Counterfeiting and the Slave Trade

Durning the 1857-71 period, which spanned the US Civil War, Monroe, Green County, Wisconsin was home base to one of the nation’s leading counterfeiting gangs, the Bonelatta Gang. Green County’s top banker during this period was Arabut Ludlow.

Arabut, along with other prominent Monroe families who attended our Universalist Church, was an abolitionist. The Universalist Church, which Arabut was instrumental in building, invited speakers such as Susan B. Anthony and Frederick Douglass to lecture like-minded churchgoers on this political question at the very same time fake Union-backed bills were being circulated outside its doors…

Image courtesy of the New York Society for Ethical Culture: ”In the center of a lovely park square in Rochester, New York is a striking sculpture, a tribute to the friendship between Frederick Douglass and Susan B. Anthony, whose bodies are interred in nearby Mount Hope Cemetery. It is called “Let’s Have Tea,”…They’re not talking about any particular issue,” says the sculptor Pepsy Kettavong,…”On Sunday, 2/2/14, my friend, Mr. Leonardo Gibson, and I performed it [Kettavong’s play about Anthony and Douglass] at the New York Society for Ethical Culture”. “

Joseph Seligman, the New York banker, was the first president of the NY Ethical Cultural Society (founded 1876), which became entwined with his son’s (and Jacob Appelbaum’s) Humanitarian Cult, an astroturfing organization designed to steer NYC’s socialist movement.

The Bonelatta Gang specialized in distributing counterfeit bank notes from New York and Rhode Island banks. These two states had a nearly 100-year old global reputation for currency forgery by the time of ringleader Napoleon Bonaparte Latta’s entry into the racket circa 1850. According to historian of US counterfeiting David R. Johnson, counterfeiting is more dependent on inter-generational transfers of expertise than most law-breaking. Therefore, the history of Rhode Island and New York counterfeiting ought to shed light on the origins of the Bonelatta Gang.

Ironically for Arabut Ludlow, Rhode Island’s reputation for counterfeiting was built in the 1770s on top of existing illicit Atlantic trading networks. Most African slaves were sold through illicit trading (smuggling) networks in the New World, with some estimates as high as three-quarters of enslaved people being trafficked this way through ports like Jamaica.

The majority of the information on Rhode Island in this post comes from Katherine Smoak’s paper “The Weight of Necessity: Counterfeit Coins in the British Atlantic World, circa 1760–1800” [The William and Mary Quarterly , Vol. 74, No. 3 (July 2017), pp. 467-502]. In the 1700s, counterfeiting coins rather than paper money was the norm. As Smoak relates:

In the 1770s Rhode Island–based counterfeiters and traders capitalized on established routes of legal and illegal exchange to send bad coin to the Greater Antilles at a moment when changes in Spain’s monetary policy and regional trade patterns meant both that coin was particularly needed in the region and that residents cared little about its quality.

Regular readers may remember my discussion of “interloping traders” and the British Government’s partnership with them in the Caribbean as part of a strategy to undermine London’s Spanish and Portuguese competitors. These “interloping traders” included smugglers based out of RI and NY.

According to Smoak, these counterfeiters, “small groups of Rhode Island traders”, were “drawing on their experience in illegal commerce” to send a bewildering array of false coin to Jamaica, Barbados and other colonies in the West Indies under British rule.

In the late 1760s and 1770s, Rhode Island–based coiners and merchants took advantage of such variety [in coinage] and began sending light and counterfeit coin to Jamaica and neighboring Saint Domingue in search of profit. ...Jamaica residents likely saw more coin than any of their colonial counterparts; most of it arrived courtesy of the island’s robust trade with Cuba in slaves and livestock.

…The well-organized trade in bad coin between Rhode Island and the Greater Antilles had been underwritten by the former’s most prominent mercantile families.

Jamaica in relation to Rhode Island and Cuba. Cuba is an important part of the Goetz and Roosevelt Family stories.

Trade in the New World revolved around the exchange of European goods (often cloth) for slaves in Africa; who were then sold across the Atlantic for sugar, precious metals, rum; all of which were then shipped back to the Old World and sold, most profitably to Continental Europe. (There was also a market in Africa for New World goods!) Bands of Rhode Island traders found their niche in this system:

By 1770 Jamaican governor Sir William Trelawny was complaining to the Board of Trade that “North American Traders” had flooded the colony with so many counterfeit doubloons, “supposed to be coined for the most part at Rhode Island,” that the government needed to take action. Rhode Island captains, who came to the island to purchase sugar and rum, Trelawny explained, convinced Jamaicans to receive the counterfeit doubloons—which contained real gold but were 25 percent underweight— and “run the risque of their circulation” by giving a higher price for sugar or “by fixing a lower value on the Doubloon at the time of Purchase.”

…

Counterfeiting was the preserve not just of economically marginal people in Rhode Island but of some of the most famous trading families in the colony. Rhode Island’s counterfeit trade flourished when Newport and Providence were at the height of their trading power. Following a brief economic depression in the early 1760s, Providence emerged as a growing commercial port, dominated by the Brown family. The Newport trading community had long-standing commercial relationships in the West Indies. Both Providence and Newport lacked the expansive hinterlands of their New England and mid-Atlantic counterparts; Rhode Island trading communities achieved success by focusing on diversified shipping to the West Indies and on risk taking, including privateering and smuggling. The counterfeit trade may have been another component of Rhode Island traders’ often risky portfolios.

