CHF Editor Coin History, U.S. Coins

The Infamous ‘Folsom Prison Nickel’

What follows is the text of an article which appeared in San Francisco’s The Call newspaper, March 10, 1898. 

Outside of California residents, most of the rest of the world was to first hear the name Folsom Prison in the 1955 hit song “Folsom Prison Blues” by Johnny Cash. In 1968, Johnny Cash performed live at the prison to the delight of inmates and jailers. 

BOGUS MONEY IS MADE RIGHT IN FOLSOM PRISON

Guards Surprise Convicts Busily Engaged in Coining Nickels in the Engine-Room.

SACRAMENTO, March 10. 

A counterfeiter’s layout has been discovered at Folsom within the State prison walls, the last spot on earth where one would look for the illegal minting of Uncle Sam’s coin. If there is a place in the broad universe where neither the opportunity nor demand of money arises it is within the walls of the State prison; at least such is the general impression of people who are without experience with criminals. To those who have had dealings with me sentenced to long terms of imprisonment for the commission of crime it is known that there is no passion or desire stronger than the predilection of a prisoner to carry upon his person some small amount of money. On the part of many it becomes a mania, and they will resort to all sorts of devices and any kind of a subterfuge to withhold a few pieces of coin from the Warden upon entering the prison. Secretary Smith, in speaking of this peculiarity on the part of prisoners, once said to The Call correspondent: 

“You would be surprised to know what difficulty we have in securing money from the prisoners who are brought here. No second termer ever comes without an endeavor to conceal upon his person some bit of money. I have known them to have five-dollar pieces covered with cloth and sewed upon their vests as buttons. They conceal money in their hair and in their ears, and we are not always successful in obtaining possession of it. Not long ago I brought $75 worth of books for our library with money found around the prison grounds — money that had been hidden by convicts or carried in, notwithstanding the precaution we take to relieve all the prisoners of every cent they have upon their person when entering for registration .” 

But while it may not be astonishing to find this overwhelming desire on the part of convicts to conceal their spare change, there is probably no prison in the United States where the criminals successfully operated and circulated bogus coin, manufactured within the prison walls under the very eyes of the officers. For some time past Officer Charles Jally. whose station is at the rock crushing plant, has had his suspicions aroused by the peculiar conduct of some at the prisoners under his control At first he thought these whisperings and signals were carried on in the planning of some scheme to smuggle in opium. This is a very common matter at the prison, and only last week Guard Lamphry burned ten pounds of the drug which had been surreptitiously brought within the confines. After three or four days of watching Jally informed Superintendent Taylor, and both became convinced that some deeper plot was being laid, and they became more determined than ever to ascertain the cause of so much suppressed excitement among the convicts. 

Yesterday they were rewarded. Some time during the morning Jally informed Taylor  that there was something wrong in the engine room. Taylor gathered about him Guards Jally and Silak. and the three made a rush for the engine room. Convicts Cayne(sic) and Brown were encountered, and as the officers rushed in both convicts leaped through a window in the engine room and ran to the tank of the canal, which was within a short distance of the engine house. One of the guards followed them, while the others proceeded to Inspect the engine room.

As the convicts reached the edge of the canal there was a splash of muddy water. The crucible and dies they had used were forever beyond the possession of those in pursuit. The quick sands and murky waters of the American River were safe custodians of their guilt.

There were other evidences, however, and they consisted of a pile of nickels which were captured by the guard who entered the engine room. These nickels were splendid specimens of workmanship. The material out of which they were made consisted of babbiting, which is a white soft metal which forms the inside rim of the axle box found on a locomotive. This substance was taken from the engine which runs through the prison grounds and hauls the trains of crushed rock which are shipped from the prison rock crusher.

The nickels are seemingly as perfect and complete as any ever made by Uncle Sam. Many of them have been given circulation and The Call correspondent found no difficulty in procuring one of them in the town of Folsom.

How the dies and crucibles were ever made will perhaps remain a mystery. Plaster of parts molds were used, and in the engine room were found many fragments of this material.

Captain Murphy was rather reticent when asked about the affair.

