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The buck starts here, and may stop here, at the nation's money mills; Bureau of Engraving and Printing and Secret Service

"You'd be surprised at the number of people who do not believe in banks," Gracie Scruggs declares. Scruggs is a supervisor at the Bureau of Engraving and Printing in Washington, D.C., the factory that makes the nation's paper money. She's referring to people throughout the United States who hide money in mattresses. She knows they're out there because many of these individuals indulge in a second ill-advised habit: they smoke in bed. Incinerated mattresses arrive regularly at Scruggs' department, the Office of Currency Standards, where, as a free public service, specially trained currency examiners armed with tweezers, butter knives and knitting needles gingerly pick through the debris, searching for redeemable currency.

"We receive mutilated currency of all kinds," says Scruggs. "By mutilated' I mean buried, burned, torn, petrified, teargassed, chewed by animals and exposed to the secretions of decomposing bodies." A farmer once mailed in a cow's stomach; the examiners verified that it contained several hundred dollars. The examiners have pieced together money confetti sent in by a man who had hidden his savings in the barrel of a seldom-used shotgun. If they can patch together 51 percent of a bill, they redeem it. Fearful of destroying evidence that can back up their claims, citizens pull up to the loading dock downstairs with the burned contents of entire rooms-desks, filing cabinets and all. "Even if it's just white ash, you can still see the scrollwork on the paper," says Scruggs. "United States currency is made out of a paper that is never destroyed, I don't care what you do to it."

That's overstating the case somewhat, but the bureau clearly prides itself on putting out a superior product. No commonly handled manufactured goods are more painstakingly produced than are the nation's bills and coins. Yet few products are handled with such brutal disregard by consumers. We'd be shocked if a $ 20 bill tore when we crumpled it into a coat pocket, and we'd be outraged if the ink ran when we put it through the wash. We expect cash to be durable, plentiful and genuine (though we never check to see). lf a bill or coin shortage occurred, we'd probably blame government planners, not the international black market's reliance on the dollar, and certainly not the millions of overflowing penny jars perched on dresser tops from coast to coast.

Money-the ticket to the good life, the love of which is the root of all evil-is not normally viewed as a mere manufactured commodity. But to the two huge money factories charged with keeping us all in pocket money, the United States Mint and the Bureau of Engraving and Printing, that's exactly what money is. In many ways the production of cash is like that of shoes or skis or playing cards. Coins and paper money have design review committees, physical life spans, sudden shortages and occasional factory seconds, although under no circumstances are the latter marked down for quick sale. The money business even has its share of marketing fiascos. There exists a locked storage area that is currently weighed down with 334 million Susan B. Anthony dollars. The Edsels of modern coinage, they are too unpopular to circulate and too valuable to melt down.

In other ways, of course, producing money is not a bit like producing playing cards or shoes. In the case of paper money, the distinctive feature is its markup. A $ 1 bill costs only 2 1/2 cents to make. A $ 100 bill costs the same. As a result, security at the Bureau of Engraving and Printing is tighter than a military command post.

The bureau's 27-acre facility has 400 closed-circuit video cameras, several thousand alarms, an army of of security officers who make strong eye contact, and a noticeable absence of windows. One of the few highsecurity areas that does have windows is the engraving department, where skylights let the bureau's 14 engravers work by natural light. The only newly engraved piece of U.S. currency issued in the past 60 years was the short-lived $ 2 bill, introduced in 1976, so the engravers tend to concentrate on other media, from postage stamps to White House invitations, along with keeping currency dies in repair.

A portrait from dots, dashes and lines

"We have the largest in-house staff of engravers here in the country," says Hugh Kasley, the department foreman, a relaxed, avuncular man with impeccably trimmed gray hair. "If you wanted to make counterfeit money, the best group to do it would be right here." Bank note engravers cut patterns in quarter-inch-thick steel plates using antique, hand-held styluses called gravers. Every image is composed of hand-cut dots, dashes and lines. Viewed up close, George Washington on the $ 1 bill looks like a tattooed Maori warrior. A scrollwork, some do only lettering-makes the handcrafting of competing dollar bills tougher for the occasional "free-lancer" to accomplish alone.

