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December 1992


News and Views
on Cash Services
for the
Eighth Federal Reserve District

'Tis the Season for Novelty Notes
Once again this holiday season,
retail stores are selling novelty
such as Santa Claus
notes - $1 bills with a portrait
of Santa Claus placed over that
%?-:·,_ of George Washington.
The notes have gained in
::;-:::;, - .
::-----::-- .
popularity since they
,. :
- -_·_
,,,~-::-- debuted several
years ago.
The Santa portrait
has a sticky backing that can
be peeled off, leaving the dollar bill
intact. Because the
portrait can be
easily removed, the
currency is not considered
"defaced" or "of no value."

To raise money for
charity, the notes usually sell
for more than $1; however,
banks can redeem them at face
value only.
If customers question the
value of the notes, however,
tellers may want to suggest that
they remove the stickers themselves. This should clarify the
note's actual worth.
Because of the sensitivity of
our high-speed currency sorters, we ask all banks to remove
any remaining stickers before
sending the notes to the Fed.

tion (or check number) on
the face of the note and the
relocation of the plate number
on the back of the note to the
upper-right quadrant from the
lower-left quadrant.
The high-tech printing
equipment allows both sides of
the note to be printed in a
single pass through the press.
This procedure generates
more than twice the amount
of printed sheets per hour -

roughly 20,000 - than the previously used sheet-fed presses.
Currently, the web-fed press
is printing only $1 notes. Other
denominations may also be
printed on the new equipment
in the future.

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U.S. Currency
Benefits From
Federal Reserve Bank of St. Louis


ou may have noticed
slight changes recently in
the face of the $1 note.
That's because earlier this
year, the Bureau of Engraving
and Printing began using a
new web-fed currency press,
which created some minor
modifications in the note's
The most significant
changes to the notes ~re: the
elimination of the plate loca-


Testing 1,2,3 ... How the Fed Maintains
High Quality of Cash Control
hen it
comes to
and sorting currency,
chances are that few Fed customers realize just how thorough and extensive our

Rise and Shine!
It's Testing Time in the Cash Department
Each morning at 6:45, Cash Department management
begins aseries of tests on our two high-speed currency
counting and sorting machines. The tests can take up to
an hour to complete, but they're the only way we know
that our eves machines aren't missing, miscounting or
I misprocessing a note.
Soil Calibration test- Machines must detect notes that are
heavily soiled.
Defective Note test- Machines must detect notes that
have dog-ears, holes, ripped corners, or tape on them.
Double Note test- Machines must recognize two notes
that come through overlapping.
Short Document test- Machines must recognize
partial notes.
Counterfeit test- Machines must detect bills that have
been tampered with.
Denomination test- Machines must detect notes that are
in straps of the wrong denominations.
Camera test- Management manually blocks the camera
reads each note. A note is then fed through to make
sure an error message is generated.
I Shredded Currency test- Management inspects the
shredding equipment to ensure it is functioning properly.
Shredded currency is inspected to make sure it is of the right
I dimensions.
All notes that have been rejected by the eves machines are
manually inspected by acash reconciler, who tries to
determine why they were not processed. Dog-eared bills and
greenbacks can be straightened out and put through the
machine again. Damaged and soiled bills, however, must be
shredded. Bills that are believed to be counterfeit are
inspected to determine their genuineness. If false bills are
found, they are sent to the Secret Service.

Federal Reserve Bank of St. Louis

quality-testing procedures are.
Every morning before currency processing begins, each
of our high-speed currency
counting and sorting (CVCS) .
machines is given a battery of
tests to ensure that only fit currency is channeled back into
circulation (unfit currency
is destroyed).
These daily equipment tests
confirm that the CVCS' detectors and sensors are functioning properly and able to recognize: counterfeit notes, notes
that are heavily soiled or otherwise defective, notes with
dog-eared corners, notes that
are in straps of the wrong denomination and notes that
come through face down
(known as greenbacks).
"The large number of tests
we perform on our equipment
ensures that the currency we
distribute to our customers is of
the highest calibre," says Bob
Simpson, assistant manager in
the Cash Department.
Daily tests are supplemented by a number of weekly,
monthly, semiannual and annual equipment tests that
make sure mechanical parts of
the sorting machines are functioning properly and that an
uninterrupted electrical power
supply is operating.
In addition to keeping
our machines running
smoothly, we make sure our
high-speed processing teams
are top-notch, too.
Once a month, supervisors
test each processing team seven
different ways, including: inserting an extra note into a
strap, removing a note from a

strap, inserting a counterfeit
note into a strap, inserting a
note of the wrong denomination into a strap, inserting
an extra strap into a bundle
and removing a strap from a
bundle. Members of the
processing team are unaware
of the dates on which
testing occurs.
Currency processors must
find the planted straps, which
have been sprayed with special
ink that can be viewed only under a black light. Processors are
counseled if they fail to detect
two of the same types of errors.
"In the past nine years that
I've been in Cash management," Simpson says, "not
one processor has been counseled for failing these tests. I
know that representatives from
other banks who tour our department are always impressed
by our employee testing
Simpson adds that the average Cash Department employee
has been on staff for five years
or better.