“It amounts to nothing,” the captain said, “and if it did I would not talk about it in the absence of the warden. I do not deem it to be best for the prison discipline to take such matters up and give them undue publicity in the papers.”

When shown one of the spurious coins the captain admitted that he had seen them, but beyond the admission he preferred to say nothing.

It is not supposed that Cayne and Brown are the prisoners who made the molds, but as there are several counterfeiters doing time in Folsom, it is probable that the devices used were made by some of them, and the coining of the counterfeit left to Cayne and Brown.

A very extensive traffic has for a long time been going on among the prisoners, and the officers have been at a loss to know where the convicts obtained the money which had been so freely circulated. The cigarette paper among the convicts is a very choice article, and they will give almost anything: to obtain a package of it. On the other hand, there has been a great quantity of opium smuggled in lately, and there is no doubt that these coins ; were being made for the purpose of paying those who sent it in from the outside, as well as exchanging them for cigarette papers.

It is a matter of some regret that the entire layout was not captured, as it no doubt would have given the officers some clew (sic) as to the means employed in obtaining it. Some of the officers think that the dies were smuggled in from the outside, while others hold that the entire apparatus was made within the prison walls. As there are many tools and furnaces available around the quarries, it is very probable that the latter theory is the correct one.

The ladle used appeared similar to those used around assaying establishments, while the crucible was crude in form, and appeared as though it had been melted into shape from railroad couplings.

There are many cars arriving every day in the yard, and it is from these that the prisoners are supplied with opium from the outside. The most wonderful devices are employed in this prohibited traffic. Opium has been found in the axle boxes of the cars, or fastened to the inside of a brake beam; in fact there is no place about a flat car that has not been used in concealing the drug.

The impression prevails among the officers that it was the intention of the convicts to coin a great quantity of nickels and then ship them out on the freight cars, where their friends on the outside could receive them in exchange for opium.

It is probable that nothing but nickels were attempted to be made for the reason that the convicts could not obtain the metal necessary to manufacture silver coins.

An 1898 Liberty “V” Nickel

justinrobinson British Coins, Coin History, Monarchs

Eighteenth Century Britain – Coinage in Crisis

The Industrial Revolution, which began in the middle of the eighteenth century transformed the nation’s need for money.  People living off the land in rural Britain had been largely self-sufficient.  They grew their own food, made their own clothes and bartered with their neighbours for everything else.  However, as more and more people streamed into the new urban areas looking for work in the factories, so the need for good quality money to pay their wages became acute. 

For most of King George III’s reign, British coinage was in a desperately poor state, with very few coins being produced and the market flooded with badly worn coins, tokens, foreign currencies and counterfeits.  A population explosion between 1750 and 1800 did not help matters, putting additional pressure on the already inadequate coinage.

Fortunately, the King’s final years would witness a transformation in the nation’s coinage that would not be seen again until decimalisation in 1971.    

The landscape of Manchester was transformed by the Industrial Revolution

The Northumberland Shilling

The production of silver coins slowed to a trickle during the eighteenth century and they rarely appeared in day to day transactions.  A shortage of silver led to the metal price becoming more costly than the face value of coins made from it.  Consequently, there was no incentive for the Treasury to strike silver coins despite urgent appeals from the public to do so.  Any coins that did appear were unlikely to spend long in circulation, being either hoarded or quickly melted down for their higher bullion value.

In 1763 a batch of silver shillings were struck for Hugh Percy, 1st Duke of Northumberland, who had been appointed Lord Lieutenant of Ireland.  He wanted to make an impression when he arrived in Dublin with his family in October 1763.  To do this he had 2,000 new shillings struck, which he threw into the crowds that lined the streets to welcome him.  The extravagant gesture cost him £100 but guaranteed him an enthusiastic reception, and the 1763 shilling would forever be known as the Northumberland Shilling. 

Hugh Percy, 1st Duke of Northumberland by Joshua Reynolds

From records kept at the time, we know the Royal Mint struck more silver in 1763 than the 2,000 shillings required by the Duke to ingratiate himself with the people of Ireland. Any coins that were produced were a drop in the ocean compared to what was actually needed.  Shillings would not be struck again until 1787.

