PURPOSE: To improve the precision or counterfeit discrimination of paper money by performing discrimination based on peak positions and the frequency in peak of the variable density of paper money, a ratio of differences of peak levels, and a combinational pattern of peak positions and peak levels.

CONSTITUTION: The output of a sensor 1 of a paper money discrimination device is converted to a digital signal by an A/D converter 3 and is inputted from an input/output circuit 4 to a CPU 5. Then, information related to the color and the density in the position detected by the sensor 1 of paper money 8 is read by the CPU 5. When it is discriminated in the conventional method that it is true, peak analysis is executed. In the peak analysis, positions of a positive peak value and a negative peak value of measured data of the sensor 1, which shows the change of the variable density of paper money, and measured data are obtained as a set, and the frequency in change of the negative peak and that of the positive peak are stored. In synthesized peak discrimination, it is discriminated whether the sum total of the frequency of positive peaks and that of negative peaks is within a reference range for the frequency in change preliminarily determined for paper money as the object or not.