[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]



 
                      EXAMINING ISSUES RELATED TO
                   TACTILELY DISTINGUISHABLE CURRENCY
=======================================================================


                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON

                       DOMESTIC AND INTERNATIONAL

                 MONETARY POLICY, TRADE, AND TECHNOLOGY

                                 OF THE

                    COMMITTEE ON FINANCIAL SERVICES

                     U.S. HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                               __________

                             JULY 30, 2008

                               __________

       Printed for the use of the Committee on Financial Services

                           Serial No. 110-135



                     U.S. GOVERNMENT PRINTING OFFICE

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                 HOUSE COMMITTEE ON FINANCIAL SERVICES

                 BARNEY FRANK, Massachusetts, Chairman

PAUL E. KANJORSKI, Pennsylvania      SPENCER BACHUS, Alabama
MAXINE WATERS, California            DEBORAH PRYCE, Ohio
CAROLYN B. MALONEY, New York         MICHAEL N. CASTLE, Delaware
LUIS V. GUTIERREZ, Illinois          PETER T. KING, New York
NYDIA M. VELAZQUEZ, New York         EDWARD R. ROYCE, California
MELVIN L. WATT, North Carolina       FRANK D. LUCAS, Oklahoma
GARY L. ACKERMAN, New York           RON PAUL, Texas
BRAD SHERMAN, California             STEVEN C. LaTOURETTE, Ohio
GREGORY W. MEEKS, New York           DONALD A. MANZULLO, Illinois
DENNIS MOORE, Kansas                 WALTER B. JONES, Jr., North 
MICHAEL E. CAPUANO, Massachusetts        Carolina
RUBEN HINOJOSA, Texas                JUDY BIGGERT, Illinois
WM. LACY CLAY, Missouri              CHRISTOPHER SHAYS, Connecticut
CAROLYN McCARTHY, New York           GARY G. MILLER, California
JOE BACA, California                 SHELLEY MOORE CAPITO, West 
STEPHEN F. LYNCH, Massachusetts          Virginia
BRAD MILLER, North Carolina          TOM FEENEY, Florida
DAVID SCOTT, Georgia                 JEB HENSARLING, Texas
AL GREEN, Texas                      SCOTT GARRETT, New Jersey
EMANUEL CLEAVER, Missouri            GINNY BROWN-WAITE, Florida
MELISSA L. BEAN, Illinois            J. GRESHAM BARRETT, South Carolina
GWEN MOORE, Wisconsin,               JIM GERLACH, Pennsylvania
LINCOLN DAVIS, Tennessee             STEVAN PEARCE, New Mexico
PAUL W. HODES, New Hampshire         RANDY NEUGEBAUER, Texas
KEITH ELLISON, Minnesota             TOM PRICE, Georgia
RON KLEIN, Florida                   GEOFF DAVIS, Kentucky
TIM MAHONEY, Florida                 PATRICK T. McHENRY, North Carolina
CHARLES A. WILSON, Ohio              JOHN CAMPBELL, California
ED PERLMUTTER, Colorado              ADAM PUTNAM, Florida
CHRISTOPHER S. MURPHY, Connecticut   MICHELE BACHMANN, Minnesota
JOE DONNELLY, Indiana                PETER J. ROSKAM, Illinois
BILL FOSTER, Illinois                KENNY MARCHANT, Texas
ANDRE CARSON, Indiana                THADDEUS G. McCOTTER, Michigan
JACKIE SPEIER, California            KEVIN McCARTHY, California
DON CAZAYOUX, Louisiana              DEAN HELLER, Nevada
TRAVIS CHILDERS, Mississippi

        Jeanne M. Roslanowick, Staff Director and Chief Counsel
Subcommittee on Domestic and International Monetary Policy, Trade, and 
                               Technology

                 LUIS V. GUTIERREZ, Illinois, Chairman

CAROLYN B. MALONEY, New York         RON PAUL, Texas
MAXINE WATERS, California            MICHAEL N. CASTLE, Delaware
PAUL E. KANJORSKI, Pennsylvania      FRANK D. LUCAS, Oklahoma
GWEN MOORE, Wisconsin                DONALD A. MANZULLO, Illinois
GREGORY W. MEEKS, New York           WALTER B. JONES, Jr., North 
DENNIS MOORE, Kansas                     Carolina
WM. LACY CLAY, Missouri              JEB HENSARLING, Texas
BILL FOSTER, Illinois                TOM PRICE, Georgia
ANDRE CARSON, Indiana                PATRICK T. McHENRY, North Carolina
MELVIN L. WATT, North Carolina       MICHELE BACHMANN, Minnesota
BRAD SHERMAN, California             PETER J. ROSKAM, Illinois
KEITH ELLISON, Minnesota             KENNY MARCHANT, Texas
TRAVIS CHILDERS, Mississippi         DEAN HELLER, Nevada


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on:
    July 30, 2008................................................     1
Appendix:
    July 30, 2008................................................    31

                               WITNESSES
                        Wednesday, July 30, 2008

Brunson, Melanie, Executive Director, American Council of the 
  Blind..........................................................    10
Felix, Larry R., Director, Bureau of Engraving and Printing, U.S. 
  Department of the Treasury.....................................     3
Geerdes, Richard M., President and Chief Executive Officer, 
  National Automatic Merchandising Association (NAMA)............    19
Habib, Cyrus, Disability Advocate................................    13
Knoll, Jeffrey G., Executive Vice President and Corporate 
  Counsel, Cummins-Allison Corporation...........................    21
Maurer, Marc, President, National Federation of the Blind........    12

                                APPENDIX

Prepared statements:
    Brunson, Melanie.............................................    32
    Felix, Larry R...............................................    34
    Geerdes, Richard M...........................................    42
    Habib, Cyrus.................................................    49
    Knoll, Jeffrey G.............................................    52
    Maurer, Marc.................................................    61

              Additional Material Submitted for the Record

Gutierrez, Hon. Luis V.:
    Written statement of Steven M. Rothstein, President, Perkins 
      School for the Blind.......................................    68
Paul, Hon. Ron:
    Written statement of the Coalition for the Presidential $1 
      Coin.......................................................    72


                      EXAMINING ISSUES RELATED TO



                   TACTILELY DISTINGUISHABLE CURRENCY

                              ----------                              


                        Wednesday, July 30, 2008

             U.S. House of Representatives,
                       Subcommittee on Domestic and
                     International Monetary Policy,
                              Trade, and Technology
                           Committee on Financial Services,
                                                   Washington, D.C.
    The subcommittee met, pursuant to notice, at 10:04 a.m., in 
room 2128, Rayburn House Office Building, Hon. Luis V. 
Gutierrez [chairman of the subcommittee] presiding.
    Members present: Representatives Gutierrez; Paul and 
Manzullo.
    Also present: Representative McCarthy of New York.
    Chairman Gutierrez. This hearing of the Subcommittee on 
Domestic and International Monetary Policy, Trade, and 
Technology will come to order. And thanks to all of the 
witnesses for agreeing to appear before the subcommittee this 
morning.
    Today's hearing will focus on the issues stemming from the 
U.S. District Court for the District of Columbia's ruling in 
American Council of the Blind v. Paulsen, which held that the 
United States discriminates against the blind and visually 
impaired because its paper money consists of bills that are all 
the same size, regardless of denomination. This ruling was 
upheld by the U.S. Court of Appeals by the D.C. Circuit, and 
now the Treasury Department is under an order to make U.S. 
currency tactilely distinguishable to blind and visually-
impaired people.
    We have before us today representatives of the named 
parties in the lawsuit, as well as the National Federation of 
the Blind, which filed a brief in support of the Treasury 
Department and various other interested parties.
    Let me stress that this is not a legislative hearing, and 
neither the subcommittee nor the full Financial Services 
Committee have legislation pending before it.
    We are under substantial time constraints to get through 
three panels of witnesses before a mark-up starts in this very 
hearing room at 2 p.m., so we are limiting opening statements 
for the members to 5 minutes per side. But, without objection, 
all members' opening statements will be made a part of the 
record.
    Likewise, we will be limiting our witnesses' oral testimony 
to 3 minutes each, with their full written statements being 
made a part of the record. In order to expedite this process, I 
will submit my opening statement for the record, and recognize 
Ranking Member Ron Paul for 5 minutes. Dr. Paul, you are 
recognized.
    Dr. Paul. Thank you, Mr. Chairman. Mr. Chairman, we would 
not be here, discussing this topic today, if we had a truly 
free monetary system. It is well known that I am a proponent of 
sound, commodity-backed currency. Anyone who has ever felt the 
heft of a gold or silver coin, noticed the variation in size 
and design among different denominations of precious metal 
coins, or examined the different types of reeding, incusions, 
and other edged designs, recognizes that coins are far superior 
to paper bills in terms of their ability to be distinguishable 
solely by touch.
    Due to what many people deem the impracticality of carrying 
around coins, bills have, over the course of time, replaced 
coins in everyday commerce. However, a system of competing 
currencies would ensure that blind or near-blind citizens have 
access to currency.
    If we had a truly free market in currency, private currency 
producers could produce coins or bills that are tactilely 
distinguishable, with bills incorporating different sizes, 
shapes, raised geometric patterns, and other things. It is not 
inconceivable to imagine that a privately issued currency 
incorporating such features and making itself available to all 
Americans might obtain a dominant position as a preferred 
currency.
    What prevents such a scenario from occurring is the U.S. 
Government's attempt to maintain a monopoly over the dollar. 
Through a multi-faceted legal barrier consisting of legal 
tender laws, anti-counterfeiting statutes worded to prevent the 
private issue of notes and coins, and punitive taxes on 
precious metals that would form the backing of a commodity-
based currency, the Government has ensured that alternative 
currencies, such as the Liberty Dollar, have to face an often 
insurmountable legal hurdle.
    While nothing prevents many point of sale transactions 
today from being carried out in euros or pounds, legal tender 
laws ensure that Gresham's Law--that bad money drives out 
good--remains in effect.
    The recent court ruling against the Treasury Department has 
been advertised as having a potential cost in the hundreds of 
millions of dollars. It would be far more economical to 
eliminate the legal tender restrictions on private currencies 
and enable the market to find a solution to the problem of 
currency for the blind.
    Competitive private currencies would have the added benefit 
of keeping the U.S. Government honest by forcing the Government 
to stop the limitless increase of money, which is inflation, 
thereby removing the Government's ability to run up large trade 
deficits, half-trillion dollar budget deficits, and an enormous 
national debt. Allowing currency competition would aid in 
lifting burdens not only from the blind, but also from all 
American taxpayers. I yield back.
    Chairman Gutierrez. Thank you very much, Dr. Paul. I ask 
unanimous consent that Congresswoman McCarthy, who is a member 
of the full committee, be allowed to participate in this 
subcommittee hearing. She has a very keen interest in this 
issue. And without objection, I yield to her 3 minutes for any 
opening statement.
    Mrs. McCarthy. Thank you, Mr. Chairman. Thank you for 
having this hearing. It is really going to be a learning 
experience, I think, for us, as Members of Congress.
    When the Supreme Court came down with having a reasonable 
accommodation for blind people so they can distinguish between 
money, I found the subject interesting. But already meeting 
with all parties--and it became more and more complicated, so I 
think this is going to be a very long journey, trying to figure 
out how we're going to do this, what's going to be the most 
feasible to make those accommodations.
    So, with that, Mr. Chairman, I am really looking forward to 
hearing the testimony so we can begin this process. I'm looking 
forward to working with all of the participants, and hopefully 
we can come up with a solution in the near future. With that, I 
yield back the balance of my time.
    Chairman Gutierrez. The gentlelady yields back.
    Testifying on our first panel, we have Mr. Larry Felix, 
Director of the Bureau of Engraving and Printing. As Director, 
Mr. Felix is responsible for the overall operations of the 
Bureau, and the production of U.S. currency and other 
government securities and documents.
    A career Treasury employee, Mr. Felix has spent the last 17 
years at the Bureau, most recently as Deputy Director. He 
previously served as the Bureau's Associate Director for 
Technology, and Chief of External Relations. He also chaired 
the Interagency Currency Design Task Force, a group responsible 
for recommending technical enhancements to U.S. currency 
design.
    Director Felix holds degrees from New York City College of 
Technology, and City College of the City, University of New 
York. He did doctoral work in political economy at Columbia 
University. This is Director Felix's first time testifying 
before the subcommittee since I took over as chairman, so I 
wanted to extend to him a very, very warm welcome. You are 
recognized, Director Felix.

