Counterfeit money is mostly forged or faked paper money, sometimes referred to as funny money. Counterfeit paper money is almost as old as paper money, and the practice of counterfeiting money survives into our own day as governments strive to remain one technological step ahead of the counterfeiters.
Counterfeiting became a flourishing activity early in the nineteenth century because of the proliferation of banks issuing their own bank notes. England was one country that did not spare the rod in handing out justice to counterfeiters. Between 1805 and 1818 the Bank of England successfully brought 501 counterfeiters to the bar of justice, and 207 met their fate at the gallows. Not only was it illegal to counterfeit money but having a forged note in one’s possession was illegal and ignorance was no defense. A public outcry rose up against savage sentences meted out to people who accidentally came into possession of forged notes. In 1819 the Society of the Arts, concerned about the hanging of innocent people, published its Report on the Mode of Preventing the Forgery of Bank Notes. The report found fault with the Bank of England for issuing bank notes too easily counterfeited, and proposed a distinct set of copper plates and employment of highly skilled artists to design notes and engrave plates.
The sight of two women hanged for passing forged notes led George Cruikshank, cartoonist and political satirist, to produce an antihanging note: His “Bank Restriction Note” bore an image of Britannia with a skull instead of a head against a background of despairing figures and highlighting 11 individuals hanging from scaffolds. The note also bore the signature of Jack Ketch, a notorious public hangman. Cruikshank’s note sparked riots in London, and the government appointed a royal commission to find ways of producing notes that could not be imitated. England turned to the American firm of Murray, Draper, Fairman & Company, which had revolutionized bank-note printing using a siderographic transfer process and highly complicated background patterns. The siderographic process facilitates the exact duplication of engraved steel plates by using alternating hardened and softened steel cylinders to pass on imprints. An employee, Jacob Perkins, inventor of these processes, offered his services to the Bank of England, won a contract, and the firm of Perkins Bacon became the premier producer of postage stamps and paper money worldwide during the nineteenth century.
Counterfeiting is sometimes a state-sponsored activity, with the object of producing confusion and social unrest in enemy countries. The Bank of England counterfeited vast numbers of assignats, the famous French paper money of the French Revolution that touched off a wave of hyperinflation. One of the largest counterfeiting schemes in history was Operation Bernhard, the code name for Nazi Germany’s vast program for counterfeiting Bank of England notes. Apparently the Soviet Union also resorted to counterfeiting as a weapon in the arsenal of revolution.
Thanks to an international conference held in Geneva in 1929 counterfeiting laws are relatively uniform among various countries. Counterfeiting either domestic currency or foreign currency is illegal, and counterfeiters are subject to extradition. Printing counterfeit money is invariably a felony offense drawing a prison sentence, but incidental offenses, such as owning counterfeiting equipment or possessing counterfeit money, usually draw lesser sentences.
The development of high-quality color copying machines and sophisticated offset printing operations has complicated the problem of combating counterfeiters. The United States now impresses a thin polyester thread into its federal reserve notes. The thread runs vertically to the left of the Federal Reserve seal, and can be seen when the note is held up to a light. The notes also have the words “United States of America” microprinted in letters that can only be read with magnification. Despite these innovations, counterfeiting remains a major problem in the United States.
