Illegal Tender

THE U.S. TREASURY DEPARTMENT, WHICH HAD NOT RE designed our paper money since 1929, has done so twice in the past decade. The reason: worries that counterfeiters were about to get the upper hand in the neverending technological duel between currency makers and currency fakers. Ever since money was invented, people have been trying to pass off imitations as the real thing, and America’s rich history of counterfeiting goes back as far as the first European settlers.

England’s practice of transporting counterfeiters to the colonies gave America a running start in the field of forgery, but the New World hardly lacked native talent. Wampum circulated as currency in seventeenth-century America, and Indians sometimes dyed white strings of beads black because dark ones were more valuable. Colonists were not above passing off fake coins on the natives in return. Concern over counterfeiting led the Massachusetts authorities to cease recognizing wampum as money in 1661.

The faking and altering of coins began early. “Coiners” devised endless ways to remove precious metal from coins and pass them at full value. One simple technique was to clip silver or gold from the edge of the disk. In 1704 Sir Isaac Newton, in his capacity as master of the Royal Mint, declared the standard weight of a Spanish “piece of eight,” the most common unit of currency in the colonies, to be 17.5 pennyweight, or around 27 grams. This prompted a New York sea captain to complain, “Not one piece in a hundred weighs so much.” Government mints could fight the coiners by stamping a raised circle around the margin of a coin’s face, as Massachusetts (the only American colony to mint coins before the Revolution) did in the 167Os, or by reeding the edge (inscribing closely spaced parallel lines, as on a modern dime or quarter—though no one would bother to shave the edges of modern circulating U.S. coins, since they contain no precious metal).

Enterprising miscreants also sawed gold coins in half, scraped out the interior, filled the coin with base metal, and then soldered the pieces back together. Since gold is heavier than any commonly available metal (even lead is only about 60 percent as dense), it was virtually impossible to match the weight of a genuine gold coin without changing its dimensions. Bankers and merchants fought back using a mechanism equipped with slots to measure the diameter and thickness of a suspect coin and a balance to measure its weight. Fakes were quickly unmasked, and short-weight coins were assigned a lesser value.

“Coining” continued well into the twentieth century with increasingly ingenious scams. In 1883, for example, a newly issued five-cent piece bore the numeral V but not the word cents . Criminals plated the coin with gold and passed it as a five-dollar gold piece. Still, since colonial days the main focus of counterfeiters has been the falsifying of paper money. New England’s first paper currency was printed in 1690 by the Massachusetts Bay Colony to pay troops. Robert Fenton, an experienced coiner and counterfeiter with prior convictions in England and Pennsylvania, altered some of these bills from two shillings sixpence (written as 2/6) to 20 shillings, a method of counterfeiting known as “raising” that continues today.

Since this technique called for starting with legitimate notes and required skilled work to be performed on each one, it was not suited to large-scale use. But as other colonies began to issue paper money, criminals became more technologically sophisticated. In 1704 a gang of counterfeiters took the next step by printing counterfeit copies of paper notes in quantity with a press and a copper plate.

Counterfeiting was a cottage industry as well. Around 1716 Mary Peck Butterworth, of Rehoboth, Massachusetts, developed a technique of copying the image of a genuine bill onto a piece of cloth with a hot iron, then impressing it on paper the same way. To finish, she filled in the details with a crowquill pen. A ring of friends and relatives helped manufacture and pass the bills.

In the early 1720s Butterworth and her cohorts were discovered and tried, but since Butterworth always burned the cloth master after she was finished, there was no tangible evidence of her crime and thus no convictions. That was important, because the punishment for counterfeiting could be severe. A pair of 1740s counterfeiters in Connecticut were sentenced “each to have his right ear cut off, to be branded on the forehead with a C, to be imprisoned for life, to have all property confiscated, to be debarred forever from any trade or dealing and to pay costs.”