Kasley estimates that just the portrait of Andrew jackson on the twenty took its engraver a good two months to do. Larger engravings take longer. Working from a photograph, picture engraver Tom Hipschen recently spent 500 hours on President Reagan's official portrait, a 3-by-5-inch masterpiece of incised steel. The only way engravers can correct a misplaced line is to hammer the back of the steel die after the unwanted portion has been ground out. "With President Carter," says Kasley, "we engraved the portrait the White House gave us; then they decided they didn't like the necktie." He says this quietly, his voice filled with wonder. "We had to alter the whole tie from behind-just take it out."

An engraved plate applies ink to paper by a process known as intaglio printing. In a well-guarded basement pressroom, plate-printing foreman Bob Harry leads me up onto a narrow walkway atop one of the bureau's huge presses to show me how it's done. Below us, the press is thumping out a steady cascade of $ 10 bills in sheets of 32. Four working plates, made from copies of the original engravings, have been wrapped around a spinning drum. Each time the drum turns, three things happen in quick succession: the plates are smeared with hot gummy ink, their surfaces are wiped clean leaving ink only in the cuts), then a sheet of paper is squeezed against the plate. The squeezing amounts to 25 or more tons per square inch, sufficient to force the ink onto the sheets in sticky, glistening mounds-mounds high enough to let some spenders recognize denominations by feel. As I watch, sheet after sheet of tens, green side up, floats gently down onto a growing stack. It's a lovely sight.

"We're printing over six billion notes a year now, says Harry as we climb down. A small sign on a nearby press reads: THE BUCK STARTS HERE. "In the late 1970s," he says, "we printed less than three billion a year. "Inflation has played a part, but Harry attributes the growing popularity of greenbacks to other factors: dollar changers on vending machines, cash-only fastfood restaurants and the hunger of automatic banking machines for crisp new bills. To keep up with demand, the bureau now keeps its 14 currency presses running day and night, often seven days a week.

Harry pulls the top sheet from a five-foot stack of blank currency paper that awaits its moment of glory. The paper is made specially for the bureau by a Massachusetts papermaker, Crane & Company Inc., and is shipped to Washington by
a federal crime. Possession of paper that even looks like currency paper is a federal crime. Genuine currency paper is one quarter linen and three-quarters cotton, with a few tiny red and blue fibers added to the mix to make imitation that much harder. Scraps and cuttings from clothing manufacturers are a key ingredient of Crane's recipe. I comment that the paper, for all the care taken in its manufacture, looks better after it's printed. Yeah," says Harry, "it looks a whole lot better after it's printed."

Like all printshops, this one has its share of slipups. Harry recalls the time they printed $ 1 backs on $ 5 faces, but the error was caught before the sheets went out. "I can only wonder what the value of those $ 6 bills would have been," he says. Most mistakes are less dramatic but equally unacceptable to the 176 members of the bureau's examining department. I step into a large room down the hall, where examiners stare at uncut sheets of tens as they flow through the room on conveyor belts. The only person moving is a woman in the back who is busy pulling every fourth sheet as it passes. Earlier, a press crew had run off a load of sheets without noticing a blank patch on one of the portraits of Alexander Hamilton, just behind his left ear. To a collector, the affected sheets are to die for. To an examiner, they're just junk.

The sheets that pass muster are cut down to size; then letterpresses add serial numbers, and Treasury and federal seals. The finished notes are bundled into 4,000-note "bricks" and shrink-wrapped in plastic, ready for shipping. "When we're printing $ 100 bills," says packaging expert Will Groomes, hefting a $ 40,000 brick of tens in one hand, "then we're talking about $ 400,000 right here." Several weeks a year, he says, the bureau prints $ 100 bills around the clock. At those times, a three-foot-high skid of bricks is worth $ 32 million, enough to found a university or two. "If you think of it as money," says Groomes, "you'll go crazy. So you have to think of this as a product, like shampoo."

