Counterfeiting in the United States has generally been confined to the paper money. In the early days of the Republic this usually meant that engravers worked on private bank notes but the target changed after the introduction of the greenbacks in the Civil War and the abolition of private notes. Counterfeit Federal Reserve Notes are of course an ongoing problem which is easily seen at stores where the marking pen is commonly used on $50 and $100 bills and even $20s.
That paper money has been the primary target of counterfeiters in modern times does not mean that coins are exempt from fraud. False coins have been made by criminal elements since the dawn of coinage about 600 B.C. One often sees Roman or Greek coins with an edge cut or gouge on one of the faces; this was done to make certain that the piece was not just a plated surface over a copper core.
In more modern times we have been treated to some odd cases of counterfeiting. One of the most bizarre came in the 1950s when a New Jersey mechanical engineer turned his skills towards making counterfeit nickels. After all, who checks their minor coins to make certain that they are genuine?
The engineer made nickels by the thousands, mostly taking them to banks where he claimed to be a vending-machine operator. The excuse was perfectly reasonable and the banks had no suspicions. He was tripped up by his failure to properly understand the mintmarks that appeared on this denomination.
In particular the counterfeiter was unaware that special mintmarks were used on the so-called war nickels, which were struck from 1942 to 1945. These coins did not contain nickel, a critical war material, but did have silver and manganese. To distinguish these coins from the standard ones made with the copper-nickel alloy, large mintmarks (including the letter ‘P” for Philadelphia) were placed on the reverse above Monticello.
He was undone by some sharp-eyed New Jersey numismatists. The failure to put the special mintmarks on the 1944 counterfeit nickels was his undoing and federal officials, once the scheme became known, swooped in to arrest the perpetrator. He was soon convicted.
One of the more interesting American counterfeiting cases dates back to the 1840s and involved the large cent. Common sense dictates that a coin of such little value would be relatively safe, but this was not the situation in the murky world of the New York criminal gangs.
In the late fall of 1849 Mint Director Robert M. Patterson, in his office at the Philadelphia Mint, received information through Mint Treasurer James Ross Snowden that counterfeiting of cents was thought to be widespread in New York City. Mint officials were naturally touchy about competition, especially because the profits on the cent coinage were used to offset other expenses.
Patterson was surprised to receive this kind of information as counterfeiting of the cent had never really been a problem in the United States. In the 1790s there had been concern that this might occur, which was the reason for the lettered edges found on cents and half cents from 1793 to 1795.
In addition the intrinsic value of the copper coins was high enough in the earlier days of such coinage that there was usually little profit margin for the counterfeiter. The cost of copper, however, declined in the 1840s as major copper mines in Upper Michigan were developed.
The criminal elements had been less generous with the silver coinage, however, as collectors today are well aware of the numerous half dollar counterfeits dated in the 1820s and 1830s. These were mostly made from German silver, an alloy which contained several metals but not silver. The counterfeiters were often well equipped with the proper machinery and one even finds lettered edges that are reasonably well done.
These half dollar fakes are usually ascribed to Mexican counterfeiters though on what grounds is not clear. Contemporary press accounts reporting such fakes invariably state that they were made in the northern states or in Canada, where American half dollars were in widespread use among the general public.
When the news about cent counterfeiting was received by Dr. Patterson, little time was lost in investigating the matter. His first thought was to determine if a private firm in Massachusetts, Crocker Brothers, was somehow involved. In 1849, as had been true since the 1790s, private firms prepared the cent planchets struck on the steam coining press at the Philadelphia Mint. Crocker Brothers did not prepare all of the planchets but nearly all of them so were perhaps a suspect in Patterson’s mind. He may have thought that a dishonest employee was stealing planchets and sending them to New York to be coined.
The cost of cent planchets from Crocker Brothers in 1849 was 28 cents per pound, including delivery charges by railway to Philadelphia. Copper prices had fallen over the past few years and the Mint was enjoying a healthy profit as cents, for example, were issued at the rate of 41.7 cents per pound. Considering costs of shipping to banks and businesses, the Mint was thus making a profit of more than 40 percent in the late 1840s.
All of this background information was in the minds of Mint officials when F.C. Treadwell visited his old friend, Mint Treasurer James Ross Snowden, in early November 1849. Treadwell created consternation in the minds of Mint officials with his lurid tales of counterfeiting copper cents by criminal elements in New York City. It turned out, however, that Treadwell had no direct knowledge of such affairs and was actually repeating second-hand information. It turned out that his source was a resident of New York named James Parr.
Second-hand information, especially when it concerns criminal activity, is sometimes overstated where there is only a minor problem. For this reason Treadwell was asked by Treasurer Snowden and Director Patterson to write his source at once for further information in order that Mint officials could deal with the problem. This was soon done and Parr replied in a letter dated Nov. 12, 1849:
“Yours came duly to hand. I have taken some pains & believe I have succeeded in finding the locations of our New York mints. I am certain that large quantities of Cents are made here and put into circulation. We have hundreds of thousands of dollars [worth of cents] in this city & the stock [of such false coins is] daily increasing.
