Having forged $250 million in American banknotes, Frank Bourassa was arrested in 2012 for operating a printing press on a farm in Quebec. While this may seem like a modern-day crime, counterfeit notes have been the bane of paper money for as long as they have been in circulation.
Primarily used by merchants and traders as a more convenient form of currency than metal coins, the use of paper bills was pioneered by the Chinese during the Tang Dynasty which lasted from the 6th century to the beginning of the 9th century. These bills in the form of private credit were exclusively used between merchants and not for general circulation. It would be during the Song Dynasty (10th to 13th century), that the Chinese government licensed certain deposit shops where individuals could deposit their coins in exchange for notes. By the 12th century, Chinese authorities had taken direct control of the deposit shop system, resulting in the introduction of the world’s first official government-produced paper money.
Under the Song, factories were established to print paper money using colors from different plants for the ink. These factories were located in different parts of the empire each used different fiber mixes in their paper to discourage counterfeiting. The early paper notes were very fragile and expired after three years, therefore, they were only to be used in some regions of the empire.
A single national currency which could be used across the empire would only be introduced in 1265. The currency was backed by silver or gold and was available in denominations ranging from one to one hundred strings of coins. Unfortunately, it only lasted a few years before the invasion of the Mongols in 1279 and the fall of the Song dynasty. Despite the earlier adoption of paper money in China, a severe financial crisis occurred in the 15th century during the Ming Dynasty due to counterfeiting and over-issuance of the notes, leading to their removal from circulation.
Now considered a symbol of good luck, the qian was originally used as currency in China from the 4th century BC to the 20th. The term “cash” that we use today is derived from this ancient currency.
Development of Anti-Counterfeiting Measure
Traditionally, paper currency in China had included a warning to counterfeit paper money dating back to the earliest notes issued. The ones issued during the Ming Dynasty offered a reward for the apprehension of counterfeiters. The reward often included all the counterfeiter’s property and a silver amount based on the forged notes. On some were written warnings to district officials against concealing counterfeit, with the punishment being the same as that given to the criminal: summary decapitation.
Beheading counterfeiters was a common punishment.
This punishment persisted with the introduction of Tael notes, which marked the re-introduction of paper money in 19th China after four centuries of absence. According to a foreign observer residing in Shanghai at the time, the beheading of counterfeiters was a frequent event. As a warning was not sufficient enough to deter counterfeit, these notes, which represented significant wealth, required a complex numbering system to help protect the proof of their authenticity.
Benjamin Franklin and Modern Anti-Counterfeiting Innovations
The ongoing battle between currency issuers and counterfeiters led to technological improvements in paper money design. One of the most important figures in this field was Benjamin Franklin, whose diverse skill set included the design of paper money. In 1769, Franklin was tasked with creating a new currency for the Colony of New Jersey that would be more difficult to counterfeit than its predecessors. Franklin’s design was a major success in the fight against counterfeiters, incorporating multiple anti-counterfeiting features. The copperplate engraving technique made it almost impossible to copy the fine details of the paper money while the raised printing method gave the notes a unique texture that was difficult to replicate. In addition, the higher-quality paper used also made it harder to forge.
This paper money, known as “bills of credit,” could be used to pay taxes and citizens pledged their lands as collateral. On the reverse side of a five-pound note printed in 1759, the warning “To counterfeit is DEATH” appears, continuing from the original Chinese capital punishment.
The success of these anti-counterfeiting measures was immediate, with the new paper money gaining wide acceptance throughout New Jersey. The design was so effective that other colonies and even the Continental Congress adopted it during the American Revolution. Intended to be redeemable in coin, colonies frequently issued excess amounts, leading to inflation and rendering the notes nearly worthless. This led to the saying “not worth a Continental.”
The US dollar is now made of 75% cotton and 25% linen. Higher denominations were discontinued in 1969 due to low demand, leaving only seven bills in circulation today: $1, $2, $5, $10, $20, $50, and $100. However, with inflation on the rise, higher denominations could make a comeback. Although rarely used in transactions and not printed every year, the $2 bill is still being issued. The highest denomination ever printed was the $100K bill featuring President Woodrow Wilson.
Meet the New $100 Bill by Russell Goldman and Greg Atria (2013), abcnews.go
The Art of Preventing Counterfeit Paper Money
In 18th century England, the use of specially made paper which included silk fibers resulted in more durable and difficult to counterfeit paper money. Watermarks were also added to the paper to deter counterfeiters. These unique watermarks were embedded into the paper during the manufacturing process. When held up to light, these watermarks became visible. This made it nearly impossible to replicate the exact paper money used for official currency.
The use of silk fibers and watermarks were not the only anti-counterfeiting measures employed during this time period. Intricate designs and patterns were also added to the paper money to make it harder to counterfeit. These designs were often highly detailed with intricate engravings. The printing process itself was also closely monitored. Printers were required to use specific inks and presses to ensure the quality and integrity of the currency.
‘Take One’ by Victor Dubreuil (circa 1886), Commons
The artist who created this painting is believed to have founded a French bank and fled the country with the modern equivalent of $3 million shortly before completing it.
New Methods to Detect Counterfeit Paper Currency
The Bank of England now offers detailed guidance to help people verify if their paper money is genuine or counterfeit. Two primary features that should be verified include the hologram image, which changes when the note is tilted, alternating between the amount and currency symbol. The second is the see-through window, which displays a unique shape and set of colors for each note.
In addition to these key features, the official Bank of England guide provides comprehensive information about various other intricate features to verify the authenticity of paper money. To further assist in this process, businesses are invited to join the ‘Banknote Checking Scheme,’ which provides training to staff in identifying counterfeit notes. By participating in the scheme, businesses can ensure their staff is properly trained and equipped to recognize counterfeit paper money.
Most countries publish information on the security features of their paper currencies to help businesses detect counterfeit bills. However, this same information is exploited by counterfeiters, leading to a constant race to stay ahead in the battle against forgery.
Artist rendition of a historical Secret Service counterfeit coin raid in 1875, secretservice.gov
The United States Secret Service was established in 1865 to deter counterfeiters.
After having been caught for forging $250 million, Frank Bourassa revealed having used government resources on anti-counterfeiting to design his own $20 bills. By trying to prevent fraud, governments across the world share vital information for the making of counterfeit paper money. The process of creating paper money remains highly sophisticated, which has greatly reduced the incidence of counterfeiting.
Since fiat currency has become the dominant form of money and many countries are moving towards digital versions while limiting the use of their physical currency, counterfeit paper money is bound to disappear. However, this shift has left room for more sophisticated forms of fakes with severe consequences.
