Posts Tagged ‘Greenback’

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.

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.

The Color of Money: Why is a Greenback Green?

Monday, February 9th, 2009

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greenbackIn 1929, when the United States Bureau of Engraving and Printing introduced the small-size note, that we currently use today, green pigment was readily available in large quantities.  The color was relatively resistant to physical and chemical changes, and the color was viewed to be psychologically identified with the security and strength of the United States Government.

More importantly, this newly developed ink had protective qualities that could not be easily “lifted” from the note itself, which had been a favorite technique of counterfeiters in the past.  Since the mid-1800’s, it had been customary to print bills in black, with different slight variants of color.  When photographed, the color variants would show only in black, since early cameras could only photograph in black.  Not to be outdone, the counterfeiter soon discovered that they could remove the colored elements from the Bill, photograph the remaining black ink elements, make copies, and then overprint an imitation of the colored parts on the newly made copies.

A new solution was needed, and was quickly developed. The development, as well as the patent purchase for this ink, was by Tracy R. Edson, who later Founded the American Banknote Company, one of the same firms that produced the first currency used by the United States.

The faces of these early notes that were produced under contract were printed with the newly patented green tinted protective ink.

When printing with oil-base type inks, like the new “patent green,” it is not unusual for the color to show through to the opposite side of the sheet.  Therefore, the backs of early notes were printed in a darker shade of green to make the “strike through” of the tint less obvious.

The transition to the Treasury Department’s Bureau of Engraving and Printing was gradual, so the backs of the notes produced there during the intervening period were continued to be printed in green for the sake of uniformity.

Once the Bureau was in full-scale production, there was no reason to change the traditional color, and it was only logical that the practice continue.

Thus, the “greenback” was born!

The Bureau currently uses a technique called “Intaglio Printing,” which involves a revolving plate, filled with the grooves containing the design and wording.  These grooves are filled with ink and then wiped clean on the surface.  The paper is forced with approximately 20 tons of pressure onto the plate, picking up the ink contained within the finely recessed lines and grooves, leaving the surface of the newly printed currency with a slightly “raised” feel, while the reverse has a slightly indented feel.

Thanks to new technology introduced in the last few years, the newly redesigned, recently introduced United States Currency features some new splashes of color on the various denominations, using an “Optically Variable Ink” (or OVI).  This ink allows a shift in color variation when held at different angles.

A copy machine, for example, scans a document at ONE FIXED ANGLE, relative to the bill’s angle when placed on the glass, thus not picking up the color shift.

This ink, produced by a Swiss company called SIPCA, is not readily available and thus aids in deferring counterfeiting.

So, the next time you reach in your wallet and pull out a Greenback, you’ll know why it’s green!

Federal Reserve Notes vs. United States Notes

Wednesday, October 1st, 2008

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united states notesProduced by the Bureau of Engraving and Printing and issued by the 12 Federal Reserve Banks of the Unites States of America in accordance to the Federal Reserve Act of 1913, the Federal Reserve Notes are one of two remaining US paper currency in circulation which are off legal tender today.

Before obtaining the notes, the Federal Reserve Bank must first prove that it owns equal amounts of collateral in value as a guarantee. These are usually in the form of gold certificates, US securities, and other physical assets. This requirement, which was motioned by the United States Congress, is to ascertain that in case of the dissolution of the Federal Reserve System, the liabilities of these notes can be transferred and managed by the United States Government, after first attaining the warranted assets and collateral of the Federal Reserve Banks.

Being first printed in 1914, the Federal Reserve Notes of today are not exchangeable for any form of commodities, even gold and silver, and aren’t secured by anything either. This wasn’t always the case though, as it was redeemable for silver before the year 1964, and gold before the year 1933, both these years being the end of the silver and gold standards respectively. Today, in exception of what the notes will or can buy, it has no obligated value by itself. In simple terms, the Federal Reserve Notes will only buy you all the goods and services backed by the nations economy, a term also known as fiat currency.

Federal Reserve Notes are distributed to commercial banks belonging to the Federal Reserve System, and are issued by the Federal Reserve Banks as and when requested. In order to pay for the Federal Reserve Notes in full, these commercial banks are required to first draw down their accounts with the Federal Reserve Banks in their respective districts.

