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Feds Roll Out 'Rainbows' With Extra Security
 | By Fred L. Reed III, Bank Note Reporter
October 29, 2008 |
Part 41
As reported in these pages in past columns, the nation's money stock was in dire straits in the half decade following the conclusion of the Civil War. To finance the war effort and wrench the rebellious districts back into the Union, the feds had launched a greenback fiat currency that had proven to be a sitting duck for the clandestine paper mills in the Northeast and Midwest.
Spurred by Treasury Secretary George Boutwell's decision to scrap the old compromised greenbacks, the Treasury introduced a new Series of 1869 Legal Tender Notes. The notes' souped-up anti-counterfeiting measures (shades of the present currency redesign, eh?) were hoped to be just the trick to turn the tide in the government's war with counterfeiters (Fig. 1).
Appropriately called "Rainbow notes," this sobriquet is due to their exquisite coloration. These new greenbacks are characterized by a repetitive green under print on the four lowest denominations and a localized blue anti-counterfeiting "stain" on all denominations. This "stain" results from the introduction of localized color fibers homogenously at all levels on the surface and interior of the paper. The large, colorful Treasury seals in shades of red, and bright red or blue serial numbers add to this series' multicolor appearance.
The faces of most denominations bear the imprint of the new "Bureau [of] Engraving & Printing." Alternately, on the two smallest notes ($1 and $2) in this series, the imprint reads: "Engraved and Printed at the Treasury Department." Additionally, the $2 has a National Bank Note Co. imprint on its face at lower left for reasons unclear to this writer.
The new ten-spot, the "Jackass" note, which replaced the much-counterfeited $10 Lincoln Legal Tender Note we have been discussing, is a wondrous creation. It is truly state-of-the-art bank note engraving of the late 1860s. The face features the stern visage of Daniel Webster, and the engraving "Presentation of Pocahontas at Court." Old Abe was kicked "upstairs" on the new note series, landing on the $100 note. Once again, the new Lincoln portrait was engraved on contract by Charles Burt. This is the familiar portrait that would become the "Universal Lincoln" icon on $5 bills in the 20th century.
The new Rainbows employ what was believed to be the most sophisticated counterfeit deterrence of the period. Gone are the claims of the faulty patent applications of the American Bank Note Co. (the June 30, 1857, "Canada Green" ink that did not deter counterfeiting), and Asahel K. Eaton's similarly ill-purposed anti-photographic green ink (his April 28, 1863 patent discussed in the last column). The feds' reliance on these non-performing ink patents had nearly crippled federal issue of paper money by leaving its currency susceptible to rampant fakery.
In their place, the Treasury relied on James M. Willcox's patent method of introducing colored fibers into localized areas of security paper, dated July 24, 1866 (Fig. 2). According to researcher Carlson Chambliss, the fibers are "jute," a natural fiber native to south Asia, although the fiber material is not specified in Willcox's letters patent for "Safety-Paper" No. 56,650. The inventor calls only for "fibers of any suitable material or materials different from the ordinary fibers of the paper."
Although authors usually make note of these colored fibers, there seems to be little curiosity about their origin. All denominations, $1 to $1,000, show the patent information as a circular counter on the notes' faces: "Patented // 1866 // July 24." According to Willcox's obituary in the New York Times, he perfected this security paper at his Glen Mills, Pa., factory "under government protection," for use on government treasury notes and bonds. It was eventually also adopted in Germany.(1)
"My invention consists in the preparation of a peculiar paper to prevent the counterfeiting of bank-notes, bonds, drafts, and other evidences of value," Willcox wrote.(2) The inventor rejected other processes, which mixed colored fibers promiscuously through the pulp. In contrast, Willcox claimed he had perfected the manufacture of a homogenous marked paper with distributed fibers "both on the surface and at various depths" in localized areas. "The other portion or portions of the paper being left free from such additional fibers," he wrote.
Furthermore, Willcox claimed his unique paper could only be made at a paper mill, and then only on a Fourdrinier paper machine when he introduced the fibers during the transition from pulp to paper. Adopting his process and paper would effectively combat fake notes printed on inferior, or common bank note paper. "I have designed to make a paper so distinctly marked that all can distinguish it; so peculiarly marked that all can readily learn the peculiarity," he claimed.
Willcox also conceived and perfected a proprietary "Chameleon Paper," patented May 16, 1871, which "put an end to the counterfeiting and reusing of internal revenue stamps, by which the Government had been extensively robbed of its revenue." This chemically-sensitive security paper changed colors when tampered with. Examples are illustrated (Figs. 3-4).
