American Numismatic Society
American Numismatic Society

Funny Money: The Fight of the US Secret Service Against Counterfeit Money

The Beginnings of the Secret Service

The United States Secret Service was set up in 1865 at the end of the Civil War. Its primary task was the suppression of counterfeit money. Within a decentralized system of over 1,600 banks and many other financial institutions issuing their own currency, counterfeiters had a relatively easy task. With the Legal Tender Act in 1862, which introduced the US legal tender currency known as “greenbacks,” a first step was taken towards creating a single currency for the United States.

William P. Wood, the first chief of the US Secret Service, was an unconventional individual within a government bureaucracy. A former detective and bodyguard, he had also run the prison in Washington, DC. Although somewhat controversial, Wood’s activities led to the establishment of a powerful agency. Operatives, as secret service agents were then known, rapidly gained a reputation for dedicated and forceful work. Towards the end of the century, the Secret Service had developed an impressive system of recording counterfeit notes and criminals by pioneering the use of photography.

Skilled engravers were tempted to work for counterfeiting rings, which would then “shove the queer” (sell or distribute the counterfeit money). Passing counterfeit money was often the work of confidence trickster, not infrequently women, who would be able to give the appearance of solidity and honesty.

By 1877 currency was issued solely by the government through the Bureau of Engraving and Printing. By then a professionally run Secret Service was making counterfeiting more difficult and a Federal crime, just as the Founding Fathers had provided for in the Constitution.

William P. Wood (Courtesy of the US Secret Service)