America has a long and colorful history of confidence men and counterfeiters. On this episode of BackStory, we go back to the time when fake money and fly-by-night banks dominated the economy, and uncover the origins of the lie detector test, known as “the truth compelling machine.” We’ll also try to sell you the Brooklyn Bridge.
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BRIAN BALOGH: This is BackStory. I’m Brian Balogh.
In 2008, Bernie Madoff was busted for running what’s considered the largest financial fraud in history. One thing you kept hearing from his victims, he seemed like a trustworthy guy.
Trust has always been a critical part of the US economy, but sometimes it’s worked in interesting ways.
STEPHEN MIHM: It was a saying among businessmen at this time that they preferred a counterfeit note on a reputable bank than a genuine note on a fraudulent bank.
BRIAN BALOGH: It’s April Fools’. We’re looking back at the long, veiled history of American deception. We’ll hear about a mermaid that helped rewrite the rules of chicanery.
JAMES COOK: Something that looks like a kind of fossilized or petrified monkey corpse in a kind of scene of agony.
BRIAN BALOGH: And a superhero you cannot deceive. That’s coming up on BackStory.
PETER ONUF: Major support for BackStory is provided by The National Endowment for the Humanities, The University of Virginia, and The Joseph and Robert Cornell Memorial Foundation.
ED AYERS: From the Virginia Foundation For the Humanities, this is BackStory.
BRIAN BALOGH: We’re the American Backstory hosts.
Welcome to the show, I’m Brian Balogh, 20th Century Guy, and I’m here with Ed Ayers.
ED AYERS: 19th Century Guy.
BRIAN BALOGH: And Peter Onuf, our resident–
PETER ONUF: 18th Century Guy.
BRIAN BALOGH: We’re going to begin today back in the 1820s.
There were a lot of things that were different back then from today. One of them was the money that people carried in their wallets. It wasn’t printed by the federal government. It was printed by private banks.
And when we say “private banks,” we’re not talking Bank of America. A lot of these were fly-by-night operations. And each had its own currency designs, which meant there were hundreds of different currencies circulating. That made life a lot harder for merchants and a heck of a lot easier for counterfeiters.
STEPHEN MIHM: And so let’s say that you’re a store keeper.
PETER ONUF: This is Steven Mihm, a historian at the University of Georgia.
STEPHEN MIHM: And someone comes in. You don’t know who they are. And they hand you a bill on, say, the Bank of Utica. It’s a $3 bill. And you want to know whether it’s counterfeit or not.
PETER ONUF: If you were a savvy merchant, you’d whip out a little book called A Counterfeit Detector. It supposedly listed every single bank note in circulation and explained the difference between good notes and bad ones. So you’d look up that Bank of Utica $3 bill.
STEPHEN MIHM: And of course, it gives you this endlessly bewildering description about how in the counterfeit, the horse looks vaguely suspicious. Whereas, in the genuine, it doesn’t.
PETER ONUF: It’s a guilty horse.
STEPHEN MIHM: It’s a guilty horse. I’m serious, a lot of this is deeply subjective, obviously. And hopefully, that will help you determine whether or not it’s counterfeit or not.
BRIAN BALOGH: Sales of these books were booming in the early 19th century. And that’s because counterfeiting was booming. As much as 30% of the money in some parts of the country was fake.
Nowadays, that number is just a fraction of a percentage point.
PETER ONUF: All that fake money had to come from somewhere. And in the 1810s and the 1820s, that somewhere was a dirt road just over the US border in Quebec– Cognac Street.
BRIAN BALOGH: Now, to understand Cognac Street, you have to ditch your image of a loan counterfeiter working in a basement at night.
Imagine instead, a vast hive of activity– printers, engravers, people whose job it was to sign the false notes, to transport them up and down the East Coast, and pass them into circulation. There were rivals gangs, complex family alliances, and arson attacks on enemies.
Think drug cartel.
STEPHEN MIHM: In other words, this was not a small enterprise. It was one that actually bound people together across a vast, clandestine economy that spanned hundreds of miles– as far west as Indiana, as far south as Georgia. It was an economy that, in a very perverse way in its complexity, mimicked the genuine economy that was taking shape south of the border.
PETER ONUF: In that sense, Cognac Street isn’t unusual. If you look closely, fraud and deception have always haunted the American economy. So for today’s April Fools’ edition of BackStory, we’re asking how generations of Americans have made deception work with them.
ED AYERS: We’ll meet a 19th century showman who invited Americans to enjoy being tricked, and rewrote the rules of marketing while he was at it.
We’ll find out what Wonder Woman has to do with the lie detector.
And yes, we will try to sell the Brooklyn Bridge.
BRIAN BALOGH: In just a moment here, we’re going to return to our interview with Stephen Mihm. But first, let’s establish what the legitimate economy would have looked like in the 1810s and ’20s.
ED AYERS: Now, as we mentioned, this was a time when private banks were popping up all over the place, each issuing its own money.
Now, the bank notes were basically IOUs. The idea being that if you ended up with one of them, you could take it to the bank and redeem it from gold or silver coins.
PETER ONUF: The problem was a lot of the new banks were totally unreliable. There was hardly any government regulation, so many simply churned out as much cash as they wanted. Even if they didn’t have reserves to back it up. Which meant that even real bank notes could turn out to be worthless.
STEPHEN MIHM: It was a saying among businessmen at this time, merchants, that they preferred a counterfeit note on a reputable bank than a genuine note on a fraudulent bank or a bad bank. And this cuts to the core of what money fundamentally is for us on a very deep, almost epistemological level. What is money?
