ROANOKE TIMES
Copyright (c) 1997, Roanoke Times
DATE: Saturday, March 29, 1997 TAG: 9703310051
SECTION: BUSINESS PAGE: A-9 EDITION: METRO
DATELINE: WASHINGTON
SOURCE: ASSOCIATED PRESS
The money is still green, but the faces at the Treasury Department are red.
Officials have discovered that thousands of the new $100 bills - worth at least $4.6 million - were misprinted with two of the sophisticated security features swapped.
Officials believe the error still involves a relatively small percentage of the $890 million in new $100 bills in circulation, but they concede that at this point there is no way of determining the exact amount. Even so, at least 46,000 bills totaling $4.6 million in misprinted money have been discovered, a Treasury spokesman said.
The error involves two new features added to the bills to make them harder to counterfeit - a polymer security thread and a watermark.
Correctly printed, the security thread should appear on the left side of Benjamin Franklin's portrait and the watermark should be on the right side.
But on the misprinted bills, the thread is on the right and the watermark is on the left.
The Bureau of Engraving and Printing, the Treasury agency that prints currency, first discovered the error in November. At that time, it alerted the Secret Service, the government agency that catches counterfeiters, and the Federal Reserve, whose 12 regional banks actually put the money in circulation.
However, officials said they delayed notifying the public because they believed they would be able to catch the misprints before any of them actually got into circulation.
But in two instances, commercial banks that get their money from the New York Federal Reserve branch returned a total of 33,000 in misprinted $100 bills totaling $3.3 million. In one instance, a business refused to accept a $100 bill in payment, believing it was counterfeit.
Treasury officials stressed that the misprinted money is not being recalled and is legal tender.
``The currency is still good, but if people are uncomfortable, they can bring the bill to their local bank for exchange,'' said Howard Schloss, chief spokesman for the Treasury Department.
They could also consider hanging on to the $100 bill because with the misprint it is likely to be worth more than the face amount to collectors.
Treasury officials said the error resulted when a paper company, Crane Paper of Massachusetts, put a guide notch on the wrong side of some shipments of the paper.
When the government printers inserted the blank paper into printing presses, they put it in the wrong way and the bills were printed incorrectly.
Officials said that since the error was discovered in November new procedures have been put in place to make sure it is not repeated.
The newly designed $100 bill, which features an over-size portrait of Franklin, was first put into circulation a year ago this week.
Part of the government's embarrassment about the incident stems from the fact that the introduction of the new currency was accompanied by an elaborate public relations campaign to educate the public on ways to spot the new security features as a way to crack down on counterfeiting.
Treasury signed a five-year $31.7 million contract with the Burson-Marsteller, the international public relations firm, to conduct the education campaign on the redesign of all U.S. currencies. The $100 bill has been the only bill introduced. It is to be followed by a redesigned $50.
Currency and coin dealers said the amount a misprinted $100 would be worth would depend on how many of them actually turn up in the public's hands.
Joe Gallo, a coin dealer for 33 years in Alexandria, Va., said that they could be worth as much as $250 or as little as $150 if it turns out a lot got into circulation.
``We look at the hundreds more closely now than we used to because they're new, so I think [the misprints] might get discovered quickly,'' he said.
But one problem in detecting the bills may be the fact that roughly two-thirds of all U.S. currency circulates overseas.
Crane for the last 100 years has been the sole supplier of the paper used to print U.S. currency. But critics unhappy with this monopoly relationship have been pushing the Treasury Department to put out at least a portion of currency paper for competitive bids.
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