“These cent makers … get them into circulation … [through] … the pawnbrokers. Some of these pawnbrokers use from $200 to $500 weekly & pay them out at 96 to the dollar to people who are necessitated to come within their grasp. I have appealed to the pawnbrokers to sell my cents [Parr was a merchant who took in a great many cent coins in his business activities] and have offered [to sell them at] 103 for the dollar. They have said they could do better by getting them from the [private] mint. Besides being new & clean, I suppose their hands are too clean to handle [my] dirty pennies…”
Parr, who had reason to be irritated at the competition from the counterfeiters, sought out information on their names and locations. He was able to identify one address in particular – 172 Forsythe Street – as a key spot in the operations. He uncovered the fact that 30 kegs of blanks had been delivered to this address; it turned out, however, that the kegs had then been sent to another location for the actual striking.
Parr spoke to the person who lived at the Forsythe Street address, John Coull, in an effort to learn further details. Coull made the claim that the planchets in questions had been refused by the Philadelphia Mint and had simply been turned over to him for whatever use might be made of them.
Parr also related a curious story in relation to the counterfeit coins being distributed. The preceding Friday (Nov. 9) a small girl had gone to Bowery bakery for bread and had tendered 18 “bright new pennies of 1849” for her purchase. The baker asked where she had obtained the nice new coins and she answered that her family made them. She even told the shopkeeper her home address, which was given to Parr and included in the Nov. 12 letter to the Mint.
Parr apparently knew the baker well and even managed to obtain five of the “new” 1849 cents. These were forwarded to Dr. Patterson for his examination. The correspondent had further investigated the matter and found that certain merchants were in on the counterfeiting scheme and were given their coins, to use as change for their customers, at a 15 percent discount. The Mint, of course, never discounted their coins.
There is another dimension to the situation. In 1849 cents were not legal tender and those with excess amounts of such coins had to sell them to a broker at a discount, usually about 5 percent. With this in mind the 15 percent figure quoted by Parr takes on a certain meaning in a business context.
The arrival of the Nov. 12 letter from Parr, and the enclosed 5 “new” coins of 1849, meant that Patterson would take immediate steps to determine the truth of the allegations. The coins were handed over to Chief Coiner Franklin Peale and Chief Engravers James B. Longacre for a careful examination. Both men agreed that the pieces were counterfeit, not an especially welcome determination as the director would obviously have preferred otherwise.
Mint records do not indicate how these counterfeit coins varied from the genuine but guesses can be made. First, it is probable that the designs (head of Liberty for example) were hubbed from actual coins and the devices simply not engraved from scratch. This would have been an imperfect operation, however, and hand-engraving of the minor details was no doubt a necessity.
It is also likely that the planchets weights were not carefully controlled as this would have meant a considerable amount of time and trouble, which would have reduced the profit on the counterfeit pieces. We could easily expect a difference of 10 or 15 grains from the legal weight of 168 grains for the cent.
Though Parr claimed that large numbers of the counterfeit cents had been made and passed into daily use, still it is odd that more of these have not been identified in present-day collections. In his well-known catalog of copper cents struck from 1816 to 1857, Howard R. Newcomb lists a small-date cent of 1848; he knew of only four in existence when the text was written in the 1940s. He does not mention 1849, however.
The Parr letter notes that counterfeits were also made in 1848 – the date 1849 would obviously not have been used in that year – and these are very likely the pieces listed by Newcomb. However, Parr also specifically mentioned the 1849 date and these were the ones sent to Philadelphia for examination by the experts. And the experts condemned them.
It therefore seems possible that the 1849 counterfeit cents were produced from fully hubbed dies, including the date. The products, considering the method of making such dies, would perhaps been a bit soft in the finer details and therefore have passed unnoticed as simply this or that variety of Newcomb. In addition, not all that many collectors spend a great deal of time examining their 1849 cents for minute variations in weight and method of striking.
Once the truth of the Parr accusations had been verified by examination of the counterfeit coins, Patterson lost little time in pursuing the matter. On Nov. 17 he wrote Treasury Secretary William M. Meredith reporting the circumstances of the situation and asking that action be taken to put the criminals out of business and into prison. Parr’s letter was copied and sent to Meredith as background for the charges.
Director Patterson also filled Meredith in on the historical aspects of the situation. He noted that in 1837 several private mints had struck tokens for businesses and political leaders and such pieces had circulated as cents during the economic hard times of that era. The issuing of such tokens had been completely stopped by United States district attorneys, mostly by threat of prosecution but also by actual prosecution in a few cases.
At this point the letters in the Mint records at the National Archives fall silent so we do not know what happened as a result of Patterson’s letter. However, it seems likely that the United States district attorney for New York City looked into the matter, contacted James Parr, and then took whatever action was necessary. One of these days a researcher will stumble across the appropriate files and be able to write an end to this story.
Although we do not know at this time what happened to the New York counterfeiters, we do know that such operations would have been almost pointless for the large cent after 1849. In 1850 the price of copper began to rise significantly and by 1853 even the Mint occasionally lost money because the cost of planchets and other expenses exceeded the face value of the coins.
The 1848-1849 counterfeiting interlude in New York is one of the interesting byways in the numismatic history of the United States and those who possess one of these rare pieces have something rather special. It will be interesting to see if the 1849 counterfeits can be definitively identified and become another special collectible.