As for spoilage, it is not, understandably, tossed into a dumpster in the parking lot. Its destination is a bunkerlike concrete room in the building's subbasement. There, I watch William Moore, a cheerful fellow in grimy work clothes, grab 32-note sheets by the fistful and heave them under a slowly turning drum covered with spikes. The sheets emerge on the other side of the drum in tatters and drop into an enormous well in the center of the room. The walls of the well slant inward to form a funnel down which Moore's security supervisor, Matthew Stevens, is stuffing pulverized currency with a 20-foot pole. Directly below the chute is a waste-fueled boller, and the room around us reverberates with the roar of its fire. In 1988, the boiler destroyed close to
heat one-fifth of the bureau's buildings all winter long. Moore laughs when I ask him if it makes him sad to be destroying all this money. It would make him sadder, he assures me, not to receive his paycheck.

The volume of spoiled currency the bureau destroys is small change compared with the amount of wornout bills that have to be done away with annually. If you made a neat stack of just the $ 1 bills that are destroyed each year, it would rise almost 200 miles. The task falls to the country's 12 Federal Reserve Banks. Each of them regulates the flow of cash in its region, accepting excess or worn-out bills from local banks and doling out notes fresh from Washington as needed. High-speed sorting machines shred any bill on the spot if it is too limp, too faded, too creased or generally too abused to be of further service. The sorters also detect counterfeits (by measuring the iron content of the ink, then examining the brightness of the bill along a particular strip). Evidence of a crime, counterfeits are not destroyed. Instead, they're sent to Secret Service headquarters in Washington, where two walls of filing cabinets hold four samples of every batch of counterfeit money ever seized. The inventory is growing rapidly.

"Most counterfeiters take a picture of a genuine bill, then make an offset plate from the negative," says Special Agent Pete Smoot at the agency's G Street offices, just down the block from the White House. Smoot opens and closes drawers of counterfeits as he talks, searching out his favorites among the 13,000 varieties on hand. He hands me a good-looking twenty, sharp and crinkly. The cross-hatching around Andrew jackson's head is as clear as a window screen. On both sides of the bill, tiny red and blue fibers have simply been printed right on the paper, a little trick that took somebody four separate pressruns. "Some counterfeiters draw them in," says Smoot, "and I've seen bills where the counterfeiters had cut real pieces of thread and tried to glue them on."

Though best known for protecting Presidents, the U.S. Secret Service first set up shop in 1865 specifically to combat counterfeiting. At the time, between one third and one-half of all paper money in circulation was thought to be phony. That proportion has dropped considerably, but seizures are up none the less way up. Thanks largely to better cameras and better presses, counterfeiting is a growth industry. More than 100 million counterfeit dollars were seized last year, more than double the 1975 total. The three all-time biggest busts occurred in 1988. The largest, $ 24.3 million, took place in Los Angeles the week before my visit. Back on G Street, in a windowless storeroom next to the file room, cardboard cartons of recently confiscated money crowd rows and rows of gray steel shelves. "I can't even tell you how much money is in here," says Pete Smoot. "Zillions."

Smoot has been a Secret Service agent for 17 years, and he obviously delights in the cops-and-robbers aspect of his profession. With the upbeat boyishness of a popular high school teacher, he says things to his colleagues like "When did that caper go down?" In the archive room, Smoot opens a file drawer at random and produces a sorry-looking twenty, just a photocopy on cheap paper. "Stuff like this gets passed all the time," he says. From the Reno office, where he worked until recently, he investigated a case where photocopies of $ 1 bills were turning up in a dollar-changing machine at a Carson City video arcade. Adjoining the arcade was a copy center. "It turned out a whole gang of little kids were making copies of dollar bills, walking over and putting the copies in the dollar changer, then buying soda and arcade games with the change," says Smoot. A good change machine wouldn't be fooled, he says, but arcades and laundromats often can't afford good change machines. Slot-machine slugs were another low-tech caper that used to keep Smoot busy in Nevada. "We'd catch these guys out in the sagebrush with their Coleman stoves, melting down lead and pouring it into handmade molds for Eisenhower dollars," he says. Ike may not have looked too lifelike, but the slot machines didn't care.

