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The lively and enthralling tale of three notorious counterfeiters offers insights into the makings of the American financial mind.
In Moneymakers, Ben Tarnoff chronicles the lives of three colorful counterfeiters who flourished in early America, shedding fresh light on the country's financial coming of age. The speculative ethos that pervades Wall Street today, Tarnoff suggests, has its origins...
The lively and enthralling tale of three notorious counterfeiters offers insights into the makings of the American financial mind.
In Moneymakers, Ben Tarnoff chronicles the lives of three colorful counterfeiters who flourished in early America, shedding fresh light on the country's financial coming of age. The speculative ethos that pervades Wall Street today, Tarnoff suggests, has its origins in the craft of counterfeiters who first took advantage of a turbulent American economy.
Few nations have as rich a counterfeiting history as the United States. Since the colonies suffered from a chronic shortage of precious metals, they were the first place in the Western world to use easily forged paper bills. And until the national currency was standardized in the last half of the nineteenth century, the United States had a dizzying variety of banknotes, making early America a counterfeiter's paradise.
In Moneymakers, Tarnoff recounts how three of America's most successful counterfeiters—Owen Sullivan, David Lewis, and Samuel Upham—each cunningly manipulated the political and economic realities of his day, driven by a desire for fortune and fame. Irish immigrant Owen Sullivan (c. 1720- 1756) owed his success not just to his hustler's charm and entrepreneurial spirit, but also to the weak law enforcement and craving for currency that marked colonial America. The handsome David Lewis (1788-1820) became an outlaw hero in backwoods Pennsylvania, infamous for his audacious jailbreaks and admired as a Robin Hood figure who railed against Eastern financial elites. Shopkeeper Samuel Upham (1819-1885) sold fake Confederate bills to his fellow Philadelphians during the Civil War as "mementos of the rebellion," enraging Southern leaders when Union soldiers flooded their markets with the forgeries.
Through the tales of these three memorable counterfeiters, Moneymakers spins the larger story of America's financial ups and downs during its infancy and adolescence, tracing its evolution from a patchwork of colonies to a powerful nation with a single currency. It was only toward the end of the Civil War that a strengthened federal government created the Secret Service to police counterfeiting, finally bringing the quintessentially American pursuit to an end. But as Tarnoff suggests in this highly original financial history, the legacy of early American counterfeiters lives on in the get-rich- quick culture we see on Wall Street today.
On a November night in 1876, two men passed in silence under the granite obelisk that rose a hundred feet above the tomb of Abraham Lincoln in Springfield, Illinois. Below the obelisk stood a statue of the slain president, the bronze silhouette glistening in the moonlight as the men moved swiftly by. Trying to make as little noise as possible, they entered Lincoln’s burial chamber and approached the marble sarcophagus. The men drew their crowbars and, straining against the handles, managed to push the large tablet that covered the coffin over the side. Inside was the cedar casket that held Lincoln’s corpse. Reaching into the sarcophagus, they began lifting the wooden box.
Suddenly a gunshot sounded outside. The men froze: the first shot was followed by another, then another, until the volley seemed to come from every direction. They dropped the casket and darted out of the tomb, fleeing the cemetery as bullets whistled past Lincoln’s final resting place.
The men were caught several days later. They confessed to trying to kidnap Lincoln’s body, which they planned to exchange for the freedom of their gang leader, a counterfeiter named Ben Boyd. The Secret Service, which had nabbed Boyd a year earlier, learned of the plan, and sent agents to lie in wait for the grave robbers. The officers sat watching the tomb for hours before the two men arrived. But before they could arrest the criminals, one of their pistols went off by accident. The others, thinking they were under attack, started firing wildly and the robbers escaped in a hail of bullets.
The irony of the scene was surely lost on the raiders of Lincoln’s tomb. The robbers hoped to exchange a counterfeiter’s freedom for the remains of a man who had done more than any other president in history to eliminate counterfeiting. Maybe they didn’t know enough history to make the connection; the Secret Service agents lying in the bushes nearby certainly did. Before the war, state-chartered banks across the country printed notes of various designs and denominations, which made counterfeiting fairly easy. Under Lincoln, the government began phasing out these banks and creating a uniform national currency. A few months after Lincoln’s death in 1865, the Secret Service was created to crack down on counterfeiters. Over the next several decades, the agency aggressively pursued its task, and by the end of the century, counterfeit cash amounted to just a slim fraction of the currency in circulation. The counterfeiters who flourished in the nation’s infancy and adolescence would almost entirely disappear, victims of an unprecedented centralization of federal authority. The golden age of counterfeiting was over.
