Report on making currency in 1877

A remarkable report documents the steps involved in handling currency sheets as they passed through the Bureau of Engraving and Printing in 1877 on their way to becoming notes. The value of this report is twofold. First, it precisely lays out the order in which the various items were printed on the sheets. Second, it reveals how often the sheets were handled in the process.

Two types of currency are treated in the report: Series of 1875 legal tender notes and Series of 1875 national bank notes other than $5s. The two classes involved different steps, explaining why they were profiled separately.

The backs of the legal tender notes were printed by the Columbian Bank Note Company, so the thread picks up once the sheets arrived at the BEP. The Series of 1875 national bank notes were printed entirely at the BEP except for the black vignettes on the backs of the $5s, so the thread follows the other denominations.

The report is transcribed in total below. The numbers in ( ) are the stepwise manipulations of the paper during processing. It will help to know a few terms that appear in the report.

Tissues refer to the tissue paper inserted between freshly printed sheets to prevent offsetting of the wet ink on the adjacent sheet. They would print a sheet, lay it wet ink side up on the receiving pile, and then lay the tissue upon it. They would print the next sheet and lay it wet side down on the same tissue, thus requiring one tissue for each two sheets.

Tint or tablet in the context of the legal tender notes refers to the overprinted red ornament on the face that contains a counter denoting the denomination. The counters were printed on the sheets at the same time as the Treasury seals.

Tint in the context of the national bank notes refers to the green back border containing the state coats of arms.

Numbering, of course, refers to printing the serial numbers on the sheets. The numbers were printed one number at a time by a female operator using a paging machine that held a numbering head that she used to stamp the number into place.

Appendix D
(pages 46-51 from Graves and others, 1877)
STATEMENT SHOWING MANIPULATIONS OF PAPER IN BUREAU
This statement was prepared by the accountant of the Bureau.
UNITED STATES NOTES

Counting Division

The backs are received from the bank-note company by this division. They are placed (1) in the hand of the first counter, who examines the printed side and counts the sheets twice; as she finishes each hundred she passes it (2) to the second counter, who examines the blank side and counts the sheets twice. The sheets are then tied up into packages of a thousand by one of the packers, and held until needed to print the faces.

Wetting Division
The sheets are received in this division first to be prepared for the face-printers. When received, the package is placed in the hands of the first (3) counter, who counts into “hundreds;” passes them to the (4) second counter, who counts into “twenties.” The sheets are then (5) placed between wet cloths, (a cloth between each twenty,) and set under weight for about two or three hours, after which they are (6) placed in hands of counter to be shifted into “eights,” “fours.” and “eights;” again set under weight, where they remain overnight. In the morning they are (7) placed in hands of counter, taken out of the cloths, and (8) receive a final count. When ready for printer they are (9) delivered to him, and are counted by himself or his assistant.

Face-Printing Division
The sheets are received by printer, and are counted by himself or assistant. As soon as two hundred are printed they are sent to the counting room of the division, counted (10) by the first counter, the count (11) verified by a second, and sent to the examining division.

Examining Division
The sheets are received in this division first to examine the work of the face-printers. They are received from the face-printers in “tissues,” are (12) counted twice by one counter; are (13) spread upon racks, and the racks placed in the “dry-box” overnight. Next morning taken from the racks, each printer’s work collected separately; the sheets are (14) removed from the “tissues,” and are examined with reference to “register” only. They are then passed to the examiners proper; the (15) first examiner scrutinizes the work down one edge, taking in about one-half the sheet as she finished each “hundred;” she passes it to the (16) second examiner, who scrutinizes the work down the other edge. They both count the perfect sheets into a package of a thousand, and it is tied up and held in this division until needed to print the seals.

Wetting Division
The work is again received in this division to be prepared for seal-printers. It is passed through the same counts and processes as described for face-printing, (17,) (18,) (19,) (20,) (21,) (22,) (23.)

