It turns out $1 bills are worth less than the paper they’re printed on.
So-called “paper money” is composed of 75% cotton and 25% linen. This means that money printers are being badly hit by the global increase in cotton prices. In 2010, the cost of making one bill was 50% more than it had been in 2008. That’s a hell of a leap for such a little piece of “paper”.
(More on TIME.com: See pictures of the dangerous history of printing money)
Multiply a 50% increase (to 9.6 cents per note) by the 6.4 billion new currency notes that were printed last year, and you get a very expensive way of making money. In 2008 printing cash only cost 6.4 cents per bill. But although the cost of the cotton is a significant factor in the price of producing dollar notes, it represents “less than half the total cost” of the notes, according to the U.S. Government Accountability Office. For many reasons, paper bills are just more hassle than they’re worth.
Due to a number of environmental and social factors, the price of raw cotton is at a 140-year high, and looks set to continue rising. This pricey future has prompted officials in the GAO to recommend replacing the famous $1 paper bill (featuring the face of George Washington) with a $1 coin. Coins are more durable and do not need to be replaced as often, unlike notes which wear thin and tear more quickly.
(More on TIME.com: See photos of the impact of rising food prices)
The proposed change could save the government about $5.5 billion over 30 years. So good news for the taxpayer, but perhaps not so great for Crane & Company, the Massachusetts-based provider of U.S. currency paper (which refused to comment on the story). (Via Chicago Breaking Business)