Posts Tagged ‘Civil War’

The History of the Paper Dollar

Saturday, February 28th, 2009

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The Massachusetts Bay Colony was the first of the thirteen colonies to issue permanently circulating banknotes in 1690. The reason behind this was because the paper could be more readily printed and circulated than gold coin. Many of these early bills were marked “Tis Death to Counterfeit.” In the early 1700s, each of the thirteen colonies had issued their own banknotes called “colonial script.” 1789 brought about the First Band of the United States which issued fixed denominations and printed banknotes until 1811 when it closed. From 1816 to 1841, the (you guessed it) Second Bank of the United States took on the responsibilities of printing banknotes.


The civil war, in 1861, needed to be funded with money that there just wasn’t enough of. In 1862, under Abraham Lincoln, the demand notes were issued, taking the place of interest bearing currency. Some necessities were added and changed in the next few years in order to stop counterfeiters. The new “Greenbacks” had an engraved Treasury seal and red and blue fibers in the paper which made them (at the time) very difficult to counterfeit which would cost the banks more money. Gold certificates were also issued against gold coin and bullion and were still in circulation until 1933 as well as silver certificates being issued for silver dollars until 1957. 1865 brought on the need for a Secret Service to police and control counterfeiters. How much was that really needed and how much of the US’s money was counterfeit? Oh only about one-third!


The one dollar United States Note was redesigned with a portrait of George Washington in the center and a vignette of Christopher Columbus. The back of the note also featured green and blue tinting. In 1880 the red floral design was added around the words “One Dollar” and “Washington D.C.” From 1890 to 1899 the gold and silver certificates were redesigned repeatedly in order to continue to make them harder and harder to be counterfeited. In 1910 the Department of the Treasury’s Bureau of Engraving and Printing took on all currency production functions including engraving, printing and processing. The Federal Reserve Act of 1913 created the Federal Reserve System. This means that the Federal Reserve became the central bank, regulating the flow of money. The Federal Reserve also became, to this day, the only authorized entity to issue Federal Reserve Notes (also known as, The Dollar(s)) which are the only U.S. currency produced and 99% of all currency in circulation!


“In God We Trust” No matter your religion, you know this phrase. This phrase was required by Congress in 1955 to be on every piece of currency and to this day, it still is. The last major change that was made was the microprinted security thread which was first introduced in 1990. It started with the $100 bills and the $50 bills, then eventually was introduced into the $20s, $10s, $5s, and $1s. Take a look at the money in your wallet. Now you know part of the long road traveled it took to get there.

United States Secret Service’s Role in Currency Counterfeit Prevention

Monday, December 15th, 2008

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US Secret ServiceMost ordinary U.S. citizens might not associate the Secret Service with our Nation’s currency. In fact, perhaps one of the best known services of the United States Secret Service is protecting our nation’s leaders, especially the President. However, the Secret Service plays a vital role in protecting our currency and in turn, our economy. Currently a division of the United States Department of Homeland Security, the Secret Service is responsible for two very distinct areas of responsibility. First, and notably the most well-known, Secret Service Agents serve in protective roles as to preserve the safely of our nation’s leaders and their families. Second, and less publically noted, the Secret Service is responsible for the prevention and investigation of crimes involving US currency and treasury bonds.

In 1865, the U.S. Secret Service was first established for the specific purpose of combating the counterfeiting of money.  At the time, it was reported that one-third to one-half of all the currency in circulation in the U.S. was counterfeit. In fact, in the midst of the Civil War, with somewhere around 7,000 different bills in circulation, it became almost impossible to detect a counterfeit bill from a legitimate one. Therefore, the United States Secret Service was born in order to prevent any further damage to the nation’s struggling economy.  

In 1967, the agency took on additional responsibilities which included investigating those suspected of perpetrating frauds against the government and also served other role of investigating a broad range of crime areas including everything from robberies, murders, the Ku Klux Klan, non-conforming distillers, land fraud, smugglers all the way to illegal gambling.  

Today, the Secret Service is now a division of the Department of Homeland of Security and although the roles assumed by the Secret Service in its early days have since been passed on to other agencies including the FBI, ATS, and IRS, the Secret Service retains primary jurisdiction over all areas of counterfeit U.S. currency and treasury notes as well as its special duty of protecting the president, first lady, and other U.S. dignitaries. The agency also tracks suspicious individuals and steps in to access local crimes when necessary.

One of the oldest crimes in our nation’s history is counterfeit money. Although today’s money has many more preventative measures in place to protect our currency, counterfeiting remains a very real danger for our nation’s economy. In fact, due to modern technologies available to thieves, such as photographic and printing equipment, it has become easier and easier for thieves to commit counterfeiting fraud, therefore, requiring the Secret Service in combination with the U.S. Mint to enact more and more security features into our nation’s currency.

Due to the nature of its role, many details surrounding the Secret Service are kept “secret”. Many of the agents’ identities are kept confidential for their own protection as well as the protection of their job duties. In fact, even the wives and families of some secret service agents do not know their husbands and fathers as Secret Service Agents. Whereas, many agencies require uniforms of their agents, the Secret Service uniforms are designed to blend in with the role they are performing and can range from tuxedos to business suits to jeans.

In conclusion, the United States Secret Service plays a crucial role in the safety of our nation. It protects some of the most important persons in our nation all the way from the President and First Family, to other political figures and embassies. However, its role in protecting our currency is perhaps as crucial to our economy as any other role assumed by the agency.