Indeed, their smuggling experience served them well in the counterfeit trade. Rhode Island ships, to the chagrin of Jamaican planters, notoriously stopped first at Jamaica before proceeding to Saint Domingue to buy contraband sugar and other goods at lower prices. Following the same circuits of trade, merchants bought up and shipped bad coin to Jamaica and Saint Domingue. And when officials in the Caribbean clamped down on their counterfeit importations, Rhode Island merchants appear to have redirected their efforts. By the spring of 1773, the South-Carolina Gazette was warning that Rhode Islanders were now bringing bad gold Portuguese joes [Portuguese gold 6400 Reis-piece, colloquially referred to as a half Johannes, or “joe,”] to South Carolina. Rhode Island merchants thus engaged in a sophisticated, dynamic trade in bad coin that responded to fluctuations in the monetary policies of interconnected Spanish, British, and French imperial holdings.

Smoak identifies the Brown family of Providence as leaders in Rhode Island trade (slavery, smuggling and everything else), but equally famous is the notorious slaver Aaron Lopez, the wealthiest man in Newport (judging by tax receipts) during its counterfeiting heyday.

Aron Lopez of Rhode Island

A Portuguese Jew by birth, Lopez made his fortune during a time of economic privilege for men of his background, thanks to the cameralist policies of Maria Theresa (Hapsburg, Holy Roman Empire) and her political hand in Portugal, the Marquis de Pombal. In Newport, R.I. Lopez was able to drop any pretenses of Catholicism and practice the faith of his ancestors.

From an archived version of Rhode Island’s Slave History [Paul Davis, March 2006]:

From his home on Thames Street, Aaron Lopez could walk to his private pier and a warehouse next to the town wharf. In a loft above his office, sail makers stitched sheets of canvas. His Thames Street shop supplied Newport's residents with everything from Bibles and bottled beer to looking glasses and violins.

Lopez, one of the founders of Touro Synagogue, and his father-in-law, Jacob Rivera, owned more than a dozen slaves between them, and sometimes rented them to other merchants.

Exterior of the Touro Synagogue in Newport, Rhode Island.

Sumptuous interior of the synagogue above, courtesy VisitRhodeIsland.com.

A map of Rhode Island state, showing Newport in relation to Providence.

Slaves and the poor in Jamaica were particularly affected by this trade in small-denomination counterfeit coin, Smoak:

But as in Europe, small change was in especially short supply. Cut silver dollars, known as “bitts,” and a bewildering array of silver pieces could serve as change; in the eastern Caribbean, enslaved and poor people used “stampees” and “black dogs,” small French copper coins. Enslaved individuals could accumulate large cash reserves through sales of produce and livestock, paid work, and occasional cash gifts from planters. Though his figures are not easy to confirm, Edward Long estimated that 20 percent of the hard money in Jamaica was in the hands of slaves.

…

As [Edward] Long explained—in a Jamaica- specific articulation of Gresham’s Law, the theory that bad coin drives out good—bad coin moved through domestic commerce in many ways. Large-scale merchants refused to “meddle with” the “light and bad money,” knowing that it would not be accepted for remittances back to England. It was instead “thrown” into the “retail branch of internal commerce,” where “its passage from one person to another is so rapid, that its imperfections escape notice.” The principal players of this “retail” trade, according to Long, were enslaved people and Jewish middlemen, who linked the colony’s internal markets and long-distance trade networks. Relying heavily on early modern stereotypes that associated Jewish merchants with duplicitous business practices, Long claimed that these middlemen paid careful attention to the quality of the coin they received, knowing that if it was “too much depreciated” it would not be accepted by their long-distance trading partners. Initially, these retailers accepted bad coin from customers and then “watch[ed] [for] opportunities to change it for heavy [full-weight] money,” thus putting the diminished coin back into local circulation. When retailers could no longer get good money in return for bad, they would accept bad coin only at reduced rates, or not at all. The retailers’ actions periodically caused “general confusion” as participants in Jamaica’s local economy quickly tried to offload bad coin before it lost all value. In this cycle, full-weight money was shipped off to pay overseas creditors, while bad coins became an increasingly large portion of the domestic money supply, resulting, ultimately, in periodic panics—Long’s “general confusion”—when people involved in external trade stopped accepting the bad money that usually passed with no trouble in domestic commerce.

…

Governors and legislatures also struggled to address the importation of fake copper coin used primarily by enslaved men and women. These officials worried—in the shadow of the revolution in Saint Domingue—that any disruption in slaves’ local economies might result in challenges not simply to kingly prerogative but to white hegemony.

Edward Long was both a planter and a historian in Jamaica who wrote during the 1770s, so contemporary to the RI smuggling heyday. He was in an ideal position to witness the reality of this RI/Jamaica trade.