The other US paper currency which remains as legal tender today are the United States Notes, even though it is no longer placed in circulation since its issuance was discontinued in January 21, 1971, making it obsolete. The United States Notes, interestingly, was also the first paper currency issued in the United States of America, making its debut during the Civil War after it was approved by the Legal Tender Act of 1862.

federal reserve notesThe United States Notes was issued directly by The Treasury Department, under the watchful eyes of the Unites States Government. It was limited to an amount of only $300 million in circulation at any given time, an insignificant figure these days but a magnanimous sum during the Civil War. In prior to the year 1964, the United States Notes, like the Federal Reserve Notes, was also commonly exchanged for silver and gold.

The most significant difference between a United States Note and a Federal Reserve Note is that a United States Note was reassigned into circulation free of interest, or as a bill of credit, whereas the Federal Reserve Note will generate interest to banks and stockholders. These stockholders will then act as a lending agent between the Government and the people.

Another difference between these two types currencies is that the treasury seal and the serial numbers on the United States Notes are printed in red, while these features appears in green on the Federal Reserve Notes. The United States Notes have also been credited with originating the term “Greenback”, as the currency was first printed in a distinctive green reverse, giving birth to the famous moniker that US dollar bill is today known as.

Dollar Bill Nicknames

Friday, September 12th, 2008

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Money roll greenbackThe dollar bill has come a long way. Over the centuries, it has changed hands trillions of times, owned, sold and traded by millions of people, from all walks of life, and travelled the whole world x number of times over. So its no wonder that the dollar bill today has adopted quite a number of nicknames and colloquialisms along its many journeys.

One of the most famous nicknames that the dollar bill has been tagged with is buck. This reference is said to have originated from the fur trade back in the 18th century. Another nickname commonly used until today when referring to the dollar bill is greenback. The name was exclusively applied to the dollar bill during the creation of the Demand Note dollar in the 19th century. Its reference is said to be due to the black and green printing on the back side of the dollar bill, hence greenback! Accredited to Abraham Lincoln, the greenback was used to finance the cost of the American Civil War, up north.

K, is a suffix used to describe the multiple of a thousand dollars. For example, instead of saying eight thousand dollars, one would simply say $8K instead. K, is said to have originated from the first letter of the word Kilo, which is a metric system terminology used to indicate a thousand units. The word, grand, is also another colloquialism frequently used when referring to a multiple of a thousand dollars. People sometimes shorten this designation to the letter, G. For example, 50G would mean fifty thousand dollars. Dollar bills are often referred to by their assigned denominations as well, such as five or ten.

The one dollar bill is sometimes referred to as a “single”, and the two dollar bill a “tom” or a “deuce”. Five dollar bills are sometimes referred to as a “fiver” or “fin”, and even a “five-spot”, whereas the ten dollar bill has been called a “Hamilton”, referring to the portrait of Alexander Hamilton, a “ten-spot”, or a “sawbuck”.

The twenty dollar bill has been given nicknames such as “Jackson,” a “twenty-banger,” a “twomp,” and a “double sawbuck”. Apart from the nickname fifty, the fifty dollar bill has also been referred to as a “half C,” a “half century,” and a “half yard”. A “Benjamin,” a “Benjie,” a “Frank”, a C-note, a Century Note, a “bill”, a “bigface” and even a “large”, are all nicknames given to the one hundred dollar bill.

The dollar bill has also been referred to fondly in different languages. Puerto Ricans and Mexicans living in the US would refer to the dollar bill as peso. Piastre, which is a French word for a unit of currency, is also another moniker used to describe the dollar bill. Mexicans would sometimes refer to the dollar bill as “en inglés” when paying for things with the currency. Coco, another nickname for the dollar bill in Peru, is a pet name given to the portrait of George Washington on the one dollar bill.

Whatever you may call the dollar bill, it is safe to say that it has such a strong influence and an inseparable attachment in our lives that we begin making it our own by giving it labels we identify most closely with. Are there any other nicknames that you’ve heard the dollar bill being called? Please share them with us here.