As an avid currency collector and researcher, I‘ve long been fascinated by star notes – those special replacement bills with a star in the serial number. For collectors, coming across a star note in circulation is an exciting find. These distinctive bills aren‘t just eye-catching, they also have an intriguing history and can be quite valuable in certain cases. In this in-depth guide, I‘ll share my expert perspective on what makes star notes special to collectors and how to assess their collectible value.
What Are Star Notes and Why Do They Exist?
Star notes are replacement bills printed by the Bureau of Engraving and Printing (BEP) to substitute for misprinted or damaged notes during the production process. When printing currency, a percentage of notes will inevitably have defects such as ink smears, misaligned printing, or paper folds. These imperfect bills are removed and replaced with star notes to maintain the correct number of notes in a given print run.
You can identify a star note by the distinctive star symbol at the end of the serial number (or at the beginning for older pre-1928 series). Aside from this star designation, the notes are identical to regular bills of the same series and denomination. They circulate at face value and most people never give them a second look. But for collectors, star notes are prized as special varieties with a unique story.
The star note system allows the BEP to keep accurate accounting of currency production. Each bill has a unique 10- or 11-digit serial number indicating the issuing Federal Reserve district, the series, and the bill‘s position in the print sequence. Since defective notes are removed, star notes with their own numbering sequence fill in the gaps, tracking the total output. As researcher William Piquette notes in his reference book Special Serialized Currency, "The objective is to account for 100% of the notes originally intended for the print run."
The Rarity and Appeal of Star Notes
For collectors, a big part of the appeal of star notes is their relative scarcity compared to regular notes. The BEP doesn‘t release print figures, but collector analysis of serial number ranges indicates that star notes typically account for less than 1% of notes printed. This means that for every 100 regular notes of a given denomination and series, there will be at most 1 star note printed.
However, rarity alone doesn‘t automatically make a star note valuable. The vast majority of star notes printed in the past 50 years are still readily available and sell for little to no premium over face value in circulated condition. It‘s estimated that over 90% of modern star notes ever printed are still in circulation. Even scarcer modern series usually have print figures in the millions.
In contrast, star notes from older series can be genuinely rare and highly sought-after by collectors. Take pre-1928 large-size star notes, for example. These older notes are already scarce, with perhaps only 1-3% of the original print run surviving across all denominations. But star notes from this era are even rarer. Researchers estimate survival rates of only 0.2% to 0.5% for large-size star notes, with many varieties having fewer than 50 examples known to collectors.
For small-size notes from 1928 to the present, the relative rarity of star notes also increases significantly the older the series. Collector Q. David Bowers estimates that for most pre-1950 series, only about 10-20% of star notes printed are still in existence, and considerably fewer in collectible condition. Compare that to 80-90% survival rates for regular notes from those eras.
The low survival rates for older star notes pose a challenge for collectors putting together complete sets by series and denomination. This has created a robust collector market for these elusive star varieties, especially in superior condition. In the words of vintage paper money expert Dustin Johnston of Heritage Auctions, "Collectors will bid very aggressively when they have a chance to buy a star note needed for a set. In many cases there may only be one opportunity in a decade to acquire a specific note."
Factors Affecting Star Note Value
Age, rarity, and condition are the key factors influencing the collectible value of a particular star note. In general, the older the star note and the smaller the original print run, the more valuable it will be. But within a given series, the specific issuing district and the grade also play a major role.
Some Federal Reserve Banks printed far fewer star notes for certain series and denominations than others. These "rare district" star notes can bring substantial premiums. For instance, most Series 1928 $20 star notes from New York or Chicago are worth around $200-400 in very fine condition. But a Series 1928 $20 star from the much scarcer San Francisco district in the same grade can easily top $2,000.
Condition is also critical, especially for older issues. Uncirculated examples are the most desirable and valuable. According to PMG census data, under 5% of all pre-1950 star notes they‘ve graded are uncirculated, compared to nearly 20% of regular notes. This disparity only increases for earlier series.
To illustrate the impact of rarity and grade on value, consider two Series 1928 $50 star notes that recently sold at auction. A circulated very fine example from the New York district brought $2,040. In comparison, an uncirculated example from the much rarer Richmond district sold for $16,450.
Record Star Note Values
The most valuable star notes are extremely rare varieties with only a handful of survivors known. These condition-census star notes have brought record sums at auction, underlining the strength of the top-tier market. Here are a few notable examples:
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The unique 1869 $500 Rainbow Jackass star note, graded PCGS Very Fine 35, sold for nearly $1.7 million in 2014, setting an all-time record for any U.S. star note.
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The finest known 1880 $500 Silver Certificate star note, graded PCGS About New 50, sold for $1,020,000 in 2013. No other examples have surfaced.
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The only known uncirculated 1934 $10,000 Federal Reserve star note, graded PMG Choice Uncirculated 63, realized $356,500 in 2013.
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Among small-size star notes, a 1928 $10,000 Gold Certificate star, unique in private hands and graded PMG About Uncirculated 50, holds the record at $516,000 set in 2012.
Tips for Collecting Valuable Star Notes
For collectors interested in acquiring potentially valuable star notes, here are some key strategies:
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Concentrate on pre-1950 series, especially 1928 and older. These have the lowest survival rates and highest collector demand.
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Look for high grade examples. Uncirculated star notes can be worth multiples of circulated examples, especially for scarcer varieties.
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Seek out rare district stars. Notes from low-issuing districts like Richmond, Kansas City, or San Francisco are prized.
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Research print figures and survival estimates. Develop an understanding of the relative rarity of different series, denominations, and districts.
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Review grading service population reports. See how many examples of a specific star note have been certified in various grades. This data helps ascertain rarity.
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Get rare star notes graded by a major service like PMG or PCGS. Certified notes have greater liquidity and consistently bring higher prices than "raw" notes.
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Consider star notes as an investment. Rare star notes have shown significant price appreciation over time and offer portfolio diversification as a tangible asset.
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Properly store star notes to maintain condition. Use archival-quality currency sleeves and store notes flat to avoid deterioration.
Conclusion
While often overlooked, star notes offer a fascinating specialty within U.S. currency collecting. As replacement notes, stars have a unique story and built-in scarcity compared to regular notes. This rarity and the challenge of assembling complete star note sets have created a thriving collector market.
Older star notes from the early 20th century have proven to be the most prized and valuable. High grade examples of pre-1950 star notes are the "blue chips" of this collecting niche, bringing record sums due to their exceptional rarity. While not all collectors have the means to acquire five- and six-figure star notes, there are still plenty of worthwhile star varieties at lower price points.
Whether you‘re drawn to star notes as curiosities, collectibles, or financial assets, it‘s a field that rewards specialization and savvy acquisitions. By staying informed on rarity, condition, and market data, collectors can unlock the profit potential of these distinctive bills. If you take away one key lesson, let it be that star notes are special issues that deserve a closer look – because that star designation might just make all the difference.
