A Counterfeiter's Paradise (50 page)

236, Treasury Secretary Salmon

Chase’s national banking idea: Hammond,
Sovereignty and an Empty Purse
, pp. 285–292, and Frederick J. Blue,
Salmon P. Chase: A Life in Politics
(Kent, OH: Kent State University Press, 1987), pp. 157–159. As Chase acknowledged, national banking would give “little direct aid” to the war effort right away; “the constitutional supremacy of the nation over states and citizens” provided the real impetus for the measure; see Hammond,
Sovereignty and an Empty Purse
, p. 292.

236–237, The secretary’s stubbornness

Abraham Lincoln had believed in the necessity of a national currency since 1839, when he gave a speech defending the Bank of the United States: “no duty is more imperative on [the federal] government,” he said, “than the duty it owes the people of furnishing them a sound and uniform currency”; see Hammond,
Sovereignty and an Empty Purse
, pp. 24–25. As a result, Lincoln energetically supported Chase’s national banking measure. Republican opposition: ibid., pp. 296–297, 303–309.

237, To get the legislation

Chase’s campaign: ibid., pp. 293–295, and Blue,
Salmon P. Chase
, pp. 159–160.
“Without it…”:
Hammond,
Sovereignty and an Empty Purse
, p. 293.

237–238, Chase’s persistence could

Sherman’s background: Allan Burton Spetter, “Sherman, John,”
American National Biography Online
, February 2000,
http://www.anb.org/articles/05/05-00704.html
. For Sherman’s speeches, see John Sherman,
Selected Speeches and Reports on Finance and Taxation, From 1859 to 1878
(New York: D. Appleton, 1879), pp. 32–79;
“You cannot prevent…”
appears on p. 42.

238, Sherman’s use of Jefferson

Sherman’s strategy: Hammond,
Sovereignty and an Empty Purse
, pp. 300–301, 326–327.

238–239, The Civil War

“accursed heresy of…”:
New York Times
, February 3, 1863, quoted ibid., p. 326.
“become inseparably united…”:
New York Times
, February 2, 1863, quoted in Mihm,
A Nation of Counterfeiters
, p. 333.
“The policy of this country…”:
Sherman,
Selected Speeches and Reports on Finance and Taxation
, p. 70.

239, Between Sherman’s rhetoric

The bill passed the Senate 23 to 21, and the House 78 to 64; see Hammond,
Sovereignty and an Empty Purse
, pp. 328, 332. Sluggish growth of national banks and tax on state banknotes: ibid., pp. 345–347. The National Currency Act was later superseded by a revised version of the law, passed June 3, 1864.

239–240, The United States emerged

Design and printing of national banknotes: Mihm,
A Nation of Counterfeiters
, pp. 335–338.

240, Counterfeiters felt the

Impact on counterfeiting: ibid., p. 347.

240–241, This was evidently

Incompetence of local authorities and U.S. marshals in tackling counterfeiting: David R. Johnson,
Illegal Tender: Counterfeiting and the Secret Service in Nineteenth-Century America
(Washington, DC: Smithsonian Institution, 1995), pp. 40–41, 85–86, 109.

241, Lafayette Curry Baker

Baker’s physical appearance: Jacob Mogelever,
Death to Traitors: The Story of General Lafayette C. Baker, Lincoln’s Forgotten Secret Service Chief
(New York: Doubleday, 1960), p. 17, and J. H. Harris, “Introduction,” in Lafayette Curry Baker,
History of the United States Secret Service
(Philadelphia: published by the author, 1867), p. 20. Baker’s San Francisco days and early espionage career: Mogelever,
Death to Traitors
, pp. 29–80.

241–242, Northern intelligence was

Union intelligence confusion: Johnson,
Illegal Tender
, p. 67, and Andrew,
For the President’s Eyes Only
, pp. 16–17.

