>> guest: well, again, it's important to make a distinction. i mean, goldman has really pushed this to the edge. this behavior. they -- you know, lazard, for instance, where i worked and is now a public company, they just provide m&a advice and investment management advice. they don't have any trading, they don't make any proprietary bets. .. finishx;

>> goldman sachs of the risk but at the same time they have created a huge

conflict. the other tenant of their philosophy they believe the greatest managing conflict whether their client door internally in the business of managing conflict, i think that has gotten them into a lot of trouble. as you can see guess they were very smart about seeing trouble coming then making a big proprietary bet to evade them billions of dollars while the cost everybody else billions but they did not stop underwriting mortgage-backed securities causing the problem because they thought they could make money for another six months. that is the inherent conflict that cannot be managed and goldman has proven itself unable to manage the conflict at the same time as a very subtle

point* that the financial crisis in greek commission got into is the fact the mark of the securities that it had was lower than every other firms saying trading at 100 and $0.98 but they were trading at $0.60 they had a short but benefiting from a low remarks that were translated to the market because these are not stocks traded on the exchange was one 16th of a dollar or a penny, these are lightly traded securities so if goldman says they're worth $0.50 and merrill lynch says 95 said they have a debate but eventually the rest of the market had stood met goldman was right. it has a short saving a ton of money of putting bear

stearns out of business and ag at of business they would have gone out any way but they exacerbated the decline of the competitors so if you can imagine in this time period making billions of dollars at the same time it put the counterparties out of business i am sure they did not start out doing that but that was the fact. brilliant on one hand but ruthless and devastating on another that cost us taxpayers trillions of dollars to rectify the. >> never of people have raised problems of the proprietary trading if you look back and wonder if they wouldn't have been better off letting that die a or collapse in the financial crisis? have we resolved this issue

as a nation? >> it has not. the volcker rule has supposedly made proprietary trading or some parts unlawful but goldman makes the argument that was only a small part of the business but in truth the guys you came up with the idea was three year for guys in the mortgage desk it. >> john paulson was the client and at one point* they were executing trades for him as an intermediary been copied him and did not want to trade any more because they wanted to put the same trade on themselves so here is an example to take the client's good idea there is no market for good ideas but obviously they were aware because of the

proprietary idea they copied it then decided not such a good claim because they didn't want to do the trade for him anymore but for themselves. it is so complex and raises so many important and ethical questions about behavior and what is important and what we value if this behavior isn't illegal maybe it should we maybe that is what senator levin is getting at and issuing his report last week i think this is what bothers him. i talked to senator levin and i know he is trouble but yet he did make negative show last april of the goldman team, but i think he is onto something quite real that remains desperately unsolved and needs to be before we figure out what we

want wall street to do. we want them to serve bus. it could do well by raising capital for the rest of the country to allow the companies to create new jobs or provide m&a advice to those who want that. more like a utility. we can live with those but when the dax like a casino casino, one way or the other it is not good and that is the debate we need to have but unfortunately that is not the debate we have had. >> host: it seems quite unresolved and taxpayers are still miffed about having to bail out the firms in the middle of doing that. not good for the country any way. thank you very much william for europe in wonderful book

the best of luck to you. >> thank you for having me.

had. [applause] of. >> thank you for venturing out on this rainy spring evening. i think i will start off by quoting roach remarks to the effect before i begin talking i have something to say. something everyone asks me is how do we a child, a six ft. two in with the incredibly distinctive voice ever managed to slip in cod nidal behind enemy lines? the answer is simple. she didn't. we get to that later. despite we may have read in "usa today" a bone appetit

was not a secret code. now more serious the most common question is what on earth from me to this topic? how did i come to write about julia child and how did i know the popular french chef and had worked for the country's first intelligence agency? i read it in "the new york post" i happen to see a headline secret recipes despite and exam showed that she was employed at the oss, office of strategic sources set up by roosevelt in the early days of the war the forerunner of the cia i was in washington at the time fall of 2008 and on my book tour for the irregulars and at that time the national archives released a

huge stash of classified documents that was a huge hall of paper's classified records in detail the 24,000 people that had worked for the oss during world war ii. these records identified for the first time the vast civilian and military network of operatives the serve their country during the time it was threatened. some of these people would double but very unusual you have the supreme court justice goldberg, an actor, a white sox pitcher and arthur slauson shura, jr.. perhaps the most unusual was the chef julia child. the news is that she worked at the oss made headlines back everywhere i went people would stop me and say what she really us by? what did she do? where did she go?

