May 2010

NEW $100 BILL FEATURES DRAMATIC AND SUBTLE CHANGES

At an April 21 ceremony in the Treasury Department's Cash Room, the U.S. government unveiled its design for the next generation $100 Federal Reserve Note. U.S. paper money designs are updated on an ongoing basis primarily to make counterfeiting more difficult. While certain familiar design elements are retained, some of the anti-counterfeiting features added this time around will give the $100 bill a decidedly different appearance from its predecessors.

The most obvious change will be a blue 3-D security ribbon woven into the note just to the right of Ben Franklin's portrait. The ribbon contains numerous small bells and the number "100" that appear to move from side to side as the note is tilted up or down. The bells and digits appear to move vertically as the left or right side of the note is moved closer or farther from the viewer. Another novel anti-counterfeiting measure is what the Treasury Department calls the Bell in the Inkwell. A copper colored inkwell on the right side of the note's face surrounds a Liberty bell icon. As the angle the note is viewed at changes, the color of the bell changes from copper to green, making it seem to appear and disappear within the inkwell.

Franklin's portrait on the face of the note has been enlarged and the oval surrounding it removed. Phrases from the Declaration of Independence and a quill pen used to sign it have been added to the right of Franklin's portrait. The back side of the note still features Independence Hall, but the rear side of the building, rather than the front, is now shown and the surrounding oval has again been removed. A large gold colored "100" near the right edge is intended to make the denomination more easily distinguishable to the visually impaired.

A complete description and interactive tour is available online. Although the new $100 bills will begin circulating February 10, 2011, they will be designated series 2009. Older style hundreds will remain legal tender.

GRADING PAPER MONEY

An overview of coin grading was included in the March and April issues of our newsletter. We'll now take a quick look at how the condition of paper money is evaluated. There are some similarities with coin grading, including similar terminology for coins and notes in circulated condition. Because paper money is made, handled and wears differently than coin metal, there are also some important distinctions.

When a new note first enters circulation, it's often folded in half as it's placed in a wallet, purse or pocket. A single light fold merits the grade of about uncirculated (AU). Fold it in half again, so there are a total of three light folds (one in the center and one on each side half way to the edge), and it will typically be graded extremely fine (XF or EF). Notes in these two highest circulated grades are in nearly new condition, with bright printing on crisp paper.

A note that has circulated more must be graded lower. If it still retains some of the original crispness of the paper but has more than 3 light folds, it may be graded very fine (VF). If the paper is limp but the design is not overly faded and the margins are largely intact, it may be graded fine (F). When a note has faded or started to turn yellow and the margins are significantly impaired, particularly at the corners, it will grade no higher than very good (VG). Any major tears or other damage will demote the grade to good (G), fair or poor.

Paper money that has not been folded or otherwise used will be assigned a crisp uncirculated (CU) grade. In recent years the use of grades from CU60 to CU70 for paper money in new condition has become more common. As with the MS60 to MS70 scale used for uncirculated coins, higher numbers indicate higher quality. The lowest uncirculated grades indicate an "issue." For example, a note with a light counting fold near one of its corners may still be graded CU60. To be graded CU63, also called "choice crisp uncirculated," a note should be free of counting folds and any major problems but may not be well well centered. For the grade of CU65, also called "gem crisp uncirculated," the printing must be bright and the margins at all four edges must be very nearly the same width. Higher grades are reserved for truly exceptional pieces.

When grading paper money, any writing, pinholes (e.g. from being stapled to something), tears, significant stains, repairs or other damage should be duly noted.

Our articles on coin and paper money grading will conclude in our next issue with suggestions on how collectors can become more proficient graders.

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