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decided: January 3, 1938.



Hughes, McReynolds, Brandeis, Sutherland, Butler, Stone, Roberts, Cardozo, Black

Author: Black

[ 302 U.S. Page 542]

 MR. JUSTICE BLACK delivered the opinion of the Court.

Respondents were convicted in a federal district court for violating a provision of § 150 of the Criminal Code,*fn1 which reads:

"whoever shall have or retain in his control or possession after a distinctive paper has been adopted by the Secretary of the Treasury for the obligations and other securities of the United States, any similar paper adapted to the making of any such obligation or other security, except under the authority of the Secretary of the Treasury or some other proper officer of the United States, shall be fined not more than $5,000, or imprisoned not more than fifteen years, or both."

The Circuit Court of Appeals reversed,*fn2 holding that the act did not prohibit the possession of any except the distinctive paper adopted by the Treasury, and that other paper was not prohibited even though it closely resembled the distinctive paper and was well suited for successful counterfeiting. The court accordingly believed that the evidence did not support a conviction.

The evidence disclosed that:

In 1928, the Secretary of the Treasury adopted a distinctive paper for obligations and securities of the United States; this paper was a high grade rag bond having a sharp rattle, very little gloss, and short fine silk fibers distributed throughout; in 1936, respondents had possession of paper of practically the same color, weight, thickness and appearance as this distinctive government paper and cut to the dimensions of twenty dollar government obligations; respondents' paper rattled like genuine money; it did not have red and blue silk fibers throughout, but red and blue marks were so expertly designed upon its surface that one judge, dissenting below, after

[ 302 U.S. Page 543]

     a careful examination of these marks with a magnifying glass, was still wholly uncertain whether they were actually woven in the fabric or were traced on the surface.

Did respondents' possession of this paper violate the act?

The paper was not only perfectly adapted for counterfeiting, but it is difficult to conceive of its use for any other purpose. The history and language of the act are both of importance in determining whether Congress intended to make it a crime to possess, without authority, so close an imitation of the genuine paper adopted by the Treasury.

1. The history of the law under which respondents were convicted dates from a special session of Congress in 1837. That Congress was called upon to pass legislation to meet emergency conditions following crop failures, general business distress, unemployment and discontent. Urged to action by these conditions, Congress authorized the issue of a then unprecedented amount of treasury notes. It had long been a criminal offense to make, utter, or pass counterfeit money. Realizing that the protection of the currency required more stringent laws against counterfeiters,*fn3 Congress made it a crime to possess any plate, blank note, or paper to be used for counterfeiting purposes.*fn4

[ 302 U.S. Page 544]

     This early forerunner of the present act provided in part:

"If any person . . . shall have in his custody or possession any paper adapted to the making of bank notes, and similar to the paper upon which any such notes shall have been issued, with intent to use such paper . . . in forging or counterfeiting any of the notes issued as aforesaid . . . such person . . . shall be sentenced" etc.

This original provision prohibited the possession of "similar" paper adapted to making "bank notes" but such "bank notes" obviously were to be forged or counterfeit -- not genuine. This first act thus prohibited -- not the genuine -- but counterfeit paper, intended to be made into counterfeit obligations, and its language and meaning were substantially reenacted in 1847, 1857, 1860, 1861 and 1862.*fn5

Beginning December, 1860, Congress, to meet imperative needs, again authorized great increases in government obligations. By July, 1862, new issues of currency and unsettled conditions had so stimulated counterfeiting that Congress made special funds available to detect and punish those guilty of the crime.*fn6 Such action proved inadequate to curb counterfeiters, and in 1863, Congress reenacted, strengthened and strongly reinforced the 1837 prohibition against possession of paper for counterfeiting.*fn7 The 1863 law made it a crime to "imitate, counterfeit, make, or sell any paper such as that used, or provided to be used, for the fractional notes." Although the law had prohibited the possession of paper imitating the genuine

[ 302 U.S. Page 545]

     since 1837, this 1863 amendment struck vigorously at all who in any manner ...

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