This week I am wrapping up my Secret Service series with a look at the other side, counterfeiting in the late 1800’s. While there is a lot more information to share, I just broke the counterfeiting scheme down to five basic steps with tidbits of extra information. Enjoy, and don’t get into too much trouble!
For unfamiliar terms, please visit last week’s post: Secret Service Dictionary and Fun Facts
The Process of a Counterfeiting Scheme:
Step One: Engrave plates for use on printing presses.
- Engravers were particularly scarce; those who did succumb to thievery had to serve many masters and lived rather hectic lives.
- Engravers earned between twenty to forty dollars a week and worked nearly a year to finish a set of plates.
- There was a market for used plates. A good set of plates could be sold for between several hundred and two thousand dollars.
Step Two: Print the Money
- Like the manufacturers of legal merchandise, criminals needed to consider opportunity, risk, demand, price, and quality before investing their capital, time, skills, and organizational talent in the business.
- The effort, time, and money (several thousand dollars) needed to produce an issue put the manufacturing of counterfeit notes beyond the resources of a single individual.
- Plates belonged to one partner – either because he had provided the money to have them made or because he took them as part of his share in the proceedings.
- Manufacturers used areas where there were a large number of supply stores clustered in the area to sell paper, type, ink, and various kinds of presses, which were the raw materials of counterfeiting.
- Knowledge and techniques were transmitted orally and perfected by practical experience in saloons. Counterfeiter’s reliance on an oral culture and on personal relationships effectively shielded them from the police.
- A firm could print between ten thousand and twelve thousand dollars a month.
Step Three: Sell to a Wholesaler
- The wholesaler was the key figure in the distribution process. If the wholesaler was a member of the production firm, he had direct access to the product without any additional costs beyond his original investments in the partnership.
- The whole seller sold product to dealers/retailers.
Step Four: Sell to a Dealer/Retailer
- There were two types of dealers: (1) Thieves who bought counterfeits to pass on unsuspecting merchants or (2) Merchants who were willing to cheat their customers by giving them counterfeit money in change.
- Dealers created customer lists, which they jealously guarded from their competitors. Their customers regularly wrote to the retailers or left messages at the saloons that retailers visited.
Step Five: Shove the Money – (A.K.A. Put counterfeit notes into circulation.)
- Shovers usually operated in small groups of two or three. One shover entered a shop, made a small purchase, and received genuine money in change. While the shover was transacting business, a companion remained outside to watch for the police and to make sure that the shover was not followed by the store keeper, who might have discovered the counterfeit.
- After each transaction, they placed the proceeds in a separate pocket or envelope, so that their associates would be able to trace the precise amounts each shover collected.
- Then the group returned to their meeting place and divided the proceeds.
The Price of Counterfeiting:
The price of counterfeit bills fluctuated based on their quality and lack of public awareness. New notes were easy to pass and thus sold for more money, generally between thirty and seventy cents. The better the counterfeit quality, the better the price.
As soon as a new counterfeit’s existence became widely known, dealers had to lower the prices to compensate their customers for the increased risk. Discounted notes sold for between eighteen and twenty-two cents on the dollar.