STATEMENT OF LARRY R. FELIX, DIRECTOR, BUREAU OF ENGRAVING AND 
           PRINTING, U.S. DEPARTMENT OF THE TREASURY

    Mr. Felix. Thank you, Mr. Chairman. Chairman Gutierrez, 
Ranking Member Paul, and members of the subcommittee, thank you 
for holding this hearing, and inviting me to testify. I 
appreciate the opportunity to discuss the operations of the 
Bureau of Engraving and Printing and to expand on our efforts 
to study, test, and implement measures to help those who are 
blind and visually impaired more readily identify paper 
currency denominations.
    The BEP is the security printer for the United States. 
While our primary product is Federal Reserve notes, we also 
produce security documents on behalf of Federal agencies. This 
year, the Bureau will produce about 7 billion Federal Reserve 
notes, as well as millions of secured passports and other 
printed security documents.
    Financed through an industrial revolving fund, the Bureau 
does not receive an annual appropriation from Congress. 
Instead, customers reimburse the Bureau for the products we 
produce. The Bureau works very closely with the Federal Reserve 
System and the Board of Governors of the Federal Reserve, to 
ensure that the U.S. paper currency program meets rigorous 
quality, cost, and design specifications and can function 
effectively in the marketplace.
    The currency program of the United States is a shared 
responsibility that demands high levels of cooperation and 
coordination between several Federal agencies. The Department 
of the Treasury, the Bureau of Engraving and Printing, the 
Board of Governors of the Federal Reserve System, the banks in 
the Federal Reserve system, and the United States Secret 
Service perform key and unique functions that contribute to the 
production and issuance of counterfeit-deterrent bank notes 
that are routinely accepted and widely used in commerce.
    The U.S. Government initiates a redesign of currency notes 
in order to stay ahead of evolving technologies that enable 
counterfeiting. Since counterfeiting techniques remained 
traditional for the better part of the previous century, the 
appearance of U.S. currency remained unchanged from 1929 until 
the mid-1990's.
    Because the size of U.S. currency has remained constant 
since 1929, entire industries and product lines have been 
developed and built around the size of our bank notes, 
including much of the Bureau's manufacturing equipment, as well 
as sophisticated, high-end cash handling machinery in the 
private sector, and automated vaults and storage used not only 
by the public sector, but also by commercial banks.
    Additionally, currency-accepting machinery employed by the 
private sector, portable currency-reading devices that assist 
the blind and visually impaired, cash register drawers, and 
even the basic size and composition of our wallets conform to 
the dimensions of our bank notes.
    In anticipation of the emergence of personal digital 
technology, the Government established a strategy to redesign 
currency every 7 to 10 years, in order to maintain our edge 
over counterfeiting. This new policy led to the introduction of 
the new currency design in 1996, and the colorful NextGen 
design in 2003. The Government has used these redesign changes 
as an opportunity to test, study, and implement features that 
can better assist the blind and visually impaired to more 
readily identify paper currency.
    For example, in 1983, the Bureau commissioned a study to 
research design features that would assist the blind and 
visually impaired. In accordance with that 1983 report's 
recommendation, the Bureau procured equipment and undertook 
several initiatives to incorporate machine-readable features 
into our bank notes.
    Later, in 1995, the National Research Council completed a 
study that assessed and recommended features for the blind and 
visually impaired to help facilitate them to denominate U.S. 
currency. That study recommended four modifications to bank 
notes: different size bank notes; large, high-contrast 
numerals; differing predominant colors for each denomination; 
and features that can lead to the development of effective low-
cost devices for examining bank notes to facilitate the blind.
    Since the 1995 study, the Bureau has incorporated 3 out of 
those 4 recommendations. The Bureau is committed to finding 
solutions that will assist the blind and visually impaired to 
more effectively denominate currency. Even before the recent 
decision by the U.S. Court of Appeals, the Bureau awarded a 
contract to conduct a comprehensive study of the issue.
    The BEP and its contractors have already met with the 
American Council for the Blind and the National Federation of 
the Blind, as well as the National Council on Disability, an 
independent Federal agency tasked with making recommendations 
to the Congress and the President on changes regarding 
disability policy. All of these entities have provided 
invaluable input.
    The study is intended to further advance the Government's 
understanding of the issues and to review all of the possible 
options to help the blind and visually impaired. The study, 
which is a three-part study, will examine the use of paper 
currency by the blind and the visually-impaired population in 
the United States and examine possible alternatives to improve 
their experience.
    The study will solicit input from a number of interested 
parties. It will employ surveys and focus groups to fully study 
and evaluate the issues.
    The study is intended to: One, identify the characteristics 
of blind and visually-impaired Americans and to project trends 
and needs for U.S. bank note identification purposes; two, 
examine technical and practical feasibility of technological 
solutions and currency design changes that can assist those who 
are blind or visually impaired--this will include a review of 
the effectiveness of potential features, as well as an ability 
to either manufacture these features or produce them, and will 
also look at operational, timing, and security considerations 
related to whatever proposals that are deemed feasible; and 
finally, the study will provide an economic analysis of the 
changes that have been identified. The economic analysis will 
examine societal costs to the public and private sectors and 
consider the effectiveness of these solutions, relative to 
their costs.
    The Department of the Treasury, and the Bureau of Engraving 
and Printing are sensitive to the national needs of all 
Americans, including the blind and visually impaired. Changes 
to U.S. currency can have broad consequences to all users of 
currency, and potential solutions to assist the blind and 
visually impaired must be thoroughly evaluated prior to 
reaching a final decision.
    The Department and the Bureau, in coordination with the 
Federal partners, the blind and visually-impaired community, 
and the private sector--and the major private sector users of 
currency--will continue to search for creative and practical 
solutions in this area.
    Mr. Chairman, this concludes my prepared remarks, and I am 
happy to take your questions.
    [The prepared statement of Mr. Felix can be found on page 
34 of the appendix.]
    Chairman Gutierrez. Thank you very much. Well, as I said, 
the focus of the hearing today stems from the U.S. District 
Court for the District of Columbia's ruling in American Council 
of the Blind v. Paulsen, which held that the United States 
discriminates against the blind and visually impaired because 
its paper money is all the same size, regardless of 
denomination.
    So, we are going to have to work together to resolve this 
problem, and respond accordingly to the lawsuit that was filed.
    You spoke--and it's really good, I'm really happy we have 
you as a career professional, because you have been there many 
years in many different positions. So I think you're going to 
be in a very keen position to help us figure this out. In your 
testimony, you mentioned the redesign programs that the Bureau 
has implemented over the years to maintain an edge on 
counterfeiters. Wouldn't it be fairly easy for the Bureau to 
implement the D.C. court order in the next redesign?
    And wouldn't a larger bill or a bill that is sensitive to 
touch make our currency even harder to counterfeit? That is to 
say now the counterfeiters have to figure out two things, all 
your technology and figure--I mean, this is only preliminarily.
    But if you can't see, you have much better--you use your 
fingers a lot more during the day to read Braille and a number 
of other things. And they have--the blind and visually impaired 
have a much better sense of touch than we do. Wouldn't it be 
easy to do that? What do you think?
    Mr. Felix. Mr. Chairman, clearly, we have evaluated the use 
and incorporation of tactile features into bank notes. 
Typically, because of the substrate, tactical features do not 
work. They do not last the life of a bank note. And in the 
instance of our neighbors in the north, in Canada, they have 
deployed tactile features, as well as Switzerland and various 
other countries.
    Tactile features tend to last a very small fraction of the 
life of a bank note. And so, if you're going to deploy a 
feature to assist the blind and visually impaired, it doesn't 
really help them if that feature erodes over a period of time. 
So, tactility has proven to be ineffective in the long run. The 
bank notes tend to circulate consistently over time, and in the 
U.S. case, our bank notes circulate outside our borders.
    Chairman Gutierrez. All right. How is the Treasury going to 
respond to the actions of discrimination against the visually 
impaired and the blind?
    Mr. Felix. There are a lot of potential options available. 
Certainly, one option is we have put features in the bank notes 
that are machine-readable. And in the case of Canada, they 
provide a portable detector for people, and you can certainly 
use the portable detector to authenticate and denominate a bank 
note.
    Even if we were to change the sizes of bank notes to have a 
different size and a denomination, we can't currently do that 
because of equipment limitations. But even if we could, blind 
people will--visually-impaired people will still require the 
use of a template, and that's because the range that all of the 
denominations can change is so small that certainly, in the 
case of, say, the euro, you can tell a 5 euro from a 500 euro. 
But the average blind person can't distinguish 10 from 20, or 
20 from 50, or 50 from 100, because the gradations in the size 
of these notes are very, very minor.
    And so, what the European Central Bank has done is provided 
a portable template for people to use. One of the things we are 
looking at is how do you provide people with an effective 
method for denominating currency. Clearly, having a portable 
device seems to be the most effective method for denominating 
currency.
    Chairman Gutierrez. Well, we will be working--I'm not going 
to ask you any more questions, so that we can have Dr. Paul and 
others ask. We will be working very closely, and as quickly and 
as expeditiously as possible, obviously with all of the 
interested parties, so that we can resolve this issue as 
quickly as possible. We shouldn't let it linger any more than 
necessary.
    I am really looking forward to working with you, Director 
Felix, on this issue. I am very happy, again, that we have a 
career--somebody who has made it his career to get this done.