Fed Can't Fill
Christmas Stockings
During the holiday season, the
Eighth District Federal Reserve
offices receive many requests
for rare and commemorative
coins. Reserve Banks, however,
deal only with coins that are
available for normal daily use,
namely, the penny through the
Susan B. Anthony dollar coin.
If your customers approach
you with requests for gold coins
or other commemoratives,
please direct them to large
commercial banks, coin deal-

Are You a
Read These
Facts and
Find Out!
Federal Reserve Bank of St. Louis

ers or brokerage companies.
Please also note that large-size
silver dollars can be found only
at coin dealers.

Electronic Cash
Ordering On The Way
By early 1993, Eighth District
depository institutions will have
access to a faster, more efficient
method of ordering their cash.
Acash-ordering service is
now being incorporated onto
both Fedline®, the Fed's personal computer-based
software, and ED ITH®, the

ust how much do you know
about those notes that you
work with every day? The following is a list of little-known,
yet compelling, facts about the
U.S. currency.
• The life span of $1 bills is
just 18 months because of how
often they are handled. By contrast, $100 bills last a whopping 8 1/2 years.
• Forty-five percent of all
notes printed are $1 bills. Only
3percent of all notes printed
are $100 bills.
• During 1991, the Eighth
Federal Re erve District processed 268,269,400 $1 notes on
currency machines and returned slightly more than 50
percent into circulation.
• U.S. currency is printed
on cloth-like paper that is 75
percent cotton and 25 percent
linen with red and blue fibers
• The ro;t of printing all U.S.
bills is the same for each
denomination: 2.6 rents per note.
• inety-five percent of


Eighth District Interactive Telephone Helpline. Cash
employees and bank programmers are currently working on
fine-tuning and testing
the system and expect it to be
up and running soon.

A Reminder About
Out-of-Tolerance Bags

verification of coin since deposits can be quickly verified by
simply weighing the bag
rather than piece-verifying
each coin.
Accurate piece verification
should ensure that your coin
bags will fall within the weight

From time to time, the Eighth
District surveys the weight of
coin bags by denomination to
establish weight tolerances.
Establishing standardized
weight tolerances speeds up the

newly printed bills replace
worn-out currency. The other
5percent is printed to increase
the total number of bills
in circulation.
• The highest denomina-

tion of currency being printed
today is the $100 bill. The
Bureau of Engraving and
Printing stopped printing $500,
$1000, $5,000 and $10,000
bills in 1945.

Average Life Span Of U.S. Currency






$1 Bill

$20 Bill

$50 Bill

$100 Bill

Operating Letter No. 10 Revised
arlier this month, a
revised version of Operating
Letter No. 10 was mailed to all
cash customers within the
Eighth District.
An important part of the
- revised letter outlines operating
procedures for submitting
"dye-packed" currency uncovered in bank robberies and
"contaminated" currency
This "operational highlights"
through contact with
column addresses the policies
disease or
reported in the Fed's operathuman corpses.
ing letters and is a regular
In the past, banks sent such
feature ofThe Cash
money directly
Manager. In this issue, we
for reimbursediscuss the recent revisions
ment. Early in 1992, however,
that have been made to
Federal Reserve offices began ~
Operating Letter No. 10. We
invite our readers to suggest
receiving and disposing of
future topics.
these types of deposits. Acom-



Post Office Box 442
St. Louis, Missouri 63166

7'he Cash Manager is published
semiannually by the cash departments of the Federal Reserve Bank
of St. Louis. Views expressed are
not necessarily official opinions of
the Federal Reserve.System or the
Federal Reserve Bank of St. Louis.
Federal Reserve Bank of St. Louis


plete review and application
of these revisions will reduce
the number of individuals
who must handle such
The revised Operating
Letter also details changes to
the preparation of currency
and coin deposits destined for
the Fed and the receipt and
piece-verification of currency
and coin ordered from the Fed.
This part of the Operating'
Letter instructs customers to
handle their Fed shipments
under dual custody at all times.
In addition to content
changes, the format of the Operating Letter also has been revised.
The new version incorporare5 a
more detailed indexing system,

making the Letter easier to read.
If you have any questions
about these revisions or the
Operating Letter in general,
please contact your local Fed
cash department.