currency

This page considers forgery relating to currency.

It covers -

• introduction
• state forgery
• political counterfeiting
• responses

Questions about exchange and currency in the digital environment are explored in our Money guide.

     introduction

For many people forgery equates to counterfeiting. In 2003 criminals try to be cute with colour photocopiers; two millennia ago they forged their own coins or 'improved existing currency. Pre-industrial forging is discussed in Classical Deception: Counterfeits, Forgeries and Reproductions of Ancient Coins (London: Kraus 2001) by Wayne Sayles.

The invention of paper currency - banknotes, bills of exchange, cheques - offered new opportunities. Randall McGowen suggests that one-third of all the capital statutes passed in the UK between 1700 and 1830 dealt with forgery. That is illustrated in The Perreaus and Mrs. Rudd: Forgery and Betrayal in Eighteenth-Century London (Berkeley: Uni of California Press 2001) by Donna Andrew & McGowen, supplemented by his 'Making the ‘bloody code’? Forgery legislation in eighteenth-century England' in Law, Crime and English Society, 1660–1830 (Cambridge: Cambridge Uni Press 2002) edited by Norma Landau.

     state forgery

Damage to an enemy's economy through counterfeiting under official auspices has been a feature of warfare throughout history.

Milan sought to undermine Venice by debasing the Venetian ducat from 1470 to 1476. Napoleon counterfeited Austrian and Russian notes. Frederick the Great had earlier dumped several counterfeit currencies on his opponents in the Seven Years' War. During the US struggle for independence the UK counterfeited Continental currency to the extent that it became worthless, reflected in the expression "Not worth a Continental". The UK went on to counterfeit French Assignats in the 1790's. During the US Civil War the North and South sought to print each other's notes, supposedly inspired by Mexico's counterfeiting of Texan notes during the 1846 War.

The 1914-18 War was marked by British counterfeiting of Ottoman currency, with indifferent success.

During the 1939-45 War Germany's 'Operation Bernhard' involved production of bogus Allied notes by slave labour in the Sachsenhausen concentration camp, equivalent to US$7 billion in today's currency. It's described in Anthony Pirie's Operation Bernhard (New York: William Morrow 1962). The US and UK counterfeited the Reichsmark.

It has been alleged that the US subsequently sought to destabilise the Castro regime by producing Cuban pesos for distribution as part of the Bay of Pigs invasion and printed North Vietnamese dong. More recently, North Korea has been accused of counterfeiting US dollars.

     political counterfeiting

What better way to fund a revolution than to print your own currency? In 1848 Hungarian activists in London counterfeited Austrian notes. In 1896 Frederico Mora used the Spanish-American Printing Company in New York to manufacture US$1 million of Costa Rican notes for a coup against president Iglescias. The plan failed when customs officials discovered the loot hidden in a sofa. Thirty years later Austrian royalist Ludwig Windischgraetz organised printing of 100 million French Francs to finance restoration of the Habsburgs to the throne of Hungary.

     responses

Government responses to counterfeiting have essentially taken three forms -

• elaboration of legislation, often with capital punishment provisions
• adoption of new technologies such as watermarks, thread paper and polymer-based notes
• establishment of anti-counterfeiting agencies to enforce the regime

David Johnson's Illegal Tender: Counterfeiting and the Secret Service in Nineteenth-Century America (Washington: Smithsonian Institute Press 1995) notes that during the US Civil War up to 40% of the notes in circulation were counterfeit. That's unsurprising given the absence of a central bank and the enthusiasm with which over 1,200 banks issued their own notes, much of which approached the status of a private currency. A response under President Lincoln was creation of a national currency, underpinned by the establishment of the Secret Service as the federal agency responsible for protecting the integrity coins and notes.

An Australian perspective is provided by Willibald Kranister's The Money Makers international (Cambridge: Black Bear Publishing 1989) and Les Coventry's 1998 Australia's Counterfeiting Experience (PDF), highlighting the move to polymer-based notes after a counterfeiting scare in the 1960s following introduction of decimal currency.




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