Seal-Printing Division
The sheets are received by printer and counted by himself or assistant. As soon as two hundred are printed they are sent to the counting-room of this division counted (24) once by the first counter, and the count (25) verified by the second. They are then sent to the examining division.

Examining Division
The sheets are again received in this division to examine the work of the seal-printers. These sheets are not in “tissues,” and are counted (26) but once when received. They are spread (27) on the racks and dried as described under the “face” work; when collected in the morning they go directly to the examiners. The first (28) examines the “tint” or “Tablet,” and the second (29) the seal. They count the sheets into packages of a thousand, and the work is then delivered to the counting division.

Counting Division
The sheets are received in this division for the second time, in connection with the U. S. sealer. The first counter examines (30) the seal, and counts the sheets once; as she finishes each hundred, she passes it to the second counter, (31,) who examines the “tint” or “tablet” and counts the sheets once. The work is then tied up and placed in the vault overnight. In the morning it is delivered to the pressing division, and after being subjected to hydraulic pressure, (32,) it is brought back to this division and again examined and counted (33) (34) as above described. The pressure often brings out imperfections that were not before noticeable. They are held in this division until required by numberers.

Pressing Division
The sheets are received in this division, and are placed in double pairs between press-boards. When five hundred have been so placed, the package is subjected to hydraulic pressure. They are removed from the boards, and packed by thousands. No count is required in this division, as the sheets are immediately taken to the counting division, where they are counted and examined.

Numbering Division
When the sheets are received in this division they receive a sponge count (35) by the first counter and a spread count (36) by the second. They are issued to the numberer in thousands, and counted (37) by them. At the close of the day all work is returned to the examining room of the division and counted (38). Next morning it is placed in hands of the examiners, who examine the numbers thoroughly, (39); then count the top numbers, (40); then the bottom numbers, (41); then count the sheets, (42). The work is held by this division until required by the separators.

Separating Division
The sheets are received in this division, counted once by top number, (43) trimmed, (44) counted again, (45) separated, (46) notes counted (47) into packs of “twenties,” strapped and (48) packed into bundles of five hundred sheets. The separated work is held in the vault overnight, and delivered to the Treasurer the first thing in the morning.

NATIONAL-BANK NOTES OF DENOMINATIONS OTHER THAN FIVE DOLLARS

Counting Division
The blank paper on which the notes are printed is received by this division. The sheets are (1) counted and examined by the first counter once; (2) by a second counter once. They are then delivered to the wetting division.

Wetting Division
The sheets are received in this division first to be prepared for the tint-printers. When received the package is placed in the hands of (3) the first counter, who counts into “hundred,” passes them (4) to the second counter, who counts into “twelves” and “thirteens;” (5) the sheets are then placed between wet cloths, (a cloth between each “twelve” and “thirteen,”) and set under weight for about two or three hours. After which (6) they are placed in hands of counter to be shifted into “fives,” “twos,” “fives”—“fives,” “threes,” “fives;” again set under weight, where they remain overnight. In the morning they are (7) placed in the hands of counter, taken out of the cloths, and (8) receive a final count. When ready for printer they are delivered to him, and are (9) counted by himself or his assistant.

Tint-Printing Division
The sheets are received by printer, and are counted by himself or assistant. As soon as two hundred are printed they are sent to the counting room of the division, (10) counted by the first counter, (11) count verified by a second, and sent to the examining division.

Examining Division
The sheets are received in this division first to examine the work of the tint-printers. They are received from the tint-printers in “tissues,” are (12) counted twice by one counter, are (13) spread upon racks, and the racks placed in the “dry box” overnight, next morning taken from the racks, each printer’s work collected separately, and the sheets are (14) removed from the “tissues.” They are then passed to the examiners, (15) the first examiner scrutinizes the work down one edge taking in about one-half the sheet; as she finishes each “hundred” she passes it (16) to the second examiner, who scrutinizes the work down the other edge; (17) both count the perfect sheets into packages by States and they are delivered to wetting division for back-printing.