The most exquisite counterfeit money Smoot and his fellow agents ever saw came from an artisan in Thailand named Lee Ah Sin, aka King Kong, and from a solo artist in Southern California, Marion Williams. Both men used the time-consuming intaglio method of printing. King Kong, the protege of a Hong Kong master known as Professor Wong, is thought to have passed at least $ 2.5 million of homemade money before his arrest in 1985.

Marion Williams' tabletop operation was far humbler, producing perhaps $ 15,000 a year. At the time of his arrest in 1974, Williams-or Marion. as Smoot and his colleagues fondly refer to him-was a 77-year-old recluse suffering from cataracts, hernias and alcoholism. "What finally did him in," says Smoot, "is that he took in a boarder who got curious about a locked room in the house. The boarder broke his way in, found all this money and took some that Marion would never have passed-it probably hadn't passed his quality control." The boarder was nabbed right away and promptly squealed on his landlord. Williams' apparatus now rests in a display case with the Counterfeit Division on the seventh floor of Secret Service headquarters. In it are an old box camera, a container of Rit shoe dye, a bottle of jack Daniels ("To keep him going," says an agent) and a beautiful $ 20 bill. Williams' technique was arduous but clever. He would build up photographic emulsions on a small plate of glass until the pattern was almost as deeply etched as a steel engraving. Then, using the shoe dye as ink, he would squeeze glass and paper through an old, handcranked laundry wringer, one note at a time.

The Secret Service investigates coin swindles as well. In the agency's spotless forensic laboratory, technical analyst jim Brown hands me an 1879 Morgan silver dollar. On its face are two tiny raised letters, CC," for Carson City. Without that mint mark," says Brown, the coin is worth about $ 17. With the CC, the coin's worth $ 2,500." He pops the silver dollar into the vacuum chamber of a scanning electron microscope on a desktop in front of us. Two luminous, green Cs appear on the machine's video screen. Magnified 20 times, they seem like perfectly innocent, flattop mounds. Brown ups the magnification to 200. "Look at that," he says. "You already know something's rotten in Denmark." The raised letters now resemble pancakes on a plate: a deep, dark crack runs around the base of the letters. Brown boosts the magnification to 500 and the pancakes appear to be levitating clear off the plate. Some ne'er-do-well, he suggests, managed to file the mint mark off a less valuable Carson City dollar and affix it to this one. Quite a scam, I say. "There's a million of them," says Pete Smoot.

As the Carson City coin caper illustrates, a numismatically inclined criminal can make just as much money from altered coins as from homemade bills. For this reason, security at the government's two factories for general-circulation coins, the Philadelphia Mint and the Denver Mint, is as tight as if they were stamping out gold doubloons, not pocket money. When I visit the Philadelphia Mint, a police officer asks me to set aside not only all my change but also my shoes, my glasses and my wallet before passing through a metal detector. The device is so sensitive that shoelace eyelets, screws in eyeglass temples and magnetic strips on credit cards will all set it off. The idea is to impede anyone from sneaking out with a misstruck penny, or even a penny blank, both of them eagerly sought by collectors. Off-center, Abe Lincoln is condemned The Philadelphia Mint has a decidedly unglamorous, blue-collar feel. At one end of the shop floor, blanking presses punch out coin-size disks, like tiny cookies, from long strips of metal alloy. Nearby, the round blanks are heated and rolled under pressure, which gives them rims. At the other end of the cavernous room, dozens of automated coin presses pound the blanks with several tons of pressure, heads and tails at the same time, transforming them into legal tender. At one of the presses, an inspector with a loupe tosses an off-center penny -- Abe Lincoln seems to be gazing at a new moon -- into a bin that's marked CONDEMNED.

