Accept No Imitations
The campaign against counterfeits, past and present
Part I | Part II | Part III | Part IV
It staggers the imagination to comprehend the extent and ubiquity of counterfeiting during the antebellum years. One estimate in 1862 observed that "out of 1,300 bank note issues, but 100 are not counterfeited," and counted some 5,902 different kinds of bogus bills. Others claimed that fraudulent bills accounted for upward of a tenth, a quarter, or even a half of the paper money in circulation. Many of these fakes went beyond simple imitations. Instead, counterfeiters exploited people’s unfamiliarity with the currency by issuing notes that bore no resemblance whatsoever to the genuine article (spurious notes). Others produced notes with their title, locality, or denomination extracted and a new one put in its place (altered or raised notes). Still others dropped all pretense of authenticity, and arrogated the banking function, producing notes that sounded plausible (from the Merchants’ Bank of Utica, for instance), but which had no parallel outside the counterfeit economy. Such notes, while deemed counterfeit, blurred imperceptibly into yet another category of fraud, the notes of so-called "wild-cat" banks—institutions founded by unscrupulous financiers in remote areas for the express purpose of making it difficult, if not impossible, for the notes to be exchanged for gold and silver. Counterfeiting thus existed on a continuum of fraud where the dividing line between the solid and the sham vanished upon close examination.
A similar wave of cheap and easy-to-use computer hardware and software—color photocopiers and printers, digital scanners, and image manipulation software such as Photoshop—has flooded the market, enabling anyone with a bit of computer expertise and a criminal mindset to make their own money.While the problem of counterfeiting at this time grew out of the diversity of the money supply (something that is no longer an issue), there are more than a few echoes of the past in the present battle against counterfeiting. Take, for example, the growing availability of technologies that can be turned to the counterfeiters’ ends. In the early nineteenth century, new engraving and printing techniques enabled bank-note engravers to produce infinite copies of the plates and dies used in the manufacture of notes, a process known in the bank-note engraving trade as siderography. All the elements of a bank note—the border, the pictures, or vignettes, and the denominations of the bills or names of the banks—could be copied endlessly with perfect fidelity. More than a few counterfeiters never went to the bother of engraving imitations—they could often get copies of the real thing. Add to that the discovery of chemicals and compounds capable of erasing and altering notes, and perhaps most important of all, the invention of photography in 1847, and the ease with which notes could be copied, altered, and otherwise forged grew exponentially between 1800 and 1850.
Fig. 3. Front of a three-dollar bill privately issued by the City Bank of Worcester, Massachusetts, circa late 1850s. Courtesy of the American Antiquarian Society.
And now? A similar wave of cheap and easy-to-use computer hardware and software—color photocopiers and printers, digital scanners, and image manipulation software such as Photoshop—has flooded the market, enabling anyone with a bit of computer expertise and a criminal mindset to make their own money. Like the technological innovations of the past century, this equipment does not require extensive training to use, and is cheap and widely available for use at home, schools, printers’ shops, and a host of other venues.
Fig. 4. Front of a three-dollar bill privately issued by the Asiatic Bank of Salem, Massachusetts, November 1, 1864. Courtesy of the American Antiquarian Society.
The government’s response has been swift, if predictable. Seeing the writing on the wall—and fearing the printing in the wallet—the Treasury Department funded a National Research Council study in 1993 to investigate possible counterfeiting deterrents. The research team put safety features through countless tests, probing for weaknesses, trying to find ways to outwit the latest technology. The ongoing makeover of our money is a product of that first study, and will add about two cents to the cost of producing each note, a cost, the Bureau of Engraving and Printing assures us, that is to be defrayed by interest on government bonds held by the Federal Reserve. Fear not, taxpayers!