As readers can see, “middlemen” oversaw a system where poor Jamaicans’ and slaves’ money was systematically replaced with Rhode Island counterfeit, the widespread discovery of which periodically wiped out savings. Higher-denomination coins were heavily counterfeited too, of course, but wealthier businessmen were in a better place to refuse bad coin: they didn’t live hand-to-mouth like the poor and presumably they had better trading contacts than slaves.

Imperial British authorities out of London took a somewhat schizophrenic stance toward this counterfeit trade. While fake-coin-producers inside Britain and her colonies could expect the death penalty, the punishment for importing false coin into Caribbean colonies was little more than a slap on the wrist for most. Smoak notes that the only counterfeit-pusher to be caught and punished in Jamaica during the 1770-75 period was one Reverend Francis Smith, who was executed in 1775 for importing ‘the queer’. If radical protestants from Rhode Island were among the counterfeiters, it would be entirely in keeping with the religious overtones of the British Government’s commitment to organized crime in Jamaica:

What we do know is that by partnering with these “pirate” networks, the British found one way to undermine their Spanish competitors, who started with a far more developed empire and navy than QE1. Oliver Cromwell was particularly keen to develop ties with Jamaican networks; reach out to Jewish partners; and build his “New Israel” through the famous 1654 “Western Design”.

Pirates like Inquisition-refugee Rabbi Samuel Pallache not only dealt in European slaves— one of Europe’s largest exports until about 800 A.D.— but contraband goods from Spain’s South American Colonies

These “interloping traders” would have included members of the Brown, Lopez families and other Rhode Island ‘rogues’. Their business connections would have ultimately enriched the “unorothodox investors” out of London who were in control of the British Empire by the 1790s; who enjoyed strong contacts in Portugal; and who partnered with the Hapsburgs, sponsors of the Mediterranean (White) Slave Trade and the Galician Network… which brings us to an important inflection-point in the story of Rhode Island forgeries.

By 1790, coin-forgery came crashing down for the Rhode Island set when Birmingham, U.K. began to use industrial-scale counterfeiting techniques to undercut Newport and Providence suppliers, Smoak:

After the American Revolution, as Rhode Island declined as a significant node of Atlantic trade, British manufacturers picked up where coteries of Rhode Island–based coiners and traders had left off, and counterfeit production moved from a colonial periphery to the imperial center. Manufacturers in industrializing Birmingham produced huge quantities of foreign counterfeits, from high-value gold and silver coins to low-value coppers. Merchants, clerks, and even officials bought these Birmingham counterfeits in bulk. They strategically sent them to newly acquired territories and war-torn frontiers throughout the eastern Caribbean, where demand for coin, regardless of its quality, was high.

The take-over of this organized crime by Birmingham seems to have happened bloodlessly, with Rhode Island gangsters genteelly stepping aside for their imperial masters. Hardly the type of behavior one expects from a port full of pirates!

The 1780s-90s were an important time in the history of British immigration, because increasing numbers of Jews from Hapsburg and Romanov lands were settling in her manufacturing cities. As Bill Williams relates in his The Making of Manchester Jewry:

Birmingham alone amongst the manufacturing towns attracted a sizeable Jewish population, not because Jews were drawn to its industries but because the area produced goods more easily adapted to the pedlar’s tray than Manchester cottons.

Birmingham was known for its buttons, and button-making is one of those professions that lends its skills readily to counterfeit coin-making. All the Briminghamites would have needed was a solid distribution network. Smoak:

Birmingham had long been a center of button production and thus was associated with counterfeiting: the skills needed to produce buttons and coins were virtually identical. But the rapid growth of a trained workforce in the city, coupled with technological advancements, allowed manufacturers to turn out counterfeits on an industrial scale by the 1790s…

Birmingham manufacturers produced fake high-value silver and gold coins as well as counterfeits of copper French tokens used by enslaved people in formerly French colonies acquired by the British. Growth in the counterfeit trade thus tracked larger reconfigurations of the British Empire, with a shift in production from colony to metropole and expansion in not just the quantity but also the diversity of coins produced.

An informer working on behalf of the Spanish ambassador in London during the mid-1790s gives a sense of the scale of counterfeiting operations in Birmingham. He received “unanimous testimony of some of the principal Birmingham tradesmen” that Spanish dollars had “always been issued there [in Birmingham], and that in the year 1792, one single factory had a weekly output of 100.000 Reales . . . in value.” He sent the ambassador five samples of Spanish dollars that had been altered or counterfeited by different methods, including a dollar that was clipped by a machine, one made from tin, and another made of a silver and copper alloy. The forgeries were produced openly; magistrates in Birmingham, when presented with evidence of the counterfeits from “Honest Birmingham tradesmen,” had refused to investigate. Counterfeiting was big business in Birmingham, carried on in plain sight.

Smugglers of these Birmingham fake coins were able to supply them to the same “middlemen” in Caribbean markets who had worked with the RI crew.

Prior to his expansion into the slave trade, Aaron Lopez had been “heavily indebted to an English creditor”. Given the economic realities of “interloping trade” in Portugese/Spanish goods and London’s prominence therein, Lopez’s situation was probably not unique and may help explain this smooth transition of production out of Newport/Providence and into Birmingham.

