Historical Resource Center, BEP
Currency laundering machine, 1912.
Currency incinerator, 1970.
Historical Resource Center, BEP
own model. A perfected machine capable
of laundering 30,000 to 40,000 notes a
day was put in service in 1912. Additional
machines were built and sent to Treasury
offices around the country.15
Once laundering machines were
installed, there was a significant drop in
note production as more redeemed notes
were put back into circulation and not
replaced with new notes. The resulting
decline in currency production waste
and in redeemed currency destroyed also
meant a reduction in paper going to the
macerator and pulp production.
Unfortunately, the laundering of soiled
notes only continued for a few years, ending in 1918. Supply shortages caused by
World War I forced the use of high-cotton
paper in currency production. This paper
did not stand up well to washing, and
the practice was ended. Laundering was
not revived by the Treasury after the war
despite the return to all-linen currency
paper because of growing concerns that the
washed currency was easily counterfeited.16
Consequently, pulp production (now in
liquid form rather than in dry, blanket
form) jumped markedly after 1918 and
stayed at high levels for years to come.17
Unable to reduce waste by laundering
and reusing currency, the BEP looked for
other ways to cut down on the amount of
paper going into the macerator. In fiscal
year 1927, BEP examiners introduced the
practice of “partlying.” Before this time, a
defective note on a sheet of currency led to
the whole sheet being removed from production and destroyed. To reduce spoilage, the Examining Division began marking individual defective faces and backs
with either a pencil mark or a cancellation
hole punched through the note. Workers
dubbed this process as partlying. These
individual notes would be removed and
destroyed, saving the other notes on the
sheet. Partlying reduced spoilage by about
75%, leading to a decrease in waste and
pulp production.18
Beginning in 1919, the Engineering and
Machine Division handled maceration and
pulp production. Over the next 10 years,
the division would produce, on average, 5.8
million pounds of wet pulp per year with an
annual income of around $35,000. A 1929
study showed that de-inking pulp by washing and boiling it would increase its market
value.Two years later the BEP adopted the
new de-inking process in the production
of pulp. New equipment was ordered and
installed. The cost of pulp production was
less than the previous method and would
result in a higher quality pulp for sale.19
However, the market for pulp was
weakening as the effects of the Great
Depression spread throughout the country. By the end of 1931, prices paid for
pulp did not cover the cost of preparing it
for shipment. Some pulp was sold in the
early 1930s, but most had to be hauled to
the dump.20 By 1934, the market for pulp
had collapsed. Prices fell to $2.50 per ton
when anyone would buy. The BEP had
66 Financial History | Spring/Summer 2011 | www.MoAF.org
no recourse but to discard almost all of
the pulp it produced.21 In 1935, 2,341,117
pounds of dry paper was macerated but
only 490,950 of wet pulp could be sold.
The next year, there was no market for
pulp, and it was all dumped — 864 truck
loads. In 1937, Schapiro and Sons were
the only purchasers of pulp at $.42 a ton.
There were no bids for pulp in 1938, and it
was all thrown away.22
Over the next decade, the BEP explored
various ways to deal with its waste paper
from currency and security production.
In 1940, while cancelled notes and securities were still macerated, distinctive paper
trimmings were now taken to the District of Columbia incinerator for disposal,
reducing the amount of paper going to
the macerator by 490,000 pounds.23 This
practice was continued the next year as
there was still no market for the BEP’s
pulp. Finally, in January 1943, maceration
was abandoned and the BEP started burning currency paper.24 The BEP remodeled
its own incinerators to take on the job.25
No one at the BEP was happy with this
turn of events. Burning resulted in the
waste of valuable paper and the problem
of smoke in downtown