Today in History: Secret Service Is Officially Launched to Combat Counterfeit Bills
by M.C. Millman
In the early 1800s, each of the United States's 1,500 private banks issued its own unique paper money with designs that could include anything from monuments and buildings to presidents and bullfrogs or even multiples of the above on one bill.
With 1,500 banks creating their own paper money, counterfeiting was relatively easy and a widespread problem. Not only could counterfeiters make fake bills, but they could also create fake banks.
Counterfeit bills were not the only issue with paper money at the time. Bills from different banks also had different street values. If the bill came from a bank known to be more reliable, recipients trusted that the bank had the funds to back up the paper, making it easier to use that bill for payment. Paper money from less-known or bad banks would be harder to use or pass.
To combat the counterfeiting problem, people relied on a published guide listing and describing all known banks and counterfeit bills.
Even when greenbacks came into play in 1862, creating standardized paper money at last with green ink and intricate designs that were supposed to be hard to copy, counterfeiters were not kept from production for long. Despite the greenback, nearly half the bills printed in the 1860s were still counterfeit.
In response to the continued problem plaguing the nation, the Secretary of the Treasury, Hugh McCulloch, asked President Abraham Lincoln to create a new federal law enforcement agency to address the issue.
The U.S. Secret Service officially came into being on July 5, 1865, as a part of the Department of the Treasury, when Chief William P. Wood was sworn in as the first Secret Service Chief (known today as "director") by McCulloch. At the time, the job of the Secret Service was to combat counterfeit bills. The Secret Service launched with personnel working in eleven districts throughout the county.
In 2003, the Secret Service was moved from being under the Department of the Treasury to the Department of Homeland Security, where it protects presidents, vice presidents, their families, and other high-level personnel while at the same time still keeping an eye on financial crimes, including counterfeit U.S. currency.