Money is something that can pass and function as money. That’s almost like a circular argument. But money derives its value from its ability to move from one place to another and facilitate transfers.
And as long as it performs that function– well, no one is really out.
PETER ONUF: What you’re suggesting, which is very distressing to me, Steve, is that the distinction between good and bad is sometimes hard to establish.
STEPHEN MIHM: Right. The distinction between good and bad money, between genuine and counterfeit money, was very muddy, very amorphous, and very blurry. And the counterfeiters, of course again, rhetorically make hay of this when people attack them or even put them on trial.
They’re not beyond saying that what they were doing– printing money– was really no different than what the bankers were doing. But in fact, in some respects was more honest. Particularly when you put a counterfeiter side by side with a banker who claimed that he had money in the bank to redeem his notes. At least the counterfeiters acknowledged that there wasn’t anything backing their notes.
And at the same time, people who were on the other side of the equation who hated banks, not counterfeiters but just ordinary working men and women, looked at banks and said, look, what you’re doing is really, effectively counterfeiting. You’re setting up these corporations. You’re issuing money. You have no intention of redeeming it. And in fact, you seem to have no capacity to redeem it either. And so you’re really just a counterfeiter operating with legal sanction.
PETER ONUF: Steve, I want to press you hard on how you really feel about counterfeiters. After having done all this work and written this excellent book, I think you might be a little soft on them. Is that a fair charge?
STEPHEN MIHM: I think that counterfeiters are– it’s very easy to be sympathetic to them. Or at the very least, taken with their exploits.
The one thing though, that I think sometimes gets lost when people talk about counterfeit money, they claim that it’s a victimless crime. And that’s not true.
The counterfeit money moves in circulation through the economy. Eventually stops. It almost invariably stops not at a bank, but with someone who was the least knowledgeable person about money and was the one left holding the bag. And they’re the person who is most likely to go to jail.
And if you look at the actual convictions of people accused and tried for counterfeiting or passing counterfeit notes, it’s almost invariably the low-level poor people, many of them immigrants, who sometimes couldn’t read, who end up getting the shaft, getting left holding the bag.
PETER ONUF: Yeah, this is a good point. This is the classic case of caveat emptor– “buyer beware.” And a lot of people are not capable of that kind of vigilance to know what they’re buying.
STEPHEN MIHM: Absolutely. I think you’re hitting on something actually very important, which is that in today’s climate of free market fundamentalism, there is inevitably the claim that the market will sort things out.
But this period– and arguably more recently in American history, as in the last decade– I think shows that just as much as one person may be far more equipped to wade through a mortgage document several hundred pages long, people were more equipped to discern the differences between money at this time. And that was not their fault. Coming off the boat from Ireland should not be what ultimately lands you in jail.
PETER ONUF: So Steve, let me ask, how would you explain the end of this era, how is it that we now do trust our currency? And that we’re not worried constantly about the money supply?
STEPHEN MIHM: So the answer to that question comes with the Civil War. The Civil War is like the deus ex machina. It’s the thing that transforms so many things in American history.
PETER ONUF: Yeah, Ed Ayers would agree with that.
STEPHEN MIHM: And it transforms the money supply, too.
And on the eve of the Civil War, 1860, there are, by this point, 10,000 different kinds of money in circulation. Paper money, never mind all the different coins and the rest.
The Civil War comes, we all know that wars have to be financed as well as fought. And the North almost immediately runs into a crisis of financing. And while it ultimately pays a lot of the bills with bonds and taxes, it also pays the bills with a fiat currency known as the greenback. And this is a note that is worth what it’s worth because the government says it’s worth that. It’s legal tender.
These notes offer an opportunity of unimaginable proportions for counterfeiters who have been preying on small, state charter banks, but now have the opportunity to prey on the biggest bank of all, the federal government. And of course, they swing into action, the counterfeiters, and they begin counterfeiting them.
And this would be fine, except that they are now doing something more than preying on private corporations. They are preying upon the state, a state which is actually threatened in its own survival. It has to win this war.
And as a consequence, counterfeiting becomes deemed very quickly an immense threat. Because if the money supply, which is already viewed a little bit skeptically because it’s fiat currency, is counterfeited, it’s a disaster. And so the federal government gets anxious about this. And they basically get an appropriation to create something that becomes known very quickly as the United States Secret Service, which is not about protecting the president, obviously. And Lincoln would have benefited from protection.
PETER ONUF: You might say that.
STEPHEN MIHM: It’s very strange to think that from 1865 to 1900, the Secret Service did not protect presidents. But it did protect the currency. And it did so phenomenally well.
PETER ONUF: You’re now painting a picture of the solution to the counterfeiting is the emergence for the first time of an effective federal state where it matters most in the money supply. And you have a new infrastructure, to some extent, clandestine, covert, dedicated to this war against traitors against American sovereignty, the counterfeiters.
Now it’s no longer folk heroes, no longer kind of a shadow extension of the economy. Now the boundary between what’s legal and what’s not is bright and clear.
STEPHEN MIHM: That’s right. And the Secret Service, very quickly, is known as a rather fearsome organization. It is something that actually strikes terror into people because it is ruthless. It becomes known in one journalist’s phrasing as a “gigantic, invisible machine,” a kind of surveillance state dedicated to crushing these people who dared insult the majesty of this newly reinvigorated state.