242, In early 1862

Rise of the National Detective Police: Mogelever,
Death to Traitors
, pp. 85–95, 109–117, and C. Wyatt Evans, “Lafayette Baker and Security in the Civil War North,”
North and South
11.1 (September 2008), pp. 44–51. Treasury investigation: Mogelever,
Death to Traitors
, pp. 248–278; Ernest B. Furgurson,
Freedom Rising: Washington in the Civil War
(New York: Knopf, 2004), pp. 292–293; and Baker,
History of the United States Secret Service
, pp. 310–327. After the war, a woman named Loreta Janeta Velazquez published a memoir in which she claimed to have been a Confederate double agent in Baker’s employ; among other things, she said Baker used counterfeit Confederate currency to fund covert activities in the South. It’s still unknown whether her account is a fraud; see Tremmel,
A Guide Book of Counterfeit Confederate Currency
, pp. 72–84.

242–243, Baker had no scruples

Baker’s curtained coaches: Mogelever,
Death to Traitors
, p. 117.
“Baker became a law…”:
Lucius Eugene Chittenden,
Recollections of President Lincoln and His Administration
(New York: Harper & Brothers, 1904 [1891]), p. 346.

243, Whatever his vices or virtues

Baker’s innovations: Mogelever,
Death to Traitors
, p. 111. Counterfeiting raids: Mihm,
A Nation of Counterfeiters
, p. 343, and
New York Times
, August 11, October 9, and October 14, 1864.

243–244, When the prisoners

Old Capitol Prison: Curtis Carroll Davis, “The ‘Old Capitol’ and Its Keeper: How William P. Wood Ran a Civil War Prison,”
Records of the Columbia Historical Society, Washington, DC
, vol. 52 (Washington, DC: Historical Society of Washington, DC, 1989), pp. 207–208, 212–214.

244, The prison’s superintendent

Wood’s appearance and character as warden: ibid., pp. 211–212, 214–219.
“strange compound…”:
from the diary of Catherine V. Baxley, a prisoner of Wood’s, quoted ibid., p. 234.

244–245, Wood liked to let

Wood’s interrogations: ibid., pp. 220–222, and Mihm,
A Nation of Counterfeiters
, pp. 341–342.

245, By questioning the

Wood’s path to the Secret Service: Mihm,
A Nation of Counterfeiters
, pp. 344–346, and Johnson,
Illegal Tender
, pp. 70–71.

245–246, This wouldn’t have been

Obstacles faced by the Secret Service and Wood’s solutions: Johnson,
Illegal Tender
, pp. 72–77.

246–247, Wood absorbed these

Putting counterfeiters on the payroll: ibid., pp. 122–124, and Mihm,
A Nation of Counterfeiters
, p. 354. Criminal background of Secret Service operatives and questionable methods: Johnson,
Illegal Tender
, pp. 76–77.

247, Despite his men’s

Arresting more than two hundred counterfeiters: Johnson,
Illegal Tender
, p. 76. Wood’s analysis of the national counterfeit market: ibid., pp. 129–132. Extensive files on counterfeiters: Mihm,
A Nation of Counterfeiters
, p. 347.

248, In 1867, Wood

Raid: Johnson,
Illegal Tender
, p. 132. Backlash to Wood’s tactics: ibid., pp. 156–157.

248, That summer, Wood

Wood’s defense of Brockway:
New York Times
, June 27, 1867.
“We have thus…”:
New York Times
, July 2, 1867. Indignant editorial:
New York Times
, June 28, 1867.

249, Wood made halfhearted

Secret Service’s first handbook: Johnson,
Illegal Tender
, pp. 77–78. Gradual rehabilitation of the agency: ibid., pp. 79–108, 114–115. Counterfeit currency accounting for one-third and one-half of money supply: Philip H. Melanson with Peter F. Stevens,
The Secret Service: The Hidden History of an Enigmatic Agency
(New York: Carroll & Graf, 2002), p. 4. Less than one-thousandth of one percent:
New York Times
, January 29, 1911, and Mihm,
A Nation of Counterfeiters
, p. 373.

249, Wood’s aggressive leadership

Crisis of confidence among counterfeiters and tougher sentencing: Johnson,
Illegal Tender
, pp. 135, 140, 149. Decline of counterfeiting industry: ibid., pp. 174–180.