Benjamin Franklin, a printer by trade, was an early advocate of paper money. With typical ingenuity, he devised one of the earliest anticounterfeiting measures. When he won a contract to print notes for several colonies in 1739, he used a printing plate that incorporated the intricate web pattern of a tree leaf. His method for creating the plate, a tricky process of transferring the image from leaf to plaster to metal, remained secret. But even if a forger had figured out the technique, he could not have reproduced the unique pattern because every leaf is slightly different. As with the latest of today’s high-tech anticounterfeiting technology, however, the effectiveness of Franklin’s method depended on the vigilance of the person accepting the note.

COUNTERFEITING INTENSIFIED DURING THE REVOLUTION . To finance the war, the Continental Congress issued a shaky paper currency founded on nothing more than its own good faith. British authorities immediately began undermining this money with forgeries. In January of 1776 they set up a press on board the warship HMS Phoenix in New York Harbor to print bogus continentals. A year later newspapers in British-occupied New York City offered to supply “counterfeit Congress-Notes, for the Price of the Paper per Ream.” (Debasing the enemy’s currency has been a popular wartime tactic for centuries. As far back as 1470 the Duke of Milan counterfeited Venetian money during a war between the two states, and during World War II the Germans printed hundreds of millions of pounds’ worth of counterfeit British money.)

Several issues of continentals were so extensively counterfeited that they had to be recalled. Even before the war was over, the debasement of paper currency prompted Congress to eschew notes altogether. All continentals were recalled in 1781, and the disrepute attached to them was so strong that the national government issued no more paper money until the Civil War. All paper currency during the formative years of the Republic was produced by private banks. This situation was perfect for counterfeiters, because with so many different types of bills around, few people had enough experience with any given variety to spot a fraud easily.

In the early nineteenth century the Massachusetts inventor Jacob Perkins (who would later make key innovations in steam engines and refrigeration) revolutionized banknote printing in ways that permanently transformed the war on counterfeiting. Before Perkins, printers had two main means of applying ink to paper. The letterpress process used an image in relief: Ink was applied to raised areas, and the paper was pressed against them. The intaglio process, on the other hand, worked the opposite way. Images were carved into a smooth metal plate. The printer applied ink and then wiped the plate clean, so ink was left only in the sunken lines and dots. A press forced damp paper against this plate at high pressure, pushing it into the recesses to take up the ink.

Intaglio printing left the paper with a distinctive feel that has remained a characteristic of paper currency ever since. Both the engraving of the plate and the printing process were demanding skills, a fact that discouraged casual counterfeiters. A copper intaglio plate, though, was good for only about 5,000 impressions before it began to show signs of wear. Later notes were not quite as crisp as earlier ones. And if the engraver responded by touching up the plate or creating a new one, it would not be identical to the original.

A harder metal, such as steel, would allow more impressions, finer details, and much greater consistency from one note to the next, but steel was too hard to make a good engraving upon. Perkins, a goldsmith by training, used his knowledge of metallurgy to find a way around this problem. First he softened a steel plate by annealing it with heat. Then, after engraving, he heated it in the presence of carbon to harden it. The result was a plate that could stand up to 30,000 impressions.

That was only the beginning. To make additional plates, Perkins pressed a roller of soft steel over a hardened plate at very high pressure, duplicating the image in relief. Then he hardened the roller and used it as a die to impress another soft steel plate. The technique allowed him to duplicate images exactly without re-engraving, to assemble pre-existing components onto a single plate, and to copy a finished plate precisely.

Perkins had invented most of the elements of his system, which he called siderography ( sidero - meaning “iron”), by 1804. Later he improved it by adopting a device originally used for engraving watches to create decorative lines with a precision that made them exceedingly hard to copy. In this technique, cams and gears exerted eccentric circular motions to the bed that held the work, while a stationary engraving point traced a repeating pattern into the metal, somewhat like a Spirograph. Other machines could cut evenly spaced straight or wavy lines.