PETER ONUF: That’s Stephen Mihm, an historian at the University of Georgia. He’s the author of A Nation of Counterfeiters: Capitalism, Con Men, and the Making of the United States.
BRIAN BALOGH: We’re going to take a short break. But don’t go away. When we get back, we’ll take a trip to New York City. hosts, get your cash out because I understand they have a terrific deal on a beautiful bridge.
ED AYERS: You’re listening to BackStory. We’ll be back in a minute.
TONY FIELD: Hello, podcasters. Tony Field here, BackStory senior producer. We’ve got a couple of new shows in the works that we wanted to let you know about. The first, we’ll explore the history of gridlock in America. We’ll look at dysfunction in the halls of Congress, but also at stalemates that aren’t political.
If you’d care to join us on the phone to share the story of an intractable standoff from your own life, we’d love to try and put that story in historical context.
We’re also looking for stories for the other show in development, that one will look at the history of Americans leaving America in search of some purer version of American ideals. Do you have family stories along these lines? Let us know. Our voicemail number is 434-260-1053. Our email is email@example.com. Or you can just leave a comment for us at backstoryradio.org. Thanks so much. Now, back to the show.
BRIAN BALOGH: We’re back with BackStory. I’m Brian Balogh, and I’m here with Ed Ayers.
ED AYERS: Hello.
BRIAN BALOGH: And Peter Onuf’s with us.
PETER ONUF: Hey, Brian.
BRIAN BALOGH: And we’re talking about deception in American history– cons, swindles, hoodwinks, scams.
ED AYERS: In the history of American swindles, there’s one in particular that seems to loom a little larger than any other swindle. And it goes like this–
ANDY MILLS: All right.
ED AYERS: A man makes his way out to the Brooklyn Bridge.
ANDY MILLS: There’s plenty of people out. It’s a nice, warm night.
ED AYERS: This is reporter Andy Mills. He’s going to help us out on this one.
ANDY MILLS: The sun is currently setting over the city. The lights are just now starting to come on. This is prime time for people to just be snapping photographs.
ED AYERS: And this guy, as he’s walking across the bridge, he’s on the lookout.
ANDY MILLS: I’m seeing a lot of athletes, a lot of runners. I’m seeing a lot of people who are carrying merchandise.
ED AYERS: He’s looking for a particular kind of person.
ANDY MILLS: I’m keeping my eye out for people who look like they may be suckers.
ED AYERS: Because this man is about to sell them the Brooklyn Bridge.
ANDY MILLS: All right, I may have some people here. They look really nice. They look well dressed. They look like they got the money.
ED AYERS: Newspapers reported that soon after the bridge was finished in the early 1880s, suspicious characters started trying to sell the bridge to some of the immigrants who were flooding into New York City.
ANDY MILLS: Hi, ladies. How are you doing? I’m sorry to interrupt you. I see that you’re here enjoying this lovely bridge. And I was just wondering, would you be interested in buying this bridge?
FEMALE SPEAKER: Where are you going with this?
MALE SPEAKER: No, not interested.
FEMALE SPEAKER: I don’t want to own anything.
ANDY MILLS: You don’t want to own the bridge?
FEMALE SPEAKER: No.
MALE SPEAKER: No, what would I do with it? I don’t know.
ANDY MILLS: I’ll ask this lady. Hi, there. How are you? She just ran away. She literally ran away from me.
PETER ONUF: In 1928, the New York Times finally caught up with a couple of these con men who had been trying to sell the bridge. The first, George Parker, was a notorious con man who is said to have sold the bridge multiple times. The second, William McCloundy, was known by the police as I.O.U. O’Brien.
MALE SPEAKER: It depends how much you’re selling for.
FEMALE SPEAKER: Is there a payment plan?
ANDY MILLS: Oh, a payment plan? Yeah, we can setup a payment plan. How much money you think you’d be willing to throwdown though?
FEMALE SPEAKER: I have like $20 in my wallet.
ANDY MILLS: $20? Look at this– turn around and see that view.
CHAN: I don’t think so.
ANDY MILLS: Why not?
CHAN: I think it costs more money to maintain it rather than earning money.
ANDY MILLS: Just think, you could rename the bridge. You don’t have to call it the Brooklyn Bridge. If you own it– what’s your name?
ANDY MILLS: Chan?
ANDY MILLS: This is the Chan Bridge from now on.
ED AYERS: So Brian, I find this a little hard to understand. People look around, they see this enormous thing and think that it could be sold to them. What kind of logic, what kind of con could somebody actually make that would work?
BRIAN BALOGH: Well, half of the con is what’s in the mind of the people you’re going to con. So first of all, you to understand, these are people arriving knowing that this is the land of opportunity. Secondly, these were not just a bunch of saps, even though some of them were my relatives, Ed. These people arrived here knowing that they needed a job. And those cons all started with a tiny realistic possibility.
Would you like a job on this bridge that I own? I’m about ready to build a toll booth. Immigrants would have seen toll booths back in the old country. They understood that people owned bridges, not the government. Individuals owned bridges. And yeah, that’s just what they needed, a foot in the door. A job.
MALE SPEAKER: I just don’t have the capital.
ANDY MILLS: If that’s your problem, then we’ve got no problem.
FEMALE SPEAKER: Are you also selling the Eiffel Tower for scrap metal?
ANDY MILLS: Well, no. The Eiffel Tower you’re going to have to talk to somebody else about. And you know what? Towers, they crumble and fall. Bridges, they bring people together.
