Today’s Counterfeit Coin Market
Today counterfeit American coins circulate in large numbers. A booming collectors’ market fuels the effort to mint good quality fakes. Sometimes the coins are not even real silver or gold. In China, counterfeiters mint, tone and age the popular Morgan Dollars. These coins look the part, but are frequently are not even minted on real .900 silver planchets. The Chinese have been experts at faking silver for 1500 years.
At other times they are the exact weight and purity of metal. The quarter eagle gold piece of 1911 is a common coin in the collectors’ market. Even so, the collectors’ value still out paces the intrinsic gold value. As a result Middle Eastern counterfeiters struck a number of high quality fakes in the correct weight of gold in the 1960’s to sell on the collectors; market. This is a problem for coin collectors, but not so much for the average person today.
Contemporary Counterfeit Coinage
Counterfeit coinage made for everyday transactions (contemporary counterfeit coinage) is rarely if ever encountered today. Currency counterfeiting has largely supplanted coins. But, throughout most of history, counterfeiters faked government-issued coins from all countries. In England in the 17th Century, counterfeiting small denomination coins was quite common, and profitable. In part, because King James issued a patent to John Harrington, Lord of Exton, to issue copper Farthing tokens. These undersized coins were minted between 1613 and 1642. At 12 millimeters in diameter and weighing just 9 grains of copper, they were easily counterfeited. In comparison, the regal issued Farthing that began to be issued in 1672 weighed 79.8 grams.
Although hated by the public and widely counterfeited, some of the tiny “Patent Farthings” made it to the American colonies. Several have been found in Virginia, near Jamestown, and at Virginia Beach. These coins, both the counterfeit and genuine, were especially hated by the Puritans, so much so that the Massachusetts General Court passed a law on March 4, 1635 stating that a musket ball should be used as a substitute for a farthing in trade, and that the farthing shall not be traded. When the Puritans took over Parliament in 1642, they ceased minting the Patent Farthing stopped and abolished the monopoly on minting coinage.
Trade Tokens
With the halt of the Patent Farthing, a shortage of small change was still an issue. Merchants, civic organizations and municipalities started making “Trade Tokens.” They used lead, copper, pewter, and tin to strike this alternate coinage. They were round, square, or octagon. In London alone, during the period between 1642 and the restoration of monarchy in 1660, there were 2,461 varieties of trade token in circulation. Charles II demonetized the Trade Tokens in 1672, but that was not the end of the tokens.
The American Colonies were still experiencing a small coin shortage, and many trade tokens were still trading in the Americas, sometimes at a higher value then they had in England. In 1681 a man named Mark Newby purchased a large quantity of the demonetized trade tokens at a discount, and took them to America to trade at a profit. In 1682 Quakers aboard the ship “Unicorn” brought with them 300 pounds of trade tokens as well. Although demonetized in England, the coin shortage in the American colonies compelled merchants to welcome the tokens. Though not precisely counterfeiting, this type of money use was outside government control and still profitable for those willing to travel.
Counterfeit small change filled the gap
As seen with the trade tokens, people in the colonies were willing to accept substitutes for actual regal minted coins. So needed were the small coins that according to Louis Jordan of the Numismatic Endowment at University of Notre Dame, “The Maryland Gazette of February 28, 1754, stated both genuine and counterfeit English halfpence were circulating in the colony and suggested the value of the counterfeits should be lowered to a farthing each”. The counterfeit halfpence, like the demonetized trade tokens, circulated in the colonies even if worth nothing in England.
The authentic coins might trade at double their worth while counterfeits traded at a reduced rate. In New York, the legislature passed a law in 1754 to clarify and establish the exchange rate of 14 halfpence to a shilling. They also appointed a man named William Taylor to melt down all discovered counterfeit coins. Measures such as these began to restore some balance in trade.
The Revolution
During the American Revolution the government collected all metals to melt down for reuse as war materials. Small change was no exception. They collected and melted all the copper coins, authentic and counterfeit. The colonists conducted almost all trade by barter, the use of paper notes, or credit. Late in the war however, British camps and garrisons such as New York received large amounts of counterfeit coins. These coins circulated throughout the mid-Atlantic states. By the last years of the war Pennsylvania refused to take known counterfeit coins and advised the public to do the same.
Counterfeits are back
After the war many saw the new United States as a great target for counterfeiting. As early as 1785 or 1786 counterfeit coins may have been produce in England for the sole purpose of export to the United States. The New York Legislature conducted an investigation in 1787 and found that there were a great many coins in circulation being traded that had been made in Birmingham, and called Birmingham coppers by the people. Although thinner and of inferior copper than crown coins, they were greater in number than genuine British coppers or the Irish half-pence, of which there were few.
Counterfeit or not, the colonists needed coins and traded them with different values. Some full weight crown coins traded at twice their value while undersized copies traded at less then face. Add to this the multitude of coins and tokens from other countries in circulation in the new country and a simple trip to the store might be a real hassle. It would not be until the coinage act of 1792 that the United States would start minting coins. Still, coins from other countries would be the norm for many years to come. And many of those were likely counterfeit.
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