250, The national notes

Campaign against toy money and
“Securities and Coins…”
: ibid., p. 177.

CONCLUSION

252–253, While the federal government

Regular panics: Wesley C. Mitchell, “Business Cycles,” in National Bureau of Economic Research,
Business Cycles and Unemployment: Report and Rec-ommendations of a Committee of the President’s Conference on Unemployment
(New York: McGraw-Hill, 1923), pp. 5–6. The Panic of 1907 and the founding of the Federal Reserve: Kenneth Weiher,
America’s Search for Economic Stability: Monetary and Fiscal Policy Since 1913
(New York: Twayne, 1992), pp. 19–22, and William G. Dewald, “The National Monetary Commission: A Look Back,”
Journal of Money, Credit and Banking
4.4 (November 1972), pp. 930–935.

253, The architects of the Federal

The Fed and the money supply: Weiher,
America’s Search for Economic Stability
, pp. 22–23, and Liaquat Ahamed,
Lords of Finance: The Bankers Who Broke the World
(New York: Penguin Press, 2009), pp. 11–15.

253–254, The United States had

Congress passed the Gold Standard Act in 1900, legally cementing the gold standard that had been effectively in place since 1879. The struggle over greenbacks and the gold standard: Stephen Mihm,
A Nation of Counterfeiters: Capitalists, Con Men, and the Making of the United States
(Cambridge, MA: Harvard University Press, 2007), pp. 363, 369. The Federal Reserve Note: Arthur L. and Ira S. Friedberg,
Paper Money of the United States: A Complete Illustrated Guide with Valuations
, 18th ed. (Clifton, NJ: Coin & Currency Institute, 2006), p. 126.

254, The Depression severed

Roosevelt’s monetary policies: Lester V. Chandler,
American Monetary Policy, 1928–1941
(New York: Harper & Row, 1971), pp. 272–295, and Weiher,
America’s Search for Economic Stability
, pp. 79–82. Nixon closing the gold window: Daniel Yergin and Joseph Stanislaw,
The Commanding Heights: The Battle Between
Government and the Marketplace That Is Remaking the Modern World
(New York: Simon & Schuster, 1998), pp. 62–64.

254, By 1971, the government

Number of dollars held overseas: U.S. Department of the Treasury,
The Use and Counterfeiting of United States Currency Abroad
, pt. 3 (Washington, DC: U.S. Government Printing Office, September 2006), p. 9.

255, As the dollar has become

Counterfeiting in Latin America, Colombia, and Peru: U.S. Department of the Treasury,
The Use and Counterfeiting
, pp. 60–65. Decline of Colombian counterfeits and rise of Peru: Josh Meyer, “The Nation; Fake Dollars from Peru Trouble U.S.; Millions in Counterfeit Notes Have Been Seized in the Last Year,”
Los Angeles Times
, September 13, 2009, and “Printing Money; Crime in Peru,”
Economist
, May 9, 2009.

255, The most deceptive

North Korea and the supernotes: Stephen Mihm, “No Ordinary Counterfeit,”
New York Times Magazine
, July 23, 2006; Dick K. Nanto, “North Korean Counterfeiting of U.S. Currency,” U.S. Congressional Research Service (RL 33324), June 12, 2009; and Bill Gertz, “N. Korea General Tied to Forged $100 Bills; Report Details ‘Supernotes,’”
Washington Times
, June 2, 2009.

255–256, Overall, counterfeit currency

Amount of counterfeit currency in circulation: U.S. Department of the Treasury,
The Use and Counterfeiting
, p. 75. New security features of 1996 notes: Mihm, “No Ordinary Counterfeit.” New $100 bill: “U.S. Government Unveils New Design for the $100 Note,” Press release from the Department of the Treasury, the Federal Reserve Board, and the U.S. Secret Service (April 21, 2010),
http://www.newmoney.gov/media/release_04212010.htm
; and Jeannine Aversa and Martin Crutsinger, “Government goes high-tech to redesign $100 bills,” Associated Press, April 22, 2010.