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Old Currency

In 1918, the Federal Reserve Board begins issuing currency in $500, $1,000, $5,000, and $10,000 denominations. The $100,000 note was actually a gold certificate that was not circulated or issued for public use. The Bureau of Engraving and Printing printed the notes during The Great Depression in 1934 with a portrait of Woodrow Wilson on them. Only 42,000 of the $100,000 bills were ever printed for the purpose of conducting official transactions between Federal Reserve banks only.

On July 14, 1969, the Department of the Treasury and the Federal Reserve System announced that currency notes in denominations of $500, $1,000, $5,000, and $10,000 would be discontinued. Their main purpose was for bank transfer payments. With the arrival of more secure transfer technologies, however, they were no longer needed for that purpose. Although they were issued until 1969, they were last printed in 1945. Federal Reserve Notes now being printed in $ 1, $2, $5, $10, $20, $50, and $100 denominations, represent the main US paper currency. The $100 bill is now the highest denomination being printed. Silver certificates in $1, $5, and $10 denominations have been discontinued.

Currency movements are difficult to measure for some of the same reasons that currency is popular: It can be easily concealed and readily carried across borders, even in large quantities (a briefcase can hold $1 million in $100s).

Before the advent of paper currency, gold coin — in the form of Dutch guilders and other coins of the realm—circulated far outside the countries in which they were minted; similarly, bank notes (that is, notes issued by private commercial banks) in the United States and England in the 19th century circulated far beyond the market areas of those banks. US currency today provides many of the monetary services that gold coins once did.

"Money laundering" is the process by which one conceals the existence, illegal source, or illegal application of income, and thendisguises that income to make it appear legitimate. Narcotics traffickers, for example, often seek to change large amounts of cash received from "street-level" sales in'to an ostensibly legitimate form, such as business profits or loans, before using those funds for personal benefit or reinvesting them in new narcotics purchases and distribution. In addition, corporations otherwise engaged in legitimate commerce may develop surreptitious channels for the use of corporate funds in the payment of commercial bribes or unlawful political contributions.

Law enforcement agencies recognize that narcotics traffickers, whomust conceal billions of dollars in cash from detection by the govern-ment, create by far the greatest demand for money laundering schemes.It must be noted, however, that numerous other types of activities typicalof organized crime, such as !oansharking and gambling, also create anappreciable demand for such schemes.

At one end of the spectrum, a narcotics traffickerwho wishes merely to increase the immediate portability of cash receipts can simply exchange smaller-denomination bills (e.g., one-, five-,and ten-dollar bills) for larger-denomination bills. A Currency Transaction Report (CTR) that must be fried by banksand other financial institutions whenever a currency transactionis more than $10,000.

Although organized crime has made use of money laundering tech-niques for some time, law enforcement agencies did not initially under-stand the importance of money laundering as a significant aid to orga-nized came. In the 1967 report of its Task Force on Organized Crime,the President's Commission on Law Enforcement and Administration ofJustice did not specifically address the topic of money laundering. In-deed, there is little evidence to suggest that the national law enforce-ment community even recognized money laundering as a discrete ac-tivity until the end of the 1960s.

Salmon P. Chase, secretary of the treasury under Abraham Lincoln, is remembered by most people as "the guy on the $10,000 bill." The largest denomination ever printed for public consumption, the $10,000 bill never got much use. This lack of use is understandable, given that its value outstripped the net worth of the average American during most of the time the bill was available. The bill was first printed in 1934. The $100,000 note was actually a gold certificate that was not circulated or issued for public use. The Bureau of Engraving and Printing printed the notes during The Great Depression in 1934 with a portrait of Woodrow Wilson on them.