DALTON, Mass. – Stephen Crane made the paper on which Paul Revere printed the first currency issued by the rebellious American colonies in 1775.

His descendants have been the sole providers of paper for U.S. currency since 1879, and now the sixth and seventh generations of the family are eyeing the world’s latest currency: the euro.

Last month, in its first overseas venture, Crane & Co. acquired the Bank of Sweden’s currency works.

Despite dollar coins, e-mail, credit cards and periodic predictions the paperless office is just around the corner, Crane just keeps rolling.

And the family still makes its currency paper and fine stationery the old-fashioned way – out of cotton.

The Cranes never switched to wood pulp when the cheaper material began attracting other papermakers in the late 1850s. However, the cotton the company uses today comes mainly from recycled denim and the waste products of textile and cotton mills.

“Our products are tied to enduring values. The challenge is how best to combine the old with the new,” said Lansing Crane, chief executive officer, and the sixth generation of the family to head the firm.

Despite heavy promotion, the newest dollar coin hasn’t developed into a threat, said Crane, who remains confident about the staying power of paper money, and the thank-you note.

“Government provides the currency the public demands,” Crane said. “Given a choice, the public prefers paper, because it is easier to handle and a better solution.”

The privately held company, with 1,200 employees in its mills in this Berkshire Hills town and another 300 in Sweden, does not disclose its sales and profit figures.

Crane said the slowdown in the economy has taken a toll over the past 18 months, particularly on the stationery business, which makes up the bulk of its operations. Still, he said, “it’s a very healthy, growing business.”

The company also recently submitted a bid for a new four-year contract to continue providing currency paper to the U.S. government.

Claudia Dickens, a spokeswoman for the Bureau of Engraving and Printing, declined to disclose if there were any other bidders for $200 million contract to be awarded in October. Sometimes old ways come into new favor for new reasons.

“No trees are killed to make the U.S. dollar bill,” said Douglas Crane, who heads the company’s currency division, while his brother, David, is in charge of stationery. The two are nephews of Lansing Crane.

The 19th century Cranes stuck with cotton because they were trying to carve a niche in the high end of the paper market with fancy writing papers for high society and business executives.

These days the process, with its use of reclaimed materials, has proved to be cleaner and more environmentally friendly than wood pulp, with fewer attendant cleanup costs, he said.

For generations, the mix of cotton and linen that the company uses for U.S. bank notes has given strength and a special feel to the nation’s paper money. And it adds a measure of security.

“The majority of counterfeits are still caught by bank tellers handling the currency,” Douglas Crane said. “They become experienced in what it feels like.”

The U.S. dollar, which with recent improvements now lasts on average about 22 months, is the most durable bank note in the world, he said.

The development of computers, scanners and ink jet printers that can easily copy the colors and designs of bank notes has upended the money paper business.

“Until 1991, we were papermakers,” Lansing Crane said. “We provided a nice sheet of paper to the government and they could print any denomination on it they wanted. Now, we are really in the technology business.”

Each denomination is printed on special paper imbedded with an ever-increasing number of colored threads, holographs and other light-catching devices aimed at foiling counterfeiters. It’s the part of the business that came to fascinate Douglas Crane, who majored in pre-med in college with an eye toward bioengineering

“Sure, I thought about doing something else and I looked at a range of different things,” he said. Still, he was captured by the puzzle of transferring new developments from the laboratory to the manufacturing process in a business that has little tolerance for error.

New technology is what drew the family firm to acquire the Bank of Sweden’s bank note works near Stockholm for $15 million.

The former AB Tumba Bruk, now Crane AB, includes a currency printing plant, marking Crane’s first venture into printing money. It also includes a mill that produces paper for the new euro note, with its distinctive holograph strip, as well as the Swedish kroner, which features a similar holograph strip.

The agreement calls for Crane to manufacture and print the kroner through 2005 and the print works could open new markets beyond Sweden with countries looking to buy finished notes, Lansing Crane said. But he admitted the possibilities offered by the euro are what intrigued the family.

“In the long run – and we always look in the long run – the euro is a market you can take part in only by being there,” he said. “The U.S. government will always be our first and best customer, but as an old, family business, we have to stay even with the world.”