Few countries have had as rich a counterfeiting history as America. In the centuries before the Civil War, the absence of a strong central government, an anarchic economic system, and the irrepressibly entrepreneurial spirit of its citizens helped make the country a haven for counterfeiters. Counterfeiting gave enterprising Americans from the colonial era onward a chance to get rich quick: to fulfill the promise of the American dream by making money, literally. Stories of their rise and fall thrilled their contemporaries, who traded tales of these criminal adventurers in taverns and devoured the reports that appeared in the pages of local newspapers. Although the memory of early America’s moneymakers was preserved in local legends, by the twentieth century they would fade from public view, relics of an unrulier era in the nation’s history.
American counterfeiters had an early advantage over their European counterparts for one crucial reason: the British colonies in North America were the first governments in the Western world to print paper currency. Paper notes appeared in response to the severe shortage of precious metals that was a persistent problem of colonial life. The British government limited the export of gold and silver to the colonies, and although an array of foreign coins circulated—pieces of eight, reals, doubloons, mostly of Spanish and Portuguese origin—there weren’t enough to meet the demand. Colonists developed a range of different strategies to deal with the problem. Starting in the seventeenth century, American settlers tried using an Indian currency called wampum that consisted of beads of shell strung together on a thread, but widespread counterfeiting soon made it worthless. Since blue wampum was more valuable than white wampum, Indians often dyed their shells to sell them at a higher price, and diluted the threads with pieces of stone, bones, and glass. Colonists also tried using food commodities as money: in the seventeenth century, Massachusetts adopted corn as its official medium of exchange, and in Virginia, tobacco circulated as the common currency.
Coins would have been more convenient, but the paucity of precious metals in North America made coinage difficult. Unlike Latin America, whose gold and silver deposits provided the Spanish and the Portuguese with more than enough raw material to mint their currency, British settlers in the Atlantic colonies found little to work with. Even when colonists acquired precious metals through trade, the idea of a coined colonial currency met with opposition from home. Massachusetts began minting silver coins in 1652, but by 1684 the British government had ordered the colonists to stop, citing their violation of the royal right of coinage.
A growing colonial population and an expanding continental market demanded more credit, and with precious metals scarce and the home government hostile to coinage, paper money offered a solution. In 1690, the Massachusetts legislature started printing bills of credit to pay its debts. The authorities promised to retire the bills by levying future taxes payable in the new notes. But the colonists weren’t concerned: relieved to have something resembling a functioning currency, they treated the notes like money, and Massachusetts kept the credit engine going by printing new issues to supersede the old ones.
The colonists had discovered a loophole in British regulations. Paper money didn’t infringe on the home government’s monopoly on coinage, and since the Massachusetts bills of credit were not redeemable by the British Crown, they weren’t officially considered money. South Carolina started issuing bills of credit in 1703, followed by New Hampshire, Connecticut, and the remaining nine colonies over the next several decades. By 1764, the colonies had become so dependent on paper money that when the British Parliament passed legislation prohibiting bills of credit, it sparked an uproar, further souring relations between the colonists and their transatlantic rulers.
Paper money may have satisfied the colonial craving for credit, but it also exposed the economy to new vulnerabilities. Unlike gold or silver, which can be traded as commodities, notes have no market value aside from being a medium of exchange. Without anything “hard” to fall back on, paper can become worthless overnight, more useful as wallpaper or kindling than as money. Bills are only pieces of paper inscribed with a promise—the promise to be received for public debts like taxes, to be redeemed for a certain quantity of precious metals, or, as is the case today, to be accepted for all debts, public and private.
Paper money had other disadvantages. Excessive printing of paper caused inflation, which became an endemic problem in the colonies. The crude quality of most colonial currency also made counterfeiting relatively easy, and since many colonists were illiterate, spelling errors on fake bills often passed unnoticed. But in spite of its drawbacks, paper money became an indispensable part of the American economy from its debut in seventeenth-century Massachusetts through the Revolution and beyond.
