New Countries Create Money Explosion

Millions of crisp kroons for Estonia and litas for Lithuania have rolled off the presses at a plant that makes paper money in Los Angeles. A Canadian company in Ottawa has printed 1.5 billion hyrvnias bound for Ukraine.

Like their flags, a national currency is a distinctive symbol of sovereign status for some recently independent countries.

“It’s a unique time for moneymaking. There’s a huge potential,” said Stanley Kreitman, president of New York-based United States Banknote Corp., the largest “security printer” in the Western Hemisphere.

“Not all of the former Soviet republics have switched from the ruble yet. When the fighting stops in Yugoslavia, I’m confident we’ll do work for Croatia,” Kreitman said. “And Czechoslovakia is due to split in January.”

U.S. Banknote’s Los Angeles plant has already printed 300 million litas in six denominations and 150 million kroons in three denominations. The colorful Estonian money was put in circulation in June.

Litas, portraying a national hero, have yet to be reintroduced into Lithuania. As a first step, coupons have replaced the Lithuanian ruble. Another Baltic country, Latvia, has issued its own ruble as interim money and may introduce lats sometime next year.

The new Ukrainian money, waiting to be circulated in 1993, when dire economic conditions may improve, is Canadian Bank Note Co.’s biggest overseas order. “We are looking beyond this initial order because of the high Ukrainian inflation rate,” said Shirley Arends, vice president of the private company, which prints half of Canada’s money.

The company also has contracted with the National Bank of Tajikistan, she said, for a large currency order.

Beginning with the three Baltic republics in 1991, more than 20 countries have struck out on their own as the Communist Bloc has disintegrated. Not many have yet issued their own money. The new Russian government is printing its own rubles on the old Soviet presses.

Apart from national governments, globally only 10 or 11 tightly secured companies are literally capable of making money, with the major international production concentrated among five. They print the money for most countries.

The world leader among money printers, De La Rue, turns out currency for 90 to 100 countries, including some of the newest, said David Rigg at the company’s London headquarters. He declined to disclose the new clients, but said the expansion of the money-printing market will stretch over several years because of the complicated process for countries to convert their currencies.

Paper money usually circulates for about 12 to 18 months before it wears out and should be replaced, so contracts with new countries will be ongoing, Kreitman said.

To prevent counterfeiting, special papers, inks, watermarks, designs and printing methods are customized for each nation.

Paper for some of the former Soviet republics’ money is supplied by the same manufacturer that provides all the paper for U.S. dollars, Crane and Co. of Dalton, Mass. The special rag paper is made from “raw cotton and from ‘waste’ cuttings from the textile industry--from blue jeans, shirts and underwear,” said spokesman James Manning.

Besides currency, Kreitman said, U.S. Banknote has orders for stocks and bonds from institutions such as the Central Moscow and Kazakhstan stock exchanges.

No other country in the world uses more currency than the United States.

But a single, common currency for Europe, the 12-member European Community’s elusive goal for the end of this decade, would be the world’s biggest new moneymaking venture.