What Makes Banknotes Collectable ?

There is a useful website that deals specifically with Canadian Paper Money. Has great pictures of each the past Canadian notes as well as its own forum.

http://www.cdnpapermoney.com/

To briefly go over what makes paper notes worth more than face value, you are correct that condition plays a large part of the equation. Also, the rarity of the note - determined by signature/serial #; whether it is a regular note or a "replacement note"; special serial #'s such as solid #'s like 8888888 or "Radar" #'s like 6542456.

Certain series are also more in demand by collectors such as the 1935 Bank of Canada series and the 1954 "Devil's Face" series.

That is a condensed summary but hopefully gets you on the right track.

Here's a paper money grading guide that I use to get you in the ballpark.

• UN (Uncirculated) - A perfectly preserved note with crisp clean paper and sharp square corners.
• AU (About Uncirculated) - An almost perfect note with only very minor handling. May have a bank counting fold at a corner or one light fold through the center. A note in this condition cannot be creased, a crease being a hard fold which has "broken" the surface of the note. Paper is clean and corners are not rounded.
• XF (Extremely Fine) - A very attractive note with only light handling. May have a maximum of three light folds or one strong crease. Paper is clean and corners may show only the slightest evidence of rounding. There may also be the slightest sign of wear where a fold meets the edge.
• VF (Very Fine) - An attractive note, but with more evidence of handling and wear. May have several folds both vertically and horizontally. Paper may have minimal dirt but is still relatively crisp and not floppy. There are no tears into the border area, but may show slight wear. Corners also show wear but not full rounding.
• F (Fine) - A note which shows considerable circulation, but is still on the desirable side. Has many folds, creases and wrinkling. Paper is not excessively dirty but may have some softness. Edges may also show much handling, with minor tears into the border area but not extending into the design. There will be no center hole because of excessive folding. A staple hole or two may also be present.
• VG (Very Good) - A well used and abused note, but still intact with no pieces missing. Corners may have much wear and rounding with tiny nicks and tears that may extend into the design. Paper may have some discoloration or staining and a small hole may also be seen at center from excessive folding. Staple and pinholes are usually present, and the note itself is quite limp. Overall, a note in this condition is not necessarily unattractive.
• G (Good) - A well used and heavily circulated note. Normal damage from prolonged circulation will include strong multiple folds and creases, stains, pinholes and/or staple holes, dirt, discoloration, edge tears, center hole from excessive folding and rounded corners. No large pieces of the note may be missing and graffiti may be present. Overall, an unattractive appearance.
• P (Poor) - A note with severe damage because of wear, staining, pieces missing, graffiti and larger holes. May have tape holding pieces of the note together and trimming may have taken place to remove rough edges. A note in this condition is only desirable as a filler or when no other note of this particular issue is available.

Age, scarcity, demand, just like all other collectibles.

pocket change 50!

Chartered notes are another interesting frontier for banknote collectors!