Many banks adopted Perkins’s methods of mechanized engraving, producing notes they thought were beyond the talents of any counterfeiter. An 1809 Massachusetts law required all banks in the state to employ steel engraving for notes. The Perkins system had, it seemed, dealt a deathblow to counterfeiting. In 1851 H. C. Foote, the author of a treatise on detecting counterfeits, declared that “since the invention of the Geometric Lathe, Ruling Engine… and the invention of transferring engraving by Perkins, it has been rendered entirely out of the question—in fact a physical impossibility—for any genuine note to be perfectly imitated.”

Foote was correct, and yet the nation was even then enduring a deluge of worthless paper. It was the fragmented American banking system, rather than any technological weakness, that made the currency vulnerable. When Thomas Jefferson became President in 1801, only one federal and 30 state-chartered banks existed in the United States. The lone national bank expired in 1832, and there would be no others for more than three decades, but as early as 1813 the number of state banks had risen to 208, and by the Civil War there were more than 1,600. These banks churned out at least 7,000 varieties of notes, each with its own design and denomination.

PRINTERS’ CATALOGUES OFFERED REAL AND FAKE BANKERS a wide range of border designs and other decorative elements. One Delaware City Bank dollar bill featured four vignettes: a woman leaning against a shield, a passenger train, a farmer with a sickle, and a small dog. Classical gods and goddesses appeared side by side with scenes of industrial stalwarts casting gears. Notes of the Saint Nicholas Bank in New York City showed a jolly Santa Claus descending a chimney, and other Santa Claus images appeared on notes from banks as far away as Wisconsin.

Anyone with access to a printing press could print up bills and pretend they were legitimate. And even when bills were backed by an actual chartered bank, the bank might have few or no assets (there were cases of barbers and bartenders issuing notes). Imitations of bills from reputable institutions were easy to pass, since most issues did not circulate in large enough quantities for their minute details to become familiar, and in any case, the necessary graphic elements were easy to assemble.

When notes of different denominations used the same design, it was easy to raise their value, and counterfeiters could also buy elaborately printed notes of defunct banks for practically nothing, scrape off the name of the issuing bank, and substitute a sound one. Even better, the plates from notes of “blown” banks were frequently auctioned off. In view of all these opportunities for fraud, a merchant or customer presented with a bill had to ask: Does this bank exist? Is it solvent? Does this note bear the proper design? And if it is proper, has it been printed legitimately?

Entrepreneurs assembled and sold lists identifying which notes were good and which were bogus. The earliest “counterfeit detector” was published in Boston in 1805, and they became ubiquitous by the 1820s. Counterfeit detectors described what a valid bill should look like and listed the various counterfeit, spurious, altered, and raised versions that had turned up. Yet the counterfeiters managed to stay several steps ahead of those who were trying to catch them. Payton’s Counterfeit Detector of 1839 listed 1,395 bad notes, some of them copies of real ones and others whose issuers included 20 fictitious banks, 43 banks whose notes were worthless, and 54 bankrupt banks. Though the detector was meant to reassure those accepting currency, a Boston writer noted that it revealed merely “a dim outline landscape of the great system of counterfeiting.”

By 1853 a New York City bank teller was ready to declare the “danger that the whole system of bank paper for currency may yet have to be abandoned” because of forgeries. The New York Times raised an alarm in 1862, claiming that 80 percent of banknotes then circulating were fakes. Counterfeiting, the newspaper declared, was “undermining our morality as a nation.” More conservative estimates held that between a third and a half of U.S. currency was bogus.

Counterfeiting rings hired out-of-work engravers, assembled substantial printing plants, and maintained networks of wholesalers to distribute their notes, along with “shovers” to put them into circulation (unscrupulous merchants joined in the trade, handing out counterfeits as change). Shoving was not as easy as it might sound. A reliable shover had to be skillful enough to avoid suspicion and resourceful enough to keep from getting arrested if caught.

One shover’s technique was to carry just a single counterfeit bill at a time. If it was spotted when he tried to spend it, he could say he had gotten it in change, and a search of his pockets would show that the rest of his bills were legitimate. He had an accomplice, though, a boy with a wad of fakes who followed him on his rounds at a distance of a block or two. After the shover had successfully passed a counterfeit bill, the boy would walk past and discreetly hand him another.