Wetting Division
The sheets are again received in this division to be prepared for the back-printers, and are (18) counted into “hundreds,” then (19) into “sixteens” and “seventeens;” (20) placed between cloths; (21) shifted by “sevens,” “twos,” “sevens”—“sevens,” “threes,” “sevens;” (22) taken out of cloths and (23) counted. When ready for printer they are delivered to him, and are (24) counted by himself or his assistant.

Back-Printing Division
The sheets are received by printer, and are counted by himself or assistant. As soon as two hundred are printed they are sent to the counting-room of the division, (25) counted by the first counter, (26) count verified by a second, and sent to the examining division.

Examining Division
The sheets are received by this division again to examine the work of the back-printers. They are received from the back-printers in “tissues;” are (27) counted twice by one counter; are (28) spread upon racks and dried as before described. Next morning taken from the racks, each printer’s work collected separately, the sheets are (29) removed from the “tissue.” They are then passed to the examiners, (30) (31) who examine the black back only in the manner heretofore described. The perfect sheets (32) are counted into packages by States, and they are delivered to the vault-keeper, and held by him for back-printers until need to print the faces. When needed to print the faces, they are taken out by the hundred straps, the old sheets only being counted, and delivered to wetting division.

Wetting Division
The work is again received in this division to be prepared for face-printers. It is passed through the same counts and processes (33) (34) (35) (36) (37) (38) as described for back-printing.

Face-Printing Division
The sheets are received by printer, and are counted by himself or assistant. As soon as two hundred are printed they are sent to the counting-room of the division, (39) counted by the first counter, (40) counter verified by a second, and sent to the examining division.

Examining Division
The sheets are received by this Division again to examine the work of the face-printers. They are received from the face-printers in “tissues;” are (41) counted twice by one counter; are (42) spread upon racks and dried, as before described; next morning, taken from the racks, each printer’s work collected separately, the sheets are (43) removed from the “tissues.” They are then passed to the examiners, (44) (45,) who examine the work with reference to the face only, in the manner heretofore described. The perfect sheets (46) are counted into packages by banks, and are sent to the pressing division.

Pressing Division
The sheets received in the division are (47) placed in double pairs, between press boards and subjected to hydraulic pressure. They are (48) removed from the boards, packed by banks, and sent to the counting division.

Counting Division
The sheets are brought to this division on an informal receipt, (49) examined and counted on the face by the first counter, (50) examined and counted on the back by a second; then sent to the numbering division.

Numbering Division
When received in the numbering division the sheets (51) are given a sponge count by the first counter, and (52) a spread count by the second. They are given to the numberers to have bank number placed on them. The numberer (53) counts them for her own protection. When completed they are returned to the examining room of the division and (54) counted. Next, placed in hands of examiners to be examined with reference to the “bank” numbers. The examiners first examine (55) the numbers thoroughly, then (56) counts by the number at the top of the sheet, then (57) by the number at the bottom, then (58) by spread count. They are then given to the numberers to have the Treasury numbers placed on them, and they pass through like counts and examinations as for the bank numbers, (59), (60), (61), (62), (63), (64). They are then delivered to the separation division.

Separating Division
When received in this division the sheets are (65) counted by the number at the top; passed to the trimming-machine and trimmed; returned to the counter’s table, (66) and counted again by the number at the top. They are delivered to the surface-sealers.

Surface-Sealing Division
When received in this division the sheets are given (67) a sponge count by the first counter, who, as she turns the sheets, examines the treasury numbers; she passes them to a second counter, who gives them a (68) sponge count, and at the same time examines the bank numbers. After being “sealed,” an examiner (69) scrutinizes the seal and the charter number near it; and a second (70) scrutinizes the charter number at the other edge of the sheet. They are then (71) counted by the treasury numbers at the bottom of the sheet, and (72) then by the backs. They are then delivered to the counting division.

Counting Division
The sheets are received again in this division for a final examination. The first examiner (73) scrutinizes the treasury numbers, the seal, and charter number at one edge, counting at the same time; the second (74) scrutinizes the bank numbers and the charger number at the other edge, then, turning, (75) scrutinizes the State shield on the back. They are then delivered to the Comptroller of the Currency.