When the Continental Congress needed to generate revenue to fund the war against the British, it printed paper notes called continentals, whose value fluctuated with the public’s confidence in the promises of the new political leadership. In the early days of the Republic, debates over paper currency preoccupied prominent people like Benjamin Franklin and Alexander Hamilton, who tried to shore up the finances of a country that had few natural resources and little political or economic leverage. The decades before the Civil War saw the rapid proliferation of different currencies, as banks and a host of other state-chartered companies like insurance firms and railroads flooded the country with paper that constantly oscillated in value. By the time the federal government began regulating the money supply, there were more than ten thousand different kinds of notes circulating in the United States.
Paper helped entrepreneurs secure capital on credit and catalyzed commerce, but it also made the economy highly volatile and vulnerable to periodic fits of inflation. Perhaps the biggest beneficiaries of this financial chaos were counterfeiters, who thrived in a virtually unregulated economy that ran mostly on faith. These moneymakers were characters worth remembering—people like Mary Peck Butterworth, a housewife from Rehoboth, Massachusetts, who during the early eighteenth century ran a counterfeiting operation out of her kitchen with the help of a hot iron. Butterworth would cover a note with a strip of damp muslin and run her iron over it, transferring the bill’s design to the fabric, which she then imprinted onto a blank piece of paper. She made a fortune selling the notes to her husband’s friends. When the authorities learned of Butterworth’s activities and came to arrest her, they couldn’t find a shred of incriminating evidence, just an ironing board and a few burnt scraps of muslin in the fireplace. Another counterfeiter named Peter McCartney had less luck eluding arrest but earned a reputation as a talented escape artist. According to one story, he once bet the chief of the Secret Service that he could break out of an Illinois jail. When McCartney showed up at the chief ’s hotel room that evening, he told the astonished detective that he was calling to pay his respects and would return to his cell presently. “I merely wished to show that some things could be done as well as others,” the counterfeiter explained. McCartney eventually went to prison for twelve years. “He was not an ordinary man,” wrote Allan Pinkerton, the founder of the country’s first private detective agency, “and when he disappeared suddenly, it was as if some great wreck had gone down at sea.” The counterfeiter died in an Ohio penitentiary in 1890 at the age of sixty- six, having forged more than a million dollars.
Counterfeiters owed their success in large part to the patronage of their fellow citizens, who often didn’t discriminate between forgeries and the genuine article. They were grateful to get a note that could hold its value until they could pass it, regardless of its authenticity. The men who printed the genuine bills and those who counterfeited them were opposite sides of the same coin: both hoped to inspire trust in pieces of paper whose value relied entirely on the confidence that people had in them.
It was this faith that enriched three of the most colorful counterfeiters in American history: Owen Sullivan, David Lewis, and Samuel Curtis Upham. Owen Sullivan (c. 1720–1756) was an Irish immigrant whose extraordinary talent for earning people’s trust made him among the most notorious counterfeiters of the colonial era. After stints in Boston and Providence, Sullivan settled in a sliver of swampy land on the lawless border between New York and Connecticut, where he forged tens of thousands of pounds’ worth of colonial currency. David Lewis (1788–1820) was a charismatic counterfeiter and robber who prowled Pennsylvania’s Allegheny backcountry. His legendary acts of charity catapulted him to prominence as a populist folk hero, a Robin Hood who dispensed his ill-gotten gains to the poor while punishing the greedy. Samuel Curtis Upham (1819–1885), a Philadelphia shopkeeper and former California gold prospector, sold counterfeit Confederate currency from his storefront during the Civil War. Upham’s “mementos of the Rebellion” proved enormously popular, and the influx of these fakes into the South drove down the value of Confederate currency, infuriating Southern leaders.
The biographies of these men tell the story of a country coming of age—from a patchwork of largely self-governing colonies to a loosely assembled union of states and, finally, to a single nation under firm federal control. Each responded to the political and economic realities of his era, propelled by a desire for profit and fame. They belonged to a class of criminal that overran America for much of its history, as integral to the country’s financial past as those who printed its many kinds of legal currency.