Those who wanted to go into business as shovers were themselves often hoodwinked by swindlers who advertised “money making opportunities” by mail order. One practitioner of this “green goods” scam in the 1860s sent interested parties a genuine five-dollar bill, claiming it was an example of his skill at counterfeiting. He included a price list for other denominations. The takers, who were many, could hardly complain to authorities when the sellers vanished. Others pulled the same scam in person, showing purchasers a wad or bag of “counterfeit” bills and then surreptitiously switching them for plain paper at the last minute.

The counterfeiting business changed during the Civil War, when the national government began issuing paper money for the first time in 80 years. The notes were marked by portraits as well as traditional vignettes. This feature took advantage of a characteristic of the human brain: Because of our evolutionary conditioning, faces are easy to remember and recognize at a glance. That makes it hard for a counterfeiter to copy them accurately, because a minor flaw in the engraving will throw off the expression. The fronts of the new bills were printed in black and the backs in a green tint that was considered more indelible than other inks. The color of these “greenbacks” came to represent the security of United States currency.

A few years after it started issuing paper money, the federal government placed a heavy tax on issues of notes by state banks, effectively ending that practice. Banks with federal charters could still issue notes, though these were printed by the U.S. Treasury under strict controls. They continued to circulate until 1935. Since federal supervision of banks was much stricter than that of the states, problems with notes from “wildcat” banks greatly diminished.

Oddly enough, the appearance of a uniform national currency actually encouraged counterfeiters. Because the new notes were backed by the government instead of some possibly shaky bank, users did not examine them with the same care they had applied to state-bank currency. To combat the new wave of counterfeiting, the Treasury Department took the extraordinary measure of hiring agents to hunt down forgers. This was the first real police authority assumed by the federal government.

The Secret Service, founded in July 1865, was at first led by an unscrupulous detective named William P. Wood, a former prison superintendent, who set out to capture counterfeiters and “convince such characters” that they could no longer “ply their vocation without being handled roughly.” Wood was ousted in 1869, and his rough-and-ready band of detectives evolved into a highly effective enemy of counterfeiting. By infiltrating “coney” rings and tracking the sale of printing supplies, they were largely successful in squelching the counterfeiting epidemic by the end of the nineteenth century.

The distinctive paper used for banknotes was one major obstacle to would-be fakers. Going back to the Revolutionary era, the government had ordered papermakers to embed tiny chips of mica and silk fibers in their banknote stock, which could be sold only to authorized buyers. Some notes also had a watermark, a thickness variation incorporated in the paper during manufacturing, which was invented in thirteenth-century Italy. The paper itself was made from a durable combination of cotton and linen, giving it a distinctive feel.

How Technology Raises the Bar for Counterfeiters

In the face of obstacles human and technological, coney men developed their own weapons. Even before the Civil War they had begun to employ a technology that vastly simplified their work. An 1856 issue of Banker’s Magazine worried that photography would allow criminals to “copy bank notes with such degree of skill as to deceive all but the very best judges.” Using light-sensitive chemicals, a counterfeiter could achieve almost perfect facsimiles in a few hours rather than the months it took to engrave a plate. These early counterfeits were simply two photographs of bills printed on paper and pasted together.

Because photography was black and white, banks began printing large letters or figures in red, blue, or green to thwart the technique. The eye easily distinguished vignettes printed in black over other features in color; the camera did not. Like most anticounterfeiting measures, these made duplication harder and more time-consuming, but not impossible. Creative masking, bleaching, and photographing through filters allowed the skilled counterfeiter to separate colors and print different parts of the bill separately.

DURING THE 1880s THE COUNTERFEIT WARS ESCALATED further with the advent of photolithography and photoengraving. These techniques used the photographic process not for making direct copies of money but for creating the plates by which bills could be mass-produced. The lithographic method applied the image of the bill chemically to a stone or a zinc plate. The surface remained smooth, but certain areas accepted ink and others repelled it. Photoengraving was an etching process in which an image was deposited on a plate by photography and then physically cut into it with acids. The result was a plate with raised and lowered areas, like an ordinary engraved printing plate, but done with chemicals.

