On August 5, 1865, a former United States Army officer named William P. Wood walked into a converted building on F Street in Washington, D.C., accepted a modest government salary, and became the first chief of the United States Secret Service. He inherited a staggering problem: by conservative Treasury Department estimates, somewhere between one-third and one-half of all paper currency then circulating in the United States was counterfeit. Within months, Wood and his small cadre of operatives had made the arrests that would define the agency’s early reputation and, more importantly, reshape the landscape of American paper money collecting for generations to come.
A Nation Awash in Bogus Bills
To appreciate why the Secret Service’s founding arrests matter to currency collectors today, you need to understand just how chaotic American paper money had become by the final year of the Civil War. Before 1861, the United States had no standardized national paper currency. The circulating medium consisted of thousands of different bank notes issued by roughly 1,600 state-chartered banks, each with its own design, engraving style, and redemption reliability. Counterfeiters thrived in this confusion; a skilled printer in Ohio could pass a doctored note from a Georgia bank without anyone being the wiser.
The Legal Tender Acts of 1862 and 1863 introduced something genuinely new: federally issued Demand Notes and United States Notes (the famous “Greenbacks”) that were obligations of the federal government rather than private banks. The first series, authorized under the Act of February 25, 1862, produced notes in denominations of $1, $2, $5, $10, $20, $50, $100, $500, and $1,000. These are catalogued today as Friedberg numbers 16 through 183e in Robert Friedberg’s standard reference, Paper Money of the United States. The Bureau of Engraving and Printing had not yet been consolidated, and private firms including the American Bank Note Company and the National Bank Note Company handled production.
Crucially, the very novelty of these notes made the public unreliable detectors of counterfeits. Most Americans had never held a genuine Greenback before 1862; by 1865 they had been handling them for barely three years. Counterfeiters adapted almost immediately. Treasury Department records from 1865 document at least 25 distinct counterfeit varieties of the Series 1862 $1 Legal Tender note alone, and the five-dollar denomination attracted even more criminal attention given its everyday utility in commerce.
When examining Series 1862 and 1863 Legal Tender notes (Fr. 16-71), pay close attention to the Treasury seal impression. Genuine notes feature a crisp, deeply inked red seal with sharp sawtooth points. Many 1865-era counterfeits show a blurry seal perimeter or irregular tooth spacing, the same defects that Wood’s operatives were trained to detect. Even today, these authentication points help distinguish problem notes from genuine examples.
The Legislation That Created the Agency
Congress had been debating a federal anti-counterfeiting bureau since at least 1863, when Treasury Secretary Salmon P. Chase first formally proposed one. The enabling legislation was quietly tucked into a routine Treasury appropriations bill and signed by President Abraham Lincoln on April 14, 1865, the very night he was shot at Ford’s Theatre. The bitter irony was noted by contemporaries. The agency formally began operations on July 5, 1865, under Wood’s command with a staff of roughly 30 operatives spread across the major cities.
Wood brought an unconventional background to the job. He had spent the war running the Old Capitol Prison in Washington, a facility where he developed an extensive network of informants among criminal populations. He understood that catching counterfeiters required penetrating the underground printing and distribution networks, not merely intercepting bad notes at the point of exchange. This intelligence-driven approach directly shaped how the first major 1865 arrests unfolded.
The Brockway Arrest: October 6, 1865
The arrest that most clearly justified the Secret Service’s creation came on October 6, 1865, in New York City. William E. Brockway, known in Treasury files as “the King of the Counterfeiters,” was apprehended by Secret Service operatives working under Wood’s direct instruction. Brockway was no ordinary small-time printer. He had been producing high-quality counterfeit $100 Legal Tender notes of the Series 1862 issue (corresponding to the genuine Fr. 152-165 range in Friedberg) using stolen or duplicated intaglio plates of exceptional quality.
What made Brockway’s operation remarkable, and what makes the genuine notes he was imitating so interesting to collectors today, was the technical sophistication required. The authentic Series 1862 $100 United States Note features an intricate portrait of Abraham Lincoln on the left obverse, a spread eagle vignette, and a complex lathe-work geometric border. Brockway’s counterfeits reportedly fooled bank tellers in New York, Boston, and Philadelphia. Treasury officials who examined his shop noted engraving tools, multiple copper plates, and distribution ledgers suggesting a network reaching across at least seven states.
