The Designation That Divides Collections
Walk through any major currency show and you will hear the same conversation at nearly every dealer table: a collector holds up two seemingly identical $1 Federal Reserve Notes, both graded 65 Gem Uncirculated by PMG, and asks why one sells for $45 while the other commands $180. The answer almost always comes down to three letters printed in the upper-right corner of the certification label: EPQ.
Exceptional Paper Quality is not simply a reward for a note that has never circulated. It is a separate, stringent evaluation of the paper itself, its surfaces, its originality, and the integrity of its manufacture. Understanding what graders look for when awarding EPQ, and what disqualifies otherwise beautiful notes, is arguably the most practical knowledge a serious currency collector can acquire. It affects submission strategy, buying decisions, and long-term portfolio values in ways that raw grade numbers alone cannot capture.
A Brief History of the EPQ Standard
Before third-party grading services entered the currency market in the 1990s, paper money was sold almost entirely on a dealer’s word and the buyer’s eye. PMG, founded in 2005, and PCGS Currency, which launched its currency certification program formally in the mid-2000s, both recognized early on that a numerical grade alone failed to communicate one critical variable: whether the paper had been artificially manipulated to look better than its natural state.
PMG introduced the EPQ qualifier as part of its core grading philosophy from the outset. The designation signals that a note at grade 63 or higher not only meets the criteria for its numerical grade but also exhibits paper that is entirely original, untreated, and free from any post-production enhancement. PCGS Currency uses the same EPQ designation for grades 63 through 70, and employs PPQ (Premium Paper Quality) for notes graded 58 and below that similarly exhibit original, unenhanced surfaces.
The practical effect was immediate and substantial. Dealers and auction houses quickly observed that EPQ-qualified notes brought dramatically stronger prices. Heritage Auctions’ currency archives, for example, show consistent patterns where a 1928 $100 Gold Certificate graded PMG 65 EPQ regularly realizes two to three times the hammer price of an otherwise identical PMG 65 example without the qualifier. The market had spoken: originality commands a premium.
What Graders Actually Examine
The evaluation for EPQ is not a single test but a multi-factor assessment conducted under magnification and specific lighting conditions. Professional graders at both PMG and PCGS Currency examine the following elements in sequence.
Paper Originality and Sizing
Currency paper manufactured by Crane and Company for the Bureau of Engraving and Printing contains a specific blend of 75% cotton and 25% linen fibers with red and blue security threads embedded throughout. Over time, or through handling and environmental exposure, this paper loses some of its original stiffness, or sizing. The sizing in paper money refers to the starch-like compounds inherent to the paper stock that give a fresh note its characteristic snap and rigidity.
A note that has been lightly pressed, humidified, or treated with any external stiffening agent will exhibit subtly different surface texture under raking light and magnification. Graders look for natural, uniform paper stiffness consistent with original manufacture. A note with added sizing feels artificially stiff in ways that differ from natural crispness, and trained graders can detect this distinction reliably. Any evidence of added sizing automatically disqualifies a note from EPQ designation, regardless of how stunning it appears to the naked eye.
When examining a note before submission, hold it horizontally under a single-point light source and observe how it responds to a gentle flex. Original paper with natural sizing will have a uniform, spring-like resistance throughout the note. Pressed or re-sized paper often shows inconsistent stiffness, with areas near folds feeling different from the center field.
Surface Examination for Cleaning and Chemical Treatment
Cleaning is the single most common reason an otherwise high-grade note fails to receive EPQ. Collectors and dealers have employed various cleaning methods over the decades, ranging from light erasure of surface soiling to chemical washes intended to brighten a note’s appearance. Under ultraviolet light, which both PMG and PCGS Currency use as a standard examination tool, cleaned notes frequently fluoresce differently than original examples. The inks used by the BEP, particularly the intaglio-printed portrait inks, respond to UV light in specific ways that cleaning disrupts.
Eraser marks leave microscopic fiber damage that graders identify under magnification. Chemical washes can alter the color of the Treasury seal and serial numbers in ways that are invisible under normal lighting but apparent under UV. Even light dusting with a soft cloth, something many well-intentioned collectors do to remove surface dust, can disturb the natural skin of a note and affect its EPQ eligibility.