    Dr. Paul, please, you are recognized.
    Dr. Paul. Thank you, Mr. Chairman. Mr. Felix, you mentioned 
that the Bureau of Engraving and Printing has other documents 
that you have to do, as well. Can you give me a rough number of 
how many different documents you are involved in? Is it 10, 20, 
100, or 500? What?
    Mr. Felix. It is more like 10 or 20.
    Dr. Paul. Ten or twenty. And you mentioned passports. That 
must be one of your big ones. Do you still print treasury bills 
and bonds?
    Mr. Felix. Not the Bureau of Engraving and Printing.
    Dr. Paul. They don't do that? But, you know, you have these 
other documents, and none of those fulfill this requirement 
with Braille.
    Mr. Felix. That's correct. Most of the documents we produce 
do not require Braille.
    Dr. Paul. And would the logical conclusion be that if it is 
discrimination to not adjust our currency, it would be 
discrimination not to adjust these other documents?
    Mr. Felix. Most of the documents we produce tend to be 
documents that interface with machines; they have machine-
readable characteristics. That is, in fact, our core 
competence, to be able to marry technology on the printed 
document. So, the vast majority of our work is based on the 
machine to document interface.
    Dr. Paul. But if the Government is charged with 
discrimination because they don't fulfill this requirement, it 
seems like it would be logical that the private companies would 
be held responsible too. Although I might not agree with that, 
and I would like the market to solve those problems and have 
competition, it seems like in this day and age, the people who 
print other documents would be required to do the same thing, 
like a stock certificate or a regular bond.
    Or, for instance, if--I think not too many people use cash 
any more. More and more people are using credit cards. And 
let's say that we end up--and the blind use credit cards or 
cash even less, and use credit cards, it seems like this may 
well lead into saying, ``Well, how does a blind person''--and I 
don't know, maybe it's already taken care of, but how would a 
blind person read his receipt? Maybe the Government will come 
along and then say, ``Well, make sure the receipt is in 
Braille, too.''
    So, it could go on and on. Do you see that as a natural 
consequence, or is that worrying too much?
    Mr. Felix. Well, Mr. Chairman, you know, I think I would 
prefer to address the issue as it relates to U.S. currency. And 
as it relates to U.S. currency, the Government has been 
proactive in putting features that are accessible. We could do 
more. We haven't yet, we haven't gone to the notion of changing 
the sizes of bank notes, but we have gone and incorporated many 
accessibility features into the bank notes.
    And, in fact, we have relied and helped and encouraged the 
private sector to develop readers using the features we have 
deployed, so that it can be made available to the blind and 
visually impaired who need those devices.
    Dr. Paul. Thank you. I have no more questions. I yield 
back.
    Chairman Gutierrez. Thank you, Dr. Paul. I will recognize 
the gentlelady from New York for 5 minutes.
    Mrs. McCarthy. Thank you, Mr. Chairman. One of the things 
that I wanted to--going back to your question, Mr. Chairman, on 
the ``tactable'' dollars, half the population of the blind or 
visually impaired suffer from diabetes. And with diabetes, a 
lot of them do not have the feel of touch in their fingers. So, 
that kind of starts off right there with a difficulty.
    But that comes down to what is a reasonable accommodation 
from the Supreme Court, because, to be very honest with you, 
when I was asked to look into this, the more we looked into it, 
the more we found how difficult this is going to actually be.
    I know that you are looking at a new design, or a $100 bill 
which has the tactable feel on it for security reasons. Now, is 
it because the $100 bill is not circulated as much as the 
smaller bills, that you feel this is going to work? Or is this 
just an experiment?
    Mr. Felix. Well, the $100 bill offers us an opportunity to 
both address tactility, from a security perspective, as well, 
you know, as potentially to see if tactility assists people 
with denominating the currency.
    Just what we have done in a series of design redesigns was 
to use these designs to attempt to deploy features that can 
facilitate some people with some level of vision impairment to 
be able to distinguish. And if you look at a $5 note, we 
increased the size of the high contrast numeral on the back. It 
was another attempt, sort of as we go on, to progressively 
increase the functionality of the bank notes.
    So, clearly, increased tactility on the $100 bill certainly 
does promote an opportunity for people with vision impairments 
to distinguish the notes, but it also adds to some of the 
security elements.
    Mrs. McCarthy. Could I just follow up, and if you could, 
explain with a little bit more detail on what you have also 
been working on.
    I know Engraving and Printing has been encouraging the 
development of technology and currency reading devices, 
including technology that could be downloaded off the Internet 
and programmed into cell phones, which also may assist blind 
individuals and the visually impaired not only to read the 
currency, but also cash registers and price stickers and things 
like that. How far is that going and where are we on that?
    Mr. Felix. That is correct. The Bureau has been trying to 
stimulate private sector development to--because we have 
already incorporated features more than 10 years ago into the 
bank notes, we have been trying to stimulate the private sector 
to use these features to develop devices that will enable 
people to denominate.
    We have even funded an awful lot of research. But 
inevitably, these companies come back to us and say, ``There 
isn't a market.'' The market, in order to develop a portable 
feature, doesn't make their product cost effective. And so 
that's one of the challenges we have, because we recognize 
there is a need for this product, and we have put the features 
in. We will continue to maintain these machine-readable 
features, it's just that the private sector, so far, has not 
indicated an interest to follow up on those features.
    But we have done several studies, and will continue to do 
additional studies, to see if there is some way we can 
stimulate the development of a low-cost feature.
    Mrs. McCarthy. Well, just out of curiosity, though, with 
the private industry not really getting involved in this as you 
have been trying to work with them, was that even before the 
Supreme Court judgement, or now will they start looking at it, 
because now this is almost like a mandate?
    Mr. Felix. We started this effort back in the late 1990's, 
in an attempt to stimulate private industry to pick up on the 
features that we have incorporated for them. They have.
    Interestingly, they use these features that we have put 
specifically for the blind and visually impaired, they use it 
for security reasons. But they don't use it for developing a 
feature for the blind.
    All of these developments have occurred maybe as recently 
as last year, and it's an ongoing effort to encourage them to 
try to develop a market. But they really don't see that it's a 
sustainable market for them.
    Mrs. McCarthy. As we go forward--and, obviously, when you 
look at the--our European colleagues that do mostly coins from 
a $1 coin and a $2 coin, are we looking into that?
    I know there was a concern, because it's so bulky, not in 
our pockets, but when you're talking about dealing with 
retailers and things like that.
    Mr. Felix. It is the position of the Treasury Department 
that it should give the American public the choice between a $1 
coin and a $1 bill, and--rather than having the Government 
dictate that, ``You shall not have a dollar bill.''
    We think that is a fair position, in line with the spirit 
of allowing choice and freedom to the American public. So, we 
fully support the fact that people have a choice between the 
two. But, nevertheless, by having that choice, we recognize 
that we have to work on finding a much more universal solution 
for the paper currency, because we clearly recognize that is a 
hurdle for some people.
    Mrs. McCarthy. Thank you. I yield back the balance of my 
time, and I know we will be working closely with you. Thank 
you.
    Chairman Gutierrez. Thank you very much. Thank you, Mr. 
Felix. Let me just say that we are going to be in recess. We 
have a Republican Convention, a Democratic Convention, things 
to do in August. It's also very hot here, so we will be away.
    We will get back here on the 7th or the 8th, so we will be 
in touch with your office. The gentlelady from New York and I 
are going to be calling other interested parties, so that we 
can--I mean outside of these hearings--we can kind of listen to 
you, and have a conversation among ourselves with interested 
parties.
    So, during the recess, get ready. We will be back, and we 
will be calling you and arranging a time to meet with you and 
other interested parties so that we can have a more informal 
discussion about this issue. Thank you so much, Director Felix.
    We now have the next panel: Melanie Brunson; Marc Maurer; 
and Cyrus Habib. While everybody is getting seated, I ask 
unanimous consent that the written testimony of Perkins School 
for the Blind be admitted into the official record. Hearing no 
objection, it is so ordered.
    Thank you so much. I will now introduce our second panel. 
First, we have Melanie Brunson, executive director for the 
American Council of the Blind. She has been with the ACB since 
1998. Previously, she served in the capacity of director of 
advocacy at ACB. Prior to that, she was in private practice of 
law for 12 years. Ms. Brunson holds a B.A. and a J.D., both 
from Whittier College.
    Second, Marc Maurer is joining us. He is president of the 
National Federation of the Blind. Mr. Maurer has been president 
of the NFB since 1986. And from 1997 to 2000, he also served as 
president of the North American Caribbean region of the World 
Blind Union. Mr. Maurer graduated cum laude from the University 
of Notre Dame, and received his J.D. from Indiana University 
School of Law. In 1981, Mr. Maurer was elected president of the 
National Association of Blind Lawyers, and served in that 
office until 1985. And from 1984 until 1986, he served as 
president of the National Federation of the Blind of Maryland.
    Mr. Maurer has received numerous honors and awards, 
including the Presidential Medal for Leadership in 1990, the 
Baltimore Business Journal's 1999 Innovation Award for 
Excellence and Workplace Technology, the 2002 VME Robert Dole 
Award, and the Daily Record's 2002 Innovator of the Year Award.
    And finally, we have Cyrus Habib. Mr. Habib is a third-year 
law student at Yale Law School, where he is editor of Yale Law 
and Policy Review. Mr. Habib, along with the Yale Law School 
dean and several other students, submitted an amicus brief in 
the ACB v. Paulsen case, arguing that the U.S. currency is 
inaccessible to the blind. In the past, Mr. Habib has been 
awarded a Soros Fellowship, a Rhodes scholarship, a Truman 
scholarship, and in 2001, won the United States Congressional 
Service Award.
    We thank you all for coming here. Your complete testimony 
has been submitted for the record, and we will begin with Ms. 
Brunson, please.