FEMALE SPEAKER: I could not pay more than a thousand euros– dollars, sorry.
ANDY MILLS: Thousand dollars? Sold. Sold.
FEMALE SPEAKER: Yes!
ED AYERS: Well, has this opportunity already been taken, Brian? Because this actually sounds like something I could do in my spare time.
BRIAN BALOGH: Well you know, Ed? In the 1920s, on Ellis Island, they started posting signs and handing out pamphlets saying all bridges are owned by the government. Do not buy a bridge.
So at least if you came through Ellis Island, you would be warned in very explicit terms that you should not buy a bridge.
PETER ONUF: Yeah. Now, tunnels on the other hand–
PETER ONUF: Special thanks to the ever-cunning Andy Mills for helping us on that one.
ANDY MILLS: Now, there’s the woman who ran away from me. I’m not going to ask her again.
PETER ONUF: And what about you? Have you ever been conned in a foreign land? Have you ever found yourself being taken advantage of in a completely unfamiliar environment? Let us know at backstoryradio.org.
BRIAN BALOGH: When you go to a science museum, like the Smithsonian or the Museum of Natural History, there’s this understanding that what you see is what you get.
Displays are clearly labeled. If there’s an animal on display, there’s probably a little plaque explaining where that animal came from, what it eats, et cetera. Deception does not enter into the equation.
ED AYERS: But for many museums, this dedication to the serious business of the truth can be problematic. How do you keep a crowd coming back if there isn’t any intrigue? Historian Jay Cook told me that this was exactly the problem a place in Philadelphia called The Peale Museum faced in the 1840s.
JAMES COOK: And they’re trying any number of things. They have dance concerts. They have magic shows. They even do a little bit of blackface minstrel shows as part of the mix because these are popular trends– new forms of show business that they’re using to dabble in as a way to make money.
But by the early 1840s, in the final years of the museum’s existence, they decide that they will try their hand at presenting a mermaid. And a mermaid, at this point, is one of these wondrous creatures of myth and legend. And this is not the Little Mermaid by any means. This is something that looks like a kind of fossilized or petrified monkey corpse in a kind of scene of agony. It does not look like a happy creature.
And it’s about three or four feet long. It doesn’t look particularly believable to modern eyes. But it does look seamless. It’s not easy to detect the fusion of monkey body and salmon tail.
There had been mermaid sightings by whaling ships over the years. There had been stories in magazines and newspapers about the possibility of a mermaid’s existence. But Peale’s exhibitions are supposed to be as transparent and legible and knowable and categorically certain as they can possibly be.
So what Peale does is to put a mermaid on display and say this was created by clever Japanese craftsman.
ED AYERS: So they’re not even trying to fool you? They’re saying, look at this wonderful thing that is nothing like what it pretends to be.
JAMES COOK: That’s right, the fooling in the sense of straightforward deception or blatant fraud just doesn’t make any sense within the Peale’s conception of what an exhibition is, what natural history is, what the project of enlightenment is.
ED AYERS: But they did make sense to somebody else in America in the 1840s if I’m not mistaken.
There’s another mermaid swimming around Northeastern United States?
JAMES COOK: There is. And that mermaid belongs to Phineas T. Barnum, P.T Barnum. And Barnum develops this act early in 1842.
He’s a young man just trying to break into show business in New York City. So this is Barnum a good three or four decades before he gets into the business of traveling three-ring circuses. And it’s really a fake mermaid, the so-called Fiji Mermaid, that launches Barnum’s career as a successful showman in American cultural history.
ED AYERS: So I’m taking it that Barnum does not tell the world, hey, look at this wonderful example of Asian artistry? He is saying, hey, you think this might be a mermaid.
JAMES COOK: Right. And I think the thing that’s so interesting about Barnum is that his entire mode of promotion, marketing, showmanship is about creating uncertainty, creating controversy about whether the object is, in fact, what it is represented to be. And so he does things that we– and certainly Peale– would understand as completely counterintuitive.
He accuses himself of fraud. He hires rivals to accuse him of fraud, to exhibit rival mermaids who they admit are artificial curiosities and not authentic in any way. But then, they accuse him of doing the same thing. And so Barnum’s consumers don’t really ask the kinds of questions that Peale would ask. They don’t care much about what a mermaid eats, where it lives, its habitats, its life expectancy, how it mates. What Barnum’s customers are interested in is the question of, is this mermaid in fact an active impostor, or overt deception, or fraud?
ED AYERS: I have to admit that I’m puzzling now about what mermaids do eat. Because it seems faintly cannibalistic if they’re eating fish. But anyway, let’s not focus on that.
So as you said, this seems counterintuitive that Barnum is actually accusing himself, although not in his own voice, of being fraudulent. Is any of this sort of inoculating himself against real charges of being fraudulent? Is this just like reverse double psychology? What’s his logic about why this would work? And apparently, it does.
JAMES COOK: It does. What Barnum really understands, I think in this intuitive way, is that his customers are now operating in a world of strangers– the new, modern metropolis where they don’t know the people who try to sell them things or bring them into business ventures. This is a brave new world of the 1830s, 1840s. And many of the folks in his exhibition rooms are new migrants to New York City who had come from the rural hinterlands in New England and upstate New York. And they’re working through these problems of perception, these problems of how you know what’s real and what’s fake. How you know who’s honest and who’s a criminal.
