Today’s post comes from National Archives Office of Strategy and Communications staff writer Rob Crotty.
During the Civil War in 1861, a nearly broke Federal Government came up with a clever way to get rich quick: print money. Prior to this the United States Treasury had never issued the paper dollars we have all come to recognize as U.S. currency, relying instead on coins and paper banknotes.
The mastermind of the paper currency was Salmon P. Chase, an aspiring politician and the Secretary of the Treasury. Not one to miss an advertising opportunity to boost his political career, Chase put his own portrait on America’s first greenback dollar bill (he also appears on the $10,000 bill, but that wasn’t his call) and emblazoned the currency with the words “In God We Trust.”
While Chase’s greenbacks helped pull the Government from the brink of financial ruin, a hastily created paper currency used throughout the Union (and much of the Confederacy) made it a target for counterfeiters. By the end of the Civil War, one in every three bills was fake. At some points during the war, a dollar bill was only worth 34 cents due in part to counterfeiting schemes.
Abraham Lincoln understood this problem. On April 14, 1865, President Lincoln created the Secret Service to purge the country of counterfeit bills. Later that night, Lincoln was shot.
Ironically, the Secret Service that Lincoln created on the day of his assassination wasn’t originally chartered to protect the President. It would take 36 years and two more Presidential assassinations before the Secret Service assumed this responsibility with an Act of Congress. For the time, money was its sole focus.
The Secret Service assumed its task vigorously. The threat of counterfeit currency was real–hyper-inflation could destroy prospects of reconstruction and exacerbate financial hardships caused by the war. Using a crew of ten, some of whom were reformed counterfeiters themselves, the Service’s first director William P. Wood set out to clean up America’s currency. By 1869, the Secret Service had arrested over 200 counterfeiters and opened 11 offices across the country.
How much our of money is counterfeit 150 years later? The number is 1 in 12,240.
2 thoughts on “What’s in your wallet?”
Great article! Thanks for digging up stories like this one. How ironic was it that Lincoln was assasinated the day he created the Secret Service? Then again, as you point out, the purpose of the Secret Service was not to protect the president at that time.
Excellent book on this subject by Stephen Mihm: A Nation of Counterfeiters; Harvard University Press, 2007.