This is planet money from NPR. Just a quick note. Today's show is a rerun. There is a new update at the end here. Take out a dollar bill, actually do it here, all right, and look at it. But try not to look at it as money. Try not to look at it as this special thing that you can exchange for. Whatever you want. Try to see past that and see it for what it actually is, right? It's a piece of paper. Somebody makes this paper. If you think about it, if it's your job to make the paper for the U.

S. Dollar, that's kind of a funny job. Every time you go out in the world, you'd see people using this thing that you made passing these pieces of paper back and forth and probably never thinking about where they came from. Hello and welcome to planet Money. I'm David Kestenbaum, and I'm Jacob Goldstein. Today we visit the place that makes the paper for every single dollar bill in the world. It's a small paper mill in Massachusetts that's been doing this for 130 years. Oh, this message comes from NPR sponsor, Squarespace Squarespace allow small businesses to design and build their own websites using customizable layouts and features, including e commerce functionality and mobile editing. SQUARESPACE also offers built in search engine optimization toe help you develop an online presence, go to squarespace dot com slash NPR for a free trial, and when you're ready to launch, use the offer code NPR to save 10% off your first purchase of a website or domain.

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ke NPR dot org's slash Planet Money newsletter. So I visited this mill that makes the paper for dollar bills last year. It's tucked into ah, valley by a river in belt in Massachusetts is actually very, very pretty. When I got there, I met this man named Doug Crane, and he handed me the most solid, substantial business card that I had ever seen. Frankly, it looked more like a wedding invitation. That's it is important that you can cut a steak with your business card. I think the card reads. Douglas A. Crane, vice president of Crane and Company. Doug said he'd show me where our money comes from, and he leads me

into this old weathered factory building feels a little bit abandoned. We go through a door up some stairs and eight points above us to this giant metal medieval looking sphere. Looks kind of like the death star from Star Wars. Just a just a little bit small. It's pretty crazy looking. It's about 15 feet in diameter on, uh, it will hold, you know, several £1000 of fiber to time. That's the raw material for dollar bills. That's right. So that's where it all starts. It turns out no trees are killed in the making of dollar bills. What is in that big ball is linen Dollar bill is 75% cotton, 25% linen. It's more like a T shirt and on the floor next to us are these huge mounds of damp linen fiber that's already been cooked. It is the most un remarkable stuff. It's kind of gray, and it smells a bit like wet leaves.

Linen cotton make for very sturdy paper as a quality check, Doug says. They do this thing called a fold test, where a machine folds the paper and unfolds in folds and unfolds it until it breaks. And currency paper can last like 5000 folds. Normal paper that you'd stick in a copy machine that he says will break after about 100. So you spent a lot of time trying to make these dollar bills really tough. How does it feel when you're out there in the world, you see some someone crumple up a dollar bills to get in their pocket, or it's like thrown in some tip jar or something? I think it's great. I'm like, you know, this is what the products made for. It's it's it's there to be used. And if this is all people want to use it, that's you know that's up to them.

I think it's fantastic you seen a bill that particularly impressed you that it, like, held up so long or that it seems so like it been through a lot in particular. Oh, yeah. You know, uh, had an example of one banknote that ended up in an eagle's nest. Ah, that had been in an eagle's nest, I think for quite some time. Ah, it was just, you know, the thing looked to be in pretty good shape. A little weathered,

I would say. But there it waas Jacob. If you asked how this little mill ended up making the paper for the most trusted currency in the world, it is a wild story. Doug's father was a papermaker and his father's father and his father's father's father and his father's father. How long are you gonna go back? I'm here to interrupt you. The story starts in 18 79 and this this story is lower in Doug's family. I love it because it demonstrates the power of competition. So Doug takes me to this little museum they have at the mill. It's this other old building and has some historical documents in it, and the whole story is laid out there in 18 79. Rutherford B. Hayes is president and the paper for the U. S. Currency at the time is not being made by the crane family.

It is being made by another mil in Philadelphia, J. M. Wilcox and Company. The U. S government is buying the paper from them for 75 cents a pound and 75 cents a pound seemed expensive to the U. S. Treasury Secretary at the time Wilcox and company said Okay, well, you know, we can do it for a little less instead of 75 cents. Weaken do 70 cents a pound and the Treasury Secretary thinks about it and decides. You know what? We're gonna open up the contract and let people bid on it. We'll see if someone can give us an even better price. The market.