The master engravers Baldwin Bredell and Arthur Taylor were so adept at these techniques that in the 1890s they were actually able to make a photoengraving plate and print bills in their prison cell, using smuggled tools, chemicals from the prison laundry, extracts from fruits and flowers brought by visitors, and sunlight. At the time, they were awaiting trial for producing copies of $100 bills that were so good that the government had been forced to recall the entire issue upon which they were based. Impressed with their skill, the chief of the Secret Service helped set the men up in legitimate businesses after their release.

At first photographic reproduction had its limits. Fine engraving and intricate lathework were hard to reproduce; the spaces between the lines tended to close up during the printing process. Nevertheless, photo methods remained the counterfeiter’s most potent tool for a century. Refinements made it possible for counterfeiters to produce almost perfect plates of a banknote from photographs. The equipment required, though, remained highly specialized and called for advanced skills. Its dissemination has long been monitored by the Secret Service.

Counterfeiting has always attracted an array of practitioners as colorful as they were technically skilled. One who operated during the nineteenth-century heyday of the art was William E. Brockway, a gaunt, sharp-nosed man known as Long Bill. He was born in 1822 and as a boy went to work for a New Haven printer who made banknotes. He also sat in on Yale classes in chemistry and law and was thought a promising student.

The banks that dealt with Brockway’s employer kept the plates for their notes in vaults and lent them to the printer under strict supervision. During the 1840s Brockway and an accomplice distracted a bank official long enough to run a thin lead sheet through the printing press, making a copy of the engraved plate. By depositing a layer of copper on the purloined lead impression, Brockway created a serviceable copper plate identical to the original. This episode launched him on a career of counterfeiting that would span the remainder of the century. In 1849 the New York Journal of Commerce reported that his fakes “created much astonishment by the accuracy with which they were engraved.” Over his entire career Brockway may have printed $10 million in bogus money, as well as untold amounts of forged government securities.

One of the great mid-century counterfeiters was Ben Boyd, who provided phony bills for an Illinois-based ring. When he finally went to jail in 1875, scores of people were put out of work. So desperate were the ring members to regain their livelihood that they came up with a plot to steal Abraham Lincoln’s body from its sarcophagus in Springfield and hold it for ransom until Boyd was freed. Informers tipped off the police, the plan was aborted, and the ringleaders were captured.

Another notable coney man was Emanuel Ninger, a German immigrant and sign painter by trade. He was a solo practitioner who drew his fakes by hand on high-quality bond paper, which he bought from the same company that supplied the government. The paper was not the same as that used for currency, but it was as close as he could get. He cut the paper to note size and soaked the pieces in weak coffee to give them an aged appearance. (The psychology of counterfeiting has always dictated that bills that look used are easier to pass than new ones.)

While the paper was still wet, Ninger laid it over a genuine bill—twenties and fifties were his favorites—and mounted them on a sheet of glass with a light behind it. He could now trace the design of the original in pencil. Once the paper had dried, he carefully went over the pencil marks in ink. He didn’t try to copy the intricate scrolling but merely suggested it with deft touches. With a fine brush, he added tiny colored lines to imitate the threads found in government bills.

It probably took Ninger the better part of a week to complete a copy. On the last Friday of every month he traveled from his New Jersey farm to New York City and made small purchases with his bills. His forgeries began to be noticed and even admired midway through his career, usually long after he had spent them, but his identity remained unknown. In 1892 The New York Times described a “particularly fine counterfeit of a 50-dollar bill,” which had been inspected by bankers and “received the respectful consideration it deserved.” Newspapers dubbed the forger Jim the Penman. Some who received the artistic copies had them framed and even sold them for more than their face value. Examples still exist and are prized by collectors, though they cannot be bought or sold openly, since the Treasury Department has the right to seize all counterfeit notes, no matter how old.