Moneymakers didn’t just infiltrate the money supply—they embodied the nation’s speculative spirit. The American economy rose and fell on a tide of paper credit, fueled by notes that tended to promise more than they could deliver. As long as everyone believed something had value— whether a colonial bill of credit or a stock certificate—it did. But when that faith faltered, mistrust spread throughout the system, triggering a panic. Americans had a confidence problem: they either had too much of it, taking risks as everything surged, or too little, fleeing the market as everything crumbled. By feeding America’s appetite for paper currency, counterfeiters helped stoke this cycle. They made fake money in a country where real money’s value was often just as imaginary, bluffing their way to wealth in the casino of American capitalism.
A conversation with Ben Tarnoff, author of MONEYMAKERS
Q: Can you explain the significance of the title Moneymakers?
A: "Moneymaker" was the colonial word for counterfeiter. When Owen Sullivan, the first counterfeiter profiled in my book, gets into a drunken fight with his wife in Boston in 1749, she calls him a "forty-thousand-pound moneymaker." The neighbors overhear this remark and tell the police, who discover fake bills and printing materials at Sullivan's house and arrest him. I liked the word "moneymaker" because it's so literal: of all the ways to acquire money, only "moneymaking" involved actually manufacturing it. A disgruntled silversmith could disappear for a week and return richer than the city's wealthiest merchant. Getting rich quick inspired as much awe and envy back then as it does today. For those riches to be fabricated by hand, and not earned the old-fashioned way, made counterfeiting seem like magic. It's easy to see why counterfeiters became the outlaw celebrities of their day. They embodied the enduring fantasy of instant wealth. Their fortunes were, in every sense, self-made.
Q: What initially drew you to the topic of counterfeiting?
A: When I started reading about the subject, I became fascinated with the stories of the individual counterfeiters. Very few began as professional criminals. Most started out as craftsmen: silversmiths or engravers, usually. Creating a plate for printing counterfeit bills required tremendous dexterity. The success of an entire operation essentially rested on one pair of hands. So counterfeiters tended to be talented artists—but they were also aggressively entrepreneurial. They needed to think on several levels: quality of the craftsmanship wasn't the only factor determining the success of a counterfeiting enterprise. There was the sale of the notes themselves, whether to regional distributors or to gangs of "passers." There was the geographical question of which communities to target. Perhaps most importantly, counterfeiters had to elude law enforcement and, as their notoriety grew, the prospect of lifetime imprisonment or execution. For these reasons they came to understand the political and economic landscape of early America far better than most criminals of the era.
Q: Do you think your book has special relevance today?
A: The financial crisis reminded us how rapidly wealth can evaporate. It reminded us that, despite huge advances in technology, we still live in a very precarious system. What Moneymakers brings into focus is that financial volatility hasn't been the exception in American history: it's been the rule. It's tempting to think of our economic trajectory as one continuous ascent since the 18th century. But America's path to prosperity has been anything but linear: it's run from boom and bust, through wars and political upheavals, and impoverished people at least as often as it's enriched them. Men and women two hundred years ago were not substantially different from us. They were just as delusional about the prospect of inexhaustible growth in the 19th century as we were in the early part of the 21st—and just as shocked and angry when those delusions gave way.
Of course, many specific circumstances have changed since then. Counterfeiters were once ubiquitous in American life; today, they've virtually disappeared. Until the final decades of the 19th century, counterfeiters provided a significant portion of the nation's money supply, feeding America's addiction to paper credit with fresh infusions of fake currency. These days, counterfeit bills account for a negligible portion of the total in circulation. But though physical counterfeiting has declined, the spirit of counterfeiting endures. Counterfeiters' core insight was that confidence creates value. If a paper rectangle carried the right marks in the right places, and the person holding it appeared trustworthy, then it became valuable. Much of today's financial trickery proceeds from the same principle.
Q: What surprised you most while researching and writing?
A: There was a lot that surprised me. Maybe the most surprising single fact was how many different private paper currencies circulated in the United States before the Civil War. I'd thought we'd always had a single federal currency, but it wasn't until the 1860s that it became politically possible for Congress to phase out the bills of some sixteen hundred state banks and replace them with national notes. More surprising than this, however, was how long the American people endured—and in many cases, endorsed—a system with so many evident flaws. From the Revolution until the Civil War, they dealt with hundreds, and eventually thousands, of different banknotes, each fluctuating in value. They were victimized by predatory lenders, speculators, and a banking sector that swung from prosperity to panic, with devastating effects. The federal government could've stepped in to simplify and stabilize this state of affairs. But the American people generally resisted the idea of a federal government powerful enough to make meaningful interventions in the economy and the currency, even if it would be to their benefit. The resistance to federal power was rooted in a particular interpretation of the Constitution and a long legacy of limited government. It led people to act against their economic self-interest, en masse and for long periods of time. Outdated notions of proper governance proved remarkably persistent, even when modern circumstances demanded something very different.