Counting Marks and Mechanical Impressions
Federal Reserve Banks counted, sorted, and bundled notes mechanically for decades. High-speed counting machines left characteristic impressions on notes, particularly along the edges and in the lower serial number area. These counting marks are distinct from circulation wear: they are mechanical impressions made while a note was technically still uncirculated, either in transit or during Fed processing before distribution.
A note bearing visible counting machine impressions will receive its numerical grade based on the absence of actual circulation wear, but those mechanical marks typically disqualify it from EPQ. This is one of the most frustrating situations for collectors because a note can be demonstrably unspent, crisp, and original yet still fail to earn the qualifier. Star notes and notes from the first and last serial numbers in a pack are statistically less likely to bear counting marks because they occupied the outermost positions during mechanical processing.
Original bank-wrapped packs are the gold standard for EPQ-eligible material. Notes from sealed BEP packs or original Fed brick wrappings, particularly for modern small-size Federal Reserve Notes from the 1960s through 1990s, have the highest rate of EPQ qualification because they never entered counting machine cycles. If you acquire original wrapped packs, photograph the wrapping and document provenance before breaking them for submission.
Folds, Bends, and Corner Integrity
A single hard fold breaks paper fibers in a way that is permanent and visible under magnification regardless of how carefully the fold is later flattened. This is why a note can carry a grade of 65 without EPQ: the numerical grade reflects what is seen overall, but even minor fiber breaks at corners or edges, caused by handling during sorting or counting rather than true circulation, can eliminate EPQ eligibility.
Corner integrity is especially scrutinized. Graders look for sharp, uncreased corners with no splaying of the paper fibers at the tips. Rounded corners, even slightly so, indicate paper that has been compressed or handled. A fresh note from a BEP-sealed pack will have perfectly angular, needle-sharp corners with no fiber separation whatsoever.
Stains, Foxing, and Environmental Damage
Foxing, the small brownish spots caused by mold or oxidation, is common on notes stored in humid or improperly controlled environments. Even microscopic foxing visible only under magnification will disqualify a note from EPQ. Similarly, notes that have been stored near rubber bands, which were commonly used in bank currency packaging well into the 1970s, frequently show rubber burn staining along their edges. The 1969 series Federal Reserve Notes are particularly susceptible to this type of damage because many original packs from that era were rubber-banded before distribution.
Ink smears, printing artifacts, and paper inclusions present at manufacture are generally treated differently. A note with a manufacturing defect is evaluated on its own merits: if the defect is original to the printing process, it does not necessarily disqualify the note from EPQ, though dramatic defects affect the numerical grade itself.
EPQ Across Specific Note Types: Where It Matters Most
The financial impact of EPQ varies significantly by note type and era. For common modern Federal Reserve Notes, such as series 1988A or 1993 one-dollar notes, the EPQ premium is real but modest because high-grade EPQ examples are relatively available. The calculus changes dramatically for pre-Federal Reserve issues, large-size nationals, and scarce small-size types.
Consider the 1928 series Legal Tender Notes (Friedberg catalog numbers Fr. 1500 through Fr. 1501 for the $1 denomination). A PMG 65 EPQ example of the 1928 $1 Legal Tender Note has realized $1,200 to $1,800 at major auctions. The same note graded PMG 65 without EPQ typically sells in the $400 to $600 range. The EPQ premium here represents a 200% to 300% value differential for identical grade numbers.
For National Bank Notes, which were printed on paper that varies considerably in quality by printer lot and storage history, EPQ designation is exceptionally rare. A National Bank Note graded PMG 64 EPQ from a small-charter bank is a serious trophy regardless of specific issuing institution. Collectors of nationals have long understood that EPQ on a territorial or small-town charter note represents perhaps one-in-fifty or one-in-one-hundred of all surviving examples in high grade.
For large-size type notes from the 1914 to 1923 era, EPQ on any note graded 63 or higher is significant enough to justify premium submission fees and patience. When buying raw examples at shows or from dealers, carry a small UV penlight and a 10x loupe. UV examination of the reverse is particularly informative because cleaning marks and washing effects are often most visible on the less-inked surfaces of the back design.