I love it. Lo and behold, Wilcox comes in even lower. Substantially lower it. 61 4/10 scents and Jacob here I have a copy of a hand written letter they have in the museum describing what happened So, like 100? Yeah, hand. It's very fuzzy, but but clearly, there are more bids coming in on, and apparently people are bidding even lower. One. Winthrop Murray Crane bids 40 cents. Someone else bids even lower. At 39 3/4 cents per pound,

the bidding is his long, ongoing process that last for days and finally, in literally the last minutes. There is one last lowest bid Winthrop Murray Crane again, this time for a smidge less 38 9/10 cents a pound, which wins it the winning bid. I should note wins by less than a penny a pound. It is sort of fun to imagine this America that was just so different. The story goes that on the last day, the competitors tried to keep Winthrop Murray Crane in his room in his hotel room to make sure he didn't go out and put in an even lower final bid. They threw him a going away party, but he snuck out and ran down to the Treasury building just before the deadline. It's a delightful story. It seems like a myth. I have to say it seems to be true. That's actually the tame version.

Here's Peter Hopkins. He's a historian who runs that little museum at the mill. There are other versions out there that that tell us that his competitors locked him in his his room and he, being a tall, skinny New Englander, climbed out through the transom and then sprinted down to the Treasury building. Transom is the little part over the door or the window. Exactly. Winning the contract is one thing. Keeping it is another currency paper has to be two things right. It has to be durable. Okay, they've done that. But there's this other thing, which is arguably the most important quality you want and currency, which is that it has to be hard to counterfeit.

If it turned out that half of the $100 bills out there had been printed on someone's office copy machine, you know no one would trust the U. S. Dollar. And while you might think that the security features air in the ink and the printing, it turns out that a lot of the security is at Doug's end in the paper itself. For one, the paper just feel special. Remember, it's made of cotton and linen. And then there are all these little hidden security features, like there's this little plastic security strip that the government provides that gets embedded in the bill. In the $20 bill, for instance, If you look, you can make out these very tiny words 20 and USA on it on the strip itself,

and they're subtler stuff. Doug took a bill out of his pocket and pointed to these little colored threads that are scattered around in the bill. There's a red one there. There's another one up over there. They're just everywhere in there, and all the denominations have a mixture of red and blue, different mixture. Fridge bill. Or now, um, I'm not supposed to talk about that. This happened several times in our conversation, like when he shows me a blank sheet of currency paper that's destined to be $20 bills. So this is a sheet as a full size sheet can take this home with me? Definitely not. Definitely not.

This is actually, you know, even though it's here at our mill and we have made this that by law, this is really you know, the property of the US government, and if you were to possess this sheet of paper outside this environment, you could be arrested and charged with a fairly serious crime. When a shipment of paper is ready to be sent to the bureau of printing and engraving. It gets picked up by two guys in an 18 wheeler. The truck looks like any of the truck on the highway, but it's secretly armored. We actually ran into two of the drivers. One of the guys said, Yeah, it's a little weird, you know,

when they pull into a rest stop and people notice that they're wearing guns. People will say, What you hauling? He says he always tells him Halloween candy. Now, Doug says, no one has ever stolen any paper. But there have been some very impressive counterfeits that surface. Occasionally, you may have heard of these counterfeits called Super notes. One day, Doug got a call from the Secret Service asking him to come check one out to see what he thought of it. This was down in Washington. I was at the Secret Service at the counterfeit lab there and was showing this note when you looked at it. Well, I got That's a pretty impressive fake.

Yeah, I did. I I looked at at night. I thought, Boy, someone has has really stayed up a lot of nights. Uh, putting a lot of effort into this. Was it a fake 100. It was a fake 100. You know, Jacob, it's unclear who is making these. Theo's government has said it might be North Korea, but the counterfeit rated in general, it is very low.

