Life of a Banknote

The American Bank Note Company and other private contractors initially designed, engraved, and printed banknotes. In 1877 Congress mandated that the Bureau of Engraving and Printing within the U.S. Department of the Treasury take over those duties.

By meticulously cutting extremely fine dots, dashes, and curved lines of varying depths and widths into a piece of soft steel, known as a master die, the engraver produced a very lifelike and three-dimensional image on a two-dimensional surface.

The art of engraving not only brought a unique beauty to the bureau’s printed products; it also served a more pragmatic function as an anti-counterfeiting measure.

In 1868 the OCC’s Headquarters staff consisted of 72 clerks, a third of them women. Working under tight security, the clerks cut, registered, bundled, and shipped currency to the issuing bank; once the bank received the cash, each note had to be signed by hand.

By the 1900s, OCC clerks processed, inspected, and counted about 800,000 notes—worth about $4 million—each day.

The Comptroller’s office required a vault large enough to store sheets of paper for thousands of active banks and provide working space for several clerks.

Early on, the vault’s contents were organized geographically by region and town name. Later, materials stored in the vault were organized by bank charter number.

The large volume of currency shipments each day required OCC staff to follow a rigorous protocol for methodically going through the vault on a rotating basis to pull the needed sheets.

In the Redemption Division of the OCC, old currency was received and exchanged for new currency.

The agency provided banks with a new dollar for every old dollar submitted.

Expert counters worked to prevent error and loss. The staff went to great lengths to protect the old notes from being stolen; they punctured four holes into some, cut off the corners of others, and ultimately cut them in half.

Canceled banknotes passed through the macerator, a huge steel receptacle that ground them into a liquid pulp, which was rolled out into sheets of bookbinders’ board and sold for $40 a ton.

The largest value of banknotes ever deposited in the macerator in one day was $151 million, destroyed on June 27, 1894; it consisted of national banknotes and U.S. bonds.