Birmingham’s fake coins were used to pay British soldiers in the West Indies as well as slaves, the latter of which became a political liability. It was the local British government (rather than that out of London) and slave-owners who were the slaves’ only defense against these “tolerated” coiners/local “middlemen”:

Less than a year later, the governor of Tobago acted in response to “dissatisfaction among the industrious negroes” who received bad coin “for the Production of their Labor, but cannot pass it even with the very persons, who imported it.” He implored the assembly to vote “a sum of money, in order to buy up all this sort of Coin, which shall be in the Hands of negroes, and to destroy the Currency of the whole.” The assembly directed slave owners to collect any bad coin in the hands of enslaved men and women but to compensate their loss; slave owners were promised a tax credit for any costs sustained in the exchange. With the specter of slave revolt fresh in their minds, the Martinique and Tobago governments moved to preserve a particular form of enslaved people’s property, implicitly acknowledging their right to receive, spend, and accumulate wealth in the form of coin. At the same time, officials directed slave owners to act as intermediaries in collecting and replacing bad coin. In reckoning with counterfeit small change, governors and planters were forced to take the economies of enslaved men and women into account.

Free but poor Tobagonians found themselves in a much worse position than slaves when the inevitable “general confusion” struck.

But what happened to the Rhode Island gangsters who used to benefit from this trade? They sought out new types of currency to forge. Insights into this situation may be had from a look at what was going on in New York state at the same time.

According to numismatist Kenneth Scott in 1953:

It has been recently stated that "New York is indisputably the global capital of the counterfeit world," and even under the rule of the Dutch its earliest currency, wampum, was being imitated, evidently before 1650… It is possible that both whites and Indians indulged on the practice, though the Indians may have been the chief or sole counterfeiters of their medium of exchange, as appears to have been the case in Rhode Island at about the same time.

Clearly, there was something in the water in New England that made even the most holy of places rife with unfair business practices:

The next case of counterfeiting involved a merchant of some prominence, Gabriel Ludlow, who was born on November 2, 1663, at Castle Cary, Somerset, England. Ludlow arrived in New York on November 24, 1694, built and owned vessels in the coasting trade and set up a place of business in Queen Street. Three years after his arrival he married Sarah Hanmer… and in 1697 became a vestryman of Trinity Church.

His trouble with the law is told in the minutes of Special Sessions of the Peace which was held in Trinity Church on October 12, 1698. They read as follows:

After the last supream Court of Judicature of this Province was adjourn'd the Grand Jurors of this City that attended the said Court Recommended to the Justices a Matter that was under Consideration (to witt) that Gabriel Ludlow of this City had offered several Counterfeit Dollars. Whereupon the Justices sent for the said Gabriel Ludlow and Examined him …upon his Examination and making up of his Cash he did find seaventy three Dollars which he Imagined were not soo good as those that are current in the Province… And the said Gabriel Ludlow humbly prays that the Justice will make a favourable Construction on the matter he being a person of unstained Reputation. Whereupon the Justices having duly Considered doe order and adjudge that the said Gabriel Ludlow doe pay good Money to such persons as the said Corrupt Dollars have been Issued unto and that he pay as a fine the Sum of three pounds Currant Money of New Yorke for the use of Trinity Church and that he give Security for his good behaviour for three Months from the date hereof and also Pay the Costs of this Special Sessions.

Ludlow and his security, John Hutchins, one of the justices who had tried him, gave recognizance in the sum of fifty pounds for Ludlow's good behavior, and henceforth he not only kept out of trouble but became a person of considerable importance in the colony. In 1699 he was made clerk of the New York Assembly and in the following year clerk of the vestry of Trinity Church, both of which posts he held until his death in 1733.

Readers may wonder if Gabriel Ludlow is related to Arabut Ludlow, our Monroe, WI peddlar-turned-banking-magnate. The family history of Arabut Ludlow, supposedly born in Vermont, is something that has puzzled genealogists since 1998 (at least). Arabut Ludlow is a 19th century Man of Mystery. Gabriel Ludlow, however, was a known quantity and not in a good way:

A letter dated May 15, 1699, from the Governor of New York, the Earl of Bellomont, to the Lords of Trade explained how Ludlow secured the position of clerk of the Assembly. "I am sorry to say it," wrote Bellomont, "but 'tis an undoubted truth, the English here are soe profligate that I can not find a man fitt to be trusted, that's capable of businesse ... I was obliged to employ one Ludlow a merchant to be Clerk of the Assembly this Session, one that was lately convict of cliping and coining in this towne. I think proper to acquaint your Lordships of this circumstance, that you may see how impossible a thing it is to make a right choyce of men in this place, and what sort of men I have to doe with. Those that are honest of the Dutch, being formerly kept out of imployment and businesse are very ignorant, and can neither speak nor write proper English."

Trinity Church, NYC sits at the end of Wall Street and as a major property owner in Lower Manhattan is one of the richest parishes in the world. The controversial “founding father” Alexander Hamilton, who was very friendly to central banking and West Indian trade, is buried on its grounds. Hamilton was killed in a duel with Aaron Burr over the affections of a women; Burr would go on to marry a rich New York prostitute from Rhode Island named Eliza Bowen Jumel.

