Previously unknown 1974 replacement $2 turns up

By Bret Evans

Discoveries continue to turn up among older banknotes.

Kitchener, Ont., dealer Steven Bell recently reported the discovery of a previously unknown replacement note in the 1974 $2 series.

"It just turned up," he told Canadian Coin News. "It was in a random collection that someone asked to organize for them."

Replacement notes are created as substitutes for bills that are damaged or incorrectly printed during the production process. Damaged sheets of notes are removed and replaced with a sheet of pre-produced notes for this purpose, keeping the sequence of serial numbers otherwise intact. Because these notes are printed in advance and usually used singly, the security printers identify them with separate serial number outside of the normal production process. In the case of the 1954 and 1974 series, the replacement notes were identified by the presence of an asterisk as the first element of the note's serial number.

In the case of the 1974 $2 series, replacement notes are known for 10 prefixes, not including the newly discovered note, serial number *RD805999. Notes at that time were printed in sheets of 40.

Because their use is somewhat unpredictable, and unused notes are eventually destroyed, the actual number of any replacement note is based on estimations by collectors. In this case, some of the notes have an estimated population of just a few hundred, while others are estimated in the hundreds of thousands. That means that while replacement notes are usually worth a premium over the common production notes; the exact amount depends on the number of known notes.

Low-denomination notes, the workhorse of the economy, have short lives in circulation. In this case, after more than 30 years, the chances of many more turning up are somewhat slight.

The 1974 series of $2 notes, named for the year the note was designed, was issued from Aug. 5, 1975 until it was replaced by the $2 bird back introduced into circulation Sept. 2, 1986.

At this time the note remains in the hands of the private collector, but Bell said the owner has expressed an interest in selling it at the June Torex sale.

January 17, 2012 to January 30, 2012 issue of Canadian Coin News