Ninger’s efforts pointed up a flaw in the government’s strategy for fighting counterfeits: Finely detailed and hard-to-copy engraving and lathework went for naught if citizens didn’t check for them. The biggest tip-off has always been the paper. If it doesn’t feel right, a cashier will become suspicious and take a closer look. Like facial expressions on the portraits, the feel of the paper is something that people notice without trying.

In 1896 Ninger was finally caught when he made the mistake of laying one of his bills on a wet counter in a bar. The ink ran, and the bartender alerted the police, who caught Ninger as he was boarding the ferry back to New Jersey. He was convicted and sentenced to six years in prison, a light sentence that served as recognition of his artistic flair. He served a little more than four years.

As a small-time individual counterfeiter, Ninger was an exception. For the most part, counterfeiting required substantial capital investment. Skilled engravers and printers were needed, as well as an army of wholesalers and shovers. The bigger the ring, the more vulnerable it was to infiltration by the Secret Service. By 1903 it was estimated that only a single counterfeit dollar was circulating for each $100,000 in currency, quite a turnaround from the days when half the money in the country was suspect.

COUNTERFEITING CONTINUED AT A MODEST LEVEL through the first half of the twentieth century. In 1929 the Treasury reduced the size of bills and took the final step toward standardizing them. Every example of a given denomination, whether silver certificate, Federal Reserve note, or whatever, would have the same portrait and the same vignette on the reverse. “Raising” notes became more difficult; a $10 bill with George Washington’s face was unlikely to fool a merchant (though in the middle of a large stack it might pass). The long strips of thread in specific places on the bill were replaced with short fibers that were mixed into the paper slurry and distributed randomly. These were difficult to copy in bulk.

By the middle years of the century counterfeiting seemed to have been eliminated as a major problem. Fully 90 percent of counterfeiters were being apprehended, and the government was confiscating most bogus money before it was spent. For small-time crooks, forging checks was much easier, and the spreading use of credit cards gave birth to numerous scams that did not require skilled labor or expensive equipment. Counterfeiting seemed on its way to becoming a quaint, archaic craft.

In recent decades, however, two new fronts in the counterfeiting war have opened up: computer technology and globalization. The Xerox photocopier arrived in the late 1950s, and the first color copiers followed in the 1970s, but they were very expensive and could not reproduce banknotes accurately, since the engraving was too fine for them to handle. In the 1990s, however, cheaper photocopiers based on digital technology began turning out reproductions of ever-higher quality. In 1990 a color scanner capable of resolving 600 dots per inch sold for $10,000. Today a 4800-dpi scanner costs about $500. Professional-quality print and imaging software has also become easily affordable. By the end of the 1990s a personal computer with a scanner and inkjet printer could copy currency with alarming accuracy. Many such machines can even reproduce watermarks and subtle color tints.

At the same time, hostile governments and organized-crime cartels abroad set up counterfeiting operations that produced what are sometimes called “superbills.” Although the Treasury Department has never confirmed the details, plea-bargaining criminals reportedly gave a federal prosecutor counterfeit $100 notes that were almost indistinguishable from real ones. They fooled the department’s own sophisticated scanners, which use 30 separate sensors. Close examination by humans revealed extremely minor imperfections. Gangsters in Colombia have bleached dollar bills and used photolithography to print the images of $100 bills on the paper, and North Korea has also applied its extensive technological expertise to create fake hundreds. It is estimated that as much as three-quarters of all counterfeiting of U.S. currency occurs outside the United States.

Counterfeiters using home computers need neither specialized skills nor a large investment nor a network of distributors for their casual forgeries. A foreign industrial-level operation is largely beyond the reach of domestic legal sanctions. Both threats presented new challenges to the money supply in the 1990s, prompting the Treasury to redesign American currency for the first time in 65 years.

