Value and Rarity of 1928 Series Two Dollar Legal Tender Star Notes

The Legal Tender deuces have always held a special attraction to collectors and the less interested public. Whether you were prone to tearing off the corners of two dollar notes to ward off the bad luck of this denomination in superstitious years passed, or lured to the rarity and challenging pursuit of collecting this small size series in replacement Star Notes, almost everyone wants to tuck them in their “collection”.

In an effort to practice full disclosure in this writing I should mention that I am a cataloger for Smythe. It seems humanly impossible for one to be objective when discussing most any subject as we all base our judgments on personal experiences. Auction prices realized certainly have veracity in determining the value of Banknotes, but only if one views the material for sale. A conservatively graded note can skew the numbers higher as the floor bidders who had the opportunity to view the notes may pay double the expected price. The reverse is true for a note described as Gem but which is actually a re-embossed or pressed note or both. That stated I will keep my personal grading opinions to myself and list the grades as described. Prices realized do not include the identity of the auction company. The approximate date is listed in parenthesis after the price realized. All auction prices include the buyer’s fee. Prices before 1998 will not be used, as I do not wish to cause regret for most everyone’s lack of foresight in purchasing this popular series sooner. Prices of five plus years ago have little bearing on today’s market if there have been significant offerings since.

I will explore the collecting of this popular denomination and the general characteristics starting with the series 1928 Star. Although not rare, this first series is neither plentiful in higher grade circulated or uncirculated grades. I have found that all Legal Tenders come well embossed and this series is not the exception. Usually found well centered with wonderful white paper and dark contrasting inks, this Star issue has sold for $2035 described as Superb Gem CU (06/01), Choice CU $1265 (07/02) and for $1094 in Gem CU (01/03). Even though it is difficult to be objective when describing competing auction prices realized, grading subjectivity makes auction prices a starting point for approximate value but far from an absolute in determining fair market value. In this case a good point could be made for $1600 as the mean or average price for a Gem note. This series Star falls in at sixth place in rarity. A good beginning as they get tougher from here until the last three series of issue.

The 1928A Star is third in rarity with few if any recent appearances in CU. The finest offered in the last few years was an EF for $2750 on a fixed price list of 1998. Just prior to this offering a CU note sold for over $7000. Appearances in auction since have been scant. A VG/Fine example brought $950 (2000), Good to Very Good $650 (2002), VG $891 (07/02). Most recently a note described as Fine with some ink sold for $863 (01/03). A best guess (there is no definitive census in small size notes to date) is that slightly over 20 pieces exist in all grades with the majority obviously around VG. It is challenging to avoid hindsight in this instance as the first two higher grade notes listed appear to be relative bargains to one desiring the finest example.

The 1928B Star is far and away the front-runner in rarity. The high water mark attained in public auction of $22,000 (2000) for a Fine specimen was most recently offset by a Very Good+ which brought $7475 (01/03). An irregularity to say the least, as this writer personally liked the appearance of the latter specimen by a full grade. It is beyond the scope of this article to delve into the reasons for such anomalies in auction results. The reason for this seeming disparity is most likely as simple as two very eager buyers hashing it out in a sale. The buyer in the second case now owns one of only 7 reported notes of this kind (one as yet unconfirmed but from a respected customer). Obviously there is a relative dearth of easy money today as compared to almost three years ago, yet as demonstrated other less rare issues of Star notes are bringing consistent and strong results.

As a cataloger for R. M. Smythe I am striving to withhold my opinions regarding either grade or prices garnered from prices realized at auction. Extrapolating any opinions as to price and value will be left to the reader. To assist in this task, in all but a few cases, I have used prices realized of notes personally viewed and judged not to be, in my opinion, excessively liberal (frequent) or conservative (rarely) in grade description. It is a fairly difficult job to find a firm price for this ever-changing market as I discovered contributing to other numismatic publications.

The fourth scarcest Star Note in the Two Dollar Legal Tenders is the 1928C. An EF/AU note brought $770 (2000); Choice CU $1045 (2000); VF/EF $920 (07/02); and lastly a F/VF for $518 (01/03). With so few appearances, and none in similar grades, it is difficult to find a pricing pattern for this scarce issue. The Small Size specialist and researcher, Dave Schlingman, has proven his theory that the rare Mule variety can exist in a Star Note but none have been found to date. If one exists it will stand alone as the king of this series of Star Notes.

The 1928D is known in two different varieties as a Star Note, both Mule and regular. The 1928D Mule is fifth in the rarity rating for Stars. Prices realized include a Choice CU at $1050 (2000); a Gem CU $$1320; a Superb Gem CU $2035 (06/01) and most recently a Choice CU $1495 (07/02). In the non-mule variety, seventh on the totem pole for rarity, this note has recently realized: Choice CU $305 (2000); Gem CU $825 (06/01); CU $489 and Gem CU $920 (07/02); and lastly $633 for a Choice CU (01/03).

Second only to the extremely rare 1928B Star is the 1928E Star. A Fine sold for $1650 and a Choice to Gem CU at $8000 in 2000. Only one note offered in 2001 brought $8800 in Choice CU. Most recently an about Fine brought $2875 (07/02) and another described as Fine/Very Fine brought $2070 (01/03). With less than 5 to 6 known in CU and perhaps a two dozen or so in all other grades, this note’s rarity and value appears to be well defined.

The 1928F Star is second to last in rarity. At least one respected dealer felt it was scarcer than the 1928D non-mule variety five years ago, however recent public and private offerings currently disputes that rating. Although nearly twice as scarce as the 1928G Star, the 1928F has achieved only slightly better results in auction; a Choice CU brought $475; a Gem CU $660 in 2000; another Choice to Gem CU brought $715 (06/01) and a Choice CU $575 (07/02).

Last for rarity is the final issue for this Small Size design type is the 1928G Star. Available occasionally as consecutive notes, examples have sold in Gem CU for $550 (2000), Superb Gem CU $1045 (06/01) and Choice to Gem CU for $575 (07/02). In January 2003 there were three auction offerings; A Choice CU sold for $355 and two separate notes in Gem CU sold for $460 each.

The most recent auction results have been reported by spectators of the markets as being weakened due to the lack of speculator interest. As a very active retail dealer participating in this market daily I dispute any speculator driven theories. In my experience less than 10% are speculators, with the vast majority being collectors who can no longer afford Large Size Type. Although small-size collectors must be wary of the same deceptive practices, namely chemical processing, washing, pressing and re-embossing, inherent in the Large Size arena, the comparative collector interest in the rarity and value of these notes is indisputable. Show after show collectors come to the tables with their difficult to fill want-lists.

As stated in the beginning of the first part of this article there are many reasons why one auction’s results could be weaker; too much material coupled with auction sessions running until nearly 3 AM at a very busy venue, a lack of consistent grading standards and a weaker economy could have a major effect. As can be plainly seen in the realized prices listed here some of the strongest results were attained just last July. In all areas of the market, save perhaps Nationals and Obsoletes, which are less grade sensitive, the notes bringing the strongest prices are top grade original pieces of this country’s financial history.

All text © 2004 Scott Lindquist. All Rights Reserved