Sheet and Single Note Replacements

The catalogue does not define these terms in either of the two places I first checked, so I will try to explain the terms here.

Firstly, I should briefly explain why replacement notes even exist in the first place. Decades ago, it mattered, most especially to bank tellers, that a bundle of 100 banknotes be consecutively serial numbered with the last two digits going from 00 to 99 or 01 to 00. Nowadays, with automated counting machines and other technology, such a requirement has become redundant. Indeed, in my observations, many of the younger bank tellers struggle to count banknotes manually and have become dependent upon the counting machines, but that's a whole other story. So, when a defective note was discovered, it must be removed. In order to keep the bundle properly numbered, the original method was to reprint a note with the same serial number as the removed note. This was deemed too costly so the idea of a replacement note was invented (we're talking about almost 100 years ago now in Canada, somewhat before that in other jurisdictions). Separately numbered and marked banknotes were preprinted and used to replace defective notes. Thus the sequence could be maintained and if a bank teller saw an out-of-sequence note with an asterisk on it, they'd know why.

Banknotes go through several stages of production, listed here in a highly simplified manner:
- Paper / substrate production
- Printing on both sides
- Serial numbering
- (in older series, the addition of seals and/or signatures)
- Cutting
- Packaging

At various points along the way, the product is inspected for quality control. At least during the era of "unidentifiable" replacement notes, that is, replacement notes not otherwise identified by an asterisk or X in the serial number, it was determined that there were two different types of replacement notes: sheet replacements and single note replacements. These originated from two different inspection points in the process.

The first inspection point, or at least the first one relevant to this discussion, occurred after serial numbers were applied but before cutting. At this point, if a defective sheet were to be discovered, the whole sheet would be removed and destroyed, and a whole sheet of replacement notes would be inserted in its place.

The second inspection point occurred after the sheets were cut into piles of separate notes. If a defective note were discovered at this stage, only a single note would be required to replace it. Thus, a short run of replacement note sheets would be cut up and available for this purpose.

So, sheet replacements were replaced an entire sheet at a time, whereas single note replacements were only used one note at a time.

Replacement notes had an evolution:
- Same number replacements: a new sheet was prepared and numbered with the same serial numbers as the defective sheet.
- Identifiable replacements: Notes printed before the main production run and identified with an asterisk initially, or an X.
- Unidentifiable replacements: Noted printed before the main production run but not specially identified.
- Replacements inserted in groups, not exactly in place of defective sheets.
- No replacements at all.

Presently, Canada does not use replacement notes. When a defective sheet or note is discovered, it is simply removed and destroyed. Then when packaging, they simply ensure that there are 100 notes in every bundle with the serial numbers being irrelevant. This is why during the 2017 $10 series 5-1/2 prefixes (CDA-CDF) were required to fulfill an order of 40,000,000 banknotes. They just kept printing until they had a sufficient quantity of "good" product.

Hopefully that helps shed some light on the subject.