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Counterfeit money

Imitation currency intended to defraud

  • 18 min read
  • 7 chapters

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With the introduction of paper money, counterfeiting as a whole has also changed. While early forms of money were more vulnerable to replication, now with modern tools counterfeiters have evolved into using things such as high-resolution scanners. Today, some of the most realistic counterfeit banknotes are called Superdollars because of their high quality and imitation of the real US dollar. There has been significant counterfeiting of Euro banknotes and coins since the launch of the currency in 2002, but considerably less than that of the US dollar.

Counterfeiting has numerous effects including reduction in the value of legitimate money; an increase in prices (inflation) as a result of an increase in money being circulated in the economy—an unauthorized artificial increase in the money supply; a decrease in the acceptability of paper money; and losses, when traders are not reimbursed for counterfeit money detected by banks, even if it is confiscated. Banks and law enforcement across the globe work to prevent and detect counterfeit currency, while also helping to educate the general public on how to identify fakes.

History

Counterfeiting has occurred so frequently in history that it has been called "the world's second-oldest profession". Coinage of money began in the region of Lydia in Asia Minor around 600 BC. Before the introduction of paper money, the most prevalent method of counterfeiting involved mixing base metals with pure gold or silver. A common practice was to "shave" the edges of a coin. This is known as "clipping". Scraps of precious metals collected in this way could be melted down and even used to produce counterfeit coinage. A fourrée is an ancient type of counterfeit coin, in which counterfeiters plate a base-metal core with precious metal to resemble the solid-metal counterpart.

The Chinese government issued paper money from the 11th century AD. In the 13th century, wood from mulberry trees was used to make banknotes. To control access to the paper, guards were stationed around mulberry forests, while counterfeiters were punished by death.

In the 13th century, Dante Alighieri wrote of Mastro Adamo as a counterfeiter of the Florentine fiorino, punished by burning at the stake. The English couple Thomas and Anne Rogers were convicted on 15 October 1690 for "Clipping 40 pieces of Silver". Thomas Rogers was hanged, drawn, and quartered while Anne Rogers was burnt alive. Evidence supplied by an informant led to the arrest of the last of the English coiners, "King" David Hartley, who was executed by hanging in 1770. The extreme forms of punishment were meted out because counterfeiting was regarded as a form of treason against the State or Crown rather than as a simple crime.

In the late-eighteenth and early-nineteenth centuries, Irish immigrants to London acquired a reputation for the production and spending (uttering) of counterfeit money, while locals were more likely to participate in the safer and more profitable forms of currency crime, which could take place behind locked doors. These include producing the false money and selling it wholesale.

In the British colonies in North America, Colonial paper currency printed by Benjamin Franklin and others often bore the phrase "to counterfeit is death". Counterfeiting in the early United States became so prevalent by the early-nineteenth century that contemporary accounts like those from author John Neal claimed that as much as half of the US currency in circulation was counterfeit. By the 1830s, American newspapers began listing instructions for identifying counterfeits. Because currency was issued by individual banks, approximately 5,400 types of counterfeit bills circulated in the US by the 1860s.

States have used counterfeiting as an element of warfare. The idea involves overflowing an enemy economy with fake money so that the real value of the money plummets. During the Seven Years' War of 1756 to 1763, Prussia disrupted the economy of the Polish–Lithuanian Commonwealth (ruled by King Augustus III, simultaneously Elector of Saxony) by minting counterfeit Polish coins. Great Britain used counterfeit money during the American Revolutionary War of 1775 to 1783 to reduce the value of the Continental Dollar. The counterfeiters working for the British became known as "shovers", presumably for the ability to "shove" the fake currency into circulation. Two of the most well-known shovers for the British during the Revolutionary War were David Farnsworth and John Blair. They were caught with 10,000 dollars in counterfeits when arrested. George Washington took a personal interest in their case and even called for them to be tortured to discover further information. They were eventually hanged for their crimes.

During the French Revolution, counterfeiting assignats (the currency France issued backed by confiscated Church lands) became a major effort by Britain. In an effort managed by William Playfair under the sponsorship of Secretary at War William Windham and Secretary of War Henry Dundas, the British produced paper for counterfeiting at Haughton Castle and several other mills. Although questioned as a rumor for many years, the British operation was confirmed in the 1990s when Northumberland antiquarians discovered paper molds with the French watermark at Haughton Castle. A mold with the watermark of Playfair's Original Security Bank was found nearby, confirming his role in the operation.

During the American Civil War, private interests on the Union side heavily counterfeited the Confederate States dollar, often without the sanction of the Union government in Washington. The Confederacy's access to modern printing technology was limited, while many Northern-made imitations were printed on high-quality banknote paper procured through extra-legal means. As a result, counterfeit Southern notes were often equal or even superior in quality compared to genuine Confederate money.

In 1834, counterfeit copper coins manufactured in the United States were seized from several ships with American flags in Brazil. The practice appeared to end after.

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