TYPE NOTES
     Conspicuously missing from the NWPMC auction were the six-figure rarities that, despite the small audience to which such items appeal, always attract considerable attention due to their rarity and the media appeal of anything expensive. This absence might logically be taken as confirmation that the potential sellers of such material feel that now might not be the best time to offer these rarities in the auction marketplace. Also notable about the NWPMC sale was the much smaller percentage of items in the uncirculated category than typical for a major auction, and the much higher percentage of middle grade circulated material offered. In general, retail prices seemed to struggle to reach the low end of the estimate and tended more toward below to slightly above CDN wholesale Bid levels reported for October. Also worth mentioning was the higher than typical proportion of “raw”, as opposed to third-party certified Notes offered in St. Charles, perhaps not surprising in view of the smaller than typical proportion of uncirculated versus circulated Notes included in the catalog. One might reasonably infer from the 93% sell-trough rate for Large Size Type Notes, that in the market segment most heavily represented, i.e., middle and upper grade circulated material, there exists a harmonious balance between consignor and purchaser price expectations.

SMALL SIZE TYPE NOTES
     The mix of items offered in the NWPMC auction was more typical of past Knight auctions than the Large Size Type Notes section, i.e. with a higher proportion of uncirculated and therefore third-party certified items. The Small Size Type Note section, however, enjoyed a less impressive sell-through rate than the Large, with only 82% of the items offered actually sold. To a much greater extent than in the Large Size Type Note section of the catalog, Small Size Type Notes tended to surpass the low end of the catalog estimate, sometimes quite impressively. This was especially true for low and fancy serial number Notes, an area that clearly remains one of the most popular sub-specialties in the overall field of collectable Paper Money.

FRACTIONAL CURRENCY
     The St. Louis auction included a Fractional Currency section too small to reach any generalized conclusions based on its results. In general, however, anecdotal reports from dealers remain consistent with past observations. The sharpest focus of buyer interest, and therefore upward price pressure, remains on exceptionally well-centered Notes, regardless of scarcity, the very scarcest Friedberg numbers, particularly in the Justice and Spinner series and on Notes with scarcity above that for levels of their general design Type. More common material, by definition, quite readily available from a multiplicity of sources, continues to experience less certain demand and can often be saleable at disappointingly low levels compared with published price guides.

NATIONAL BANK NOTES
     National Bank Notes, reflective of their highly specialized collector base and the overall thinness of the multiple geographic collecting specialty areas that are often collectively and misleadingly characterized as the “National Bank Note market,” experienced the lowest sell-through rate at the NWPMC auction—75%, more tepid than typical for a Knight sale. Scattered throughout the National Bank Note section was a reasonably impressive array of Serial #1 Notes, until not long ago one of the hottest tickets in town. A surprising number failed to sell, with many that did in the 1929 series hovering around the $1,000 mark. One impressive result, however, demonstrating that the right item and the right buyer can combine to produce a result atypical for a particular sale, was a Florida Serial #1 $5 1929 Ty.1 on the Palatka Atlantic NB. Cataloged as Gem CU and estimated at $10,000-$15,000, it sold for an impressive $17,250. Another result demonstrating that real demand currently exists for rare National Bank Notes was the level achieved by a Fine 1902 Red Seal issued by The First NB of Lake Arthur, Territory of New Mexico. With a low estimate of $15,000, this well circulated rarity sold for $14,950. Another rare example worthy of comment was the $10 Red Seal issued by the First NB of Douglas, Wyoming. Cataloged as VF and with a $50,000 low end estimate, it actually sold for $34,500. The previous time the Knight firm handled this same Note, it went for $43,700, perhaps indicative of a general decline in price levels for scarce to rare National Bank Notes in the interim.

MISCELLANEOUS
     Demand for Obsolete and Confederate Notes, areas less prone, if at all, to speculator driven buying activity as the now more sedate market rose to a frenzied peak in the Summer and Fall period of 2008, remain surprisingly strong. Such material is supported by collector driven demand and the long-term holding patterns more typical of the collector buyer.

Reprinted from the No. 11 NOVEMBER 2009 issue of the Currency Dealer Newsletter "the Greensheet"
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