And this is the era where the confidence man first emerges as a social type, a kind of named criminal category in American journalism in the 1840s. And what’s so clever about Barnum is that he positions himself in relation to this as showman and invites his customers to weigh in on his own activities. And so he’s allowing them to kind of talk through these questions and debate them. And then, once the process is over, to conclude that they got their money’s worth in this entertaining exhibition where no one was hurt and no one was seriously cheated.
ED AYERS: Jay, thanks so much for joining us and laying out that fascinating story.
JAMES COOK: It’s my pleasure. It’s great to be with you.
ED AYERS: Jay Cook is a historian at the University of Michigan, and the author of the book, The Art of Deception: Playing with Fraud in the Age of Barnum.
PETER ONUF: So Ed, this problem that Jay Cook identifies, the problem of deception, of fraud, of confidence games, of needing to learn what’s really going on in a hidden economy in which the surface doesn’t tell you what’s behind the scenes, that’s so 19th century and so not 18th century. We’re not worried about the hidden games and tricks and frauds and confidence games that merchants are pulling on us in the 18th century.
The whole idea of customer, think about it for a minute, means custom. It means a relationship that endures over time. And on both sides of that very personal transaction, there is trust. We trust each other. We’ll always be here for each other.
ED AYERS: Oh, that’s so pleasant, Peter.
PETER ONUF: It’s beautiful.
BRIAN BALOGH: Yeah, it works really well when there are only 17 of you in the whole country.
ED AYERS: Yeah, exactly. Well, but you’re talking about the 19th century, Peter. But we go a long way toward fixing the problem that we create in the first place.
In the very same decade that PT Barnum develops all of this elaborate chicanery, we also developed some elaborate machinery to figure out people’s credit. And so you had people like R.G. Dun, which grows into Dun & Bradstreet, which figures out a way to have correspondence from the various towns across America, sending in evaluations of their neighbors. People send reports back in from every little hamlet in town across America to New York and they put it in a big book.
They would have put it in a computer if they had it, but they didn’t. They put it in books that you could buy that gave a credit rating to every person who did business in the country. And so they would be filled with things like, used to be good businessman, took to drink. Had good business, but wife ran off with merchant, things like that.
And so then they said, well, that’s very unwieldy way of doing it, telling these little stories. They turned it into numbers and names. So the phrase of, if you’re an A1 type of person, that comes out in these credit ratings. But if they say, you’re good for nothing, that means that you’re good for no kind of credit. And so I’d like to think that we pretty much fixed everything in the 19th century. And I don’t know why capitalism would be any problem thereafter.
BRIAN BALOGH: Well, I’ll tell you why, Ed. Selling stuff. While you were worrying about the character of businesspeople, large corporations, starting at the beginning of the 20th century, were worried that their customers, who no longer could see them, know them, they were worried that they would trust them. And the major way that they answered that, besides advertising which was important, was federal regulation.
From the Pure Food and Drug Act in the early 20th century to the Consumer Product Safety Act in the 1970s, we have a government ensuring trust between the seller and the buyer.
The funny thing is today we live in a world of turning to businesses themselves in order to trust the products we buy. So for instance, we have something like CARFAX, which gives us the history of a used car we might want to buy, to protect us against, perhaps the most fraudulent class of businesses out there– those used car salespeople.
ED AYERS: Brian, Brian, Brian, I thought we were friends.
BRIAN BALOGH: We’re not?
ED AYERS: I think you know very well that my dad was a used car salesman.
BRIAN BALOGH: He wasn’t that kind of used car salesman.
ED AYERS: Well, if you are the son of a used car salesman, you notice that people don’t differentiate. There’s one person, there’s one category of jobs that you can make fun of with impunity in this country, and that’s the used car salesmen. And I grew up with one and watched how hard he worked. And he’d come home every day so discouraged by the way that the customers would come in and try to con him.
ED AYERS: No really, that’s the way that he would see it. They come in and they are assuming that he is crooked. And so they’re going to do whatever they can do.
And I can remember the very early days when you could get a published account of how much the car really cost. He hated that so much. People would walk in and let me tell you, no use trying to fool me. I know how much this car really costs.
And dad told me something that has always stuck with me. He says, son, the only piece of business advice I need to tell you is this. Never start lying. Because once you start, you can’t stop. You’re going to get in trouble. And you’re going to have to face these people around. They know where you are. They’re going to come back and get you.
PETER ONUF: Well, Ed, your dad had customers, just like my people back in the 18th century.
ED AYERS: He did. And he required people coming back to say, that was a good car, Tommy. What else you got this time?
BRIAN BALOGH: So Ed, I take it your dad didn’t live to see CARFAX for instance?
ED AYERS: That’s right.
BRIAN BALOGH: So what have we lost with the Consumer Product Safety Regulation and federal laws and lemon laws and CARFAX? Have we lost something between Peter’s custom-oriented customer and your dad, the salesperson?
ED AYERS: Yeah, dad would tell you that the goal was for the customer to leave feeling that he had gotten a good deal.
Today, if you go in and pay something the computer has told you is the right price, there’s no sense of accomplishment. There’s no sense that you actually came out ahead in any way.
I think that’s what my dad loved. If he’d have one used car being traded for another used car, there’s so many variables and so much variation in it. But today, if it’s just a transaction in which it’s like going to Target and just buying something off the shelf, what you’ve lost is any sense of your own personality, your skill, ingenuity, actually getting you something better than the list price.
BRIAN BALOGH: Of course, you do actually make it out of the parking lot of Target.
ED AYERS: See, there’s those jokes against my dad again.