When Birmingham took over the coin trade, these New York and Rhode Island businessmen looked to more technologically progressive forms of money. Historian David R. Johnson explains:

Counterfeiting’s evolution for over a century and a half prior to the mid-nineteenth century created a historical memory of its practices that could be transmitted across generations of criminals, as new individuals learned its lore and techniques…

Coining did not, however, lend itself to elaborate organization because of its simplicity. Since the necessary skills and material were widely available, anyone with the basic knowledge could produce coins in practically any locality…

The opportunity for more elaborate counterfeiting operations, particularly counterfeiting paper currency, had to await economic and political events…When colonial legislatures bowed to these pressures and authorized various schemes for paper currencies, they unwittingly created a market for counterfeit notes…

Manufacturing paper notes required greater skills, more expensive equipment and materials, more time and more organization than making coins. Despite the difficulties, there were criminals willing to try producing paper notes. Thomas Morton, who was infamous for passing counterfeit money, probably provided in 1707 the necessary knowledge to a group of skilled Boston tradesmen who produced the first large-scale printing of counterfeit bills of credit in Massachusetts…

Demand for spurious notes from groups such as Morton’s contributed to the further elaboration of the counterfeiters’ social world. There is evidence from as early as 1717 of a wholesaling operation in which counterfeiters offered their customers paper money through the mail. They apparently had considerable success; by the 1720s traffic in counterfeit notes had become a serious problem in New England.

Johnson explains that until the 1840s, the small size of crime districts in US cities meant these bill-counterfeiters usually based operations in rural areas. This lead to a fascinating bifurcation in the counterfeiting community:

Although the Midwest enjoyed rapid population growth from the beginning of the [19th] century, urban development suffered from inadequate trade connections prior to the opening of the Erie Canal [October 26th, 1825] and the introduction of river steamboats…Large infusions of canal and then railroad workers into the region during the late 1820s probably changed that situation. These transients created a demand for housing and amusements, which generated working-class neighborhoods where criminal institutions could begin to develop…

St. Louis and Nauvoo, Illinois, combined to create the second major production center in the nation. This peculiar pairing may have reflected the evolving character of the Old Norhtwest’s urban system, whose immaturity would affect the social structure and the opportunities of the region’s local underworlds.

From the ChurchofJesusChrist.org:

Historic Nauvoo is a cultural landscape that interprets the headquarters of The Church of Jesus Christ of Latter-day Saints located in Nauvoo, Illinois, from 1839 to 1846. Under the prophetic leadership of Joseph Smith and Brigham Young, Latter-day Saints worked together during these years to build a faith-based community and a temple overlooking the Mississippi River.

Access to the Mississippi River was very important for the Bonelatta Gang, which operated out of St. Louis as well as Monroe, WI.

St. Louis, with only nine printing firms in 1860, offered even less potential assistance to counterfeiters. It did, however, have other advantages that may account for its emergence as the dominant partner in the region’s St. Louis-Nauvoo production center. As one of the oldest cities in the Mississippi-Ohio River system, St. Louis benefited enormously from the expanding national economy after 1815…. Its location astride the region’s two largest water routes made it relatively more attractive as a production site, because counterfeiters had greater access to more customers than in the other river cities.

German counterfeiters were represented in this Midwestern region, with Nauvoo and Cincinnati being favored operation locations.

Nauvoo’s role as the other half of this western production center probably reflects the evolving nature of counterfeiting in the region. As a very small but strategically located settlement, it may have developed its peculiar functiton after the Mormons’ departure in the [late] 1840s…but its location on the Mississippi River permitted easy communication with St. Louis.

Not all historians are comfortable with Johnson’s exculpation of Mormon involvement with counterfeiting. Christopher Clark, in his review of Johnson’s book notes [Crime, History & Societies , Vol. 3, n°2, 1999]:

It is noteworthy, for instance, that Nauvoo, Illinois, became part of a 'westerd' counterfeiting nexus in the 1840s. Johnson attributes this to economic decline after the Mormons left for Utah, apparently overlooking early Mormonisms close association with. rural coiners and forgers and, hence, the possibility that Nauvoo's importance as a counterfeiting centre was due not to the Mormons' departure, but to their presence.

Certainly, Mormon leadership, from Joseph Smith downwards, have been involved in spurious banking activities, such as the 1837 Kirtland Safety Society. Readers will find more information on Mormon leadership’s business partnerships with the Republican Party in Ohio in my post Submarines in the Great Lakes.

These rural areas provided contraband for networks that stretched along the East Coast and into Canada and Mexico. As early as 1808, less than twenty years after Rhode Island lost its place in the coining world, US prison inmates were teaching each other the finer details of bill manufacturing.

My point here is that ‘crime neighborhoods’ in cities post-1840 lead to counterfeiting becoming an urban phenomenon rather than a rural one. Bordellos are usually the backbone of crime neighborhoods. By the 1820s in New York City both counterfeiters and whore-houses used saloons as a common fronts in the metropolis’s proto-‘red light district’. Specialization in the sex trade at this time was already quite developed, Burrows:

Different houses had distinctive clienteles (southerners, Germans, Astor House visitors) and particular specialties: Mrs. Hathaway’s “fair Quakeresses”, Mrs. Everett’s “beautiful senoritas [who] are quite accomplished,” Miss Lizzie Wright’s “French Belles”. Carnally incline males kept abreast of the possibilities by perusing handbooks such as Charles DeKock’s “Guide to the Harems”, Free Lovyer’s [sic] “Directory of the Seraglios”, and Butt Ender’s “Prostitution Exposed”.