Q: Your book focuses on three counterfeiters. What made you decide on these people in particular?
A: With this subject there's no shortage of colorful characters and engaging anecdotes. But I wanted to focus on people who, in some way, illustrated the story of America's financial evolution. These three men stood out because they intersected with the broader currents of their respective eras in exceptionally interesting ways. They were each active at moments of major change in the American monetary landscape. For example, Owen Sullivan launched his counterfeiting career in 1749, the same year that the Massachusetts legislature passed a highly controversial bill phasing out the colony's paper currency within the next two years. Decades later, David Lewis picked a similarly momentous time: just as the rapid proliferation of note-issuing banks flooded the early United States with new bills, with obvious benefits for counterfeiters. Samuel Upham took advantage of the unique circumstances brought about by the Civil War. He forged Confederate money with impunity from the safety of Philadelphia, peddling his fakes openly to soldiers and smugglers headed South. Sullivan, Lewis, and Upham gave me a way to connect the story of American counterfeiting with the story of America as a whole.
Q: What did you learn about America through writing this book? What did you learn about Americans?
A: When you write history, you begin to see a lot of common ground between the past and the present. Almost every day, I would encounter a fact or a story that called to mind current events. America may look a lot different in 2010 than it did in 1690-1865, which is roughly the period covered by my book. But there are certain resonances. One theme that seems to have persisted, despite the major realignments of the last century, is the notion of getting "something for nothing." America's first settlers thought of this country as a blank: "vacuum domicilium," in John Winthrop's words, or vacant land. This was a fantasy, of course: the land wasn't vacant, and clearing it involved a centuries-long struggle. But the idea of forging value in a void remained a powerful one.
Paper money belongs to this tradition. It makes something out of nothing by investing an otherwise worthless material with monetary value typically reserved for gold or silver. In fact, the American colonies were the first governments in the Western world to print paper currency. The notes first appeared in 1690 in response to the severe shortage of precious metals that plagued colonial life. Faced with a scarcity of coin, colonial America needed a way to fund wars and collect taxes and conduct trade: more broadly, it needed a way to convert the ambitions of its inhabitants into real economic growth. Paper currency met that need. It provided a country with few natural resources and little political or economic leverage the fuel to colonize an entire continent. Our economy ran on paper promises that, in many cases, couldn't be kept—yet our collective faith in these promises helped produce real things, like canals and railroads. By postponing the present in anticipation of the future, paper promises helped America grow.
Q: Did you develop a new appreciation or understanding of the American economy through writing this book?
A: Our economy has grown so much in scale and sophistication that it's hard to draw exact parallels. But there are certain patterns that feel very familiar. In the book I write a lot about confidence. It sustains the economy by underpinning the value of our currency; it also enriched counterfeiters over the centuries, who grew very adept at cultivating it. In the period covered by the book, Americans tended to have a confidence problem: they either had too much of it, taking risks as everything surged, or too little, fleeing the market as everything crumbled. As long as everyone believed something had value—whether a piece of colonial money or a stock certificate—it did. But when that faith faltered, mistrust spread throughout the system, triggering a panic. The essential features of our most recent crisis would be familiar to people living through the Panics of 1819 or 1837 or any of the several subsequent disruptions in the following decades. The issue of how crises are created is very contentious, and I've tried to be careful about not drawing unfair comparisons. Without diminishing the complexity of the debate, though, there are fascinating convergences between past and present when it comes to America's turbulent finances.
Q: What do you hope readers take away?
A: I think the most exciting thing about history is that it's filled with real people. They felt pain when they lost their life savings in financial panics. They argued bitterly about the role of government in the economy, just as bitterly as we do today. The more time I spend reading about the past, the more I'm reminded of people I know today. The correspondences aren't perfect, but enough of them exist to suggest human that nature hasn't changed much in the last three centuries. If there's a larger lesson to the book, that might be it.
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