History - Catching Counterfeiters:
Prior to the 20th century, money in the United States came in an amazing
of different forms. The federal government made little effort to adopt a
standardized currency. Until the Civil War, the United States Mint
concentrated
its efforts on manufacturing gold and silver coins. Government paper
currency
was limited to "fractional currency" (denominations less than a dollar),
Treasury
notes, and postal currency valid for the redemption of postage stamps,
but which was also used as tender.

From Harper's Weekly: "Printing the Queer" - Before
the Secret Service was created in 1865, the Treasury Department relied
upon the U.S. Marshals Service to pursue counterfeiters on a national
basis.
During the Civil War, the government
introduced
"greenbacks," the first national paper currency. Private banknotes and
gold and
silver coins continued to circulate, creating a confusing plethora of
monies.
Individual banks issued their own currency, called banknotes, in all
denominations. Banknotes were only as solid as the banks which issued
them.
Since few banks of the period were actually sound. this paper currency
varied in
true value. The situation worsened considerably when President Jackson
effectively destroyed the domination of the Second Bank of the United
States in
the early 1830s. Banks sprouted across the country, each issuing its own
currency, each competing for business, and none regulated or held to
standard
practices.
Americans took their chances dealing with these banks, for they had no
insurance for their deposits, no government control over how the banks
did their business. The frequent recessions and depressions of the
period wiped out many fortunes, large and small, leaving in their wake a
profound distrust of bankers and banks, banknotes and paper currency.
Gold and silver alone retained their true value and people tended to
hoard these precious metals as much as possible.
Counterfeiters found their paradise. Over a thousand banks issued their
own notes, a cornucopia of choices for anyone who wanted to forge his
own currency. By the 1860s, an estimated one-third of the currency in
circulation was counterfeit. Retailers subscribed to weekly papers
showing drawings of the latest counterfeits, much like, in the late 20th
century, store clerks checked lists of credit cards for bad numbers.
Continued: Page
One | Two |
Three
| Four |