For additional security, the Rainbow notes also employ George W. Casilear's patent for printing a colored (red and blue have been observed) serial number against a fine line guilloche (intricate engraved pattern) to foil tampering, patent No. 84,341, dated Nov. 24, 1868 (Figures 5-6). (3)
"Be in known that I&have invented a new and improved Mode of Preventing the Alteration of Numbers or the Addition of Figures on Bonds, Notes, and other Securities," Casilear wrote. His approach was to imprint numbers "on a finely-engraved background&of scroll-lathe work, or any other printed matter, the groundwork of which shall be tinted in fugitive colors or inks." Furthermore, his idea was to print serial numbers between marks "leaving no room for adding an additional number on either side of the figure or figures." These might be parentheses, or as seen on the Series 1869 notes a prefix letter and a suffix consisting of a five-pointed star.
Although Casilear was not acknowledged on the Series 1869 notes, his name is recognized on some notes of later series in connection with this patent. For example, on the Series 1874 $2, the imprint beneath the bottom left serial number reads "G.W. Casilear's Patent Nov. 24, 1868" in tiny lettering. A similar legend appears on the Series 1875 $10 note (Fig. 7).
Most denominations of Rainbow notes have a single "Patented, Nov. 24, 1868" in proximity to their lower left serial numbers; however the $100 and $1,000 denominations (at least) have this twice in proximity to both serial numbers. Most of these patent imprints are very small and obscure; if I missed any I would appreciate knowing about it.
Casilear, who had a long and somewhat turbulent career in the bank note industry, also served as chief engraver and superintendent of the engraving division at the BEP.(4) In addition to his Nov. 24, 1868, engraving patent to foil fakery, he patented an improved paper to foil altering in 1875, and three years later another improved bank note paper employing localized fibers and coloring.
The four lowest denomination notes also employ green, repetitive micro printing on face to preclude raising. Note backs bear the imprints of either the ABNCo. or the NBNCo., including the characteristic green ink tints and repetitive machine rosetteswithout either ABNCo's or NBNCo's counterfeit-deterrent patent claimsas additional security (Fig. 9).
In addition to all this (hope-for) ramped-up security, these Rainbow notes are the first Legal Tender Notes to sport a counterfeit clause, which had been previously employed on national currency. When the National Currency Act was drafted, secs. 59 and 60 provided sentences upon conviction for counterfeiting the notes of confinement at hard labor for a mere three to 10 years and a fine not exceeding $1,000.(5) However, when passed the stricture was more stringent providing for incarceration up to 15 years.(6)
I've illustrated the counterfeit clause from a National Bank Note in Part 34 (BNR February 2008). As noted here earlier, penalties for counterfeiting federal greenbacks were different from those for faking nationals. The Act of Feb. 5, 1867, specified imprisonment up to 10 years and/or a fine up to $5,000 upon conviction for counterfeiting treasury notes.(7)
The new Rainbow notes bear a daunting anti-counterfeiting warning, not seen on earlier series of Legal Tender Notes, which is as stern as the image of Webster on the $10 note face. On the back of the new $10, a large medallion dominates at the very center of the note's back. The message is clear: "Counterfeiting or Altering this note, or passing any counterfeit or alteration of it, or having in possession any false or counterfeit plate or impression of it, or any paper made in imitation of the paper on which it is printed, is felony and is punishable by $5,000 Fine, or 15 years imprisonment at hard labor or both" (Fig. 8).
The new notes were not a new authorization. The Act of March 3, 1863, provided for the reissue of Legal Tender Notes "from time to time as the exigencies of the public service may require." The Act also provided that for any United States Notes "returned to the treasury, and cancelled or destroyed, there may be issued equal amounts of United States notes, such as are authorized by this act."(8)
The "exigency" was the compromising of the Legal Tender Notes in circulation by false imitations. As will be vividly demonstrated in the following fiscal year figures, these supposedly more secure Series 1869 Rainbow notes merely replaced the earlier Legal Tender Notes that had to be withdrawn, viz:
l In FY 1870 $66.8 million in Series 1869 notes were issued/an equal amount of Series 1862/3 notes were withdrawn.
l In FY 1871 $107.3 million in Series 1869 notes were issued/an equal amount of Series 1862/3 notes were withdrawn.(9)
Since these notes bear the throwback authorization date of March 3, 1863, the counterfeiting strictures of that Act apply and not the then current lesser strictures of the Act of Feb. 5, 1867. The 1863 Act carried over section 6 of the prior Act of Feb. 25, 1862, which first authorized Legal Tender Notes.(10) Under terms of section 6 of the Act of Feb. 25, 1862, punishment of counterfeiting upon conviction was liable to a "fine not exceeding five thousand dollars, and by imprisonment and confinement to hard labor not exceeding fifteen years, according to the aggravation of the offense."(11) This is the warning that appears on the Rainbow notes.