Brockway was convicted and sentenced in 1866. He would return to counterfeiting after his release, making him one of the Secret Service’s recurring antagonists through the 1870s and 1880s, but the 1865 arrest established a critical precedent: the federal government could and would prosecute currency crimes at the highest level of the operation rather than simply prosecuting the street-level passers.
Series 1862 $100 Legal Tender notes (Fr. 152 and Fr. 165, the two primary varieties distinguished by the obligation text and seal placement) are genuine numismatic prizes. In VF-20 condition, authentic examples catalog between $2,500 and $4,500 depending on the specific Friedberg variety and signature combination. The Chittenden-Spinner signature pairing on Fr. 152 is particularly sought after. Always purchase high-denomination Civil War-era notes with third-party grading certification from PCGS Currency or PMG given the long history of sophisticated counterfeits in this denomination.
The Fractional Currency Connection
While Brockway dominated headlines, Wood’s operatives were simultaneously targeting a less glamorous but equally damaging counterfeiting network: the systematic faking of Fractional Currency. These small-denomination federal notes, issued in 3-cent, 5-cent, 10-cent, 15-cent, 25-cent, and 50-cent denominations starting in 1862, had been intended as a stopgap solution to the hoarding of silver coins. By 1865, approximately $26 million in Fractional Currency was in circulation across five distinct series.
The First Issue Fractional notes (August 21, 1862 to May 27, 1863) were essentially postage stamp designs printed on currency paper, literally using the images of the then-current 5-cent and 10-cent stamps, which is why collectors still call them “Postage Currency.” Their simplicity made them easy to counterfeit. A November 1865 Secret Service report documented the arrest of a Philadelphia printing shop operator named James Carson who had been producing counterfeit 25-cent Third Issue Fractional notes (the genuine versions being catalogued as Fr. 1294-1299) using a lithographic process rather than the intaglio engraving of genuine government notes. The difference in printing method, raised ink versus flat ink surface, is still the primary authentication test collectors and dealers use today.
Carson’s arrest was less celebrated than Brockway’s but arguably more significant for the ordinary public. The 25-cent denomination was used in everyday transactions: streetcar fares, bread, a glass of beer. The contamination of this common denomination with lithographic fakes had eroded public confidence in small commerce in ways that $100 note counterfeiting simply could not.
The Genuine Notes That Spurred a Crisis
Understanding what the counterfeiters were imitating helps collectors contextualize the genuine notes from this period. The Series 1862 Legal Tender notes were printed by the American Bank Note Company and the National Bank Note Company under contracts with the Treasury Department. They carry the signatures of Treasurer Lucius E. Chittenden and Register Francis E. Spinner in the earliest printings, transitioning to S.B. Colby as Register after July 1865. This signature transition is a key dating tool: notes signed by Chittenden and Spinner predate the Secret Service’s founding and were the primary targets of counterfeiters in the 1862-1865 window.
The paper itself was distinctive. Treasury specifications called for a blend of linen and cotton fiber with embedded red and blue silk threads, a security feature introduced specifically to combat counterfeiting. Carson’s lithographic fakes lacked these threads entirely. When held to light, genuine notes from this period show a characteristic translucency pattern from the fiber blend that is essentially impossible to replicate with standard commercial printing stock.
If you are building a type set of Civil War-era United States Notes, prioritize the lower denominations where collector budgets allow genuine examination of security features. A Fine-12 example of the Series 1862 $1 Legal Tender (Fr. 16, Chittenden-Spinner signatures) typically trades in the $150 to $250 range and offers an accessible entry point. Under a loupe at 10x magnification, examine the silk thread inclusions in the paper, the crispness of the Treasury seal’s sawtooth border, and the fine crosshatch lines in the portrait background. These are the exact features that distinguished genuine notes from the counterfeits that drove the Secret Service into existence.
The Broader Arrest Campaign of 1865
Between August and December of 1865, Wood’s operatives recorded 200 arrests for counterfeiting-related offenses across the northeastern states, a figure the agency proudly reported to Treasury Secretary Hugh McCulloch in its first annual summary. These arrests were geographically concentrated in New York City (where the distribution networks were thickest), Philadelphia (a center of printing trade expertise), and Cincinnati (a western hub for passing bogus bills into the Ohio River trade economy).
