The company that churns out paper for Uncle Sam's greenbacks
Most companies aspire to make stacks and stacks of money, but few have had as much practical experience as Crane & Co. A family-owned business nestled among the Berkshire Hills of western Massachusetts in Dalton, Mass. (population 6,800), Crane continues to make currency paper for the United States Treasury Department the old fashioned way - they churn it - in huge vats. Then, as the company has done for 108 years, this goulash of cotten and linen is run through a drying and pressing process before the blank paper is cut into sheets, inspected, counted, and shipped off to Washington. Eventually, this paper pops from automatic tellers and into our pockets as crisp 10 and 20 dollar bills.
For a company whose main source of pride is that a dollar bill can be folded more than 8,000 times before it deteriorates, the result has been steady, if little-publicized success. Though just a pipsqueak compared to the nation's largest paper manufactures, Crane has consistently won the government contract for currency paper since the Treasury began letting bids in 1879.
Crane's sales in 1986 were $104 million. About $25 million of the total came from selling the government more than 200 million sheets of super tough paper to make into money. Yet, survival has required a lot more than a fat federal contract, company officials say.
Crane has stayed afloat through the Civil War (the company was founded in 1801), two world wars, and the depression era of the 1920s and '30s by harkening to the exhortation of founder Zenas Crane to produce the highest quality paper money can buy - and by learning to be a niche player in a world of giant paper manufacturers.
``If you look back in history, I think you will find that the same basic business principles people say are new and modern today, are the same ones they talked about 50 or 60 years ago,'' says Thomas White, Crane's president.
``There's no big secret in terms of running a business,'' he says. ``It's sticking to the basics. The difficult part is doing all the basics well. It's knowing your customer, providing a good product, having good working relationships with your employees, having a good quality workforce and then you are successful.''
Part of staying successful has meant shunning the now-almost-universal practice of making paper out of wood pulp that came into wide practice in the late 1800s. Long after other manufacturers had turned away from rags for paper stock, Crane continued to solicit bundles of linen rags from local housewives. Today the company buys cuttings from textile mills that it mixes into the thick pulp later transformed into paper seemingly as durable as Levi Strauss denims.
In an attempt to foil would-be counterfeiters, Crane began putting silk threads in the paper in 1928. Since then, more sophisticated anti-counterfeiting methods have been developed, including placing metallic threads, and fluorescent fibers in bank notes. With today's sophisticated photoreproduction techniques, the primary means for preventing counterfeit money has been the use of paper that was virtually unreproducible.
``The tactile senses of a bank teller are probably the first and foremost means for detecting a good counterfeit,'' says Frederick Crane, a descendent of the founder, and a chemist recently retired as head of research and development.
Crane is also a major supplier of currency paper to the American Bank Note company, which prints money for other nations along with stock certificates, and bond notes for Wall Street. The company sells direct to some countries that would rather do the printing themselves.
Competing strongly with a British company named Portals, Ltd., Crane supplies currency paper to several South and Central America, Mr. Crane says. ``Without a doubt the lower value of the dollar has increased our competitive strength overseas,'' he says. Still, the company invests almost 2 percent of sales (about $2 million) in research and development, about double paper industry norms.
Maybe because Crane & Co. officials live in the same town where their manufacturing plants are, the company has made what seems to be an extraordinary effort to be a good guy.
Long before environmental concerns were widespread, Crane in the late 1950s began a $1.5 million anti-pollution campaign to clean up the Housatonic river. Since then, substantially more has been invested ($3.8 million last year) in bettering water quality.
There is little question that Crane overshadows Dalton politically and economically through the 750 jobs it supplies. But Crane is also its main bene-factor, funding a scholarship program that distributes about $60,000 annually to as many as 100 local high school graduates for college work. The company also offers its employees good pension, vacation, life insurance, and profit sharing which distributes 25 percent of profits before taxes ($3.4 million last year) to employees.
``I think they have tried very hard to be a good employer,'' says Dorothy Chapman, a reporter who covers Dalton for the Berkshire Eagle newspaper. Says Ms. Chapman: ``Workers tend to stay with the company for a long time. I think they have genuinely been a good neighbor to this town.''