By Jay Rudo
This is one of a series of short guides I will be writing to help beginner collectors with coins and
paper currency. This particular guide covers two subjects: National Banknotes and Star Notes.
Prior to the Civil War very little was done to standardize the currency we used in the United States.
Notes printed in Maryland, for example, were fine for use in and directly around Maryland, but if a
person were to travel to South Carolina they would have to exchange currency in many local areas on
their way to keep valid currency to spend.
In part to finance the Civil War and in part to standardize currency and curb counterfeiting, the U.S.
Congress passed the National Bank Act of 1863. Part of this act required banks to purchase government
bonds to fund the war, and in exchange they would receive currency to issue up to 90% of the money they
had paid to charter. This currency is known as “National Bank Currency.”
Issued in four basic types with sub-types known, National Bank Currency is most notable for being the
only federally issued currency with the name of the city of their issue printed on the front of the
Although some states are quite scarce, especially in the West, many collectors can find their
home town printed on a U.S. Bank note. With over 14,000 chartered banks to choose from, names such as
Globe, Arizona and Yale, Oklahoma are known to exist.
Recent activity in this branch of notaphily has been tremendous with values of many notes, especially
rare and unique specimens, climbing hundreds of percent in value.
The following image is of a "third charter" $10 National Bank Note. You can see the bank of issue right on the note - "The City National Bank of New Britain, Connecticut. The charter number for this bank, 12846, is printed in large blue numbers twice on the front, and in black numbers in four spots around the border.
We get questions on a regular basis regarding the purpose of star notes. In brief, star notes replace
defective notes. A star is placed at the beginning (for earlier currency) or at the end (for more
recent currency) to show that the note bearing the star is a replacement of a destroyed note. This
helps the Bureau of Engraving and Printing maintain a correct count of notes in a serial run.
A little history about the star note – the first account in the official records mentioning the
manufacture of special notes to replace destroyed notes was a letter to Lee McClung, Treasurer of
the United States, from Joseph E. Ralph, Director of the BEP, dated April 14, 1910. In part, it
suggested, “that the bureau be authorized to prepare a stock of notes numbered in sequence, distinguished
from all other notes by a special letter of character printed before/after the serial number… that these
notes be substituted for defective specimens… with notation on the pages indicating the package contained
such substitutes” (5 edition Oaks/Schwartz).
Interesting to know is that the first star notes issued were series 1899 silver certificates (issued until
Another anecdote of interest is that it has been estimated that the total production of star notes equals
less than one percent of all notes produced. This is why star notes, especially in the earlier large size
currency, carry a hefty premium value.
The following is a star note for a $1 silver certificate. The star means that the first print run of this serial number had to be destroyed, and this note is a substitute.