The Northumberland Shilling 1763

Counterfeiting

During the first decade of the new King’s reign, the number of counterfeit copper coins in circulation increased dramatically. To combat this, in 1770 the Treasury ordered the Royal Mint to produce copper coins in huge quantities, and over the next six years, millions of farthings and halfpennies were struck and issued into circulation. 

However, far from dissuading the counterfeiters the huge influx of quality copper into the market only facilitated the production of more fakes.  A skilled fraudster could melt down one genuine coin and make two or three underweight coins with the metal.  In 1775 the Treasury admitted defeat and the official Government coin presses fell silent again. 

A counterfeit coin of George III

Counterfeiting was a serious offence punishable by death.  On 18th March 1789, Catherine and Hugh Murphy were executed at Newgate Prison in London for coining.  The term covered several offences, such as clipping bits off silver and gold coins to melt down, colouring coins to make them look more valuable, producing counterfeits and possessing the equipment to do so.    

Coining was an act of high treason in that it was considered to be a crime committed against the King.  Therefore, Catherine was not hanged alongside her husband.  Instead, she became the last woman in Britain to be executed by burning at the stake, the penalty for female coin counterfeiters until 1790.   

Catherine Murphy was burnt at the stake for coining in 1789


The counterfeiting law only applied to criminals making visually exact replicas.  Many criminals took advantage of this legal loophole by making coins with deliberate errors in their inscriptions, trusting that people would be unlikely to spot the difference! 

Shock Report

An official examination of coins in circulation in 1786 confirmed that the nation’s coinage was in a shocking state; badly worn, barely legible, underweight and mostly fake.  Only about eight per cent of ‘halfpennies’ in circulation were genuine.  Genuine coins were often hoarded, and the fakes spent first, thereby proving Gresham’s Law that “bad money drives out good”.      

Wear and tear over decades meant that smaller denominations were often so worn that it was impossible to discern the image that had once appeared on it.  Some dated back to the reign of William III (1650 –1702) and had been allowed to circulate for a century. 

The Royal Mint responded to the crisis by effectively shutting down.  It produced no copper coins at all between 1775 and 1821. A small batch of silver shillings and sixpences were struck in 1787, but only because the Bank of England wanted to sell them to collectors looking for Christmas and birthday gifts.  It was left to others to propose a solution to the problem.   

The Royal Mint at the Tower of London circa 1809
justinrobinson British Coins

Sir Isaac Newton – Warden of the Mint

Isaac Newton, pictured in 1689

In 1693, fifty-one-old Isaac Newton was mentally exhausted. After firmly rejecting a career in the family farming business as a young man, he had instead written the laws of motion, explained orbital mechanics, investigated the principles of light and colour and developed the calculus. His place in history as one of the greatest thinkers of the modern age was assured.

Newton had grown bored with his sedentary life as a Professor at Cambridge University. The man who had once pushed a bodkin into his eye to test his theories about colour now found that the scientific pursuit of truth no longer held the appeal it once did. His finest achievements were, he felt, behind him, and his behaviour had become increasingly unpredictable and erratic. He would fly into furious rages and write angry, vengeful letters to former friends accusing them of betrayal and conspiracy at the slightest provocation. Plagued by depression, paranoia and insomnia, he suffered what he would later describe as his ‘black year’. It would last eighteen months.

Newton needed a change of scene and a new challenge to exercise his mind. After a while, he began to bombard his friend Charles Montagu, Chancellor of the Exchequer, with letters requesting work in London. Eventually, on 19th March 1696, he received a reply, notifying him that he had been recommended for the position of Warden of the Royal Mint. Newton eagerly accepted and had reported for duty within the month.

Based at the Tower of London where the Mint made the coins of the realm, the Warden’s job was to enforce laws against counterfeiting. The office had been viewed as a largely symbolic position that required little work. However, Newton took the role extremely seriously and relished the challenge. Whether Montague intended it that way or not, his decision to allow Newton to apply his scientific methodology and towering intellect to the currency crisis was to prove an inspired one.

