Archive for the ‘history of’ Category

A small word called tax

Thursday, March 12th, 2009

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Filing taxes is something that is dreaded by the common man every year. However it seems our ancestors would be as dreadful as we are since the history of tax can be traced to as long back as 3000 BC in ancient Egypt. Tax was historically collected from the people in the form of a percentage of the crop yield, and this had to be handed over to the Pharaoh. Taxes have evolved over the years, and in modern taxation systems, tax is solely collected in the form of money, and is usually performed by a government appointed agency.

While the collection of tax has always been debated, funds collected by the taxation process are used for various purposes mainly for providing greater benefits and improve the level of basic services such as water, energy and waste management for the people. The rate of tax is fixed by the government, but can be increased depending on the economic condition of a nation. During the eighteenth century, England was at war, and the tax burden increased dramatically by 85% over this period.

In the modern society, taxes can be seen everywhere and they have become a part of life. With the introduction of the Value Added Tax (VAT) in 1954, all commercial activities were tagged with the tax label, and the consumer had to pay a tax for any commodity that he or she buys. History however has seen the weirdest of tax schemes. In Britain, a tax was imposed on windows by William Pitt, as it was considered to be a luxury possession. Nero the Roman Emperor taxed urine, as it was used as a raw material for a number of chemical processes. Peter the Great, the czar who modernized modern Russia is said to have introduced soul tax, for the maintenance of armed forces.

Tax havens evolved as a direct economic response to the principle of taxes, as places where taxes were levied at an extremely low rate or not levied at all. Tax havens can be traced to ancient Greece, where sea traders deposited foreign goods in Greek island to evade the two percent tax imposed by Athens. The oldest tax haven is said to be the Channel Islands dating as far back as 1006 A.D, although economic commentators suggest that the first “true” tax haven was Switzerland. Most European governments had to pay for reconstruction costs for damages suffered during the World War I using the taxpayer’s money, but Switzerland’s neutral policy during the war allowed it to maintain a low level of tax.

Evasion of tax is considered to be a crime, and the non-paying entity or individual can be subject to civil penalties such as fines or forfeiture or criminal penalties such as incarceration. In spite of this, individuals and companies try to evade tax, considering it to be a burden on their income. Individuals have tried various means to evade tax, with the strangest being a person trying to claim his dog as a dependent. Yet another instance saw a man trying to save tax for the money that he had made from donating sperms, claiming that he had been depleted.

With economies on a downturn, tax is becoming the focal point of all discussions on reviving shattered economic conditions. Council taxes have been increased in some places to bring some money in the exhausted council coffers, and Japan is considering cutting tax rates to boost economic demand. Tax has never been so much in the limelight, and it is becoming increasingly clear that this small three letter word will play a big role in the months to come.

The $2 and $100 Bills-The Rarer Currencies

Thursday, March 12th, 2009

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The first two dollar notes were called United States Notes or “Legal Tenders”. They were issued by the Federal Government in 1862, featuring a portrait of the first Secretary of the Treasury, Alexander Hamilton. In 1869, Thomas Jefferson’s portrait started being used and the same portrait has continued to be used for all two dollar United States Notes and all two dollar Federal Reserve Notes. Monticello was first featured as the vignette on the back of the two dollar United States Note in 1928. Monticello was Thomas Jefferson’s estate in Virginia.

In 1976, in celebration of the United States bicentennial, a two dollar Federal Reserve Note was introduced. Thomas Jefferson’s portrait was still on the face but Monticello was replaced on the back by a vignette of the signing of the Declaration of Independence. This painting of the Declaration of Independence was painted by John Trumbull. The original portrayed forty-seven people, 42 of whom were signers out of the fifty-six on the Declaration of Independence. Because of a limited amount of space on the two dollar note, five of the forty-seven were left off. The most recent printing of the two dollar note was in 2003 and at this time there are no plans to redesign it.

The first one-hundred dollar notes were also called United States Notes or Legal Tenders. They were issued by the Federal Government in 1862 and they featured a vignette of an American eagle. Benjamin Franklin first had his portrait on the one hundred dollar note in 1914, the first series of these Federal Reserve Notes. The one hundred dollar note is the largest denomination of Federal Reserve Notes that are currently issued in the United States. The life span of a one hundred dollar Federal Reserve Note is 89 months on average. This is much longer than other denominations of currency since this is rarer and circulated less than they are.

In 1996, the one hundred dollar Federal Reserve Note featured large portraits, watermarks and color-shifting ink. The notes also included micro-printing, which is lettering so small that it is hard to replicate, on the front of the note. “USA 100” is written in the numbers located in the lower left corner and “United Sates of America” is in one line on the left lapel of Benjamin Franklin’s coat.

Since 1928, the vignette on the back of the one hundred dollar note has featured an engraving of Independence Hall, the former State House of Pennsylvania, in Philadelphia. Independence Hall is often called the birthplace of our Nation because inside is where the Declaration of Independence was signed and where the Constitution of the United States was drafted. It has been said that the man and women in front of the hall close to the building are embracing but there is no record of that. The hands on the clock on the hall are set to 4:10. There doesn’t seem to be any explanation as to why this time was chosen.

The History of the Bureau of Engraving and Printing

Monday, March 9th, 2009

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The Bureau of Engraving and Printing can be traced back to August 29, 1862. It was a single room in the basement of the Treasury Building. Here, two men and four women separated and sealed $1 and $2 US notes which had been printed by private bank note companies. Now, there are about 2,500 employees working out of two buildings in Washington D.C. and a new building in Fort Worth, Texas. On April 26, 1991, the Western Currency Facility in Fort Worth had its grand opening.