  STATEMENT OF MELANIE BRUNSON, EXECUTIVE DIRECTOR, AMERICAN 
                      COUNCIL OF THE BLIND

    Ms. Brunson. Good morning. First of all, I want to thank 
the committee for holding this hearing, and for the opportunity 
to speak with you this morning.
    As was indicated, I represent the American Council of the 
Blind, an organization which was founded in 1961, and currently 
has members in all 50 States, most of whom are blind or 
visually impaired.
    ACB's mission is to increase the independence, equality of 
opportunity, and quality of life for all blind Americans. We 
believe that one way to increase the independence, enhance the 
opportunity, and improve the quality of life for blind 
Americans is to ensure that they can identify the denominations 
of their own bank notes, without having to rely on someone who 
is sighted to assist them.
    Since the exchange of bank notes is a key component of so 
many transactions engaged in by our society today, we believe 
that it is imperative that the Government recognize that people 
who have visual impairments should be able to conduct their 
part of such exchanges independently. And we have been pleased 
to hear about some of the efforts that are currently ongoing to 
address this issue, as you have heard about this morning.
    The rate of unemployment among people who are blind or 
visually impaired is unacceptably high. We believe that job 
opportunities that are currently, at best, limited, and 
sometimes even unavailable to people who are blind, would be 
opened up to us if we could identify paper money as efficiently 
as others do.
    This is particularly significant for young people, and 
other first-time job seekers who are looking for entry-level 
positions in places such as stores and restaurants, so that 
they can gain the work experience they need to advance in their 
chosen careers. Such jobs are currently frequently customer 
service-related, and involve a good deal of handling money.
    Certainly, there are blind people who now work in cash-
intensive business situations, but they are forced to rely on 
either the honesty of their colleagues and customers, or 
currency reading technology that is inefficient and often 
unreliable. Money identifiers are slow, frequently inaccurate, 
and, in noisy situations, are unusable.
    It is common knowledge that blind people who are required 
to complete transactions involving cash quickly, such as 
cashiers in vending facilities, often abandon their money 
identifiers and rely on the honesty of other people to identify 
the cash involved, so that they can quickly meet the needs of 
their customers.
    The problem with this scenario is that, oftentimes, 
verification by another sighted person isn't any faster than 
verification using a money identifier. Secondly, the process 
requires that a blind person often make an issue of, or call 
attention to his or her visual impairment in order to get 
someone else to assist, or take the risk of being defrauded.
    The fact is that, while most people that you encounter on a 
day-to-day basis are honest about the denomination of money, I 
can personally testify to instances from my own experience, and 
could provide additional anecdotal evidence in a significant 
amount from other people, that would show that blind people do 
get defrauded because of their inability to ascertain the value 
of U.S. bank notes.
    It is our position that if blind people are to be truly 
accepted as equal partners in the work places, cultural 
activities, and economic life of this society, the Government 
must design and issue bank notes that we can identify 
independently.
    As I alluded to a minute ago, we believe that currency 
readers are a very poor substitute for bank notes that are 
readily distinguishable without vision. In addition to being 
slow, each time a bank note is redesigned, the users of 
currency identifiers currently have to return the units to the 
factory to be updated, and there is a charge for such updates.
    Over 180 countries around the world have found ways to 
incorporate tactile features into their bank notes that enable 
blind and visually impaired people to distinguish notes of one 
denomination from another. They have also taken steps to 
enhance the visual distinctions between denominations.
    Chairman Gutierrez. Ms. Brunson, you have 10 seconds to 
conclude your testimony.
    Ms. Brunson. Thank you. We simply want the Government of 
this country to do the same. We are not as concerned about the 
speed, as we are about the appropriateness and the usability of 
the features involved.
    And we thank you for the supportive comments that you have 
made, and we hope that this committee will support our efforts 
to obtain accessible currency. Thank you very much.
    [The prepared statement of Ms. Brunson can be found on page 
32 of the appendix.]
    Chairman Gutierrez. Thank you for your testimony.
    Mr. Maurer?

STATEMENT OF MARC MAURER, PRESIDENT, NATIONAL FEDERATION OF THE 
                             BLIND

    Mr. Maurer. Good morning, Mr. Chairman. My name is Marc 
Maurer and I am the president of the National Federation of the 
Blind. It is the oldest and largest organization of blind 
people in the United States. It has an affiliate in each of the 
States, the District of Columbia, and Puerto Rico, and it has 
chapters in most large cities and many of the small ones. I 
come to present the considered opinion of the National 
Federation of the Blind regarding currency identifiable by 
blind people.
    Would it be desirable to have a method for blind people to 
identify currency independently? Of course it would.
    Are blind people able to use the currency today, without 
modification? Certainly, we are.
    The argument has been made that currency which cannot be 
identified independently by blind people discriminates against 
the blind. However, blind people use items that are not 
tactilely identifiable by the hundreds every day.
    The argument about the currency has implications far beyond 
the money. In the work that I do, I handle currency, documents, 
and affidavits. Very few of these items are identifiable by 
touch. But to say that I cannot use them is to make an argument 
that isn't true. We know that the blind can manage currency as 
it now exists.
    It would be more convenient to have a method of identifying 
it without help. However, many of the methods used throughout 
the world don't work. In Canada, the bills that I have received 
have had Braille symbols on them, but these were useless to me. 
There are other methods of doing it. Some of them work, but 
none of them are as easy as some of the methods that we might 
recommend.
    Technology has been developed that can readily identify 
currency. The KNFB reader has a currency identifier in it that 
a number of blind people have used with outstanding success. A 
stand-alone currency reader, portable enough to carry in a 
pocket, could probably be produced for as little as $100.
    One final point should be made. To say that we can't manage 
money is to argue that we, as blind people, are helpless. This 
is not the case. To say that we might be victims of fraud is to 
argue that we can't imagine methods of protecting ourselves. 
Such an assertion also urges the unscrupulous to try to prey on 
our vulnerabilities, be they real or imagined.
    To describe us as helpless, vulnerable, or incompetent is 
to paint a picture of blind people so negative that others in 
society are persuaded to mistrust any ability we have. Can you 
trust a blind lawyer, if he can't even figure out how to manage 
his money? How can you be sure that your lawyer will be able to 
handle your transactions if he can't handle his own? These are 
the unfortunate associations that come from the false and 
misleading argument that the blind cannot manage currency.
    The National Federation of the Blind has adopted 
resolutions about currency in 1994, 2002, and 2008. I attach 
these for your information. If there is to be a change in the 
currency, we who represent the largest number of blind people 
in the Nation wish to be involved in drafting and crafting the 
change.
    I do have a currency reader here. And, if we could take 
just a moment, I would like to have it demonstrated.
    Mrs. McCarthy. [presiding] Permission granted.
    Mr. Maurer. This is--it just mentioned that it was a $20 
bill. It had to check it twice, in order to be sure. I'm sorry 
that we didn't have it on the microphone.
    But we have had no false positives with this machine. It is 
currently expensive. We believe that it can be made for $100 to 
go on any cell phone, and we think it will be an effective 
method of identifying currency.
    We ask that we participate in whatever the crafting of the 
change might be, as we estimate that there will be a change in 
the currency.
    This concludes the summation of the statement of the 
National Federation of the Blind. Thank you very much.
    [The prepared statement of Mr. Maurer can be found on page 
61 of the appendix.]
    Chairman Gutierrez. I would ask those who are present to 
please refrain from applauding or interrupting in any way the 
proceedings. Thank you very much.
    I am sorry I had to leave momentarily, but we had a Rove 
contempt citation and I had to show up for that.
    Finally, we have Mr. Cyrus Habib. I recognize you for 5 
minutes. I will also give you 30 seconds when the light turns 
red.

