New Currency Aims to Counter Counterfeiters

Fearful of the skills and machinery of high-tech counterfeiters, the Treasury Department announced Wednesday the first major redesign of U.S. currency since 1929, unveiling plans for a new $100 bill with an off-center, and much larger, portrait of Benjamin Franklin.

The revised C-note will be available starting in 1996, with new bills for smaller denominations issued later. By the year 2000, new versions of all bills from $1 to $100 will be in circulation. All will have the same color and feature the same historic people as the current greenbacks. But the portraits will be 50% larger.

The new bills are designed to thwart advances in computer printers and copying machines. “Access to a variety of technologically advanced equipment has resulted in a significant increase in the general quality of counterfeit currency,” Guy Caputo, deputy director of the Secret Service, told the House Banking, Finance and Urban Affairs Committee.

On the $100 bill, Franklin’s face will be moved to the left by one-half to three-quarters of an inch, leaving room for an embedded thread, which can be seen with magnification to spell out “USA 100,” and a watermark portrait of Franklin that will be visible when the bill is held up to the light. A new type of green ink will appear to turn gold as the bill is handled or viewed from another angle.

The new $100 bill will be printed with a technique called moire-generating patterns. Lines on the bill appear straight to the human eye. But when the bill is put through a copying machine, the resulting counterfeit lines will be wavy.

Treasury and Federal Reserve officials emphasized that all $100 bills now in circulation will remain legal and insisted that there are no plans to recall any of the current $100 bills, although they are heavily used by drug dealers, smugglers and organized crime.

“All genuine United States currency now in circulation, whenever issued, is legal tender and should continue to be legal tender,” Edward W. Kelley Jr., a member of the Federal Reserve Board of Governors, told the committee.

Surprisingly, the biggest threat to the safety of U.S. currency comes from abroad.

More than 50%, and perhaps as much as 60%, of the $357 billion in U.S. currency in circulation is held outside the United States, Kelley said.

The Secret Service works closely with foreign governments, and more than $120 million in counterfeit U.S. bills was seized abroad last year, compared with just $44 million in bad bills in the United States, Caputo said.

Bad $100 bills are so common in the Middle East that many merchants demand $120 when someone gives them a $100 bill, to cover potential losses from counterfeits, said Rep. Bill McCollum (R-Fla.), a member of the committee.

The governments of Iran and Syria, as well as Middle Eastern terrorist groups, are distributing high-quality counterfeit $100 bills, says a report by a terrorism task force of the House Republican Research Committee.

Caputo refused to respond directly to Republican members’ questions about the so-called super bill, an excellent ersatz version of the $100 bill allegedly being printed at the Iranian government mint in Tehran at the rate of $1 billion a month.

“We don’t have any conclusive evidence at this point” of any foreign government producing counterfeit U.S. currency, Caputo said. The growing threat of quality counterfeits has forced the Clinton Administration to take major steps to revise the currency design for the first time since 1929, when the standard Federal Reserve note shapes, sizes and denominations were established.

In 1990, responding to better color copiers, the Federal Reserve began issuing a new series of $100 and $50 bills containing a security thread and a microprint reading “The United States of America” around the border of the portrait, with the type too small to be read without a magnifier and too indistinct to show up in a copy reproduction.

As older bills move from commercial banks to Federal Reserve banks, they are replaced with the new series of bills. More than 80% of the $100 and $50 bills circulating in the United States are now the new version.

Although the 1990 series of bills can defeat counterfeiting on most current color copiers, the Treasury was eager to anticipate the next generation of technology, and officials decided to take more radical steps by changing the basic look of the currency.

“Because of its enduring value and worldwide acceptability, the dollar will always be a target of counterfeiters,” Treasury Undersecretary Frank N. Newman said at the hearing. “We must take steps now . . . to address a threat that will increase as technology improves. That is what our program is all about--attacking the future technological threat before it fully evolves.”

The detailed design and production plan for the new $100 bill will be completed next year, with the bills printed and issued in 1996. The lesser denomination bills will then be issued in intervals of six months to a year, and all bills should be circulating by the year 2000.

Because the pictures on the new currency of George Washington, Abraham Lincoln and Alexander Hamilton will be twice as big as they are now, the government will prepare new engravings filled with more fine lines and details. The pictures will be easily recognizable to the public, but harder for counterfeiters to reproduce. New portraits will still be serious and statesmanlike.

“You won’t see a grinning Ben Franklin,” a Treasury official said.

New Design to Target Fakes

Among the likely changes the Treasury Department is considering:

Larger portraits: For more detailed engraving

Portrait moved off-center: To make room for a watermark

Machine-detectable threads: Embedded in the paper, positioned by denomination

Iridescent Discs: Colored discs only a few millimeters wide that reflect light

Color-shifting ink: Would appear green when viewed straight on and gold from an angle

Computer-designed patterns: Turn wavy when illicitly copied

Watermark: Smaller version of the portrait visible only when a bill is held to the light

Area for engraved borders