Emma S. Brown was the youngest employee every hired by the Bureau of Engraving and Printing. She started working in 1865 when she was almost 11 years old. She had a physically –handicapped mother and an older brother who was the main bread winner for the family. He was a soldier with the 188th Pennsylvania Volunteers and was killed in action during the siege of Petersburg in July, 1864. Emma Brown’s Congressman gave her a political appointment to the Bureau of Engraving and Printing in the examination division. Ms. Brown was forewoman of the trimming section for 59 years before retiring on April 24, 1924.

1877 brought the need for a Plate Printer force which included a large number of experienced firemen who were formed into a Fire Brigade for the protection of the Bureau of Engraving and Printing property. Electric lighting was introduced to the Bureau in 1888; six years before a majority of the Bureau positions were placed under Civil Service. By 1908, all of the positions were under Civil Service. The printing of revenue stamps was taken over by the Bureau in 1876 and in 1894 they began printing postage stamps. During World War II, the Bureau overprinted stocks of regular currency notes that had certain distinguishing, identifying features which were shipped over for use in the Hawaiian Islands.

The Bureau of Engraving and Printing has printed currency for the governments of the Republic of Cuba, Siam, Korea and the Philippines. The Bureau was reimbursed by each government for all the work that was done. Denominations ranging from 1/5 cent Wine Stamp all the way to the $100,000,000 International Monetary Fund Special Notes were produced by the Bureau. There were many discrepancies in the stamps and currency. This opened an investigation and a tremendous amount of time into the research. Samples include:

• A man who insisted the portrait of Lincoln on the $5 bill must have been printed in reverse because Lincoln parted his hair on the left side, not the right. After much correspondence, several trips to museums and the Smithsonian Institute including a study of the Lincoln death mask all revealed that Lincoln’s mole and part were indeed on the same side of his face, on the right.

• On the Pony Express Stamp of 1941, many have insisted that the wrong saddle was on the pony.

• Some have said that on the Gold Star Mother Stamp of 1948 showed a Russian star.

• The Little America Stamp of 1933 had the continents on it that some would argue were misplaced.

• One man insisted that the word “Anniversary” on the 1952 Gutenberg Bible Stamp was misspelled.

In each of these occurrences and many more, the Bureau of Engraving and Printing proved conclusively that the designs depicted were correct.

Currency Counterfeiting - A global nemesis

Sunday, March 8th, 2009

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The history of counterfeiting traces itself to the history of money itself. Counterfeiting had started when money was in its most primitive stages. The ancient Greeks and Romans resorted to shaving down legal coins, reducing their value, and use the shavings to cast new coins. The advent of paper money led to the modern day counterfeiting. With potential ill–effects being as huge as bringing a whole nation down, counterfeiting has proved to be a nemesis among nations, and the punishment for this crime can be as extreme as death.

Apart from being a human crime, counterfeiting by itself has been used among various nations to destabilise the economy of an entire nation. Governments have used it to a great degree of success by overflowing the target nation with fake bank notes, causing the real value of the currency to crash. During, the Revolutionary War, the Government of England resolved to counterfeit to reduce the value of the Continental Dollar. The United States government took a similar course but the fake Confederate currency they produced was of a superior quality as compared to the real thing.

The most professional campaign of counterfeiting was conducted by the Germans in World War II. The Germans manufactured very convincing paper, and used the professional expertise of prisoners held captive in Sachsenhausen concentration camp, to produce the fake currency. The Bank of England managed to obtain some bogus German currency, and found the forgeries so good that it is said that the only way to distinguish it from the real thing was that the forged one was better.

In the modern days, counterfeiting has been used to promote and sponsor terrorism. The Central Bureau of Intelligence (CBI) in India has reported that rupee notes are supplied by the Pakistan government press, free of cost to Dubai-based counterfeiters who, in turn smuggle it into India. This money is later used for funding terrorist activities inside India, and is also reported to be the main source of funding for the recent Mumbai blasts.

With advances in technology, the quality of counterfeiting has improved drastically, making it difficult to tell the real thing apart from its counterfeit. It is claimed that the U.S dollar bills produced in North Korea, are the finest counterfeit banknotes, and are called Superdollars because of their high amount of detail and quality. However, with the advent of the Euro, there has been a substantial decrease in the amount of forged U.S currency.

Counterfeiters use various measures to produce replicas of the original currency. Devices can range from a simple colour photocopier to much technologically advanced printing techniques like those used at the national mint depending on the level of accuracy and detail desired. Counterfeiting has become more of a bother now than ever before as it is easier for small-time operators to pull it off. All that is required is a high-resolution scanner, a high-end colour printer and a personal computer system.

Considering the nemesis that counterfeiting has on the economy, the governments of various nations have taken a number of steps to combat it. Techniques like making intricate designs, using ink patterns that are hard to duplicate have been employed. US greenbacks were traditionally printed in two inks. Many nations print engraved money, which use specially engraved plates that are very difficult to replicate. Some countries also resort to coming up with new designs frequently.

Statistics for counterfeiting remain uncertain, as it is difficult for most people to recognize a forged currency unless they are trained to do so. Some estimates place the proportion of bogus currency in Western Europe at about 3%, but the ratio is much higher in less developed countries. The usual target for counterfeiting is the $100 bill, and many of the forgeries are very good.

With so many techniques applied by various nations, the truth is that until money is being printed, counterfeiters will exist.