What sets this factory apart from other assembly line operations, aside from all the security, is the glinting, gleaming product. As I wander the floor, I'm surrounded by jiggling chutes and swirling trays of shiny treasure. A mint worker with a shovel and a rag reaches into a large canvas bin to smooth out a glittering mountain of blanks with a proprietary sweep of his hand, a pirate admiring his booty. Underfoot, the pitted concrete floor is littered with hundreds of sparkling blanks. All around me, creeping rivers of coins drop endlessly from conveyor belts into large bins in a perpetual jackpot, a Las Vegas gambler's dream-nightmare.

The factory produces 35 million coins a day. Threefourths of them are pennies. Doing away with all this penny making altogether might seem like a sensible way to save the federal government some money. Mint spokeswoman Eleanor McElvey points out, however, that pennies retail for one cent but cost the mint only six-tenths of a cent to make. The 50-cent piece, the highest-denomination coin the mint makes, costs a nickel to produce. "We come out ahead with every piece we make," McElvey says. The mint's total return, she notes, which includes income from commemorative coins, proof sets and other collectibles, amounts to several hundred million dollars a year.

A cramped corner studio on an upper floor is the workspace of the mint's sculptor-engravers. American citizens are notoriously resistant to new designs for money, as sponsors of the $ 2 bill and the Susan B. Anthony dollar quickly learned, so the sculptor engravers spend most of their time on commemorative and presentational medals. I notice an exception on a tabletop in one corner, a plaster bas-relief of George Washington the size of a dinner plate. Taped to the top is a handwritten sign: FRAGILE' "This is the original model for the 1932 quarter," says Edgar Steever, 76, one of several old-timers in the shop. The plaster model is rolled out every year for a date change, he explains. The final 8" in 1988" has just been scraped off, and a carefully fashioned clay 9" stuck in its place. A series of molds will be taken from this original to yield the new year's working dies.

A more unusual mint heirloom is Peter, a stuffed bald eagle that overlooks the mint's lobby from a Plexiglas case. According to mint lore, Peter was a domesticated eagle that nested in the mint in the early 1800s, occasionally posing for new coins. He met his end when he caught a wing in a huge coining-press flywheel. By some accounts, Peter continued to pose for coins after his visit to the taxidermist.

The only person still living to have sculpted an entire general-circulation U.S. coin, eagle and all, is Frank Gasparro, who retired as chief engraver of the mint in 1981. A short, animated 79-year-old with emphatic eyebrows, a crumpled necktie and a jimmy Durante profile, Gasparro still does medallion work in an immaculate private studio a mile away from the Philadelphia Mint. He designed the Eisenhower and Anthony dollars, and he engraved the "tails" sides of both the 1959 penny and the 1964 Kennedy half dollar. He also designed a two-cent piece for the mint in the late 1970s -- "It was smaller than a penny, larger than a dime, with just a big 2' on it," he says -- but the Treasury Department dropped the idea.

Gasparro is an excitable man and nothing seems to thrill him more than the subject of coin making. As a 12-year-old apprentice sculptor, he saw a medallion being sculpted and found the experience more exciting than a baseball game." When getting change, he has been known to show cashiers the back of a penny and announce he designed it. "They'd look at me like I was crazy, so I don't do it anymore," he says. I ask Gasparro if he signed his work. "Sure, I'll show you." He fishes around in his pocket and pulls out a penny. "Here's my FG' right here," he says, pointing to the bottom right corner of the Lincoln Memorial. It occurs to me that few other artists in the country could show me objects from their oeuvre by reaching into a pocket or a guest's pocket, for that matter.

Gasparro is well aware that most people think of coins (when they think about them at all) as tokens of exchange, not portable sculptures. I ask him if he thinks the penny will ever be abolished. "No way. There's a psychology to it. The 99-cent sale -- people want that penny back!" Do you? I ask. "Sure I do!" Moreover, he says, he always keeps an eye out for pennies when he walks down the street. "I do it for sentimental reasons," he says, laughing. "I find more pennies than anybody."

(cite provided by snopes)