The Submission Strategy Question
Understanding EPQ changes how experienced collectors approach submissions. Notes that are obviously pressed or cleaned should not be submitted at premium service levels because the grading outcome will be a straight numerical grade without the qualifier, and the cost of submission will not be recovered in resale value for common types. However, for genuinely original material, particularly notes acquired from estate collections, original bank rolls, or old-time accumulations where no modern handling has occurred, premium submission service is almost always justified.
PMG’s current grading tiers, as of 2024, include Economy, Standard, Express, and Walk-Through service levels ranging from roughly $22 to $150 per note. For a note with EPQ potential that could command a $500 to $1,000 premium with the qualifier, even the highest service level is economically rational. Collectors who submit randomly without evaluating EPQ potential first are leaving significant money on the table.
PCGS Currency similarly structures its submission tiers, and both services offer bulk submission discounts for dealers and large collectors. The key strategic consideration is this: if you have doubt about a note’s originality, have it examined by an experienced dealer or use a pre-screen service before investing in professional certification.
| Note Type / Series | Grade Range | Est. EPQ Rate Among Certified | Rarity |
|---|---|---|---|
| FRN Series 1988A to 1999, $1 | 65 to 67 | ~60 to 70% of submissions | Common |
| FRN Series 1969, $1 to $100 | 64 to 66 | ~30 to 45% (rubber band damage) | Scarce |
| Silver Certificate Series 1957, $1 | 65 to 67 | ~50 to 65% of submissions | Common |
| Legal Tender Note 1928, $1 (Fr. 1500) | 63 to 66 | ~20 to 30% of submissions | Scarce |
| Gold Certificate 1928, $100 (Fr. 2405) | 63 to 65 | ~10 to 20% of survivors | Rare |
| Federal Reserve Bank Note 1929, $5 to $20 | 63 to 65 | ~15 to 25% of survivors | Rare |
| National Bank Note, any territorial charter | 63 to 65 | Under 10% of surviving notes | Key Date |
| Large-Size FRN 1914 Blue Seal, $5 to $20 | 63 to 65 | ~10 to 18% of survivors | Rare |
| FRN Star Note Series 1995, $1 Atlanta (F*) | 65 to 67 | ~55 to 65% of survivors | Key Date |
| Hawaii Emergency $1 (Fr. 2300), Series 1935A | 63 to 65 | Under 15% of survivors | Rare |
Common Misconceptions That Cost Collectors Money
Several persistent myths about EPQ circulate in collector communities and deserve direct correction. First is the belief that a note graded 67 or 68 automatically carries EPQ. This is false. The numerical grade and the EPQ designation are entirely independent assessments. A note can achieve a very high numerical grade based on its surface quality, centering, and absence of folds, while still having been lightly pressed or treated in a way that disqualifies it from EPQ. The grade reflects what you see; EPQ reflects what you know about the paper’s history and integrity.
Second is the assumption that EPQ is impossible to achieve for notes with minor printing defects. Misaligned seals, partial cuts, and offset impressions are manufacturing characteristics, not post-production enhancements. PMG and PCGS Currency evaluate these as error notes, and many legitimate error notes carry EPQ designations because they left the BEP in original condition and were never subsequently handled or treated. An error note with EPQ is often the finest possible example of that error variety.
Third is the idea that age alone prevents EPQ. While it is statistically true that older notes are less likely to have survived in original condition, age itself is not a disqualifier. A large-size United States Note from the 1880s that spent 140 years in an original envelope at a consistent temperature and humidity can earn EPQ if the paper remains original and the surfaces are untouched. The oldest EPQ-designated notes in major collections predate 1900, and they represent among the most coveted items in American numismatics.
Conclusion: Three Letters That Tell the Full Story
The EPQ designation exists because a grade number, however precise, cannot fully describe a note’s condition. Numbers measure what is there: the presence or absence of folds, the sharpness of printing, the quality of centering. EPQ measures something equally important but fundamentally different: what has never happened to the note since the moment it left the Bureau of Engraving and Printing.
For collectors at every experience level, understanding EPQ means understanding that currency grading is not a single-axis measurement but a two-dimensional assessment. A note with a lower numerical grade and EPQ often represents a finer collectible than a higher-graded note without the qualifier, because the EPQ example tells you its paper is telling you the truth. In a hobby where so much depends on originality and authenticity, that honesty carries a price, and it should.