How Benjamin Franklin Fought Counterfeit Money in Colonial America
It takes one genius to lay the foundation of ground-breaking ideas.
The First American gave us an inspiring history lesson.
Imagine living in a country with an unstable monetary system.
Lack of uniform currency, shortage of coins, and rampant inflation are part of everyday life. Plus your hard-earned money is easy to counterfeit. And there’s a war.
That was the American reality three centuries ago.
Challenges of Paper Money
Paper money was a new concept back then.
People used specie coins as a medium of exchange. They had tangible value due to the gold, silver, and copper contained in them.
As the economy and trade expanded, a shortage of coins made transactions difficult. Paper money was vital to establish an independent economy.
But you didn’t want to hold paper money. It was precisely this - worthless paper - you’d have crumpled with skepticism.
Benjamin Franklin suggested the value of paper money should be tied to land.
This limited the supply of bills. Money could not be printed like there was no tomorrow.
More land meant more money. This encouraged the country to expand.
Above all, America needed to finance the Continental Army to fight the British.
But as the saying goes, all’s fair in love and war.
The British tricked the monetary system to weaken the Continental Army during the American Revolution of 1775-83. They set up printing operations in New York to flood the colonies with counterfeit money and cause hyperinflation.
The trick added to the Continental Army’s difficulties but didn’t help the British win the war.
Fight Against Counterfeit Bills
Franklin developed key concepts for the circulation of money and opened printing houses. He knew that counterfeiting paper money was easier than copying a friend’s homework.
Our hero was a savvy businessman who had an advantage over criminals. He was looking to produce bills by using high-quality work and materials.
While some of his methods were simple, some were truly ingenious.
Franklin deliberately misspelled certain words on the bills and added printer information and even warnings to counterfeiters.
He developed a distinct type of paper hard to replicate.
He used a black ink pigment and occasionally added red and blue.
He used special techniques to print the bills, like the nature printing method - transferring the structure of a leaf with its complex vein arrangement onto the bills.
Counterfeiters’ focus was on the bill design. Their materials were cheaper than Franklin’s. A trained eye could easily tell a fake bill from genuine currency.
We have scientific evidence for Franklin’s high-quality work. A recent study used electron and X-ray beams to examine more than 600 bills printed between 1709 and 1790, among them those produced by Franklin’s network and counterfeiters.
The study was challenging. You can’t simply put a historical artifact under an electron or X-ray beam. The researchers minimized radiation intensity and used special lenses to prevent the degradation of the paper bills.
Here’s a recipe to tell a legal 18th-century bill from a fake bill:
The black printing pigment used by Franklin shows negligible amounts of calcium and phosphorus. Counterfeit bills contained large amounts of these elements.
The paper used to produce legal bills had several millimeters-long blue threads and microfibers concentrated on the paper surface. Counterfeit bills had no threads or microfibers.
Legal bills contained translucent fillers of different sizes. Counterfeit bills didn’t.
Franklin used these security features in denominations above $8. The more expensive the bill, the more harm counterfeited money could do.
Challenges and Outlook
People used to rely on their visual perception of bills to figure out what was real and what was fake. This wouldn’t work in 2024.
Since Franklin, money-printing techniques have become more sophisticated. So has counterfeiting. It’s even encouraged by some governments.
We’re facing new challenges now that we’re moving toward digital money. Faking it is hard as today’s banks have complex internal systems that quickly spot when something is wrong.
My bank saved me $300 once when I booked a hotel room on booking.com. Someone intercepted my credit card information and tried to make a purchase online. The bank blocked the transaction and emailed me. I had my money safe again 30 minutes and a few forms later.
But that’s just banks. They have no control over insider trading, tax evasion, or money laundering using cryptocurrencies. Since Franklin, technologies have changed. People haven’t.
However, global finance has become way more stable after the US gained independence.
Developed countries have solid monetary systems.
We have enough to live a comfortable life, even in crises.
International money cooperation is a support system for countries in financial distress.
The world is heading for prosperity despite occasional turmoil in the financial markets.
It’s because every era has its own Benjamin Franklin whose inventive mind and compassionate spirit are dedicated to the betterment and protection of society.
Conclusion
Few have shaped America more than the great Benjamin Franklin.
The First American helped gain the country’s independence, establish public services, and contribute to the monetary system.
We’re still using paper money in 2024. Much of the current technology is based on Franklin’s innovations - paper composition, watermarks, and anti-counterfeiting measures.
Franklin left an enduring legacy that resonates far beyond his time.
This article is for informational purposes only. It should not be considered Financial or Legal Advice. Not all information will be accurate. Consult a financial professional before making any major financial decisions.
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Denis- this is a useful article. I learned a lot about Franklin's choices (and how they changed American currency as we know it). For the rest of the week, I'll probably be staring at my paper money and seeing the features you've mentioned here. :)
Interesting article Denis. Nice mix up!