BRIAN BALOGH: It’s time for another break. When we come back, a superhero you cannot deceive and her rather curious origins.
ED AYERS: You’re listening to BackStory. We’ll be back in a minute. Trust me.
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PETER ONUF: We’re back with BackStory. I’m Peter Onuf.
ED AYERS: I’m Ed Ayers.
BRIAN BALOGH: And I’m Brian Balogh. Today on the show, April Fools, we’re looking at three centuries of cons, frauds, and scams.
PETER ONUF: As always, we’ve been inviting your thoughts on the subject on our website. We got a comment there from Elizabeth in Lewisburg, Pennsylvania. And we have Elizabeth on the line to share that comment now.
Elizabeth, we’ll level with you. This is a show about deception.
ELIZABETH: I’m glad to hear that. No dissembling here.
PETER ONUF: No, not at all.
BRIAN BALOGH: Not yet.
ELIZABETH: Well, I was wondering about intrafamily swindles.
BRIAN BALOGH: Do you know my family, Elizabeth?
ELIZABETH: Intrafamily swindles in the context of the stock market crash of 1929, actually.
In every family, I’m sure that there is a favorite uncle who has some kind of– or supposed financial acumen. And everyone else in the family says, oh, well, let’s trust Uncle So-and-so to invest our money in the stock market. And Uncle So-and-so is actually a closet gambler and uses the money otherwise, and assumes that he’ll be able to make it back before anyone asks for their returns. Then he doesn’t.
So this is what happened on one side of my family. And they came down on him hard and he went to jail.
And then on the other side of the family, the favorite uncle lost all of everyone’s money in the crash. And then, whatever he could retrieve he paid himself and said, oops, sorry, and they all forgave him.
PETER ONUF: Wow. He didn’t pay anybody else back? It was just–
ELIZABETH: No, he paid no one else back. So my question is for you, when you have people who are in your family, you have a close personal connection with them and they swindle you, are we more willing to forgive them than people who are not?
PETER ONUF: Yeah, I think the default is to hunker down and maintain family solidarity. And I think there’s a good reason for it.
In the 19th century and before, family connections are a way of socializing risk. And in my period, the great commercial networks of the Atlantic world, and even within the colonies, would be family dynastic networks. Or, the next best thing would be for instance, the Quakers had a religious commitment that taught them to trust each other because their word was always good. And the great challenge is to achieve the kind of trust that enables you to act together.
So I think deeply embedded in our psyches is a notion that trust begins at home. And I think that story about the investor uncle, Elizabeth, I think that’s the one that is– that’s the default. And I think you, in the tone of your voice, and maybe I’m not listening closely enough, were suggesting that you endorsed that, too. Even though this guy was a scoundrel, this investor, there was something about what the family did that makes sense to you.
ELIZABETH: Yeah. Well, it really depends on the context of the family and whether or not the investing uncle, individual, had a history of going out on a limb and always losing. Finally, they had a–
PETER ONUF: There would be a learning curve there.
ELIZABETH: Yeah, exactly. Or, whether somebody had done, in good faith, the best that they could do. And so we embrace them. We take care of them. And we don’t kick them out on the shingle. Because they are, at the end of the day, family. And so you’re right, the trust factor is very much there and we always trust family more than we trust any outsider.
PETER ONUF: Well, that’s true. But don’t we learn who in the family deserves trust? And aren’t there ways of dealing with unreliable people in families? Mainly by not taking risks on them.
BRIAN BALOGH: I would answer Elizabeth’s question by saying that the degree of retribution depends on the degree of interdependence in the first place. And I’m guessing that for much of Ed’s century, operations, whether businesses or farms, were family oriented, family dominated.
ED AYERS: Oh, yeah.
BRIAN BALOGH: And people probably compromised or cheated at the edges all the time. But people also were constantly dealing with each other. It was a constant negotiation.
This was true even for the first part of the 20th century in certain businesses. I come from a small business background. My father and my uncle were in business together. And depending on what week it was, they were heroes or they were villains. They were honest, moral people or they were crooks, and it went back and forth. And as a kid growing up in this environment, you just got used to this was the nature of family business.
My larger point about the 20th century is the number of people engaged in family businesses diminishes across the 20th century. And increasingly, we kind of contract out the decision-making about whether somebody is a crook or not to law enforcement, to attorney generals, to regulators, et cetera, et cetera.
I don’t know, what do you think, Ed?
ED AYERS: It’s interesting that the dynamic you lay out there, Elizabeth, is one of the most famous plays in American history of Death of a Salesman. And it’s the uncle who has gone out and made all this money and is entrepreneurial, and he’s on other continents. And he comes back and he makes the humdrum life of the non-risk-taking salesman seem like a real dead end.
PETER ONUF: Right. Exactly.
ED AYERS: So it’s kind of interesting. We wouldn’t want to glorify too much the way that families can absorb all this. And in other ways, they embody the tensions with them, sort of a capitalist economy. So don’t feel bad. It’s just the way America is.
BRIAN BALOGH: Well, thank you for joining our family for this brief moment, Elizabeth.
ELIZABETH: Well, thank you very much. I really enjoyed you bantering about the question.
ED AYERS: Hey, Bantering R Us.
ELIZABETH: Thanks a lot.
PETER ONUF: Thanks, Elizabeth.
BRIAN BALOGH: Bye.
PETER ONUF: If you’ve got a question about history, drop us a line. Our whole number is 434-260-1053. Or, you can leave a comment on our website, backstoryradio.org.