         STATEMENT OF CYRUS HABIB, DISABILITY ADVOCATE

    Mr. Habib. Thank you, Mr. Chairman, Ranking Member Paul, 
and members of the committee. I would, first of all, like to 
thank you for holding this hearing, for taking up this 
important issue. I would also like to take this opportunity to 
thank the American Council for the Blind for their leadership 
on this issue, and Congressman Frank's office and staff for 
their leadership and for helping us to be here today.
    It is an honor for me to sit among leaders of the blind 
community, and individuals from industry. In deference to time 
constraints, and in the wake of some of the testimony that has 
already been heard, I want to just focus, Mr. Chairman, on 
three points.
    I, and another fellow law student at Yale, began work under 
Dean Harold Koh on an amicus brief for the D.C. circuit about a 
year-and-a-half ago, specifically because we felt that the 
issue of blind employment had not adequately been made by the 
parties in that case, that the issue of inconvenience to a 
blind consumer, and the opportunity for a blind consumer to be 
defrauded had been mentioned, but that in balancing government 
interests and undue burden with the impact on the blind 
community, the blind employment issue, which Ms. Brunson has 
spoken to you about, had not adequately been raised.
    There are three things that I think are important. And in 
writing that amicus brief, we represented the Perkins School 
for the Blind, which is the largest educational institution for 
the blind.
    The first point is the importance of entry-level jobs. When 
working with students from the Perkins School, we heard many of 
them--teenage, late teenage, early twenties--saying that first 
job, which I think all the members of the subcommittee will 
acknowledge is integral to obtaining references, to having key 
work experience at an early stage, to building mentorship 
relationships, that those jobs were the very jobs from which 
they had been foreclosed.
    Mr. Maurer mentioned that any such changes, proposed 
changes, would imply that blind people are currently not able 
to hold those sorts of jobs. What the students at the Perkins 
School were telling us is that those prejudices, Mr. Chairman, 
are already present, and in fact, are barring them. And the 
experts and staff at the Perkins School concurred with that 
assessment, that those biases, that blind people are unable to 
handle, denominate, verify, and exchange cash currency are 
already there, and that itself is detrimental to them.
    The second point I want to make is about financial 
literacy. This is what I have deemed the ``lemonade stand 
effect,'' which is that from a young age, Mr. Chairman, all of 
us Americans begin the process of becoming financially 
literate, you know, the archetypal example being the lemonade 
stand.
    Blind people, by dint of not being trusted and able, 
independently--not withstanding a 5-year-old being able to use 
Mr. Maurer's machine--are, from a very early stage, cut out of 
the process of being the front man in financial exchanges. And 
this leads to an attenuated effect, which is financial 
illiteracy, which we argue is at the heart of the epidemic of 
blind unemployment in this country, as well.
    The final point I want to make is about, once again, this 
idea of perception. Blind people are fully capable of being 
employed in many of the same capacities as any other person. 
All we seek is an opportunity to enter into the economy of this 
great Nation. And by remaining in State and Federal, Social 
Security disability pay, and so on, we are not living up to our 
full potential. And that is marring and tainting our image.
    When I lived overseas in England, I was pleasantly 
surprised to be served at a cash register for the first time in 
my life by a blind individual. That altered my perception of 
what sorts of jobs could be available to blind people, and 
motivated and catalyzed me to take on this issue when I 
returned to the United States, and found out about the great 
work of the American Council.
    I want to just close, Mr. Chairman, by addressing--in 
calling on the subcommittee to take urgent action on this 
issue, I want to address the issue of private versus public. 
And, again, as a matter of law, this lawsuit was brought under 
section 504 of the Rehabilitations Act. That is a statute that 
requires the Government to make reasonable accommodations in 
avoiding discrimination.
    With all due respect to those who are proponents of a 
private sector fix, we argue that the Court of Appeals and the 
D.C. District Court have both--in agreement that section 504 
controls this matter of law, and--as a matter of law, controls 
this case. And so, we really would hope that, in taking action, 
the subcommittee would look affirmatively to how other 
countries have dealt with this in the public sector, and abide 
by the holdings of those courts.
    Once again, I want to thank the subcommittee for your time, 
and also clarify in closing that I come before you as an 
individual, not as a representative of the Perkins School for 
the Blind or the law school. I stand ready for any questions. 
Thank you.
    [The prepared statement of Mr. Habib can be found on page 
49 of the appendix.]
    Chairman Gutierrez. Thank you so much. Well, Mr. Maurer, 
how do you respond to Ms. Brunson's and Mr. Habib's testimony, 
that having tactilely distinguishable currency is vital for 
young people and others, first-time job seekers who are looking 
for entry-level positions in stores and restaurants, and 
looking to become financially independent and not on Social 
Security and other kinds of Government aid, but that this would 
help them secure jobs and a livelihood? How do you respond to 
that, Mr. Maurer?
    Mr. Maurer. The reality is that blind people are doing cash 
management at cash registers today. And the argument about cash 
is one that is a real argument, but it is only one tiny 
argument among so many. Entry-level jobs today are a problem, 
but they are very much a problem, because of lack of computer 
technology-based access that is at least as important.
    And if Mr. Habib hasn't ever run a lemonade stand, then his 
experience isn't as broad as mine. I have, and I was blind when 
I did it. And I delivered newspapers and collected currency.
    Managing currency for blind people is a thing that blind 
people do now. If a person doesn't want to employ you and uses 
that argument, then they will have another one, which is to 
say, ``Can you read the price tag on the product that is coming 
to your cash register?'' ``Can you tell whether it is a package 
that contains one product or another?'' Do you have to identify 
everything by touch?'' And if you do, then it's only one tiny 
element of all of the things that have to be managed. There may 
be a way to do it, but it's a bigger problem than they are 
talking about.
    Chairman Gutierrez. Ms. Brunson, would you care to respond? 
I am not trying to--I mean, there is a significant difference 
here, and I thought we would take these 5 minutes just to 
develop it somewhat.
    Ms. Brunson. Well, certainly there are any number of items 
that one deals with in managing either a professional position 
or any number of transactions involving doing business, either 
personal or professional. And to say that because you don't 
have a way to address all of them, or you might not want to 
address all of them, you shouldn't address any of them, I think 
isn't appropriate.
    And so, I think that because of the degree to which 
currency affects so many aspects of our lives, that doesn't 
mean that we shouldn't address it, just because we might not 
have the opportunity to address all of the issues that might 
come up at once.
    Chairman Gutierrez. Mr. Maurer, the lawsuit has been filed. 
The court has found that it is discriminatory. How should we 
resolve that?
    Mr. Maurer. The lawsuit is over, Mr. Chairman. The Treasury 
does not intend to appeal the lawsuit. I think the lawsuit is 
an error. That's a personal opinion, and that--
    Chairman Gutierrez. I guess my question is, we know that it 
is over and it has been found to be discrimination. How do we 
resolve that, Mr. Maurer?
    Mr. Maurer. That, I appreciate, is the decision of this 
subcommittee, working with the Treasury. I don't--the 
recommendation that I would have would be a technological 
solution. I think it is the most effective. I think it is the 
most cost effective, as well as the most technologically 
effective. That is, I think it is the best way for blind people 
to identify currency. That is why I brought the currency reader 
today. I think it is the best way to go.
    Now, the Treasury may not agree, you may not agree. And 
that, of course, is an argument that I will make to you.
    Chairman Gutierrez. Okay. Well, we will continue. Mr. 
Habib, do you have any closing comments?
    Mr. Habib. I just wanted to make one quick response to Mr. 
Maurer's point in answering your first question, which is that 
I think it misses the mark in the sense that price tags, Mr. 
Chairman, are a matter of a private store. If I go into a 
grocery store, whether that employer has made the workplace 
accessible to me or not is a matter of reasonable 
accommodations governed by the Americans with Disabilities Act. 
That is a different statute than what we're talking about here.
    We are talking about the Government. We are talking about 
section 504 of the Rehabilitations Act. Not withstanding Dr. 
Paul's points, U.S. currency is, in the status quo, a public 
accommodation, is governed by public--by the section 504 of the 
Rehabilitations Act, and as such, is held to a completely 
different standard than the type of workplace, you know, 
environment in a private business, such as what Mr. Maurer was 
referring to.
    Chairman Gutierrez. Thank you so much. Dr. Paul, please, 
you are recognized for 5 minutes.
    Dr. Paul. Thank you, Mr. Chairman. First, I would like to 
ask unanimous consent to insert into the record a written 
statement on this topic by the Coalition for the Presidential 
$1 Coin.
    Chairman Gutierrez. Without objection, it is so ordered.
    Dr. Paul. Thank you. Actually, I don't have a question, but 
I do want to make a brief comment. And maybe Mr. Maurer would 
comment on it. I was fascinated with his testimony, because 
sometimes I don't find a lot of optimism in finding all the 
solutions with more regulations and more rules and more 
Government.
    And, fortunately, today I think we live in an age where 
technology is so beneficial. Even in medicine today, whether 
it's dealing with the blind and the deaf, I am sort of an 
optimist, long term, that great things will come out of 
technology. And of course, today we are not talking about that.
    But you take the problems of the bad stuff that's on the 
Internet and on television. You know, there are two ways to do 
that. You either resort to Government that monitors and gets in 
the area of violating the First Amendment, or you can go to 
technology, and all of a sudden you know how to block things on 
the Internet, and block things on TV. And I think, in some 
ways, we are talking about technology coming to the answer. 
Because too often, when we look to the Government, even though 
it seems like it might solve one problem, it might introduce 
another.
    And certainly this issue of self-reliance, which is very 
challenging, of course, under these circumstances, but I think 
there is a bit of satisfaction that all of us get out of self-
reliance, so--I keep wondering that--the demonstration you did 
is awfully fascinating. And if you can do that with a bill, 
wouldn't it be wonderful if they could do that with us at the 
airport? You know?
    And actually, there is technology available in the hands of 
private people at the airport. We might not have to have 
500,000 people on suspicious terrorist lists and being pestered 
to death to make us safe. And there are technologies available.
    So all I want to say is I applaud your approach, and I 
think hopefully this can be worked out to everybody's 
satisfaction, legally, and to benefit everybody. I would like 
to just compliment Mr. Maurer on his testimony.
    Mr. Maurer. I want to thank you, Mr. Chairman, and Mr. 
Paul. I have never met a currency that worked tactilely. If 
there is one, I would like to know about it. And I have 
traveled many places.
    We would like to be involved in the solution to this 
process. We do believe it would be more convenient; we just 
don't want to spend hundreds of millions of dollars on it.
    Chairman Gutierrez. Thank you so much, Dr. Paul. The 
gentlelady from New York is now recognized for 5 minutes.
    Mrs. McCarthy. Thank you, Mr. Chairman. Number one, I think 
everybody is going to be involved as we go through this 
process. They have to be.
    Again, we were handed down a mandate from the Supreme Court 
that we have to do something. Now I will tell you what happens 
around here, especially on committees. When we have so many 
different factions working together for the bill, against the 
bill, this needs to be changed, that needs to be changed, there 
is an expression around here: ``If no one is happy with it, we 
have actually done our job right.'' And that means we tried to 
accommodate everybody. But everybody should be involved in the 
process, and they will be.
    With that being said, you know, sitting here--and my 
background is as a nurse--so sitting here thinking, my first 
reaction is, ``Well, let's do coins.'' But then I started 
thinking of those who have other challenges, someone who 
basically might have had a stroke and will not be able to use 
their fingers to be able to pick up a coin, and yet they're 
able to work with a $1 bill or a $5 bill. So, I mean, there are 
going to be a lot more complications in other areas, as we go 
through this process.
    But Mr. Habib, when you were over in London, and you said 
that it was the first time you met a blind person or a 
visually-impaired person at the cash register, was it because 
of their currency, or was there other technology that was 
helping that person work there?
    Mr. Habib. No. They were using the British pound, which 
uses, you know, a combination of the methods that we have been 
talking about. There is a 1 pound and 2 pound coin, which I 
think takes us well above $4 now in exchange rate. So coins are 
a fairly viable solution at the low end for them.
    But the bills are also sized differently, both--and the 
changes are noticeable, to address that--the previous point 
made by Mr. Felix, that those are--the 20, the 5, and the 10 
pound notes are distinguishable from one another.
    Mrs. McCarthy. Thank you. Mr. Maurer, as we go forward, in 
many ways, like Mr. Paul, I do believe that technology is going 
to be out there. And it is going to be interesting as we go 
forward. Are we going to have a solution where, again, we're 
going to have to almost, as they say, split the baby? Some will 
be technology, maybe there will be some that will be dealing 
with the actual hard currency.
    We are too early in the stage to actually know all of that, 
even though we have had many meetings with different groups. On 
the next panel it's going to be interesting to hear them on the 
accommodations and what they're looking at, basically, on how--
and the ideas they have on how we can address this issue that 
we're going to be looking at.
    So, again, this is very, very early. I have to ask you, Mr. 
Chairman, do we have a timetable on this?
    Chairman Gutierrez. We don't have a timetable. We will be 
getting together in the beginning of September to put one 
together. The first thing is getting--
    Mrs. McCarthy. So there was no mandate from the Supreme 
Court on when we had to have this done?
    Chairman Gutierrez. No.
    Mrs. McCarthy. That's good.
    [Laughter]
    Mrs. McCarthy. Well, you know Congress works slow, anyhow. 
But if we are going to be making major changes, which I guess 
that's what we're going to be doing, this needs to be really 
thought out, and have all areas working together so that when 
we make this decision, it's going to be accommodations for 
everybody, and hopefully satisfactory.
    With that, I yield back the balance of my time.
    Chairman Gutierrez. Thank you so much. We don't have a 
specific timetable, so we will be working on the issue. But we 
will be working responsibly to get it done in the quickest way 
possible. I think that's our goal, to get it done quickly. 
There is a court mandate. We should respond to it in the most 
timely fashion possible. That is certainly going to be my goal.
    I would just like to say to Mr. Maurer, Mr. Habib, and Ms. 
Brunson, look, you all represent a community of people in the 
United States. You do a wonderful job. You have a difference of 
opinion, and you come from a point. But we will be talking to 
all of you to figure this out in rendering a solution that 
responds to the court, and more importantly, that responds to 
the court that does fairness and justice, and makes America a 
better place for all of us to live in.
    I thank you all for participating in this panel.
    Ms. Brunson. Thank you.
    Mr. Maurer. Thank you, Mr. Chairman.
    Mr. Habib. Thank you very much.
    Chairman Gutierrez. We have on the next panel Mr. Richard 
Geerdes and Mr. Jeffrey Knoll; if they would come up to the--
Mr. Richard M. Geerdes, testifying on our third panel, is 
president and CEO of the National Automatic Merchandising 
Association, NAMA. Mr. Geerdes assumed the leadership of NAMA 
on January 1, 1999. A native of Chicago, Mr. Geerdes holds an 
MBA in finance and a bachelor's degree in management 
information sciences from Western Illinois University.
    Mr. Geerdes has worked at NAMA since 1988 in various 
capacities. He joined the staff of NAMA following his 
experience as a vending operator in a series of senior 
management positions with Interstate United and Canteen 
Corporation.
    And we have Jeffrey Knoll. He is executive vice president, 
corporate counsel for Cummins-Allison Corporation of Mt. 
Prospect, Illinois. Mr. Knoll serves as executive vice 
president corporate counsel for Cummins-Allison. Mr. Knoll 
holds a J.D. with honors from Chicago Kent College of Law, as 
well as undergraduate and graduate degrees in aerospace 
engineering and engineering mechanics from the University of 
Illinois at Urbana-Champaign.
    In his current position, Mr. Knoll receives all corporate 
legal affairs for the company, including prosecution and 
litigation of intellectual property rights. You are both 
welcome, and we will start with Mr. Geerdes for 5 minutes.

