Billions of dollars, euros and yen zap around the globe electronically in milliseconds these days. That's the way that modern economies work. But there's still a need for cold, hard cash.
The World's Jason Margolis has more about how the financial uncertainty in the world today is impacting companies that make money, by making money.
Doug Crane's family has been making paper for money for a long, long time. His great, great, great, great, great grandfather, Stephen Crane, owned and operated a mill outside of Boston during the revolutionary war.
Doug Crane: "He made bank note paper at the time for Paul Revere to print continental currency on. And that's sort of a humbling aspect of our roots."
Since 1801, Crane & Co.'s mill has been located in the town of Dalton in western Massachusetts. The company is the sole provider of paper notes for the US government. They take a blend of cotton and linen, add security features like watermarks with Ben Franklin's image, then send stacks of paper to the US Bureau of Engraving and Printing where it becomes money.
At the mill, huge rolls of paper unwind above our heads. They're producing hundreds today.
Doug Crane: "You can touch this right here. It's sort of fun to touch. That's hundreds of dollars going past your fingertips."
More like hundreds of thousands of dollars. Each roll of paper will become $800,000. And there are dozens of rolls on the factory floor.
Overall, this mill produces about 18 million pounds of bank note paper each year. Crane also provides paper for 18 other currencies at its mill in Sweden. Doug Crane says it's a good time to be in the currency business.
Doug Crane: "Well the demand sort of ebbs and flows, and certainly there's been a stronger demand on currency and on certain denominations in particular since the economic uncertainty has really spread across the world."
Crane says there's been a significant uptick in demand for $100 bills in particular. That's a note people like to stash away during times of uncertainty, especially people outside of the US.
It's not just Ben Franklins being horded. The company Fortress Paper prints the euro and the Swiss franc at its mill near Zurich. Chad Wasilenkoff is company CEO.
Chad Wasilenkoff: "With the global crisis going on, these printing presses are running fast and furious around the world, so it's very robust times there."
Wasilenkoff says they're expecting to produce 40 percent more paper for the euro next year. That's partly because old euros need to be replaced, but also because of the financial instability in Europe.
Chad Wasilenkoff: "People are reluctant to keep as much money in the banks, and they're pulling it out and going back to the old form of sticking it under the mattress. I mean, if you had your cash sitting in a Greece bank, you might be a little reluctant, and you'd want to have some extra reserves sitting around just in case."
Historical evidence confirms this behavior says economist Michael Walden at North Carolina State University. Yes, our bank accounts are insured to a point by our governments, both in Europe and North America. Still, Walden says it's understandable that people hold onto a kernel of fear.
Michael Walden: "I think people in these times like to simply have more cash on hand. I think that just fulfils a basic primal need we have when there is heightened financial fear."
That's not to say we'll see bank runs like in the Great Depression, or even what happened just three years ago in Iceland when people were walking around Reykjavik with bags of foreign currency.
Robert Howell at Dartmouth's Tuck School of Business thinks the worst is behind us.
Robert Howell: "I certainly think that the financial leadership in Europe and China, and certainly in the United States, are doing everything and will do everything they can to prevent a run on the banks worldwide. I don't think we're going to get to the point, where everybody is trying to put cash under the mattresses."
Jason Margolis: "So your mattress is not getting any thicker?"
Robert Howell: "No, no it isn't."
There is another potential business opportunity for currency companies: some eurozone countries could revert to their old currencies. Again, Chad Wasilenkoff.
Chad Wasilenkoff: "Demand for bank notes would definitely go up. So obviously the most likely to leave the eurozone first would be Greece. So they would have to get, whether it was drachmas again, or whatever they would decide, produced and they would have to create reserves."
That said, Wasilenkoff doesn't want too much economic uncertainty. After all, even though he makes money by making money, like any business, he still needs a stable economy to operate.
Back in Dalton, Doug Crane says pretty much the same thing about a potential euro collapse.
Doug Crane: "Well, it certainly would create a short-term need for new bank notes. If you were to ask if the currency industry is hoping for something like this, I think the answer is no, not really."
He says in the long run, currency makers, like him, need people to have trust in their product. That is, have trust in cash.
Doug Crane (Photo: Peter Hopkins)
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Jason Margolis and Doug Crane inspecting $100 bills. (Photo: Peter Hopkins)