[INTRO MUSIC PLAYS]
HOWARD:
Hello and welcome to Noteworthy by the U.S. Currency Education Program, or CEP. My name is Howard Williams and I'm the manager of the CEP. The CEP is responsible for ensuring the integrity of and trust in the U.S. dollar by providing information and training resources to the public. Check out our website at uscurrency.gov to find free information and training resources on U.S. currency. Leading our discussion today will be Maria Hawkins, who is joining us now.
MARIA:
Hello, and thank you for joining us. My name is Maria Hawkins, and I'm a member of the U.S. Currency Education Program team. I support domestic and international stakeholder outreach, and I'm joined by Kristen, another colleague of ours here at the Federal Reserve Board. Could you please introduce yourself and tell us a little bit about your role?
KRISTEN:
Hey, Maria, thank you so much for having me. My name is Kristen and I work on the banknote design and development team at the Federal Reserve Board.
MARIA
Thanks so much for coming to the show, Kristen. We're very excited to talk to you today about the journey of money. Have you ever thought about the life cycle of money? That is how it goes from the design to the printing press to your wallet.
KRISTEN:
Well, Maria, I'm probably one of the very few people that actually has thought about that.
MARIA:
That makes a lot of sense given your role. Before reaching circulation, there are five steps in the currency life cycle, design, order, production, issuance, and circulation. Each of these steps requires close collaboration between the Federal Reserve Board, the Federal Reserve Banks, the U.S. Department of the Treasury's Bureau of Engraving and Printing, and the United States Secret Service as they also contribute to the design process of U.S. currency.
KRISTEN:
That's right, Maria. And the first step requires the most amount of lead time. Step one is the design process. Luckily, this only occurs when there's a change to the design of the banknotes. It involves precision, highly trained banknote designers and engravers, specialized equipment and cutting-edge technology that incorporates complex security features to deter would-be counterfeiters. This job is in very experienced hands. The BEP, since 1862, has manufactured our nation's currency using two different facilities, one in Washington, D.C. and one in Fort Worth, T.X.
New U.S. currency is currently being designed to deter counterfeiting and these new Federal Reserve Notes will be issued in the coming years.
MARIA:
The design starts with sketches from the banknote designers who develop a layout and an overall art of the banknote to include borders, a portrait on the front and a vignette on the back. Then the designers work closely with the engravers who create the artwork that will be etched into the plates to create the raised printing that gives U.S. currency its tactile feel. The artwork is called engraving, and each engraving consists of numerous detailed lines, dots and dashes that vary in size and shape.
KRISTEN:
And a fun fact for our listeners, Maria, you might already know this, but it takes 10 years of working as an apprentice before someone can become a banknote engraver.
MARIA:
That seems like a really long time, but with that level of detail and precision that they have to adhere to, it isn't surprising.
So after the engraved banknote design is complete, the final designs are cut into steel dies that are processed into printing plates. The plates are cleaned, polished and chrome plated for hardness. Then they're ready to go to the printing press.
KRISTEN:
But remember, that's only one of the many different printing processes that are used to make U.S. currency. Because there are so many different production steps involved, the design and testing process is very extensive and can last several years. The second step of the journey occurs when the Federal Reserve Board places an order for currency from the BEP.
This occurs each year, and not just when there's a new design. The print order reflects the board's estimate of net demand for currency from domestic and international customers for each calendar year and how much currency is expected to be destroyed because it's no longer fit for circulation.
MARIA:
To give a breakdown, of the Federal Reserve's currency print orders, more than 70% are for notes that will be used to replace bills that are considered to be unfit to use and need to be removed from circulation. Unfit bills might be torn, stained or otherwise damaged in some way.
KRISTEN:
That's right.
The third step is production. The BEP receives the order and manufacturers the notes. Producing a sheet of notes takes several days and uses a variety of presses and printing techniques, and once printed, the sheets pass through a quality control system that accepts or rejects sheets within .3 seconds.
MARIA:
There are so many layers to just the production process. The paper used for U.S. currency is actually very interesting because it is so unique. We encourage people to remember, feel, tilt, and check to determine if their notes are authentic. And the feel aspect is so important partially because of the unique texture of the banknote paper. It's been manufactured by the Crane Company in Massachusetts since 1879, and it's different from normal paper. It is a blend of cotton and linen.
Today, a significant portion of the cotton is derived from waste fiber that is generated from the garment manufacturing industry. The paper has a lot of specialized features, including watermarks that are built into the paper that make it distinctive.
KRISTEN:
The 4th step of the journey is issuance, or when the Federal Reserve Board issues currency to the Federal Reserve Banks. The U.S. banknotes that were just printed in the production step don't actually become lawful money until this issuance step has occurred. Finally, the new notes enter circulation. They travel from one of the two printing facilities to the 28 Federal Reserve Banks across the country that distribute the banknotes to the public through commercial banks, through credit unions and savings and loan associations.
MARIA:
Currently, there are more than $2.2 trillion worth of money in circulation globally.
KRISTEN:
That is quite a journey for our money to make.
MARIA:
One question that we frequently get is what determines the lifespan of a note? The lifespan of a note is how long a bill lasts before it is physically unfit to use. This varies by denomination, and it depends on a number of factors, including how the denomination was used by the public. For example, larger denominations, such as $100 notes, are passed between users less frequently than lower denominations, such as $1.00 notes, which are used far more often.
KRISTEN:
And to illustrate that point even more clearly, the lifespan of a $1.00 bill is estimated to be 6.6 years, while a $100 bill lasts roughly 23 years.
MARIA:
Another common question is, how much U.S. currency is circulating abroad? It is estimated that as much as 1/2 of U.S. currency is circulating outside of the United States.
KRISTEN:
Well, we hope that through this episode you've gotten a better insight into the journey of U.S. currency, how is it printed, where it circulates, and how long a banknote can remain in circulation before it needs to be taken out of circulation.
MARIA:
For more information about U.S. currency, visit uscurrency.gov and please subscribe to our podcast so you don't miss out on future episodes and connect with us on social media.
Thanks for listening to Noteworthy. Until next time.