Researchers at the Federal Reserve Bank of Chicago published this estimate that something like one in 10,000 U. S. Bills in circulation are fakes. That's like 10.1% 1 of the things That's interesting to me to think about you at this little mill in Massachusetts. I mean, we can think of them as just another U. S. Government contractor, but really, the U. S government here is sort of a middle man because the final sort of customer for Crane paper is, is us is basically every person on the globe who wants to hold the U. S. Dollar bill. So really, crane at this little mill,

they have to be able to crank out enough paper for every person in the world who wants dollar bills, and sometimes they have to do it really quickly. Doug told me this amazing story that when the financial crisis hit, the government called and said, We need paper for $100 bills. More hundreds. There was all of a sudden a big increase in demand for $100

bills in the middle of the financial crisis. Ran seven days a week for weeks on end, making hundreds. Even today, a large percentage of production is $100 notes. Just to continue to meet this ongoing demand overseas turns out their arm

or $100 bills in circulation than $20 bills. Maur hundreds than twenties. I mean, you see $20 bills, every single, there have a few in my wallet.

When was the last time you saw 100? It's shocking to us to think of this. Of course you don't see them. Where are they? Overseas people seek out hurts. And you know, I guess one term is mattress money. It's a safe haven for where do they put them? I couldn't tell you. I mean, it goes out there. I'm not sure anyone knows.

Okay, I'm sold that Doug Crane is doing a good job making these bills and providing the world with all the US currency at once. But there's just one sort of big picture question that I still have, which is, you know, when we go back the story for how Crane got the contract in the first place 100 years ago was a story about the benefit of competition and how opening this up saved the U. S. Government So much money. And now, from what you're saying, Crane has this long running monopoly. Yeah, This is not a secret is something people have thought about. The Government Accountability Office published a report in 1998. The title was meaningful competition unlikely under current conditions. Doug says That's a fair assessment. I mean,

a lot of specialty paper mills have gone out of business. His is one of the few that are left and the paper they make it is not ordinary paper. It has all these security features in it. So at this point, they are the only real option which does raise this question. How do we know the governments getting a good price from you? If you're the only game in town, that's an excellent question. And you know, because we are the only game in town, we know that we have to behave in a responsible way. And also the government just makes them open their books. Does it pretty intense audit every four years when the contract is up for renewal. We have full disclosure of what all of the production costs are. It's how the government purchases from from a sole source. David,

you and I were talking about this a while ago, trying to figure out how to evaluate this kind of thing. And it does seem like you could look at what another country pays for its papers. Maybe some kind of comparison. Yes, I looked into that a bit, tried to compare with Canada. As far as I can tell, the US dollar is cheaper to make them a Canadian dollars. So I don't know, maybe we're getting a really good price. I asked the crane how much profit you making selling currency paper to the U. S. Government. He said, You know,

I can't tell you. It's proprietary s. So I put in a request with the U. S. Government to see if they could give us some measure of the Prophet Crane is making. And Jacob just before you walked in here, I got a phone call saying Sorry. You know, that's it's proprietary. We can't release it. You can contest that and they will contest Contested support for NPR and the following message come from Capital One's business Credit card, The Spark Cash card offering unlimited 2% cash back on everything you buy for your business Capital one. What's in Your Wallet? Visit capital one dot com for more information. Starting college can be overwhelming. Everyone from almost every background has that fear that they got

in here by accident. That's scary. NPR's like it is here to help make your freshman year a little easier. Listen to NPR Life Kids New Guide on College or subscribe Toe Life hit all guys

for all the episodes, all in one place. Hey, it's David again. Just wanted to let you know that after this podcast posted the first time we did end up contesting man NPR's legal department. If I remember it right, we had a young lawyer who was an intern, took this project on and rode a 13 page appeal, citing an impressive array of previous instances where similar information had been released. But here's the final response we got says from the Treasury Department's inspector general quote. After careful review and consideration, I am denying your appeal and affirming the initial denial will post the appeal in the response online. You can read it and see what you think. Doug Krane retired from Crane Currency in 2013 and then in 2018 Crane Currency was bought by another company. Confusingly, This other company was also called Crane Crane Co. But was totally unrelated to Crane Currency.

Do you want us to do a show about how some other thing is made? Email us at planet money at NPR dot org's. You can also find us on Facebook, Instagram and Twitter at Planet Money. This episode originally ran back in 2012. Today's rerun was produced by a vivid Cornfeld are supervising producer is Alex Goldmark. And

our editor is Bryant, her staff. I'm David Kestenbaum. I'm Jacob Goldstein. This is NPR. Thanks for listening. Okay.