BRIAN BALOGH: One of the things that makes deception so tantalizing is that seemingly, anyone and everyone is capable of it. The choice of whether or not to lie is equal opportunity.
ED AYERS: But the fact is, before the turn of the 20th century, very few people would have thought about lying this way. Deception, it was thought, was something you were born into.
GEOFFREY BUNN: So by the end of the 19th century, European criminologists are trying to discern what makes somebody a criminal. And they have a very biological view of that. They think that there are born criminals. That if you are born a criminal, you are kind of an evolutionary throwback to a previous age.
BRIAN BALOGH: This is Geoff Bunn.
GEOFFREY BUNN: I’m a senior lecturer in psychology at Manchester Metropolitan University in England.
BRIAN BALOGH: And he’s the author of the book The Truth Machine. And Bunn says this idea that there’s something inherent to all criminals, some sort of deception hard-wiring, leads to an interesting trend.
GEOFFREY BUNN: They think that they can measure these atavistic qualities. You must have a strange breathing pattern, or perhaps you’ve got an unusual blood pressure. There’s something weird about your skin.
BRIAN BALOGH: Psychologists, like Carl Jung, are using instruments to measure blood pressure and respiration rate, sweat levels, all with the assumption that their subjects are, in fact, criminals. And science can determine what makes them criminals.
GEOFFREY BUNN: But this idea, when it travels across the Atlantic, is transformed. And the lie detector is the result.
MALE SPEAKER: You’re about to see a factual documented demonstration of one of the most effective instruments science has placed in the hands of modern investigative agencies. This is a true account of the lie detector in action.
BRIAN BALOGH: When you think about lie detectors today, the little black box with needles moving up and down, that machine is actually a sidestep from these European soul machines of the 19th century. Remember, the soul machines already assumed that the subject was a criminal. The lie detector is trying to figure out whether or not the subject is a criminal.
And what’s so interesting about this transition from assuming criminality to looking for lies, is that it doesn’t come out of the laboratory. It comes out of pop fiction. A new genre of the novel in the early 20th century, the whodunit.
GEOFFREY BUNN: So what happens is that the novelists latch onto this concept of a machine for detecting criminality. But in the context of the whodunit story, you don’t want to have the reader guess the whodunit straight away simply by what he looks like. You want them to keep guessing. So the novelists start thinking, well, what about if you use this technology on people who are just ordinary citizens? On pretty, young ladies who nobody would suspect of having committed a crime?
It’s the novelists who wanted to keep the suspense in the story. Anyone in the story could be a potential criminal.
FEMALE SPEAKER: “There’s a contrivance recently invented by some college professor.”
BRIAN BALOGH: This is an excerpt from the 1907 crime novel, The Yellow Circle.
FEMALE SPEAKER: “It is a lie detector. With its aid, one can plumb the bottomless pits of a chap’s subconscious mind and fathom all the mysteries of his subliminal ego.”
BRIAN BALOGH: So they basically democratize deception. It’s available to anybody.
GEOFFREY BUNN: Exactly. The lie detector is invented on the back of a democratic impulse that everyone shares the same physiology.
BRIAN BALOGH: Well, no wonder this is done in America, we’re all free to be criminals here.
GEOFFREY BUNN: Well, exactly.
ED AYERS: In 1921, the fiction became a reality. Two rather strange characters made their way onto the scene, one on the East Coast of the US and one on the West Coast. And each claimed to have invented the modern lie detector.
GEOFFREY BUNN: On the East Coast, out of Boston, you have William Moulton Marston, who was a Harvard psychologist. And then on the West Coast, out of Berkeley, California, you have a younger man, Leonard Keeler, who is associated with the reforms of the American police, the Berkeley Police Department.
BRIAN BALOGH: The machines are basically variations of each other. Marston’s technique is to measure changes in blood pressure, while Keeler, over on the West Coast, builds a machine to measure blood pressure, respiration, and skin conductance. Or, what you and I would call sweat.
GEOFFREY BUNN: So I suppose you could say that Marston is regarded correctly as an inventor of the lie detector. Whereas, Keeler is properly known as the inventor of the polygraph.
BRIAN BALOGH: So do these machines work? What is the evidence of their effectiveness?
GEOFFREY BUNN: Keeler always said that the main use a lie detector is to intimidate a suspect into making a confession. Keeler said, if you have a suspect in the cells, tell them that in the morning they’re going to have a lie detector test. They have all night to stew over it. If they’d rather not take the test, they’re going to confess.
Ideally, you would get a confession rather than having to go through the rigmarole and procedural of the test itself. So they work in that sense.
ED AYERS: Right from the start, there are skeptics. Lots of people raised questions about the lie detector’s accuracy and ethics. But despite the push back, the machine manages, over the course of a century, to become a pop psychology juggernaut. How?
BRIAN BALOGH: Well, according to Bunn, the lie detector falls back into the realm from which it came– fiction.
GEOFFREY BUNN: So Marston, the Harvard trained psychologist, creates the lie detector in 1921, his version of it. He has a rather interesting career thereafter working in advertising in New York. He goes to Hollywood for a year. He writes novels. He writes self-help psychology textbooks.
And then, towards the end of his life, he is asked to consult about comics. Well I’m sure you’ve heard of Wonder Woman.
BRIAN BALOGH: Yes, even I’ve heard of Woman Woman.
GEOFFREY BUNN: The great American pop-culture comic book super-heroin. He creates Wonder Woman in 1941. And he gives Wonder Woman a lie detector of her own. She has a golden lasso of truth.