STATEMENT OF RICHARD M. GEERDES, PRESIDENT AND CHIEF EXECUTIVE 
  OFFICER, NATIONAL AUTOMATIC MERCHANDISING ASSOCIATION (NAMA)

    Mr. Geerdes. Thank you, Mr. Chairman. Good morning, Ranking 
Member Paul, Mrs. McCarthy. Thank you for the invitation to 
testify today.
    NAMA is the National Automatic Merchandising Association, 
since 1936 our country's national trade association, 
headquartered in Chicago, representing people in the vending, 
coffee service, and contract food service industry in this 
country.
    NAMA estimates that approximately 20 million Americans 
purchase a food or beverage item from a vending machine every 
work day. And I want to emphasize that people who are blind or 
visually impaired are not only important customers to the 
vending industry, but they are also important participants 
through the set-aside programs in many States, where they 
operate vending.
    I speak for NAMA's nearly 1 million members in over 2,400 
companies nationwide in an industry well north of $40 billion a 
year. NAMA members are small and mid-sized businesses who own 
and operate approximately 7 million currency and coin-operated 
vending machines across our country. And we also represent 
everyone else who supplies products, equipment, and the 
distribution chain in the industry.
    My testimony today will center on the impact to the 
industry if tactile or other changes are made to U.S. currency, 
and the various ways of meeting the currency use needs of the 
blind or visually impaired--as I said, important customers of 
NAMA. And, finally, also serving the needs of the American 
taxpayer, by keeping down vending machine operating costs to 
consumers.
    Vending in the United States is an equipment-driven, small 
business-owned, highly competitive, very capital-intensive 
business. The latest data from NAMA shows the average pre-tax 
margin of a small NAMA operator or service to be less than 2 
percent. So keeping costs under control, so that consumer 
prices can be held in check, is critical.
    Coinage and currency are the engines that drive vending. To 
provide improved accessibility and use of currency for the 
blind and visually impaired, there are various options to be 
considered, and an opportunity to use technology, as we have 
heard.
    At the request of this committee in May, NAMA resurveyed 
our members and manufacturers to get the most up-to-date 
information for Congress to consider. The most far-reaching and 
expensive change to currency for the vending industry would be 
to change its size, particularly the width of the bills.
    From a vending machine operating standpoint, it's important 
to keep in mind that the ability of bill validating equipment 
to correctly validate legitimate U.S. currency is very 
dependent, in part, on the physical size of the bill being 
validated.
    Technical research shows that bills that are significantly 
longer than current U.S. bills would not fit into the validator 
storage boxes, and would cause jamming in the bill transport 
mechanism. Longer bills would probably require additional 
software updates to the reading mechanisms. Bills that are 
significantly shorter could also create jamming in the bill 
boxes and also require software changes. Bills that are 
narrower would require, at a minimum, software upgrades. And 
also, sensing techniques used to validate bills require an 
accurate left positioning of the bill in the reader, so that 
positioning sensors can properly validate. And whether or not 
this could be incorporated into bills of various sizes is still 
open to question.
    But a change in the width of currency would require a 
replacement of the currency validating mechanisms on virtually 
every vending machine in the country. At a cost of $500 per 
mechanism, multiplied by 7 million machines, this means a 
minimum expense of $3.5 billion to the vending industry, plus 
the labor to install, which we estimate at close to another 
$100 per machine.
    To make similar changes to the 300,000 free-standing bill 
changers would likely add another $150 million to that total.
    We are still working to develop cost data for changes to 
the length of currency, but the research simply wasn't 
available yet.
    Simply put, these costs are certain to drive many of the 
small owner-operators, including those operating under the 
blind enterprise programs to bankruptcy in short order, and 
certainly will result in much higher costs to the consumers, 
given the margins in the industry.
    But we also looked at a number of other features that I 
would like to relate to you. First, the impact of incorporating 
a single large font denomination number on the bill. The effect 
of a larger single denomination number would depend on size and 
placement. As long as the larger denomination number was not in 
a position that interfered with areas that the current 
validators used for sensing, the changes to existing validators 
may not be needed at all.
    Otherwise, we estimate retooling costs to be anywhere from 
$50 to $120 a machine. So again, a cost to the industry 
somewhere between $350 million and $840 million.
    However, while incorporating a single denomination numeral 
would have the least financial impact, this modification would 
not permit people who are totally blind to determine the bank 
note denomination, so we recognize it's not a solution.
    We also examined the idea of incorporating Braille, and we 
have heard many of the pluses and minuses from the other 
witnesses. The effect, my manufacturers tell me, is again, 
dependant greatly on where the Braille or tactile features are 
placed. And because they would likely increase the thickness of 
the bill, there would be a reduced capacity in the equipment to 
hold machines--the paper bills and machines that reach bill 
capacity cannot accept additional currency, therefore, a sales 
loss. So there is a financial impact there, but it is more 
difficult to recognize.
    But again, retooling costs could range anywhere from $100 
to $500 a machine, depending on what changes were made.
    [The prepared statement of Mr. Geerdes can be found on page 
42 of the appendix.]
    Chairman Gutierrez. Thank you, Mr. Geerdes.
    Mr. Knoll, you are recognized for 5 minutes.

