Wednesday, September 02, 2009

How Often Does the Government Make New Money?

How often paper bills need to be replaced depends on the denomination

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United States paper money is one of the most sought after and highly valued forms of currency in the world. Many countries outside the United States use this money as their own national standard, and almost every nation will accept U.S. dollars.

When this is combined with the fact that paper money has a limited lifespan, it becomes clear that the United States has a significant need to continue printing paper currency in extremely large amounts on a regular basis.

Function


United States paper money is printed by the Bureau of Engraving and Printing (BEP), a division of the U.S. Treasury Department. The BEP officially became responsible for the production of the nation's currency in 1894, and has since been charged with designing and creating multiple other products for the government.

Some of these items have included postage stamps, specialized forms and documents, identification cards, various certificate types, and other paper products that have a need for increased security and anti-counterfeiting protection.

Geography


Over the past 250-plus years, United States currency has been produced in various locations due to the evolution of the country's banking system and the formalization of efficient and secure processes. At one time, money was actually printed by individual banks in each state.

Currently, there are only two locations in the country where official United States paper currency is produced -- Fort Worth, Texas and Washington, D.C. The BEP maintains these two facilities under the strictest of security measures.

Features


The evolution of the home computer has resulted in a drastic increase in amateur counterfeiting operations, which has led the BEP to re-design most of the United States bills with updated security features. Although there are some security features that have not been told to the public, a number of them have been readily admitted and described in detail by the BEP.

Watermarks and specialized threads within the actual paper are one of the more commonly known features and are both very difficult to accurately reproduce with common consumer technology and equipment. Additional features such as microprinting and magnetic strips embedded into bills are almost impossible to counterfeit.

One of the newest security measures on U.S. bills has been the addition of patterned digits on the reverse side that are detectable by a large number of computer programs that counterfeiters typically use to reproduce bills. Most of the major printer and copy machine manufacturers have installed software into their devices that recognizes these patterns and refuses to print such images.

Size


Prior to 1928, United States currency was printed much larger than what is used today. These older bills are commonly referred to as Large Sized Currency and measured 7.42 inches by 3.125 inches, or 188 millimeters by 79.4 millimeters.

Currently, the BEP prints what is referred to as Small Sized Currency, which measures 6.14 inches by 2.61 inches, or 156 millimeters by 66 millimeters. Although no official reason for the reduction in dimensions of the country's bills seems to be available, it may be that the decision was made as a way of reducing the amount of paper necessary to create bills, thereby reducing the amount of ink per bill, and ultimately reducing the overall cost of printing.

Production


United States paper money is printed in three separate stages where extremely large blank sheets are sent through various printing presses, then cut to proper dimensions, and finally inspected for errors and flaws before being wrapped and delivered to financial institutions around the nation.

To keep up with the high demand for U.S. paper currency, the BEP must print millions of dollars in varying denominations every day. In 2007, the BEP reportedly printed an average of 38 million bills each day, with a total value in the range of $750 million. In July of 2009, the BEP printed more than 14 million bills every day for an average daily face amount of more than $525 million.

Lifespan


Despite the BEP's efforts to produce currency that lasts a long time, the simple fact that money is made from paper means that bills will eventually need to be replaced. The BEP has astonishing testing procedures that verify the durability of the bills themselves, as well as the images printed on them.

Regardless, it is all too easy to accidentally destroy paper money. Lower denomination bills have a much shorter lifespan than higher denominations, therefore need to be replaced more frequently. For example, due to the higher number of times smaller bills change hands, the average lifespan of a $1 bill is approximately 18-20 months, whereas the average lifespan of a $100 bill is approximately 5 years because they are much less frequently used.

For this reason, the BEP prints significantly more 1-, 5-, 10-, and 20-dollar bills. The most common United States bills are the 1 and the 20.

Warning


The United States Secret Service is responsible for investigating and prosecuting the counterfeiting of U.S. currency. Penalties for counterfeiting are harsh, and may carry fines of several hundred thousand dollars and prison sentences up to 15 years for convictions.

Counterfeiting is a felony offense that is taken very seriously by the authorities, and investigations into such illegal activities are broad-based and wide-reaching.

References


U.S. Department of the Treasury -- Currency FAQ's
BEP Monthly Production Figures
BEP Prints 438.5 Million Notes Worth $16.3 Billion in July

Resources


Bureau of Engraving & Printing FAQ




This article is a Twisted Nonsense Exclusive! (09/02/2009)