The Grading of Fractional Currency

By Mike Marchioni

When I began collecting fractional and postage currency, thirty-plus years ago, fractional currency was generally inexpensive and grading was a relatively simple issue. Notes were classified in one of five categories: nice Uncirculated, Uncirculated, nice Circulated, Circulated and Rag. Most dealers referred to a nice Uncirculated note as "Crisp Uncirculated," what else could an Uncirculated note be if not crisp! Old time dealers would often wash and press circulated notes to improve their appearance.

By the year 2000, however, grading has evolved (a word not widely used in Dayton, Tennessee) into both an art and a science. For me there are three major criteria involved in grading color, centering and flaws.

Color is by far the easiest to deal with. Simply ask yourself whether the note possesses all of the attributes of a note fresh off the presses. Is the ink bright? Is the paper the appropriate color and texture? Are the bronze surcharges (if applicable) bright, dull or oxidized?

Centering is somewhat more problematic. Does the note have good front-to-back centering? Does it have balanced margining all around,front to back? Is the note cut to or into the design? Does the note have three jumbo margins and one average margin? What impact does this have on its grade?

Note flaws appear to be easy to deal with, but I assure you they are not! Does the note have a corner fold or a center fold? What's a "pre-print" fold? (Because second issue fiber notes consist of two thin sheets bonded together, they often have "pre-assembly" folds on either the reverse or obverse,sometimes both.) Have you ever heard of a "drying line"? What's the difference between a fold and a crease? Is the note aged? Is the printing weak on part of the note? Does it have a pinhole or a thumbtack hole? How many pin- holes does it take to downgrade a note? What does a pinch mark do to the grade of a note? How much "handling" does it take to downgrade a note from "CU" to "AU"? Is the paper Clorox bright? Does the note lack embossing? (Some notes lacked embossing from the day they were printed; others lost what they had over time!)

Theoretically, if you thoroughly evaluate a note based on color, centering and flaws, you can establish whether the note is Superb Gem, Gem, Very Choice Uncirculated, Choice Uncirculated, and so forth. Usually, the Choice Uncirculated note, and above, possesses full brilliance, is completely original and varies only in terms of margin size (or lack of margins) and obverse and reverse centering. Whereas a simple Crisp Uncirculated note may be cut to or into the design, have dull surcharge or exhibit some aging (age spots in second issue fiber notes). Technically Uncirculated notes, however, do not have "heavy" or "light" folds!

I use a fourth factor in grading which I call "nuances." Included in this category are such things as eye-appeal and note "potential". In terms of eye-appeal I determine if the note has a great "look", clarity of surcharges, etc. If you saw my collection you quickly discovered that I don't like "blob" surcharges, and I'm willing to accept "lower quality" notes, i.e., choice uncirculated, if the surcharges are clear and bold. (Personally, I never consider a note with "blob" surcharges to ever attain the grade of Gem.)

For "note potential" I try to determine how well centered, etc., can a specific note be? For example, the Fr- 1372 in my sale was graded "Gem", although one margin was full, but quite small. I contacted the person who bought the note and teased him that it was not up to his standards for "Gem." His response was simple, "It was the best I've seen in 23 years!" In my opinion, it went for a bargain price at 1000 dollars. However, a jumbo margin Fr-1234 (a former Marchioni collection piece, seen right) recently brought $575, plus 10 percent, in Lyn Knight's Memphis 2000 auction. A Fr-1234 (or 1232, 1233, 1242, etc.) is much easier to get in "Gem" or "Superb Gem" than a near-perfect Justice note. Have you ever seen a "Gem" Fr-1359, 1367, or 1371, I haven't!

For the beginner or the advanced collector, my advice is simple: study your notes under various light sources, learn rarity-in-grade, work with established dealers, study old and new auction catalogues and talk with old timers, you might learn something.