  STATEMENT OF JEFFREY G. KNOLL, EXECUTIVE VICE PRESIDENT AND 
         CORPORATE COUNSEL, CUMMINS-ALLISON CORPORATION

    Mr. Knoll. Thank you, Mr. Chairman, and members of the 
subcommittee. My name is Jeff Knoll, and I am executive vice 
president and corporate counsel of the Cummins-Allison 
Corporation. I am honored to participate and offer testimony at 
this hearing today.
    Mr. Chairman, we commend you and your colleagues for 
bringing us together in order to discuss what is truly an 
important issue.
    Cummins-Allison is a privately-held U.S. company which has 
been in existence since 1887. Cummins-Allison is an industry 
leader in the design and manufacture of high-tech coin and 
paper currency processing equipment. Cummins-Allison's 
corporate headquarters are located outside Chicago, Illinois. 
We have technical facilities in California and Pennsylvania. 
There are sales and service offices located throughout the 
United States. And we have a number of wholly-owned foreign 
subsidiaries.
    Cummins-Allison is the only American-owned manufacturer of 
currency processing equipment. All Cummins products are 
manufactured in the United States by U.S. workers.
    Cummins-Allison equipment is used by banks. It's used by 
armored carriers. It's used by governments, retailers, the 
gaming industry, and many others. The equipment is used to do 
things like count, sort, denominate, and authenticate large 
volumes of currency. When I say large volumes, these machines 
run at rates of up to 1,000 notes per minute, and they are used 
by people in applications ranging from a bank teller who may be 
taking a few notes across the counter, to a large back room for 
an armored carrier, or a Federal Reserve branch, where it is 
actually running at 1,000 notes per minute for several hours or 
several days, continuously.
    Cummins-Allison fully appreciates and supports the 
important need to facilitate the use of U.S. currency by the 
visually impaired. However, in considering any change to the 
design of U.S. currency, Cummins strongly encourages the 
Government to move cautiously, particularly with respect to 
changes made to the size of U.S. currency notes.
    More than 60 percent of the world's reserve currency is 
held in U.S. dollars, which provides America with many economic 
benefits. The U.S. dollar is easily recognized and well-
respected by hundreds of millions of people around the world, 
which provides the U.S. Government with greater legitimacy, and 
allows America to assert its economic leadership. Any change to 
the American coin or paper currency may significantly impact 
the ability and willingness of other nations to utilize our 
currency, and could have adverse impacts on our economy.
    Importantly, American currency has been the same size for 
more than 50 years--probably approaching 70 or 80 years. As a 
result, the currency processing industry has developed cost-
effective machinery which is used throughout the world to 
process the American dollar.
    Cummins-Allison has researched the development of equipment 
for processing foreign currencies as well. And our experience 
has demonstrated that it is far less expensive to process 
American currency of the same size than foreign currencies of 
varying sizes. As a result, the uniform size of American 
currency makes it a preferred currency in many other countries.
    If the United States introduced currency of varying sizes, 
the process for converting the existing infrastructure of 
currency handling and processing equipment would be extremely 
onerous and expensive. Today's state-of-the-art processing 
machinery utilizes highly engineered components for feeding, 
transporting, scanning, and stacking currency notes. The 
majority of these components could not be modified to process 
new or different sizes of currency, and would need to be 
completely replaced.
    If you consider the replacement costs for the existing 
currency processing equipment, and combine that with the 
modification or replacement costs associated with other 
industries like ATM, vending, and currency printing, it quickly 
becomes apparent that changing the size of the currency would 
be an extremely, extremely challenging proposition.
    Although Cummins-Allison has not worked intensely in the 
area of alternatives, we are aware of alternative technologies. 
And, as Mr. Maurer described previously, we think one of the 
more promising areas of alternative technology is in the area 
of electronic, hand-held currency denominators. As this 
technology continues to advance, like many segments of our 
society, the cost will come down, and the technology will 
improve. In fact, it's likely that next generation devices will 
even be able to identify counterfeit currencies.
    So, when taken into consideration with all the costs 
associated with the potential currency redesign, it may be far 
more economical and efficient to provide the visually impaired 
with personal denomination devices than to consider a broad 
scale redesign or change of the size of the U.S. currency.
    In summation, Mr. Chairman, Cummins-Allison wholeheartedly 
appreciates the importance of finding a way for blind and 
visually-impaired individuals to more easily and accurately 
identify different denominations of currency. However, Cummins 
strongly encourages Congress to strive to identify the most 
efficient long-term solution.
    Mr. Chairman, thank you again for the opportunity to 
participate in this hearing, and I am happy to answer any 
questions that you or other members of the subcommittee may 
have.
    [The prepared statement of Mr. Knoll can be found on page 
52 of the appendix.]
    Chairman Gutierrez. Mr. Geerdes, let me ask you. You said 
$3.5 billion--$3.6 billion--you said there was another $150 
million in there. That is to change the vending machines, 
alone?
    Mr. Geerdes. No, sir. That is to change the paper accepting 
mechanisms on the machines. The critical part is the width of 
the bill. If--
    Chairman Gutierrez. But changing them on vending machines, 
or all machines? ATMs?
    Mr. Geerdes. No, I'm just speaking for the food and 
refreshment vending industry. So the cost is much broader to 
industry, as a whole.
    Chairman Gutierrez. But there are other machines.
    Mr. Geerdes. Oh, yes, certainly.
    Chairman Gutierrez. ATM machines and other--
    Mr. Geerdes. ATM, coin--parking, car wash, coin-operated 
laundry, sure.
    Chairman Gutierrez. All of the other things that, when I go 
to the car wash, it takes it and--okay.
    So, there are many other machines, you're just talking 
about--
    Mr. Geerdes. Just the food and refreshment--
    Chairman Gutierrez. Food and refreshment industry, okay. I 
wanted to make sure we had that clear.
    In your testimony you suggest, Mr. Geerdes, that hand-held 
readers, scanners, could be provided to blind persons in the 
United States as an alternative to currency redesign.
    Are you suggesting that the Federal Government subsidize 
these readers? And if so, has NAMA done any research, and are 
you aware of any research on how much this would cost the 
Government per unit, and overall?
    Mr. Geerdes. Mr. Chairman, I have spoken with Mr. Felix. He 
indicated that the cost per reader was in the $100 to $125 
range, I believe he said.
    Our point was simply if Congress considered eliminating the 
dollar bill and used the savings to produce dollar coins, you 
could reallocate the savings to buy readers. We simply offer 
that as one more alternative for Congress to consider.
    Chairman Gutierrez. To change the dollar bill to dollar 
coins?
    Mr. Geerdes. To eliminate the dollar bill altogether, and 
simply go with a dollar coin, which is easily distinguishable 
by the blind. It would save the Government at least $600 
million a year.
    Chairman Gutierrez. That would complicate our problem in 
trying to figure out a solution. We have a lot of fans of the 
dollar bill.
    Mr. Geerdes. Oh, absolutely. We understand.
    Chairman Gutierrez. And so then we have to bring the dollar 
bill/dollar coin people to the table. So I think we will 
eliminate that one altogether. We just want to get to a 
solution. Starting with me, I'm a big fan of dollar bills, so 
you already have a bias here, and a prejudice here. Well, 
that's another conversation that we will have.
    So, about $100 to $125?
    Mr. Geerdes. Yes.
    Chairman Gutierrez. Okay.
    Mr. Geerdes. I believe that's what he said, yes.
    Chairman Gutierrez. Okay. And then, I want to ask you, Mr. 
Knoll, a hypothetical in the conversion process. If we had a 
redesign, obviously we couldn't--no conversion would be 
immediate, because we would have two versions. We would have 
millions, if not billions, of notes out there, all over the 
world that are already printed.
    So we would probably have two at the same time. If we could 
figure out a way to get--but we will never figure out--people 
keep coins in their houses and all kinds of stuff for years, we 
already know that. So we would have two at the same time. Has 
Cummins-Allison looked at what it would take, logistically, for 
businesses to operate two sets of currency processing 
equipment, one for the old currency and one for the redesign?
    Mr. Knoll. Well, first that takes into--I guess it assumes 
that, depending on the sizes, changes that are implemented, 
that it would be even feasible and possible to continue to 
process using existing processing technology.
    The real trick is that as the notes become more and more 
sophisticated with technical features located in specific parts 
of that note, it becomes that much more critical to properly 
register the note with the different scanners in the machine. 
When the notes are all the same size, you can really control to 
strict tolerances how those bills move through there, and are 
reliably read with all those notes, all those features being 
read at the specific locations.
    When the sizes change by denomination now, you have to 
account for both the smallest and the largest. So you have a 
question. Can you have notes that are basically floating now in 
that transport path? And can you as efficiently utilize those 
same technical features that you could reliably use when the 
notes were controlled now in this more or less floating 
environment?
    So, the real change in the infrastructure not only is how 
long would it take and how much would it cost, but is it even 
technically feasible to do?
    Chairman Gutierrez. Is it technically feasible to do? Okay.
    So, I am not going to ask any further questions here this 
morning of the panelists, except to say I am going to ask 
Congresswoman McCarthy to chair the remaining part of the 
hearing. I am going to go over to the Judiciary Committee. We 
are having more problems with Karl Rove, getting him to 
testify. So I am going to go over there, and make sure that 
happens. I thank you all for your testimony.
    Mr. Geerdes. Thank you, Mr. Chairman.
    Mr. Knoll. Thank you.
    Chairman Gutierrez. I look forward to working with you and 
convening the meetings, starting in September.
    Mr. Knoll. Yes, sir.
    Mr. Geerdes. Thank you.
    Chairman Gutierrez. I recognize Dr. Paul for 5 minutes.
    Dr. Paul. Thank you, Mr. Chairman. And the chairman has 
essentially stolen my question, but I am going to follow up on 
it. This timing, I think, is pretty important. And Mr. Knoll 
commented on it, so I will ask Mr. Geerdes to comment on this. 
Because you did throw out a number about the number of machines 
that would need to be changed, and the dollar amount.
    In a calculation, really, we have to deal with this 
problem, the transition. And I think, you know, from the retail 
point of view, do you see it as even achievable? I mean, what 
kind of cost would be involved? And would it be--would you 
think that there would have to be two machines? Or would there 
have to be a day of recall, or how do you think that transition 
would work? And what kind of extra cost would it be to bring 
these two systems together?
    Mr. Geerdes. Congressman, I believe that, yes, it's a 
terrific point. We don't see a solution to this right now, 
because the space on a typical machine front is fairly limited, 
and so it is well-defined as to where the validating equipment 
is contained.
