Brief History of Counterfeit Money

Twenty seven centuries ago, the rulers of the Eastern Mediterranean countries began to mint coins on a mass scale. Coins were standard pieces of gold, silver and other metals that could conveniently be used in one transaction after another. Counterfeiting emerged almost simultaneously with the appearance of money, as proved by the Athenian laws dating from the 6^th century B.C.

Counterfeit money was an easy way of getting rich. All you had to have was some skills in minting and an outlet for putting your product on the market. This last was, and still is, very important, as counterfeiters are mostly caught by counterfeit money being traced back to its source.

The counterfeiting involved producing coins of high nominal value similar to the real money but containing less precious metal than required. Highly skilled counterfeiters of ancient Greece brought the silver content in their products down to ten percent of the stipulated amount. “Gold” coins were also often minted from lead, and “silver” coins, from copper.

In medieval Europe, especially in the period between the fifteenth and the seventeenth centuries, great amount of counterfeit money in circulation ruined the money systems of a number of countries.

Production of counterfeit money undermines the states principal monopoly, emission of currency, and has therefore always been regarded as a most heinous criminal offense. For centuries counterfeiters had their hands cut off, they were tortured, hanged, drowned, nailed to the gates of mints, burned alive. Until the middle of the 18^th century, Russian counterfeiters were executed by pouring molten metal down their throats.

Some of the better known counterfeiters of all times were the Roman emperor Claudius Caesar Nero (1^st century , A.D.), the French king Philip 1V the Handsome (late 13^th - early 14^th centuries), also nicknamed Counterfeiter, and Fridrich the Great, king of Prussia (18^th century).

Copper coins were widely used in those times in Europe, while in Russia only silver coins had currency, and there was not enough silver to keep the value of coins level with the value of silver. In 1654, Czar passed a decree on putting into circulation silver coins whose nominal value was much higher than the real value of the silver contained in them. The same decree introduced copper coins that were to be treated as if they were made of silver, although copper was at that time 60 times cheaper than silver.

The operation brought the state treasury four million rubles, or two annual budgets, in net profit, but it also entailed a collapse of the country’s entire economy. This resulted in the 1662 uprising in Moscow which was later called the Copper Mutiny. A year later, copper coins were dropped as a means of circulation for several decades.

In the reign of Petеr the Great the spoiling of money became one of the principal sources of state revenue.

With the introduction of paper money, specialists in counterfeiting it also appeared. The first banknotes were issued in Russia under Catherine II in 1769.

In the decade between 1787 and 1797, counterfeit banknotes to the value of 170,000 rubles were withdrawn from circulation throughout the Russian empire.

The late 18^th and early 19^th centuries saw the rise of counterfeiting money of certain states by hostile countries intent on undermining their economy. Thus the English counterfeited the banknotes of revolutionary France and napoleondores, while Emperor Napoleon issued masses of Austrian, Prussian and English paper money.

On the eve of Napoleon’s invasion of Russia in 1812 counterfeiting of 25, 50 and 100 ruble banknotes was started in Paris. The banknotes were rather skillfully made, with all the necessary stamping and watermarks.

Dozens of million rubles worth of counterfeit money was brought to Russia by Napoleon’s army. In 1813, the Russian government circulated secret orders describing the special features of counterfeit banknotes, which were then exchanged for genuine money and destroyed. The process went on for more than ten years. The country sustained considerable losses. In 1820 alone some seven million rubles were paid for the counterfeit banknotes withdrawn from circulation. To compare: only five million rubles were spent on rebuilding Moscow burned down in 1812.

In the 19^th and 20^th centuries counterfeiting was fairly widespread in Russia. The government fought this evil by sentencing the culprits to hard labor and continually improving the safeguards against counterfeiting.

Spoiling the money by state mints gradually disappeared with the introduction of paper money on a mass scale. The state now achieves the same result by printing more and more money and throwing it onto the market, whereupon great efforts have to be made to curb inflation and rocketing prices.

Task 1. Find in the text:

Страны Ближнего Востока; в огромных количествах; как доказано Афинскими законами еще в 6 веке до н.э.; фальшивомонетчиков чаще всего ловят, отслеживая источник фальшивых денег; высокая номинальная ценность; искусные фальшивомонетчики древней. Греции снизили до 10% содержание серебра в монетах от их номинальной стоимости; большое количество фальшивых денег в обращении подрывало экономическую государственную систему; банкноты со всеми необходимыми штампами и водяными знаками; страна понесла значительные потери; сдерживать инфляцию.

Task 2. Speak about:

Counterfeiting of money in ancient times.
Counterfeiting of money as one of the most heinous criminal offenses.
Counterfeiting of money in 19^th-20^th centuries.
Counterfeiting of money in modern world.