i didn't know the answers too any questions so i began to do research and one thing led to another for the research. like many wartime seacrest hurt career was not a secret. the basic facts of her career could be worked up brass easily as sir ingredients. way to my sheet opened up her about her past and broker bala sirens and even mentioned a few paragraphs in her memoir my life in france. it was mentioned in various books and in one movie and it was then all of the obituaries when she died in 2004. when the huge treasure trove archives was released there was new material effect could be unearthed causing a stir. the cia held on to the classified documents for

decades and was reluctant to release them and it took william casey former director of caa to convince them to release the records and they slowly began 1981. the personnel records were the very last batch of papers to be released. julia child 130 page oss personnel file, a classified document gave the details of her career and made for fascinating reading. the first thing that became clear two me is contrary to all of those headlines, juliet was never us buy the issue very much hope to become one when she joined the agency december 1942. like so many young people in the wake of pearl harbor, she moved to washington to try to serve her country. she was single and 30 and unemployed lists several attempts of a career also looking for a second chance

to remake her life and to do something special. she was the daughter of a well-to-do pasadena rancher but spent most college years as a social butterfly and a lot of time playing golf and tennis and having a good time at parties. she was keeping house for her widowed father and living a very sheltered life and was a pretty plain person with no skills by her own account. she did not speak any languages and has never been further from the country from a day trip van tiajuana mexico. she thought she was bigger than life and destined for big things. but by 30 they had failed to materialize. very tall and athletic ensure should be n. natural for the army or navy reserves. then it rejected as too tall she was bitterly disappointed.

she used family connections and got a job at the board department. low-level job and she was a typist and she lows dipping she was determined to get promoted. she did and got transferred to the offices of the newly appointed head of the ellis says wild bill donovan. one revi ted the cloak and bread and butter for her. she found the mysterious agency glamorous and love her colleagues found itself assigned to the experimental project working with the zoologists named harold coolidge and dead descended from thomas jefferson and was developing a sharp now back to be rubbed on pilots to protect them redound at

sea. they conducted experiments and per responsibility was to go to the fish market very early for the fresh catch. for the first time she loved her work and felt she had found her niche. the oss was a strange group of people and a lot of colorful personalities and the idiosyncratic lenient atmosphere of a small liberal arts college in the same tolerance for the oddballs and the ideal female employee was between a smith graduate and a model and the kb gives a girl. and had a private income made her appear a barber approach the rumor was donovan all they hired people from the ivy league and junior league believing if you were well off you

were less susceptible not making less bit possible the oss so then forcing to scramble for talent building a huge and intelligence gathering virtually overnight they had to get creative but it knowing the specifics skills that people with the brains to make the decisions on the fly in when to throw out the rule book and the overdeveloped an underdeveloped sense of fear. the same qualifications could be used to describe been a dubious characters and critics charged minting that they were employed as

spies but they began to hire lawyers from the on wall street firm as does prominent attorneys from businessmen and the wide variety of academics was recruited from anthropologist damning was two mathematicians and ornithologist do chased rare birds across asia. so it timing being of the snc simplified the vetting process by keeping it within the family if they had a girlfriend or a sister to have a decent typing speed they would be promised if they had been a foreign languages she would be whisked off to the secret spy school to star in 10 straining working for the os us to the became fast friends with the number of young women that were training to be spies one

woman was named jane foster and from a wealthy conservative west coast family and to adventurists california girl but there is wearing it ended. she was widely traveled and briefly married to a diplomat and spoke if you

think of the oss and the paramilitary guerrilla operations they get the glory you think of images of agents parachuting behind enemy lines. but the fact is of the 13,000 employees the vast majority spent writing reports collecting and analyzing information and planning missions. the fact many of us us activities could be conducted from behind the desk went women could we equally effective. while the majority of black men did remain in washington helping to support the mission a very small percentage went overseas but the small percentage that did go overseas carry out their assignments with the

same audacity self-reliance and what day and inspired. julia got her wish early 19,442nd tangent of operatives but on the month-long boat trip for travel orders were changed and was rerouted because the dashing new supreme commander had decided it would be in much nicer and much cooler place for the wartime headquarters. the amount toppers lowered to was not a hardship post and the sokaiya was a good 1,000 miles and picture postcard pretty with a little temple and the lake where you could go rowing with your boyfriend. putting up and then giant

hotel it was run down and overrun but it looked very grand. the office headquarters the attachment 404 was housed with the old tea plantation and made up of bamboo plate hunts but the paltry use running between the bungalows and the tiny green tennis court made the play seem like the island retreat then said headquarters. borrow it was dreamy to leave his job was anything but the plan in charge of the oss registry and contain all of their most top-secret documents. and then from the joint chiefs of staff as well as locations of the oss missions with the various code names of the agents. it was an important job and

