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A Brief History of Counterfeiting

Counterfeiting of paper money in U.S. began back in the colonial days. The records of colonial courthouses reveal numerous cases of persons who stood trial for manufacturing or passing counterfeit money. Considering the number of offenders who were never caught, the scope of counterfeiting must have been alarming! And there was a good reason for that: it was easy work. Colonial notes, issued by the various colonies, did not carry the complicated engraving of late federal currency. The bills were mostly of small size, frequently printed on one side only, and bore simple woodcut or engraved designs which could be easily copied by anyone with some skill and the right tools without much trouble. Another plus for counterfeiters was the lack of education on the part of individuals who were accepting the fake notes. It has been estimated that more then half of the notes circulating in certain colonies at any given time were not genuine. Certainly, note-making gave the counterfeiter fewer challenges than producing counterfeit coins, and the evidence could be destroyed much easier and faster, if need be.

Bogus bills were also plentiful in the first half of the 19th century, when currency notes were issued by individual banks. Because of this, so many different notes circulated, each bearing their own designs and symbols, money handlers had great difficulty recognizing counterfeits.

It was presumed that the introduction of national paper currency in the 1860's would put most counterfeiters out of business. This goal was not accomplished. In fact, it did just the opposite. It gave counterfeiters greater encouragement, and while their ratio of success declined, the amount bogus bills reaching circulation actually increased. Of course, the government knew that its notes would be counterfeited. It attempted to reduce counterfeiting as much as possible by using very elaborate designs and fine engraving, since photomechanical copying techniques did not exist then, and counterfeiters were required to hand engrave their plates.

Quantities of bogus notes were regularly confiscated by authorities. Between June 1875 and June 1876 the federal government seized counterfeit currency and coins of a total face value of about $232,000. (It can be assumed that the extensive amount of this money was in notes.) At least as much (and probably more) went undetected. By 1930 it was estimated that about $750,000 worth of bogus bills were in circulation, and the problem was growing at alarming pace. Counterfeiting increased sharply during the Depression.

At this time, the measures taken to fight counterfeiting were quite unlike those of today. The Secret Service and Treasury Department released photographs and details of counterfeit bills to banks, but the public was kept more or less uninformed. It was believed that disclosure of the extent of counterfeiting would only encourage more counterfeiting. This policy changed in 1937 when Frank J. Wilson became head of the Secret Service. Wilson ordered public disclosure of counterfeiters' methods of passing bogus bills. Leaflets were distributed throughout the country to retail merchants and lectures were instituted. A public-education motion picture called "Know Your Money" was also produced. From June of 1941 to June of 1942, only $48,000 worth of counterfeit notes were seizes - meaning that a lot less were being successfully placed in circulation. However, the battle was not won. During the 1950's counterfeiting became a serious menace again, thanks to advanced technology available to counterfeiters, and the average annual seizure of bogus bills exceeded $1,000,000! - The highest in nations's history. But there was also a bright spot - less than 10% of the seized money had gotten into circulation.

Today, counterfeiting is still a prosperous trade. Rashes of fake bills, usually all of the same denomination (face value), will hit on of the major cities and are usually traced to a single source. Modern counterfeits are nearly all photomechanical, and therefore do not carry the mistakes of engraving often found on early efforts. However, they are no less easily detectable, as the paper is not correct and the printing appears dull and lifeless.



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