Manufacturing: Money's Paper Chase

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That includes protecting the company's turf. In 1987 Silvio Conte, a Congressman who represented the Massachusetts district where Crane is based, introduced the Conte Amendment, which was passed by Congress and bars foreign suppliers unless no domestic source exists. A Crane competitor, the British paper manufacturer De La Rue, has threatened to complain to the World Trade Organization about the unfair advantage the Conte Amendment gives Crane. Congress also threw up a hurdle for Crane's American competitors. By setting the contract's length at four years, the law makes it difficult for companies without extremely deep pockets to justify investing in the security technology needed for making currency paper.

Crane's currency challengers have found a champion in Arizona Republican Representative Jim Kolbe. A free trader who calls the Crane monopoly "un-American," Kolbe has introduced legislation every year for a decade to overturn the laws that he says favor Crane. "First, there's the provision that only companies that are [at least] 90% American-owned can bid," he says. "We don't allow that for anything else, not even defense." The Secret Service insists that money must be produced and printed within the U.S. to maintain security, but the GAO found no reason to bar foreign companies from making currency if they do so on U.S. soil. "Then, there's the four-year contract," Kolbe continues. "What company, with the capitalization costs it takes to get into this business, can take on such a financial burden?"

Kolbe is convinced that the government could get a better price with more competition. Another GAO report, written in 1998, bolsters Kolbe's stance. It found that in at least 13 negotiations with Crane, agency practices have caused "the government to pay more for currency paper than it should have."

Lansing Crane calls the contract a square deal, given the exacting specifications. "Any additional costs come from our need for the highest, most modern security technology," he says. And he has his own powerful allies in Congress, notably Massachusetts Senators John Kerry and Ted Kennedy, who have parried both Kolbe and the GAO.

There's no doubting Crane & Co.'s experience or its patriotic heritage. In 1775 Stephen Crane sold paper to engraver Paul Revere to print the colonies' first paper money. (A national currency did not exist until 1862.) In 1806 Stephen Crane's son Zenas began producing notes for a local bank. It's an art that the company has perfected; its "tree-free" paper lasts longer than any other paper currency in the world.

And so might its contract. Officials have tried to relax some rules to open the bidding process to more competitors. For example, companies can now provide representative samples of their products instead of actual currency paper. But absent legislative action, the Treasury is limited in what it can do.