The Bureau of Printing and Engraving issues money to the Federal Reserve Banks as needed. The process of creating money creates seignorage, which is in essence a profit to the government equal to the value of the money created minus its production costs.. . The government has three ways of getting money, borrowing, seignorage and taxation. It avoids using seignorage, except trivially, because it is highly inflationary and can have terrible consequences for the economy and the Republic.. . So, when money wears out, the Federal Reserve puts in an order for additional money from the Treasury. Additionally, as the existing supply of money begins to show strains as insufficient due to the growth of the economy, pressure is put on the Treasury by the banking system to create more money through seignorage to keep enough in peoples pockets to keep the system functioning. If money becomes short, banks pay higher interest rates in order to have enough money to function.