The Tower of London, pictured in 1737

Counterfeiting was a thriving industry in Britain when Newton arrived at the Tower of London to take up his new position. Around ten per cent of coins in circulation were fakes, cast or stamped from forged or stolen moulds and dies. In addition, the value of silver on the continent was greater than its face value on coins. As a result, huge numbers of silver coins were withdrawn from circulation, melted and taken abroad to be sold at a tidy profit. Genuine coins were often hoarded, thus proving Gresham’s law that “bad money drives out good”.

Counterfeiters would clip metal from coins (left) and use the clippings to make new coins (right).
Some counterfeit coins, such as those produced by William Chaloner, were of exceptionally high quality

Newton’s solution to the problem involved a Great Recoinage. This enormous operation involved taking in millions of pounds of coins by weight and re-minting them at their correct value. He organised a production line of 500 men at the Tower of London, and over the next four years, they smelted most of England’s money supply. To assist them, branch mints were established at Bristol, Chester, Exeter, Norwich, and York. Knowing that some counterfeiters had access to stolen Royal Mint equipment, Newton told the officers at these country mints to “trust not the computations of a single Clerk nor any other eyes than your own.”

On Newton’s orders, Mint employees worked six days a week from 4 a.m. to midnight. Before he arrived, no one thought the Mint could produce 15,000 coins in a week. Newton soon had them turning out 50,000 coins every week, and between 1696 and 1699, the value of silver struck was over £5.1 million, compared to £3.3million coined in the preceding 35 years.

Newton’s position as Warden of the Mint also meant that it was his responsibility to track down and prosecute counterfeiters. Chasing crooks was not something that particularly appealed to him, and he wrote a letter to the Treasury asking if he could be excused this particular duty. They reminded him that it was part of his job description, and so he set to work with his customary zeal and single-minded determination. To assist him, Parliament passed the Coin Act in 1696, making it an act of treason to make coins, construct, sell or possess the equipment required to make coins or assist anyone making coins. The punishment for doing so was death.

Newton was now able to devote more time to his primary duty of investigating and bringing to justice the counterfeiters and clippers. He went undercover himself and visited notorious bars, taverns and other dens of iniquity in London where criminals gathered to recruit informants and purchase information.

Newton went to bars and taverns gather evidence

Newton hired private “thief-takers” to locate counterfeiters and their equipment. Records show that he personally tracked criminals to their lairs and interrogated them in person. He became a regular visitor at the rat-infested Newgate Prison, where he conducted more than 58 interviews. Between June 1698 and December 1699, he conducted more than 100 cross-examinations of witnesses, informers, and suspects to build watertight cases against the accused. Newton gathered evidence to successfully prosecute 28 counterfeiters, most of whom went to the gallows and paid the ultimate penalty for their crimes

However, Newton’s biggest challenge was to prosecute the most prolific counterfeiter of the age. It took Newton many months to build a successful case against this kingpin of the criminal underworld, and soon he was working full time on this one goal. Like Sherlock Holmes and Moriarty, every great detective needs a worthy adversary. Newton’s was a man called William Chaloner, a resourceful and cunning counterfeiter of exceptional ability with ambitions to run The Royal Mint.

Chaloner was born in poverty, the son of a weaver in Lincolnshire. He ran away to London as a young man and started at the very bottom of the criminal ladder, hawking and scamming unwary passers-by on street corners. He possessed an enquiring mind and the gift of the gab and sometimes pretended to be a doctor to sell remedies for imaginary ailments that he would diagnose on the spot.

To provide a legitimate front for his business dealings, Chaloner set himself up as a recoverer of stolen property. Of course, he was able to do this because he had arranged for the property to be stolen in the first place. He also had a brief career informing on enemies of the state, paying Jacobites to print dissident literature and then betraying them to the authorities and pocketing the reward money. Eventually, his luck ran out, and he was named a suspect in a burglary case in 1690, which forced him to flee and go into hiding.

It was a chance meeting with a craftsman who showed him how to gild surfaces that made Chaloner’s fortune but ultimately took him to the gallows. He quickly realised the potential for counterfeiting gold and silver money, and over a lucrative eight-year career, he is believed to have counterfeited over £30,000 worth of currency.

