30 Million Flawed New Fifties Are Withheld From Circulation

An estimated 30 million copies of the redesigned $50 bill are being withheld from circulation because of a tiny printing flaw, the Treasury Department said Wednesday.

Officials said they want the first copies of the bills--designed to foil counterfeiters--to be near perfect. A decision hasn’t been made yet whether to destroy the flawed bills, which cost $1.44 million to produce, or put them into circulation later.

“The notes that were produced are clearly functional,” said Larry Felix, a spokesman for the Treasury’s Bureau of Engraving and Printing. “But clearly, if you’re going to introduce notes for the first time, you’re going to make sure the notes are as flawless as possible.”

He said the flaw--small breaks in the fine concentric lines behind the portrait of Ulysses S. Grant--is not unusual, even in bills the bureau has been printing for decades.

A decision on whether to circulate the flawed notes will be made later, in consultation with the Federal Reserve Board, he said. The bureau prints the nation’s folding money, which is circulated through banks by the Federal Reserve.

New fifties with the anomaly, first reported by the Washington Times, have been placed under seal at Federal Reserve district banks pending a decision, said Federal Reserve spokesman Joseph Coyne.

“We consider this a close call whether they are functional or not,” Coyne said. “We felt these bills were not good enough to use in the first year.”

The first year of circulation is critical because people unfamiliar with the new design might mistake the printing anomaly in some as an indication they’re counterfeit.

“It is critical that the new bills have no flaws that would undermine public confidence in them,” said Rep. Michael N. Castle (R-Del.), chairman of the House Banking monetary subcommittee. “The large number of imperfect bills may be more than just a minor problem and should not be handled lightly.”

Secret Service spokesman Arnette Heinze said his agency “will operate on whatever is issued” by the Federal Reserve.

Felix said the new $50 notes will be introduced into circulation by the end of fall, as scheduled. Only copies without the anomaly will circulate, he said.