Consider how severe these penalties could be when an average working man was paid about $800 to $1,000 annually. And also consider that the comparable clause on First Charter Nationals introduced only six years earlier specified "only" a $1,000 fine, 15 years at hard labor or both. The feds were finally cracking down!(12)
Would these new counterfeit-resistant notes prove "inimitable" (incapable of being copied, in the words of James M. Willcox), or would they too fall prey to the same fate as their predecessors? Time would surely tell.
To be continued&.
Illustrations of Rainbow notes courtesy of Sergio Sanchez and Fred Wolfe, SFW Enterprises.
A Personal Note
As always, I welcome feedback from BNR readers. We cover a lot of ground in this column, and it's surprising what sparks the interest of individuals. Questions, comments, cheers or jeers are welcome. You can contact me at fred@spmc.org or by mail at PO Box 118162, Carrollton, TX 75011-8162. If you write and wish a reply, please include a self-addressed stamped envelope, but please be aware that if your subject is of interest generally it may be addressed in a future column instead.
End Notes
(1.) "He Made Counterfeiting Difficult; Death of James M. Wilcox (sic), who invented the paper used for bank notes," New York Times, Oct. 25, 1895. Willcox's son, also James M. Willcox, authored History of the Philadelphia Savings Fund Society, 1816-1916, Philadelphia: J.B. Lippincott, 1916.
(2.) United States Patent Office, James M. Willcox, of Glen Mills, Pennsylvania, "Safety-Paper," Letters Patent No. 56,650, dated July 24, 1866, four pages.
(3.) United States Patent Office, George W. Casilear, of Washington, District of Columbia, "Method of Preventing the alteration of Numbers on Bonds, Notes, and Other Securities," Letters Patent No. 84,341, dated Nov. 24, 1868, two pages.
(4.) George W. Casilear was first employed at the Treasury Department in 1862. He served as chief engraver from circa 1875 to 1885, when he was removed by Treasury Secretary Daniel Manning in a political maneuver. See "The New Chief Engraver; Mr. Casilear's Removal Considered a Good Thing," New York Times April 18, 1885. Four years, later, however, Casilear was named Superintendent of the Engraving Department. See Gene Hessler, The Engraver's Line, BNR Press, p. 80.
(5.) "The Proposed Banking Law. The bill Now Before the Committee of Ways and Means of the House of Representatives," New York Times, Jan. 9, 1862, p. 2.
(6.) The Act of June 3, 1864, provided for penalties upon conviction of counterfeiting national currency of five to 15 years at hard labor and fine up to $1,000; see Statutes at Large, 38th Congress, Sess. I, Chapt. 106, An Act to provide a National Currency, secured by a Pledge of United States Bonds, and to provide for the Circulation and Redemption thereof, p. 117.
(7.) Statutes at Large, 39th Congress, Sess. II, Chapt. XXVI, An Act to punish certain Crimes in Relation to the Public Securities and Currency, and for other Purposes, Feb. 5, 1867, p. 383; see also Appendix to the Congressional Globe, 39th Congress, 2nd Session, Chapt. XXVI, p. 182.
(8.) Statutes at Large, 37th Congress, Sess. III, Chapt. LXXIII, Sect. 3, An Act to provide Ways and Means for the Support of the Government, March 3, 1863, p. 711.
(9.) See William A. Richardson, Report of the Secretary of the Treasury for the Year 1873, Dec. 1, 1873, p. 328.
(10.) Statutes at Large, 37th Congress, Sess. III, Chapt. LXXIII, Sect. 8, An Act to provide Ways and Means for the Support of the Government, p. 713.
(11.) Statutes at Large, 37th Congress, Sess. II, Chapt. XXXIII, sect. 6, An Act to authorize the Issue of United States Notes, and for the Redemption or Funding thereof, and for Funding the Floating Debt of the United States, Feb. 25, 1862, p. 348. Incredibly, the Legal Tender Act in its first iterations had NO counterfeiting penalty specified. It was added at the urging of Treasury Secretary Chase; see Elbridge Gerry Spaulding, A resource of war--The credit of the government made immediately available.: History of the legal tender paper money issued during the great rebellion. Being a loan without interest and a national currency, Express Printing Co., 1869, pp. 26, 58, 94, 98ff.
(12.) On June 14, 1870, U.S. Treasurer published notice of a theft from the Treasury of two thousand Series 1869 $10 notes nos. H3530001* to H35320000*, copy of notice in Library of Congress.
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