If you get caught in it, you have to tell the truth.
WONDER WOMEN: You must now tell the truth. You are working with the Falcon, and he’s working for the Nazis.
SPEAKER 12: Yes. Yes, I am.
GEOFFREY BUNN: Marston’s great rival of course, was Leonard Keeler, who started out on the West Coast.
BRIAN BALOGH: Oh, don’t tell me he creates his own character?
GEOFFREY BUNN: Not quite. There’s a fascinating connection there.
BRIAN BALOGH: In 1930, Keeler starts working in the lie detection unit at this new crime lab at Northwestern University in Chicago. And he and the lab seem to have a particular influence on one student, a guy named Chester Gould.
GEOFFREY BUNN: Chester Gould, of course, is the guy who creates Dick Tracy. Now, Dick Tracy is kind of by the early 1930s, is the latest in a long line of scientifically informed detective characters who uses lie detectors, as well as wits and brute force, and whatever, to solve crimes. So you have this rather nice parallel life situation.
You have Marston on the East Coast with Wonder Woman. You have Keeler on the West Coast with Dick Tracy.
ED AYERS: In 1937, Marston appeared in an advertisement for Gillette. He was hooking men up to a lie detector to determine– you guessed it– which razor blade they preferred. And the machine confirmed it was Gillette.
BRIAN BALOGH: Keeler even went so far as to make a cameo appearance in a 1948 film Call Northside 777.
Jimmy Stewart plays a Chicago reporter who tries to prove a man has been wrongfully convicted of murderer.
GEOFFREY BUNN: And at one point in the movie he says, OK, well, let’s hook you up to a lie detector and you tell me your story.
JIMMY STEWART AS P.J. MCNEAL: Would you be willing to take a lie detector test?
RICHARD CONTE AS FRANK WIECEK: Mr. McNeal, for 11 years I’ve been waiting for a chance to get at that box.
GEOFFREY BUNN: And the guy that Jimmy Stewart brings in to do the lie detector test is none other than Leonard Keeler himself playing himself.
LEONARD KEELER: Well, the only thing the machine is for is to record the emotional reactions of an individual. It’s a very sensitive criteria for emotional reaction, emotionality.
GEOFFREY BUNN: So there has always been a fascinating relationship between the lie detector and the world of fiction.
BRIAN BALOGH: But throughout the rest of the century, the lie detector just kind of creeps into reality.
By the 1980s, more than a million polygraphs were being administered in the US every year. They were mostly for pre-employment screening and to check out marital infidelity.
In 1988, Congress stepped in and passed the Employee Polygraph Protection Act. It pretty much banned pre-employment polygraph testing.
ED AYERS: Today, the lie detector seems to fit most comfortably in the borderland between reality and fiction. Of course, the capital city of this borderland is the daytime talk show.
MAURY POVICH: You know what I’m going to do right now? I’ve never done this in my life. I’m going to look at the lie detector test.
ED AYERS: This is from the show hosted by Maury Povich.
MAURY POVICH: How many times have you cheated on him?
FEMALE SPEAKER: Oh, god.
MAURY POVICH: You know what the lie detector test said?
FEMALE SPEAKER: [BLEEP].
MAURY POVICH: Over 25 times.
BRIAN BALOGH: It seems silly, but the idea that you can measure deception, that is as real as ever.
GEOFFREY BUNN: Since 9/11, there’s a huge interest in detecting lies from a distance, detecting lies over the telephone, and detecting lies through various techniques of pupillometrics, scanning the pupils, that kind of thing.
It’s an idea that won’t go away. It goes back to Pinocchio. Tell a lie, your body changes. We can see it. We can detect it. It’s irresistible. But a lie is quite a complex thing. You have to have a knowledge of the past, a knowledge of the future, and you have to have a knowledge of what’s at stake. You have to believe that you’re culpable. And you have to have an awareness of the context and the situation. You have to think about the context when you perform the act that led to the lie.
It’s quite a mentally complex act, telling a lie. And the idea that a lie detector can suddenly capture that instant is a rather naive one, I think.
BRIAN BALOGH: Thanks to Dr. Geoff Bunn for helping us tell that story. His book is called The Truth Machine: A Social History of the Lie Detector.
Well, Peter, to refer to your era, I cannot tell a lie. We’re out of time for today’s show. But we want to know what you think. Drop on in at backstoryradio.org and let us know.
PETER ONUF: While there, you can listen to all of our past shows and sign up for our podcast. We’ll be back next week with a show about the history of gridlock.
In the meantime, don’t be a stranger.
ED AYERS: Today’s show was produced by Jess Engerbretson, Eric Mennel, [INAUDIBLE], and Tony Field. Jamal Millner is our engineer, and Allen Chen is our intern.
Special thanks today to Philip Deloria and Angela Aleiss.
BackStory’s executive producer is Andrew Wyndham.
BRIAN BALOGH: Major support for BackStory is provided by The National Endowment for the Humanities, The Joseph and Robert Cornell Memorial Foundation, The University of Virginia, Weinstein Properties, The W.L. Lyons Brown, Jr. Charitable Foundation, an anonymous donor, and the History Channel. History, made every day.
FEMALE SPEAKER: Peter Onuf and Brian Balogh are professors in the University of Virginia’s Corcoran Department of History. Ed Ayers is president and professor of history at the University of Richmond.
BackStory was created by Andrew Wyndham for The Virginia Foundation for the Humanities.