These new ‘red light districts’ were peopled via by massive immigration, both foreign and domestic. The foreigners were mostly from Ireland and Germany, while working people from rural districts were also prominent. Historian Edward G. Burrows estimates that around 1840 38% of working prostitutes were American farm girls, another 35% were Irish and 12% were German (which may also mean Jewish at this time):

These numbers included children. Not only was pedophilia a popular gentleman’s vice, but the likelihood of contracting disease and producing pregnancy was thought to be lessened by intercourse with pre-pubescent girls. Conveniently, the age of menarche was approximately fifteen, the age of consent but ten.

As regular readers will know, pedophilia was a vice practiced well beyond the gentlemanly class— most of these children would have been abused first by their parents. Contemporary social workers noted that these delinquent children were the primary fodder of sex trade ‘entrepreneurs’. The money from this exploitation, of adults and minors alike, corrupted politics:

Politicians too leeched off sex workers. The local ward bosses who relied on muscle to dominate the polls also used it to extort revenue, often in conjunction with local police. Tammany gang leaders like Isaiah Rynders and Thomas Hyer levied tribute from brothels, saloons, and gambling dens and in return extended them “protection”. In 1850 when police rounded up brothel keepers in the Points, Alderman Patrick Kelly scurried to their aid.

Impoverished newcomers to the city were crammed into tenements abutting a burgeoning entertainment industry and the city’s most exclusive shops. This strange juxtaposition of extreme wealth next to extreme poverty provided the Galician network with their most fertile recruiting grounds in the decades which followed, but was already well establish by the time Napoleon Bonaparte Latta was born.

One of the most enterprising of the de facto whoremasters was John R. Livingston, brother of Chancellor (and steamboat financier) Robert Livingston. By 1828 he controlled at least five brothels near Paradise Square and a score more elsewhere in the city… Tobacco entrepreneur George Lorillard and Matthew Davis, a founder of Tammany Hall, were also among the ranks of patrician sex profiteers.

Theater owners, including John Jacob Astor (who had purchased the Park back in 1806), encouraged erotic third tiers as drawing cards, providing special entrances from which the femmes du pave could reach the upper house… Nor were hoteliers (Astor again chief among them) overly chagrined when whorehouses set up shop near their lobbies.

From what I can tell, John R. Freuler’s investor in Mutual Film alongside Otto Kahn, Crawford Livingston, was a descendant of the Livingston family mentioned above, but I will be able to say more on that in the future. George Lorillard’s firm became part of the American Tobacco Company, which was controlled by James Duke and Benjamin B. Hampton’s Tammany Hall sponsor Thomas Fortune Ryan. The Astors did very well for themselves and ended up being related to the British Royal Family by marriage through Camilla Parker Bowles. (yay!)

LHS front row: The young Eliza Lopes, famous for her “wiggly worm” in the royal marriage portrait above, is a descendant of the hotelier Astor mentioned above— nobody can choose their ancestors!

Prostitution and counterfeiting often exploited the same demographic: young women were typically employed ‘pushing’ the fake currency in shops (average age of 21 years), which was the most risky part of the endeavor. Most arrests were made of these low-level members of criminal rings. Until the 1860s, (when Chase took over the Treasury) the counterfeiting rings’ leaders on the other hand were usually (59%) native-born Americans (average age 27 years), though more than half of the remaining 41% were of unknown ethnicity. Of the known half of the foreign criminals, the Irish were the most numerous counterfeiting-organizers, followed by the Germans and English. (These ethnicities are not broken down by religion, many of the Germans will likely have been of Jewish ancestry at this time.) The poverty of American statistics collected on counterfeiting by 19th century police is a recurring theme; perhaps this is unsurprising given the wealth and influence counterfeiting families enjoyed during our nation’s foundational period.

The Bonelatta Gang’s New York contacts came to prominence during the last years of the native-born organizers dominance of counterfeiting networks. After their patron Salmon Portland Chase set up the ‘Secret Service’— using underhanded if not entirely illegal methods— foreign criminals took over. (Almost as if Chase put all the Americans save his Bonelatta gang out of business…) Johnson explains the situation of Bonelatta NYC contact Joshua Miner (Minor):

Joshua Minor, for example, inherited his knowledge from his father, who practiced counterfeiting for thirty years in upstate [rural] New York. Like so many others, Minor moved to New York City, where he was a successful street contractor and an important counterfeiter by the 1860s. Harry Cole [one of Miner’s business partners], another rural New Yorker, had engaged in counterfeiting for fifteen years by the mid-1860s, and would continue to do so for another twenty.

