discussion has occurred over the past few months concerning recent notes
that some people are calling "Replacement Notes". I felt it was worth it to
record here, just exactly what is going on, with a number of opinions.
What is a
Prior to 1954,
identical notes were made up to replace notes which were spoiled by the bank
note companies during printing or by Bank of Canada employees during signing
(signatures being applied by the Bank of Canada at the time). Because this
caused delays, a scheme was devised in 1953 whereby independently numbered
sheets were printed specifically for use as replacements. They no longer had
to match serial numbers and the replacements were sometimes "blocked numbered", or
were not contiguously numbered, with gaps that seem to have been randomly
an asterisk or "star" (*) preceding the prefix
was used to indicate a replacement note. When
the switch was made to three letter prefixes, an "X" in the
3rd position of the prefix
was used. (Remember though, that an "X" in the
2nd position of a 3 letter prefix
was used to indicate a test note.). See the
Identification Table for more
did the Bank of Canada stop producing Replacement Notes?
||The Bank of
Canada announced that they would not produce any more replacements notes in
Why did the
Bank of Canada stop producing Replacement Notes?
notes where discontinued to cut costs (as they were expensive to make and
track) and to bring the operations of the Bank of Canada more in line with
the general practices of most other foreign banks.
So what's this "New Replacement
Note" thing all about?
defective notes still occur, so what do the printers do about that?
numbered over 9,000,000 have been discovered among consecutively numbered
notes, often with distinctly different prefixes, indicating their usage to "fill in" damaged notes; however, it is not yet certain whether notes
numbered over 9,000,000 may also be issued as regular notes as well.
While these "inserted" notes currently tend to end with the letter "Z", for example FDZ on the new
Journey $10 notes and GPZ on the
Bird Series $5, Knight / Dodge notes, it
should be noted that some FDU and FDT 9 million notes are also believed to be
used as "inserted" notes too.
For some time,
it also appeared that FDZ and GPZ notes under 9 million would not be released, but
that is no longer the case. Full bundles of both, under 9 million, have
Other than the
discovery of Z9 Million notes in bundles of other prefixed notes, the
discovery of FDZ 9 million notes with the Knight - Dodge
signatures also tends to
indicate that the Bank of Canada did not produce a full run of the FDZ
notes the first time. It has now been confirmed by the Bank of Canada,
the changeover to K/D's happened at FDZ 9,600,000.
assuming that the FDZ 9
millions were intended solely for "inserts", the large number of errors and
production problems we seem to be having with the new
Journey Series $10 notes may have used
up all of the reserve and therefore required an additional run, this time
with the new signatures. The delay of the new $5 note does tend to support
this theory; however, it may just be where the changeover occurred. Keep in
mind that the 1989 $10 note changed
over to K/T's at the same number, BEF 9,600,000.
What does the
Bank of Canada have to say?
plug for the
Following our telephone conversation and as discussed, this is the
information you requested regarding the GPZ $5's
and FDZ $10's that some collectors have noticed
amongst bundles of notes received from financial institutions.
It seems highly likely that these notes were used to take the place of notes
that did not meet quality standards set by the Bank. In a specific note
order, there is normally a series of letters that are set aside by the
printer for this purpose.
It is, however, entirely
coincidental that these notes have the letter Z in their prefix and are in
the 9 million range. In this particular note order, there will be other
notes with the letter Z and the 9 million range, which were not necessarily
used to take the place of notes that did not meet the quality standards
during the production process.
I hope this information is helpful.
Bank of Canada
I'd like to
point out that Linda has been very helpful over past few months, as many of
you likely know. She does point out, though, that it is not within the scope
of the Bank of Canada to be answering questions about every prefix of every
note. Clearly, this type of information is within the domain of the
Paper Money Society and really has little to do with managing the countries
money supply, especially during a time of "external conflict somewhat
resembling a war, but not directed against a nation or nation-state, but
rather a concept call terrorism". Maybe we should give them a rest.