Counterfeiting made Chaloner a very wealthy man. He bought a large house in the semi-rural suburb of Knightsbridge, rode in a carriage, wore fine clothes and presented himself to high society as a gentleman. After forging “Birmingham Groats”, he moved on to more lucrative Guineas, French Pistoles, crowns and half-crowns, Banknotes and lottery tickets

Chaloner developed a sophisticated casting method that involved pouring molten metal into high-quality brass moulds and set up a factory in Egham 20 miles outside London. It was said that he was so pleased with the quality of the counterfeits he was producing that it upset him to see them used as it spoiled their perfection!

Chancellor of the Exchequer, Charles Montagu, who appointed Newton the Warden of the Mint

Ultimately, Chaloner’s giant ego was his undoing. A few months before Newton took up his post, Chaloner had written to the Government claiming to have evidence that men working at the Mint were selling duplicates of the casts used to make coins. Of course, he didn’t tell them that he only knew this because he had purchased one of these casts for himself! When Newton heard of the letter, he immediately launched an investigation and interviewed more than 30 suspects to determine whether there was any truth in the accusations. Meanwhile, Chaloner tried to involve himself in the investigation and revealed his real purpose for writing the letter. He wanted Parliament to let him run the Royal Mint to sort out the mess!

Chaloner wrote letters, published pamphlets and was even invited to appear before Parliamentary committees, arguing that only he could solve England’s counterfeiting problem. He even went so far as to publicly accuse Newton of incompetence and possibly even fraud in managing the Great Recoinage. Newton was furious at this slur on his reputation, and so began a game of cat-and-mouse in which Chaloner sought to persuade Parliament to give him control of the Mint while Newton secretly compiled evidence to expose him as the chief counterfeiter in England.

Newton discovered that Chaloner had been arrested repeatedly for various scams and had even served time in jail for petty offences. However, because there were no centralised criminal records at the time, it had been easy for him to move from place to place and start again each time he was released. Astonishingly, Newton discovered that in 1694, Chaloner had been caught red-handed in the act of forging banknotes. He had talked his way out of prosecution on that occasion by naming people who he claimed were the real counterfeiters behind the operation. He even ended up receiving a reward for his information!

Much to Newton’s frustration, in 1697, Parliament ordered him to provide Chaloner with the resources to make prototypes of a new currency that he had proposed to them. Newton refused, so Chaloner went ahead and made them anyway using stolen casts. When Newton found out through his informer network, he immediately had Chaloner arrested. Chaloner quickly paid a key witness to flee to Scotland, and without him, the case against him collapsed. Newton then went to Parliament to voice his suspicions about Chaloner, but these were dismissed, and Chaloner went back to offering his services to run the Royal Mint, whilst simultaneously producing forged £50 banknotes and lottery tickets!

After that, Newton dedicated himself solely to the task of building a robust case against Chaloner. He worked relentlessly and with a single-minded determination to gather evidence for the prosecution. He methodically bribed, threatened and bullied witnesses for information that would allow his spies and informants to infiltrate Chaloner’s sophisticated counterfeiting operation. Eventually, there was enough evidence to arrest him again, and this time Newton even arranged for informants to be locked up with him to report back on anything that he said in custody.

Newgate Prison

When the trial finally came, Newton assembled eight witnesses to testify against Chaloner, including the wife of the man he had paid to run away to Scotland. She was willing to speak in court because Chaloner had scammed them out of money as well. Such was the weight of evidence against him that the jury quickly reached their verdict and sentenced the counterfeiter to hang.

Chaloner appealed for mercy from his condemned cell in Newgate Prison and wrote to Newton several times, begging him to save his life. His final letter concluded with the piteous words; “Oh dear Sir nobody can save me but you. O God my God I shall be murdered unless you save me.” Newton did not respond.

On 22nd March 1699, there was nothing left for Newton’s great adversary to do but protest to the people who had come to watch him hang at Tyburn that “he was murder’d … under pretence of Law”. He suffered a miserable death choking for several minutes at the end of the rope, much to the amusement of the jeering crowd.

The Tyburn tree, where Chaloner met his grisly fate in 1699

It is doubtful that Newton was at Tyburn that day to witness this culmination of months of hard work. In his notebook, he wrote simply that “Chaloner could have lived a long, honest life had he let the money and Government alone.”