The notes most frequently counterfeited during this first operational window, as documented in contemporary Treasury reports and confirmed by surviving confiscated-plate inventories at the National Archives, were the $1 and $2 Legal Tender notes of 1862 and the 25-cent and 50-cent Third Issue Fractional Currency. High denominations like the $500 and $1,000 Legal Tender notes were rarely counterfeited at this period because they circulated almost exclusively among banks and large merchants who had both the expertise and the incentive to scrutinize them carefully.
| Friedberg No. | Denomination and Series | Estimated Survivors (VF or Better) | Rarity |
|---|---|---|---|
| Fr. 16 | $1 Legal Tender 1862, Chittenden-Spinner | 1,500 to 2,500 | Common |
| Fr. 41 | $2 Legal Tender 1862, Chittenden-Spinner | 600 to 1,000 | Scarce |
| Fr. 62 | $5 Legal Tender 1863, Colby-Spinner | 400 to 700 | Scarce |
| Fr. 95 | $10 Legal Tender 1863, Chittenden-Spinner | 250 to 450 | Rare |
| Fr. 152 | $100 Legal Tender 1862, Chittenden-Spinner | 80 to 140 | Rare |
| Fr. 165 | $100 Legal Tender 1863, Colby-Spinner | 40 to 70 | Key Date |
| Fr. 1294 | 25-cent Third Issue Fractional, Allison-Spinner | 3,000 to 5,000 | Common |
| Fr. 1381 | 50-cent Third Issue Fractional, Spinner autograph | 150 to 280 | Rare |
| Fr. 1228 | 50-cent First Issue Fractional (Postage Currency) | 700 to 1,200 | Scarce |
| Fr. 183e | $1,000 Legal Tender 1862, Chittenden-Spinner | Fewer than 10 known | Key Date |
Legacy: How 1865 Shaped the Currency We Collect Today
The Secret Service’s 1865 arrests had direct and lasting consequences for how American currency was designed, produced, and authenticated. In his December 1865 report to Congress, Treasury Secretary McCulloch cited Wood’s first-year results as justification for expanding the agency’s budget and reach. More concretely, the specific vulnerabilities exposed by Brockway’s operation and the Philadelphia lithography ring prompted the Treasury to accelerate the consolidation of currency printing under a single government facility: the Bureau of Engraving and Printing, which took over all note production by 1877.
The green ink on the reverse of Legal Tender notes, which had been introduced in 1862 specifically because it was difficult to photograph and therefore hard to duplicate with early photographic counterfeiting methods, was retained and refined partly based on intelligence gathered during the 1865 arrest campaigns. The name “Greenback” endures as a linguistic fossil of this security decision.
For collectors, the 1865 arrest record preserved in the National Archives provides a fascinating reference tool. The confiscated plates, many of which survive in Treasury Department collections, have been studied by numismatic researchers and their output documented. This means that for several specific Friedberg varieties, there is a documented counterfeiting history that authenticators can cross-reference when examining suspicious notes. Notes from the $1 Legal Tender Series 1862 (Fr. 16-17) and the 25-cent Third Issue Fractional (Fr. 1294-1299) command particular scrutiny at auction precisely because of how actively they were counterfeited in 1865.
Collecting These Notes Today: Practical Guidance
The Civil War-era Legal Tender notes and Fractional Currency targeted by the Secret Service’s first cases represent some of the most historically resonant pieces available to paper money collectors. Genuine examples in circulated grades (VG-8 through VF-30) are accessible at most price points. The $1 and $2 denominations appear regularly at currency shows and through established dealers; the $50 and $100 denominations require patience and a larger budget but reward serious collectors with genuine rarity.
Third-party grading is essentially non-negotiable for any note above Fine-12 condition or above $500 in value. PMG (Paper Money Guaranty) and PCGS Currency both maintain reference libraries of known counterfeits from the 1862-1865 period and their graders are specifically trained on the security feature authentication points that date back to the Brockway era. A PMG or PCGS holder does not merely confirm grade: for these particular series, it constitutes an expert authentication that directly addresses the counterfeiting history that drove the Secret Service into existence 160 years ago.
There is something genuinely moving about holding a Series 1862 Legal Tender note today. The very paper in your hands was the battleground of a national crisis, the thing that necessitated an entirely new federal law enforcement agency, and the artifact around which some of the most sophisticated criminal networks of the nineteenth century organized themselves. The Secret Service’s first arrests in the autumn of 1865 did not end counterfeiting, Brockway himself proved that, but they established that the federal government would fight for the integrity of its paper money with dedicated professional force. Every genuine Greenback that survived is, in a small way, a monument to that commitment.
