- The art of the Con
The Good Old Days
The fact there the penalty for forging money has
always been severe, but during certain it was worst than others. Forgery of
stamps was put under the category of treason and it was punishable by death.
This was particularly true during the American Revolution because the British
used phony American currency to destabilize the countryâ€™s economy. Fully 1/3
to ˝ of all currency during that period was counterfeit, most of done by British
engravers. At that time, money was issued by each colony and the bills were
overly simplistic. Often they would be printed only on one side and the designs
were uncomplicated making life overly easy for the counterfeiter.
As if that was not bad enough, later the colonies stopped the
money presses and banks took up the responsibility. They were allowed to individually
print money during that period and during that period, there were more than
7,000 banks. Think about the mess, there was no insurance on bank accounts and
banks during that period were all state chartered. Moreover, bank inspectors
had not come onto the scene at this point.
In this situation, we had a state bank that may
have been in dreadful financial position issuing money at its hearts continent
and that money was co-existing with money issued by all of the other banks around
the country. Obviously some of the money issued by some banks was worth more
than that issued by others due to the differing underlying financial condition
of the various banks. The value of the money was really a function of the banks
creditworthiness and the money they issued was based on the bankâ€™s full faith
and credit. Because of the fact that these local banks were really the only
game in town, several ratings services sprang up and they gave some indication
of the how sound various banks were. However, they were really playing the game
by the seat of their pants, because without their own auditors examining the
bankâ€™s books, their reports were more horoscopic than reality based. However,
rating the banks had become a great business and it was the only game in town.
Once a bank went under, every bit of the currency
they had issued became worthless. Of course that lead to another problem, communicates
were almost non-existent and news traveled slowly in those days. No one out
in the field could be certain that the bank that had issued the paper they were
using was in business or not at any given time. Thus, purchasing anything with
this currency was not an easy task. At best, the local merchant would look what
bank the currency was drawn on, how far away it was from his store and then
feel it to see if it felt real. After doing that rain dance, he would look
up the issuing bank in the service that had rated it. More often than not, he
would either rate the bank down; he would only give say 30 cents on the dollar,
credit in his store on that bank or would decline to take it in altogether.
For this reason, coins that had innate value were in great demand. However,
these coins were usually of gold and had a higher value and when you got your
change, you could only hope that it would be acceptable at the next place you
visited. This problem was especially humongous for traveling salespeople, cowpokes
and other that traveled a lot when working.
In a sidebar to the above, the banks that operated further and further away
from where the money was being used was for the most part was an unknown quantity
and there was no real obligation on the part of merchants to treat it as money
in any fashion. This system was hardly workable, but in many cases in early
America, the residents had more confidence in their local bank which had issued
the currency than they had in that issued by the United States Government. They
knew the bankâ€™s president, they knew his family and they prayed with him on
Sundays. This was about the best barometer they could find.
However, that created another problem, the printing
of money was rather rudimentary during that period and local banks did not have
the ability to purchase special dies and unique paper. Thus, when a bank had
a high credit rating and became was good as gold in certain localities, counterfeiting
would then follow closely on its heals. At this time the bank had to police
its own money and by the time that they even discovered a forgery, the counterfeiters
had skipped town and gone on to another bank in a distant location.
I think it was George Washington who said, when
referring to conditions during the Revolutionary War, “it took a wagonload of
money to buy a wagonload of grain.” Now of course you can see why. Paper money
printed by the United States Government did not begin until the 1860s, but mint
officials understood the counterfeiting problem and made the plates of this
paper currency much more intricate. Forgers during this period did not have
photomechanical equipment and could only do their forgeries the “old fashioned
way,” by hand forging. Most did not have either the talent or patience to make
passable bills and counterfeiting in this country stayed relatively static until
just after the panic of 1929. Whatever counterfeiting existed of government
currency was controllable.
However, modern techniques changed all of that and
gave forgers the opportunity to make literally perfect paper money from the
point of view of the engraving, but the problem for them remained within the
paper. The government upped the ante and went holographic. This type of printing
complicated counterfeiters lives even more, however by this time, counterfeiting
had become a big ticket item in crime and countries which had unlimited resources
started to engrave each others currency just in case.
Today, to some degree, the counterfeiting of money is being
replaced by the washing of checks. Why try to imitate the paper when it is a
much easier job to wash all of the characters off a check and start from scratch
with the real thing. Unbelievably, there are over-the-counter chemicals readily
available to the bad guys that can erase all of the components of your check,
if whether it is written by hand or by computer. In many cases the signature
is left intact but that is not a critical element of this type of forgery. Among
the household products that will do this job are acetone, benzene, carbon tetrachloride,
and clear correction fluids as well as many others. What a great way to earn
a little extra money while at home taking care of the house.
Check washing has spread dramatically and has become such an
egregious problem that the government is considering ordering the printers to
use special paper in the same way they do with regular currency. While this
will cause the price of checks to rise dramatically, in the long run it is much
cheaper than the alternative. Worse yet, the government has reported that any
number of post office employees have chosen to act as scouts for the washers
and pilfer envelopes that they know will be containing a large number of checks.
This is most simply accomplished by stealing the monthly statements, which contain
the endorserâ€™s checks for a thirty-day period.
Recently a new technology was discovered that may well be that
for a time, stop counterfeiting in its tracks. The government is very interested
in a technique developed by two New York Doctors in which they hide information
within DNA itself. “The basic idea is to take advantage of the enormous complexity
of the human genome to hide a message that is itself written in DNA. The message
was written as one copy per 30 million strands of human DNA. Itâ€™s a DNA needle
in a DNA haystack and itâ€™s virtually impossible to detect.” Hiding an unbreakable code within
the DNA is similar to what the Germans were doing during the war with their
secret messages. They had found a way to make them literally microscopic and
would encode and entire message in a period. When the person that it was addressed
to received it he had the methodology to blow up the dot and read the message.
The United States for most of the war didnâ€™t even know that this was going on.