Saturday, June 19, 2010

Stephen Mihm on the New Hundred-Dollar Bill

In the April 23 Wall Street Journal's Saturday Essay, "Outfoxing the Counterfeiters," Stephen Mihm of the University of Georgia discusses the U.S. government's attempts, dating back to colonial times, to foil currency forgery. "If history is any guide," writes Mihm, who is the author of A Nation of Counterfeiters, the latest attempt to forestall counterfeiters "won't be the last. Paper money in this country has followed a familiar trajectory: new designs, new dollars and, eventually, new counterfeits."   Discussing the period of the American Revolution, Mihm writes:
It's perhaps appropriate that Benjamin Franklin appears on the most valuable denomination of dollar in circulation. He designed the country's first money: the Continental dollars issued during the American Revolution to pay the costs of the war. . . . In 1776, the British occupied New York City and the counterfeiters who had already set up shop began operating under the supervision of the imperial authorities, churning out massive quantities of notes that visitors could buy for pennies and then pawn off on unsuspecting revolutionaries. . . . The quality of the British counterfeits undercut the credibility of the dollar, but the real blame for the dollar's decline lay with the revolutionaries, who issued vast quantities of Continentals to pay the costs of the war. Backed by nothing more than a shaky faith in the government, the notes depreciated, eventually becoming nearly worthless. The experience left Americans with serious misgivings about paper currency, both counterfeit and real.
The new bill will go into circulation in February 2011.

 Tip of the hat to the Legal History Blog.