Making the Grade on Paper Money: Part 2

September 24th, 2025
Last updated: September 24th, 2025

Crisp. Pristine. Obsolete. This Heads & Tails is not about fried clams, brand-new cars, or even a rotary dial telephone – though we hear they’re making a comeback where mobile-phone signals don’t reach.*

Federal Paper Money

Let’s pick up where we left off with our look at basic coin grades and their acronyms for collectors who are just starting out. Like switch-hitting baseball players, most of the same words play on paper currency’s numismatic field.

But the definitions for paper money grades are distinctly different. Here are the basic seven:

1963B Complete $1 Federal Reserve Barr Note Set - Littleton Coin Blog

Crisp Uncirculated = firm; no creases, folds, tears, plus sharp and square corners
About Uncirculated (AU) = shows slightest signs of handling with minor corner folds, finger smudges, pinholes
Extra Fine (XF) = clean and bright with original sheen
Very Fine (VF) = some crispness remains though wear is evident
Fine = circulated with fine creases, folds, wrinkles, plus color fading
Very Good (VG) = well circulated; dirty, creases and small tears
Good = heavily circulated; corners may be missing

It is not unusual to see a number from the Sheldon Scale applied to a paper grade for finer distinction.

From historic colonial paper money, to Civil War-era fractionals, on up to small-note silver certificates from the 20th century – these issues are often referred to as obsolete. It’s a term applied to scarce or rare notes whose limited availability makes them desirable in almost any grade.

Last issued in 1964, the small-note silver certificates are especially considered obsolete because they’re no longer backed by their value in silver. But they are redeemable for their face value in Federal Reserve Notes, or spent as legal tender.

Or collected! Small silver certificates, and large ones too, are prized by paper money collectors, especially if they’ve been assigned a high grade and have unique features. If you want to dive deeply into paper currency grades, visit our Learning Center through this link.

According to sources we consulted, the stand-up-and-be-counted moment for post-WWII paper currency collecting occurred in 1970, when British linguist Robert Stanley coined the term notaphily for this branch of numismatics.

Third-Party Paper Certification Services

With a significantly larger surface area than any coin, U.S. bank notes feature intricate designs, vibrant colors, detailed artwork, and ever-evolving anti-counterfeiting measures. All require a practiced proficiency for determining their worth to collectors.

“I continue to be very impressed by the quality of your bills. Your organization and graders have a lot of integrity. I can trust their opinions, even learn from them. That’s important to me…” J.T., Lonsdale, MN.

Thanks, J.T.! Littleton’s graders diligently hone their skills, and today’s team has more than 100 years of expertise between them. You might enjoy this interview with one of our paper graders when we explored collecting Christopher Columbus on currency. Our graders corroborate the assessments made by independent third-party certification services, led by Paper Money Guaranty (PMG®) and Professional Currency Grading Service (PCGS).

PMG® and PCGS each deploy additional grading terms that refer to a note’s paper quality, often pairing it with a numerical value from the Sheldon Scale for further distinction:

Premium Paper Quality = PPQ applies to circulated currency that’s Very Fine 25 (VF25) or higher and is most often used by PCGS.
Exceptional Paper Quality = EPQ applies to currency that’s Very Fine 20 (VF20) and higher and is used by PMG®.

1907 $5 Legal Tender Note Engraving Error - Littleton Coin Blog

PMG® was founded in 2005. To date, it estimates it has certified more than 10 million notes, such as this 25¢ Fractional Currency Note. Both the American Numismatic Association (ANA) and the Professional Numismatists Guild (PNG) have named PMG their official paper money grading service.

1863 50¢ Confederate Note - Littleton Coin Blog

PCGS first started certifying coins in 1986. It diversified into paper currency in 2005. It sold that service four years later. Then, in February of 2020, PCGS debuted its new third-party certification and grading service for U.S. and world bank notes named PCGS Bank Note. Here is a 1863 50¢ Confederate Note certified by PCGS.

Friedberg Numbers are Not…

…the same numbers used for the Sheldon Scale. The previous Heads & Tails blog on coin grades explained Dr. William Sheldon’s scale of 1-70 that assigned values to the condition of coins back in the 1940s.

In the 1950s, when the U.S. Treasury granted permission for photographs of American paper money to be printed for the first time, collector Robert Friedberg laid the ground work for documenting paper money. He assigned numbers in sequential order based on historical issues of currency notes.

When a new design, series, or variation to a series, such as a new signature, is added, it receives a distinct Friedberg number and is included in a reference book the numismatist humbly titled Paper Money of the United States. Today, is considered the premier reference book for American paper currency.

It should be noted: Market values for different notes are only valid at the time of publication. The 23rd edition Paper Money of the United States was published in 2024. Friedberg’s sons, Arthur and Ira, carried their father’s work forward into the 21st century. In January of 2025, the brothers sold Paper Money of the United States to Whitman Brands, which publishes the annual Red Book for coin collectors.

If you want to learn more about collecting paper money, take a look at our free, introductory guide that we’ve put online here. Remember: Your journey as a starting collector is yours to make enjoyable and satisfying – Littleton is here to help!

*Engineer in Vermont restores payphones for community use. Aired July 14, 2025. https://www.youtube.com/watch?v=rqCjnCSkQUs