Report in the Context of its Time

When John Sherman was appointed Secretary of the Treasury by newly elected Republican President Rutherford B. Hayes in March 1877, the employment rolls of the Bureau of Engraving and Printing were bloated with patronage appointees, and the Bureau was under fire for lax security. Hays had advocated in his campaign for civil service reform in order to base Federal employment on merit rather than political patronage. Former Ohio Congressman and Senator John Sherman was a like-minded Republican who, upon appointment as Secretary, used his position to further the goals of fiscal responsibility as Treasury policy.

Secretary Sherman appointed a committee of three, chaired by Edward O. Graves, to examine the operations of the Bureau immediately upon taking office in March 1877. The other members were Edward Wolcott of the Comptroller of the Currency’s office and E. R. Chapman of the Internal Revenue Commissioner’s office. Graves was the perfect chair because he had emerged as a trouble-shooter within the Treasury Department who had worked there since 1863 primarily as an auditor and was strongly in favor of civil service reform.

Sherman’s charge to the committee was to undertake a top-down assessment of the operation and efficiency of the BEP and recommend improvements.

What the 1877 committee found in terms of employment was a Bureau payroll bloated by lavish Congressional appropriations that were in turn used to cover appointments made to the workforce on the behalf of Congressmen “without the regard to the fitness of the appointees or the necessities of the work. * * * Moreover, the Bureau has been made to subserve, to a great extent, the purposes of an almshouse or asylum” (Graves and others, 1877, p. 9). The issue was job creation under the political spoils system whereby Congressmen with a sympathetic ear were finding employment for Union veterans and constituents left bereft from the Civil War by death or infirmity of providers who served the Union.

You can certainly sense that the processing described herein was bloated by many make-work steps, particularly inspections and small-lot movements involving messengers who carried the work to different stations. Those inefficiencies soaked up labor.

Practical Consideration for Collectors

Rarely do collectors consider, let alone contemplate, the implications of how their notes were made. Notice how many times the notes were physically handled. The printing process involved innumerable counts and three cycles of wetting and drying the sheets. The operations are numbered for you – 75 times for the nationals, and that just gets them out the door of the BEP. The 48 steps chronicled for the legal tender notes omits all the handling by the Continental Bank Note employees, who followed similar procedures for printing the backs.

Once the national bank notes left the BEP, the clerks at the Comptroller of the Currency’s office counted and recounted them, loaded them onto shelves, packaged them, and shipped them across the country to bankers. Once received by the bankers, the sheets were handled many more times, including signing and separating.

The legal tender notes went to the Treasurer and fared little better before being released into circulation through banking channels.

With all this handling, I am not being facetious when I tell you that the typical large size notes reached circulation in grades that the grading companies now are classifying at the high end of very fine. The best of the notes were lucky to reach the public in XF grades!

For one thing, the notes did not arrive flat!

The grading companies have inflicted on you this quest for perfection. Is that number 67, 68, 69, or 70? Like lemmings, today’s collectors chase those numbers at great personal expense.

Our industry always delivers what the customer wants, so you can find these notes in slabs where the notes are probably perfectly flat with sharp corners. Guess what happened to them between the time they were received by a banker and they reached you these many decades later!

As for me, I’ll take the raw high-end VF any day! I bought plenty of them right from the bankers in the old days with full knowledge that they never saw the inside of a wallet. I highly revere the originality that comes with such genuinely uncirculated notes. Your numbers are utter nonsense to me.

Reference Cited

Edward O., Edward Wolcott and E. R. Chapman, June 10, 1877, Report on the Bureau of Engraving and Printing made by the Committee of Investigations appointed by the Secretary of the Treasury: Government Printing Office, Washington, DC, 40 p. plus appendices with a 10-page supplement consisting of an exchange of letters written by Secretary of the Treasury John Sherman and Chief of the Bureau of Engraving and Printing, Edward McPherson.

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