Many of the anticounterfeiting measures that the Treasury put in place in the 1990s were updated versions of technologies first used in the nineteenth century or earlier. Fine engraving and intaglio printing remain at the heart of currency security. The first redesign, in the mid-1990s, enlarged the hallmark portraits and enhanced their details. These heads of Presidents and statesmen are the most vivid identifying characteristics on the bills and the hardest to duplicate. Months of hand engraving with a steel tool and magnifier went into the new designs. The craft is still highly specialized, and only a few dozen people in the world possess the skills needed to render banknotes accurately.

The Treasury has added some modern twists to two other traditional features. Starting in 1990, instead of a band of silk, the paper manufacturer wove in a polymer thread about 1.5 millimeters wide, printed with the bill’s denomination and “USA.” This security thread is visible only when light shines through the note, and it glows a distinctive color under ultraviolet illumination. Improving on Perkins’s machined engraving, the Treasury added computergenerated microprinting to some design features. This print, only 0.18 millimeters high, looks like a ragged line to the naked eye but resolves itself into words under a magnifying glass. It presents the ultimate challenge to scanners and printers, whose resolution is limited by the digital sampling techniques they use to construct images.

The new money reinstated the watermark, which had been dropped from U.S. currency in 1879. An outline version of the portrait, incorporated during paper manufacture, can be seen off to the side when light shines through the note. Some features on today’s money are printed with color-shifting ink, which uses tiny plates of thin-film filters as the pigment and shows as different shades from different directions. Glittery metallic inks are also used. Both are hard to copy. Even this technology is not entirely new, though. Some fractional currency of the Civil War era included a shiny copper-colored ink to thwart counterfeiters.

Even as the redesign was in progress, however, the digital technology available to counterfeiters was becoming increasingly sophisticated. The first counterfeits of the new bills appeared the week of issue, with some forgers substituting party glitter for the Treasury’s iridescent ink. But counterfeiters seeking to accurately replicate genuine bills must endure a learning curve. That’s why the Treasury plans to alter currency designs every 7 to 10 years, forcing forgers to start from scratch with each new issue.

Merchants and other accepters of cash have a number of ways to block the passing of bogus bills. Some merchants use iodine pens to check for forgeries. Iodine will turn the starch in ordinary paper black, but the rag paper used for genuine bills contains no starch. Casino operators in Las Vegas have begun to count cash with machines that test for counterfeits. These bill validators were originated in the late 1960s by vending-machine companies and have become increasingly sophisticated. It’s hard for counterfeiters to fool a machine. The ink used to print currency has a high iron content and a distinctive magnetic signature. Scanners detect this pattern and use optical readers to measure the levels of light transmitted as a bill passes through.

At the government’s urging, the manufacturers of some color copiers, scanners, and printers add software that can detect banknote designs. Canon copiers, for example, print a blank when they recognize a bill. They also include on every copy a code in microdots that identifies the specific machine used and can be deciphered by the Secret Service.

In addition to updating old antiforgery techniques, the government is contemplating new ones. An intriguing idea is to substitute plastic for paper. Plastics are durable and can accommodate a wide range of security devices. Australia has been using plastic currency since 1988. Holograms, already in use on credit cards, may also be used in the future to make currency harder to copy.

Radio-frequency identification chips, four millimeters square or smaller and embedded invisibly in banknote paper, have also been considered. When scanned by detectors at banks and stores, they would emit a unique signal, like an electronic ID card. This method would probably encounter resistance from privacy advocates because it could be used to keep track of where and when particular bills had been spent.

One factor in deciding what security features to include is cost. The features that have already been added raised the cost of producing each note from less than five cents to about eight cents. The Bureau of Engraving and Printing produces about nine billion notes a year, so every penny on the cost adds $90 million to the Treasury’s yearly budget.

In the future the shift to credit and debit cards may make cash so rare that it isn’t worth faking. One thing, though, is certain: As long as currency circulates, the game of technological one-upmanship will continue. It’s been true for a long time that anyone with the skills to run a successful counterfeiting operation could probably earn as much or more legitimately. But the allure of making fake money remains deeply embedded in the human psyche. As the colonial silversmith and incorrigible counterfeiter Gilbert Belcher declared, “No gain afforded me so much pleasure as that which I acquired by illicit means.”