…

The area bounded by Houston, Broadway, the Bowery, and Chatham became the heart of counterfeiting for New York— and for the United States as well. … Once entrenched in lower Manhattan, coutnerfeiterrs concentrated their activities there for the remainder of the century. Developments after 1865 reinforced their hold. The area continued to serve as the city’s entrepot for immigrants, as the heart of its economic life, and the center of its entertainment ativities— all of which strengthened and expanded counterfeiting’s institutional structure.

New York City’s bordellos and gambling dens (offering faro) occupied the same areas: higher class joints lined Broadway and adjacent streets north until 24th Street by 1850, but lower-class ones mushroomed on what Johnson describes as “notorious streets”. The informal ‘boundary’ for counterfeiting crimes prior to 1860 was south of 14th street. After 1870— ie. after the Civil War and foreign counterfeiting dominance— counterfeiters moved north to NYC’s East and West Sides.

By 1885 American-born counterfeiting-ring-leaders had been soundly supplanted by Italian ones but not Jewish ones, according to contemporary crime statistics. This is remarkable, as it flies in the face of contemporary European counterfeiting experience. Eastern European Jewish crime networks came to dominate commercial sex during this period, which had always flourished hand-in-hand with counterfeiting:

New immigration patterns undermined this American dominance of counterfeiting by the mid-1880s, when New York’s preeminence as a manufacturing center began attracting tens of thousands of Southern and Eastern Europeans. Two groups with very different backgrounds dominated this new migration: Italians, with practically no nonagrarian skills, and Jews, with considerable experience in handcrafts and small businesses….

In 1880 New York contained almost equal numbers of Eastern European Jews and Italians. Considering the similarities in their locations, economic plight and exposure to the criminal opportunities of lower Manhattan, both groups hypothetically ought to have played prominent roles in counterfeiting during the closing decades of the century. Between 1880 and 1899, however, the police and the Secret Service arrested 310 Italians and only 13 Jews.

According to Johnson, Italian immigrants congregated around Five Points and the 14 Ward, while the Jews settled in the lower half of the East Side, which eventually became counterfeit-production’s post-1870 headquarters. (Burrows paints a more nuanced picture with both ethniticies being represented in the same neighborhoods, which to a limited extent agrees with Edward Bristow’s observations about how Jewish and Italian pimps interacted.) Johnson: “Nevertheless, it is Italians— not Jews— who first appear in the available records after 1860.” Johnson explains Italian dominance in counterfiting by noting that the Italians enjoyed overseas production centers: Italian forgers living in Italy, England and France.

There are problems with Johnson’s explanation. Jewish connections with engravers in the Old World were just as strong as those of the Italians, if not stronger, and Jewish distribution networks were superior. For example, Sigmund Freud’s uncle was a famous mule for a Manchester-based group of forgers whose goal was to forge rubles to destabilize the economy in the Polish-Lithuanian Commonwealth (under Russian control) during the January Uprising of 1863. Encyclopedia.com:

In reality, on June 20, 1865, Uncle Josef was arrested by the police as he was about to sell counterfeit rubles. He was involved in an international money trafficking ring that had contacts in Manchester, where his nephews Emanuel and Philipp Freud lived. Although suspected, they were never implicated in the crime. The news was published in the newspapers the following day, but Freud's name did not appear. However, during sentencing in February 1866, the Viennese press gave the story considerable coverage, announcing "ten years of forced labor for Freud." He was released after four years for good behavior, but little is known about what became of him after that…

Freud, whose last name means “pleasure” in English, was from a wealthy family of immigrants to Vienna from Galicia, ground zero of the White Slave Trade and the Galician Network.

Bearing in mind the importance of inter-generational knowledge transfer to counterfeiting, it is noteworthy that the Nazis employed 143 Jewish, not Italian, counterfeiters as part of their economic warfare against Great Britain. (Even though the Italians were their allies!) This operation was called “Operation Bernhard”, and was successful enough to force the British to redesign their pound notes after the war. This program was extremely important to the Nazis, as one of these engravers, Avraham Sonnenfeld, reminisces about the last days of the war:

"We finally arrived at Ebensee, but the Jews, who had already seized control there, wouldn't let us in. We looked too good to them, too well fed, too clean. They refused to believe we were Jews. After two days, the Allies came to liberate us and the rest of the 16,000 Jewish prisoners in the camp."

Long story short, given the realities of global counterfeiting, there’s no logical way of explaining these post-Civil War counterfeiting arrest statistics that doesn’t cast the Secret Service in a dark light. What was this organization and who did it recruit?

The US Civil War was a risky time for American Jewish businessmen, who Union (Northern) General Grant saw as the main smugglers of cotton out of the Southern states. General Grant took drastic measures to thwart this trade, from History.com:

Almost as soon as the war began, illegal trade and smuggling between North and South started. Though the Union blockaded Southern ports, goods still made their way over the border, and profiteers continued their trade illicitly, especially as the price of cotton rose due to the embargo. Not only did illicit trading flout Union rules, but it threatened the war effort itself. …

“When cotton came from Confederate territory,” writes historian Ludwell H. Johnson, “there was always the danger that it would be paid for in supplies or munitions.” …

In August 1862, as Grant was preparing the Union Army to take Vicksburg, he commanded his men to examine the baggage of all speculators, giving “special attention” to Jews. In November, he told his subordinates to refuse to let Jews receive permits to travel south of Jackson, Mississippi or travel southward on the railroad.

