Series historical adviser Daniel Czitrom details a new type of criminal emerging in Five Points during the late 19th century – professional counterfeiters.
Episode Four introduces the highly intelligent, charismatic, and utterly ruthless counterfeiter, Philomen Keating. Keating’s character personifies a new type of criminal that emerged in the Civil War era: professional counterfeiters who exploited the new Federal “greenback” currency as a route to fortune.
Manufacturing counterfeit money had a long history dating back to Colonial times. Creating bogus coins was often the best ad hoc solution to personal debt, especially in rural areas where currency was often scarce. By the mid nineteenth century American commerce increasingly depended upon paper money, printed notes issued by some 1,400 banks chartered by states. This chaotic profusion of bank notes and the reliance upon local law enforcement made counterfeiting quite easy to get away with. As much as half the money in circulation by 1860 was counterfeit.
In 1862, as one means of financing the cost of the Civil War, Congress passed the Legal Tender Act, authorizing the Union government to print $150 million in legal tender notes, good for the payment of all debts. The new federal currency carried the full faith and credit of the national government, even though it was not backed by gold specie. Some $450 million in “greenbacks” were in circulation by the war’s end.
The new federal currency presented enormous opportunities for professional counterfeiters. “Shoving the queer” — slang for passing counterfeit money — became a specialized part of the urban underworld. Successful counterfeiting gangs were highly skilled operations combining fine art work, entrepreneurship, and maintaining regional networks of customers. New York City, the financial center of the country, became the capital of counterfeiting. In 1865 Congress created the Secret Service to suppress counterfeiting and protect the integrity of the federal currency. Establishing a federal currency, along with the new law enforcement regime to guard it, were two important examples of the how the Civil War expanded the role of the national government in American life.