As a "purist", it is my opinion that a "replacement" note
is one that is specially created, through a specific process, to be used as
a replacement note. These new notes do not seem to be special in any way
from a regular note. They are simply held back and inserted onto piles where
I do not think there can be any argument
that notes in the 9 million range are currently being inserted for defective
notes, but with no reliable way to identify them. Collectors are very much
at the mercy of sellers who claim that the note was used this way and not a
note that was released in a full bundle of notes.
While collectors could (and most likely will), try to
track and list these, blocks of notes, will be difficult to substantiate.
Even if the Bank of Canada can and will confirm them, (as with the
1986 $2 BRX notes), the process of
tracking multitudes of "blocks" of a note that count and don't count is
tiresome to collectors and will likely lead to mis-representation by sellers
with less than honest intent (or sufficient knowledge).
As much as I acknowledge the desire of "replacement"
collectors to propagate their specialty, I think we should proceed carefully
with what we call a replacement, and determine some verifiable way of
determining what was an "insert" note.
I do find it a bit telling though, that FDZ 9 million
notes, GPZ 9 million notes, and now FEA 9 million notes have all been used
for "Insert" notes. For that matter, so were FDU 9 millions, and FDT
9 millions. The difficulty is determining where the "inserting"
stopped and the "dumping" started.
So I asked
||I have very mixed feelings about the "new replacement note". I maintain
that these are inserted notes. In the past, specific replacements were
produced for no other purpose than to replace defective notes. The printers
delivered 10 million notes per prefix, and some happened to have an X. Now,
some notes are inserted and the full 10 million notes of any given prefix
are not issued. The Bank pays for the actual issued number of
notes. No notes are replaced!
[PBW: I think Harold
has another key difference between the two methods of dealing with defective
And then a
||It has been noted recently that some notes with serial numbers of
9,000,000 and higher have been mysteriously inserted into bundles of 2001
$10.00 Notes, and 1986 $5.00 Notes. These 9,000,000-numbered notes seem to
have been inserted in the bundle in exchange for another note that was
presumably damaged or defective. In essence, these “inserted notes” are
similar in origin and purpose to Replacement Notes. The Replacement Notes
issued until 1996 were marked with an Asterisk or an “X” within the serial
number, to denote their special issue. In the case of these newly discovered
“inserted notes”, there are no special numberings used to mark them. These
are, therefore, no more than regular issued notes that just happen to have
been selected to replace a handful of defective notes in a bundle.
As for the marketability of these newly discovered notes, I do not feel
that they will sell for the same kind of premiums as seen on the Asterisk
and “X” Replacement Notes. In fact, I doubt that there will be much of a
premium for these notes at all. The Bank of Canada seems to deliberately
release the remainder of the 9,000,000 numbered notes into circulation after
they have inserted all notes into a bundle that need to be exchanged. Our
firm has handled multiple bundles of 2001 $10.00 Notes, all of which had
9,000,000 or higher serial numbers. Because of this “dumping” by the Bank of
Canada, collectors should be very careful about paying a large premium for
these “inserted notes”. In a year or two, only the original finder of the
“inserted note” will be able to attest to this fact. Apart from the finder’s
claim, there will be no other way of distinguishing this note from any other
note within the 9,000,00 group. There have been reports that the Bank of
Canada has been recording the serial numbers of the notes being inserted
into bundles. I highly doubt this claim. The reason that the “X” Replacement
Notes were discontinued was because of the extra paperwork and wasted time
needed to account for (and store) a segregated group of “special” notes. By
recording the serial numbers of these “inserted notes”, the Bank will have
completely undermined the purpose of discontinuing the “X” notes in 1996.
Collectors should be very careful when considering the purchase of one of
these “inserted notes” at a big premium over face value. Remember, there are
possibly one million of these “inserted notes” out there for any given
prefix. While I agree that some notes over 9,000,000 are indeed used to
insert into bundles to replace damaged notes, the reality is that these
notes are indistinguishable from other notes in the 9,000,000 group that may
have entered circulation as ordinary notes.
Colonial Acres Coins