For Grant, prejudice against Jews mingled with personal animosity. He began his crackdown after discovering a Jewish family’s involvement in a scheme to help use his father’s name to get a legal cotton trading permit in Cincinnati….On December 17, 1862, Grant went even further. That’s when he issued an official order expelling Jews from the Department of the Tennessee, a massive administrative division under his command that included parts of Kentucky, Mississippi and Tennessee. He called the Jews “a class violating every regulation of trade established by the Treasury Department and also department orders” and gave them 24 hours to get out.

News of the order horrified Jewish Americans. Among them were the approximately 30 Jewish merchants of Paducah, all of whom who were expelled from the city along with their wives and children. Two of the men being banished were former Union soldiers.

As they prepared to leave their homes and board a river boat away from Paducah, Cesar Kaskel and others telegraphed President Abraham Lincoln in a desperate attempt to spread the word about Grant’s actions. After their forced departure Kaskel went to Washington to protest the order in person. There, he approached Congressman John A. Gurley of Ohio, who agreed to accompany him to the White House. The men hurried to Lincoln.

But though an increasing number of people were learning of Grant’s orders in the South, the breakdown in communications meant that Lincoln had not previously heard about his general's decision to expel Jewish people from the Department of the Tennessee. He was so shocked by the order that he asked his staff for confirmation. Once they confirmed that it was real, he revoked it.

News of the order continued to spread, and though some editorials sided with Grant, most condemned its targeting of Jews. “Men cannot be condemned and punished as a class, without gross violence to our free institutions,” wrote the New York Times a month after the order….

The discriminatory order was quickly squelched, but the general never forgot it. In fact, he spent a lifetime trying to atone for it. When he was running for president in 1868, he confessed that the order “was issued and sent without any reflection and without thinking.” In office, he named more Jews to public office than ever before, and promoted the human rights of Jewish people abroad, protesting pogroms in Romania and sending a Jewish diplomat to object.

“During his administration,” writes historian Jonathan D. Sarna, “Jews moved from outsider to insider status in the United States, and from weakness to strength.”

All of this went on while Salmon Portland Chase, a Lincoln appointee and founder of the Republican Party, was head of the Treasury Department. Prior to his appointment, Chase had been governor of Ohio, a state with special significance to the USA’s embattled Jewish community. From Victoria Saker Woeste’s Henry Ford’s War on Jews:

[Rabbi Leo M.] Franklin and [Louis] Marshall embodied the regional rivalry that had arisen in the late nineteenth and early twentieth centuries, as the physical center of Jewish leadership moved from Cincinnati [Ohio] to New York, The relocation amplified a shift in the character of leadership as well. The new activist organizations, led by lawyers, supplanted the authority of Jewish religious figures…

Some of the most prominent members of the city's [Cincinnati’s] Republican Party were wealthy Jews who lived in stately mansions on Fairmont Boulevard, where they boarded train lines for daily rides to their downtown offices.

Chase himself brought shocking scandal to the Treasury department, the type of scandal that wouldn’t be out of place at Five Points, as Johnson explains:

Although the Secret Service had fewer detectives than the Postal Inspectors, it quickly established itself as a general policing agency for the federal bureaucracy. This position may have evolved from the combination of a wartime scandal and other problems in the Treasury Department. The scandal occurred when Secretary Chase had decided to hire female clerks, one of whom had promptly become embroiled in accusations of sexual misconduct. With its employees’ moral character at stake, Treasury officials had displayed a persistent though erratic willingness to use SErvice detectives to check on their workers’ personal lives. Beginning in December 1865 the Service became the occasional moral guardian of the Treasury.

While Chase’s secretaries were loose women, his Secret Service operatives came from the world of pimps:

Nearly half of the early recruits [to the Secret Service], however, had criminal backgrounds. Henry O. Wright, Wood’s first recruit, was typical. Wood had hired him in December 1864, prior to the [official] creation of the Service… He undoubtedly knew a great deal about counterfeiters. Indeed, Wright had been in a Chicago jail when Wood found him and arranged for his release. Wood also hired George Hyer [a German, according to Johnson], who worked more briefly for the Service. Hyer had been accused of murdering five men, had served a prison term for counterfeiting… It was not unusual to find such individuals associated with a policing agency; detectives typically used criminals as informers in their work. Wood however, had hired them as operatives and assistant operatives for a federal policing agency.

Wood’s recruits did produce results, arresting more than two hundred counterfeiters… in their first year of operation…

William P. Wood was the right hand man of Secret Service head Edward Jordan— a Chase appointee, Republican Party member, and abolitionist. Wood’s efforts did not stop counterfeiting, but they did remove American counterfeiting leaders and replaced them with foreign ones. Chase’s ‘Secret Service’ and its informal predecessor agents quickly earned a reputation for corruption. Who would have thought giving criminals federal power would have such consequences? Johnson interprets the foundation of the Secret Service as a milestone in the creation and expansion of federal government in the United States.

All in all, counterfeiting is the red thread that runs through the history of pre-WWI US power-brokers: from their time profiting from slavery, through to their time profiting from opposing slavery.