    If the validators themselves could be made to accept a 
variety of different sizes, then simply they would have to be 
replaced. But to my knowledge, you're correct. We would have 
two circulating. And I am not sure exactly how the industry 
would accommodate that, other than to say we would lose sales, 
because the customers cannot use what's in their pocket.
    Dr. Paul. That is the only question I have, and I yield 
back the balance of my time.
    Mrs. McCarthy. [presiding] Well, I'm wondering, have you--
and I guess I should have asked this question to Treasury, 
especially with--I guess it could work with any of the 
currency, on just cutting the tip of--whether it's the $1, the 
$5, or you know, the $1 could be on the left-hand side, the $5 
could be on the right-hand side, and a $10 and $20 could be on 
each corner. How would that work out?
    Mr. Geerdes. Well, my machine manufacturers and the 
validating people tell me that that could be accommodated, 
depending on the degree of cut and other technical 
considerations. But it certainly could be a more workable 
solution, and one that would not place such a cost burden on 
industry, because the size of the bill did not change.
    That, or we have also heard discussions of perhaps placing 
notches in some fashion along the leading or trailing edge of 
the bill, a number of ways to mark it without changing the 
size. We think that is a more viable solution.
    Mrs. McCarthy. Now, would that also work, though--some of 
the--you know, like, when you go to some of the stores to 
change a $5 bill, to get change or whatever, obviously, if you 
don't put it in exactly right, it won't accept it. Would that 
be a problem with a lot of the ATM machines and things like 
that?
    Mr. Knoll. We don't make ATMs, per se, but the machines 
operate with similar technology. Certainly, there is some 
allowance for a slight variation, because even with our, you 
know, intended uniform sized currency, over time bills become 
damaged. They become--they shrink, different things happen, 
that we are inherently forced to accommodate some slight size 
change.
    But when we get into the kinds of changes that I think 
would be a perceptible difference between one denomination and 
the other, typically those kinds of variances cause at least 
Cummins-Allison equipment quite a bit of trouble, in terms of 
denominating and authenticating the notes.
    Mrs. McCarthy. By cutting the corners?
    Mr. Knoll. I'm sorry, I thought we were referring to slight 
changes in the size.
    Mrs. McCarthy. No, no, no. I was talking about taking the 
currency that we have now, and if it came out to the future 
where a corner--like, say, the $1 bill, same exact size, but 
say the left-hand corner would be slightly cut, $5 to the 
right-hand side, $10 on to the bottom, to rotate around with 
that?
    Mr. Knoll. I think we would need to look at that more 
closely. But I don't know if that would be a workable solution. 
I mean, if the overall length and overall width stayed such 
that it would fit within the existing guides, if there were 
slight changes, be it perforations or removed corners, that is 
something that could conceivably be workable.
    Mrs. McCarthy. We have heard a lot of testimony, especially 
about the coins, where Europe does use, for the pound or you 
know, our $1, $2, they're all uniform. But with coins, we have 
tried the dollar bill--I'm sorry, the dollar coin. We have been 
actually trying to push that for a long time, coming out with 
different designs and everything, to get the American people to 
start using, you know, a dollar as a coin instead of paper.
    And I guess that's another question for Treasury down the 
road, why they want to have that switchover to a coin, versus 
the dollar, as far as currency. I guess because it would last 
longer. Obviously, the dollar bill is something that would--but 
I have heard that some stores--or even storage of that, because 
it would be a lot more bulky than it would be for paper.
    Do either one of you have an opinion? I know it wouldn't 
probably affect you, Mr. Knoll, but is there an opinion on 
that, as far as storage using the coins versus the dollar?
    Mr. Geerdes. Madam Chairwoman, we haven't discussed storage 
per se, other than yes, it would generate more bulk in the 
pocket. That is certainly one argument.
    You referred to Europe. My industry in Europe does not 
accept the paper notes, because there is so much variety and 
size of the euro notes that they have not developed a 
technology affordable to use. So it's strictly coin-driven, and 
now beginning to use electronic payments, credit and debit 
cards.
    Certainly there is an extra expense in handling coins, 
there is no question about that. The Treasury should be as 
interested, because they would save--a coin lasts 30 years, the 
dollar bill lasts 18 months, so--
    Mrs. McCarthy. Thank you. I'm sorry. Mr. Manzullo?
    Mr. Manzullo. Thank you, Madam Chairwoman. This is a 
fascinating discussion on the need, obviously, to try to come 
up with some solutions that would work.
    Mr. Knoll, you mentioned that the cost to convert would be 
astronomical.
    Mr. Knoll. I think the costs, first off, are developing the 
technology which, again, is a big question mark. We spend 
months just trying to catch up with--compared to what we're 
talking about here, you know--relatively smaller changes in 
some of the currency patterns in the different denominations 
over time. Those changes alone take months and months to--for 
us to come up to speed with, technically.
    For us to talk about a more significant change, such as a 
change in the dimension of the currency, would be enormous. And 
that's just the development cost. Then we talk about how we put 
that into hardware, and how we convince a world full of people 
who are processing American dollars with very expensive 
equipment right now that, ``Oops, you need to replace all 
that.'' I am not sure how you would put a dollar figure on 
that, but it would be a high one.
    Mr. Manzullo. In addition to that would be the cost to the 
government to come up with some type of--I guess the Canadians 
put bumps, don't they, or Braille? I'm not quite sure--
    Mr. Knoll. Yes, I think there are a number of--
    Mr. Manzullo. --what is--indentations?
    Mr. Knoll. That's correct, tactile approaches to 
implementing a distinction by denomination. That's correct.
    Mr. Manzullo. But your machines are--could they be 
designed, or is it something that would be impossible, to pick 
up the indentations?
    Mr. Knoll. No. I think it's technically feasible to 
mechanically or optically sense either, you know, dimples or 
raised areas, or alternatively, perforations or cut-outs or 
notches. That could be done optically, or--
    Mr. Manzullo. It's the size of the note that would present 
the problem?
    Mr. Knoll. That is the biggest problem. We are moving--it's 
really how quickly we can move paper. And if we're moving 1,000 
pieces of paper, which, in some cases, can get very ragged, at 
1,000 notes per minute, you need to have precise control over 
that, which means you need to know where the edges are. And if 
the edges change, by denomination, that presents a very big 
problem.
    Mr. Manzullo. The mechanical scanner, I have not seen one 
of those. That technology is already here, or it is around the 
corner? Does somebody have one?
    Mr. Knoll. I have an example here with me, if I could 
demonstrate it just briefly, to show what we're talking about.
    Mrs. McCarthy. Without objection.
    Mr. Knoll. Thank you. What I have here is what is known as 
a scan head, and this is what resides in basically every model 
of equipment we sell, whether it be a desk top machine or a 
large floor standing sorter.
    And what happens is that there is a plate that is pressed 
down against here. But bills get fed through here 1,000 notes 
per minute. And there are a variety of sensors located on this 
scan head, which are reading different technological features 
that are embedded in the notes. But as you can see, the sensors 
are at discreet locations on this scan head.
    Mr. Manzullo. My question was the portable scanner that the 
person would carry in order to--
    Mr. Knoll. One was demonstrated earlier.
    Mr. Manzullo. I didn't have a chance to come here. Was it--
    Mr. Knoll. I'm sorry. It's certainly, in Cummins's 
perspective, a feasible approach. Again, I think that the 
technology is only going to get better.
    Mr. Manzullo. How much does that weigh?
    Mr. Knoll. Again, I will defer to the experts. I do not 
have a--
    Mr. Manzullo. Four ounces?
    Mr. Knoll. Approximately four ounces.
    Mr. Manzullo. Four ounces? Okay. So if the scanner were 
developed even further and, with technology the cost would 
probably go down, the least disruptive way and the most 
economical way, as far as the bill-making industry, which is 
the Treasury, and the people involving the scanners, which is 
you, Mr. Knoll, and the people with the machines, which is you, 
Mr. Geerdes, would be to have the visually impaired equipped 
with these individual hand scanners. That would go a long way 
to solving the problem?
    Mr. Knoll. That seems to have some merit. It certainly 
would avoid the wholesale redesign of the processing equipment 
problem.
    Mr. Manzullo. Okay. And if you had to take a guess at the 
amount of time to develop a new technology on your part to be 
able to read different sized bills and dimples, for lack of a 
better word, do you have any idea what your lead time would be?
    Mr. Knoll. I think you would be conservatively talking 
about years.
    Mr. Manzullo. Okay, okay. Thank you.
    Mr. Knoll. Thank you.
    Mrs. McCarthy. With a little bit of indulgence, Mr. Knoll, 
you were talking earlier, and I would like to see if you could 
elaborate on the cache that the U.S. currency carries in 
foreign markets and how changing might affect the value of the 
U.S. dollar.
    In other words, I know a lot of people over in Europe who 
actually have been putting the American dollar away, or saving 
it, for a long time. Obviously, the currency right now is down. 
But how would it affect the market if we did change the 
currency, as far as changing what the bill looks like and 
everything else like that? How will it affect, and how would we 
even handle all that money that would come flooding onto the 
market? Would that change the market?
    Mr. Knoll. I don't know how we would handle that. And it 
conceivably could. I think my point was really directed to the 
fact that there is certainly a recognition level, and for many, 
a comfort or a confidence level associated with the appearance 
of U.S. currency as it has existed for many, many years.
    And just the fact that we have--we're talking about some 
sort of a disruption or a change, I think could reflect--I 
don't know if it's a lack of confidence, but it would be a 
change. And I think there would be certainly a shift in the 
view by many as to what the status of that currency is, 
worldwide.
    Mrs. McCarthy. I know that more than 60 percent of the 
world's reserve currency is held in U.S. dollars, which 
provides Americans with economic benefits, due to the large 
quantity of American currency held by foreign nations. The 
United States is able to purchase commodities at a lower price 
and borrow money at lower rates than would otherwise be 
possible. So I think that is also a concern.
    If there are no more questions, I want to thank the 
witnesses and the members for their participation in this 
hearing. The Chair notes that some members may have additional 
questions for the witnesses, which they may wish to submit in 
writing. Therefore, without objection, the hearing record will 
remain open for 30 days for members to submit written questions 
to the witnesses, and to place their responses in the record.
    Again, I look forward to working with all of the parties. 
This is where we are all going to be sitting at the table, and 
trying to find the best solution, certainly, for all of us. And 
with that, the subcommittee is now adjourned. Thank you.
    [Whereupon, at 11:41 a.m., the hearing was adjourned.]

                            A P P E N D I X



                             July 30, 2008

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