Newsletter #6, November 20th, 2000

As nearly everyone involved in the numismatic collectibles field in Canada knows, the Bank of Canada has been selling off their archives of specimen banknotes. The first sale was in November of 1999 and the second sale, which contained not only specimens but also low number sets and replacement notes, was held Saturday November 18th at the Four Seasons Hotel in Toronto. Only 1986 Birds of Canada notes were on sale in this auction. The Bank of Canada wishes to raise funds to expand the services to collectors it offers, not a difficult task since currently those services are nearly nothing to the extent that a collector can no longer even personally go to the Bank of Canada to obtain new currency unless at the main office. The Bank wishes to offer more collector targeted merchandise of a currency nature.

Moore Numismatic Auctions was again the auction firm for the Bank of Canada Auction II, with Charles Moore serving as the auctioneer. The viewing of the lots was held before the sale and in the same hotel. A few persons I spoke with expressed difficulty at finding the sale room and viewing/registration area. Indeed, the signs in the hotel were difficult to find. This daunted few however, as by the time the sale commenced the room was full with about 150 seated patrons and a few standees hovering around the refreshments table. In fact, extra chairs had to be brought in before the auction began. Although there seemed to be a number of collectors in the room, certainly the biggest dealers in Canada were all there either bidding for their stock or executing bids on behalf of their customers. All prices quoted below DO NOT include the 10% hammer fee.

After introducing the dignitaries present at the sale, Moore's opened the bidding on Lot 1. An eerie tone was set in the room as the first two lots were sold to the mail at prices I don't think anyone expected. As it would turn out, these would be among only a handful of lots in the whole sale which sold to the mail, as floor bidding was fairly spirited for worthwhile lots. Single specimen notes were bringing $60 to $160 each for what was essentially similiar material reflecting the difference between the mail bid interest and the floor interest. In general, specimen singles went below their estimated values. The exception to this was the $1,000 specimens, which all went out the door at $1650 - $2200 each or more, and there was rumour that most had all been purchased by one bidder, totalling an investment of over $60,000.

Six piece specimen sets followed, with very few lots selling to the mail. Mail bidders were only successful by bidding excessively and many mail hammered lots sold for well in excess of what identical material on the floor was selling for. This can happen if a given lot received only one bid by mail. Most of the lots had mail bids on them, but they were quickly exceeded on the floor unless excessive. The old rules of economy of scale were on everyone's mind as the specimen set lots progressed through the single, double, and triple set lots. Throughout this segment the support on the floor was never much more than $250 a set, and into the five set lots as well, with lots selling in the $260 per set range. Seemed however the whole room was too clever by half, as the five set lots steadily increased in hammer values until by the end of the five set lots, sets were bringing $310 a set.

People who thought the 10 set lots would sell for the cheapest and had not bid on previous lots because of it were in for a shock. The first 10 set lot sold for $330 a set and prices began to steadily rise. The last few lots had spirited bidding, people realizing that they had better put their paddles up or be left in the cold. The final lots realized between $370 and $400 a set with room wide dealer support at those levels. These are exactly the same sets that were bringing $250 each in the five set lots, and the five set lots had lower serial numbers!! The aberration was Lot 178 which had serial number 888 specimen set in it, selling the 10 sets for $5025.00 . Lot 190, the only complete matched control numbered specimen set opened for $3000 and in the end sold for $8,600. The underbidder being a local B.C. bidder. A light smattering of applause was given when the hammer fell.

The second half of the auction was the low numbered sets and replacement notes. Clearly this part of the market had been under supplied for some time, since every one of the low numbered sets numbered under #100 went well over published estimates. I had commissions from my clients and found lots selling for up to quadruple what my customers had bid. Sets numbered over #100 sold at lower prices, still with consistent and spirited bidding, three set lots bringing $775 to $950, or about 20-40% over the face value, plus hammer fee. This pricing range held for pretty much all the sets, although the 10 set lots with higher low numbers brought only 10-20% or so over face--a bargain in retrospect given that the face value applicable allowed little risk on your investment. Special or symbolic serial number lots did bring extra money, such as the #99 set for Wayne Gretzky fans which sold in a lot with set #101 for $450.00 (Face in the lot was $220 as the sets were not complete) and the #0000888 set which sold to a Vancouver bidder who attended the sale personally, chasing it to several times the estimated figure of $200.

The room was at least 75% full right up to the end, and a never to be repeated sale again closed. A light smattering of applause again sounded, but less than I would have expected for the completion of such a historic event. No hommage from commerce, just more grist for the mill. I was a little distressed to see that some of the lots had changes made to their description, errata, addenda etc. which is fine, but when the lots in question came up for sale it was rarely mentioned that they had changed and I am personally sure that some of the lots were hammered to bidders unaware of this fact. The few occasions where a change was mentioned in the course of the sale caused many bidders to act surprised. A person who carefully reviewed the catalogue and the addendum/errata sheet could make astute or informed purchases. In my opinion, the questionable lots sold for more than they should have based upon the updated descriptions, however this is only my opinion and I suppose the facts will never be known. I thought people were bidding based on the old descriptions. There was no intent to deceive, I'm just trying to underscore how important it is to register early and check your catalogue thoroughly.

In related news, the Canadian five dollar note with the Knight signature has now been released and should be available through banking or business channels should you wish to add one to your collection. Due to the short period of time between now and when the current five dollar note design is due to be retired many people believe it will be a short series. Having said this let me remind people not to try and profit by hoarding, it is counter productive and results in opportunity costs to the collector.

Newsletter #7:
The New Charlton Paper Money Catalogue is Available, 13th Edition

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