carried grave responsibilities and came with a high as security clearance. she jokes even developed the top secret switch from handling so much material for a while she was never the operational a jangling behind enemy lines she did become a very able intelligence officer. her last two months in china where she served their remote military out that they shopped of she was working through a very difficult and dangerous conditions and carry on re devastating flood and a raging cholera epidemic and occasional outbreaks of crossfire from the chinese revolution over running the camp. by the end she was a seasoned veteran and would go out and get slices of the opium from the agency does said reminded her of boston brown bread but they

referred to as the operational table. issued often stay later and it was her personal and political coming of age and gave her a new confidence and curiosity about life and where she met her mentor and a soul mate paul child and embarked on the life altering romance. she met paul on the porch of a tea planters bungalow and was immediately smith 10. he was 41, a decade dollar and one head shorter and wary and withdrawn and some difficult the colleagues regarded him has a loner and moody and said in his ways and not an easy man she confided in her diary. it started off by skipping college and running off to work as a sailor and steadied painting and sculpture in paris and spoke

impeccable french and a self-taught photographer in judo black belt and jack of all trades. a connoisseur of the finer things of life of a large food fashion poetry women. he romance the prettiest officers in their detachment after his initial advances they became the best of friends with jane foster who described as a wild messy girl always in trouble and gay and irresponsible and admired her. jane was famous -- infamous overnight for her scheme to release propaganda material encased and the condoms to have a submarine release the robbers off the coast to flow to assure bearing a friendly message of allied support. [laughter] donovan was skeptical but gave for the green light.

during the year they were there jane and paul was inseparable and julia was left to pine for a man who took little notice although he knew he was not attracted to her and like the more worldly bohemian types. he did not reciprocate her feelings he wrote long letters to his twin brother in which he raved about jane's personality and hilarious wartime antics and would note that julia was a nice car with good legs. he does mr. of grown-up little girl at 31 was overly emotional and a virgin and busy trying to be brave about being an old maid. not one to give up she went on and early 1945 she and paul were transferred to try now while jane stayed behind to train native agents and

brian radiobroadcast. seizing her chance to monopolize his attention and went exploring with him and venture into all types of back alley chinese dives and try to prove herself by a eating delicacies from baby frog legs and pigs knuckles. this had days and-- of dysentery known as the shanghai shits. [laughter] can i say that? she was head over heels some of and paul was still on the fence. there from different backgrounds and dreaded to meet her father and worried she would revert to a pasadena socialite after the war and suggested they return to their wives and see how they like each other

and their civilian clothes. they went their separate ways. ball to washington and julia to california and embarked on a mission to win him over and subscribe to "the washington post" she could read what he read. she even took up the novels of henry miller which she found x-rated but paul adored and to occur first cooking lesson to make him a homemade miele when he came to visit. after six months and increasingly steamy correspondence paul succumbed to her charms and allowed his heart to be overruled than they were married september 1946. 1948 they moved to paris sam paul went to work united states information service which was a branch of the state department and juliet continued her cooking

lessons and reconnect with their old friend chain who was a painter and found her married to an odd russian man but as he rode chain was just as lazy daisy impractical and lovable as always. unhappiness was short-lived as they ever embroil with the reds by scare. only a few years after the euphoria of victory victory was a fear of communism spreading of the cold war. after 1949 after leaving the communist and setting of the republic the increasingly number of officials they became convinced communist impose a real threat to america's security. by the end of 1950, a spy fever had gripped the country and alger hiss was convicted and a flow rosenberg was arrested on

espionage and charges. by 1953 and three years of unrelenting media coverage the rosenbergs got the chair so it seemed to be convinced there are spies in every nook and corner of washington. . . >> were banned from the shelves of the usis libraries in europe. paul had to take the books off himself and see that they were destroyed. rumors about where mccarthy's

smear tactics might lead spread like wildfire. one after another, the career foreign service officers they had served with in china, among them some of their very closest friends, were accused of disloyalty and forced out while still others quit in disgust. somehow, mao's victory in china was now being seen as a part of a master kremlin plot, enabled by a bunch of secret communists within the state department known collectively as the china hands. at the same time, j. edgar hoover, the ambitious head of the fbi, was out to destroy general donovan's reputation who he viewed as a threat to his espionage empire. donovan, to protect his former staff, started burning the oss records of his former personnel. knowing that many of them, like jane and paul, had been left of center. julia and paul's poignant letters in this period capture their atmosphere of fear and

paranoia that permeated their small diplomatic circle. julia considered mccarthy to be a desperate power monger, she wrote, and believed his vengeful campaign of innuendo and intimidation was destroying a country that she loved. e am terribly -- i am terribly wore aced about -- worried about mccarthyism. what can i do as an individual? it is frightening. i am ready to bare my breasts, stick my neck out. i won't turn my back on anyone. will sacrifice cat, cookbook, husband and finally, self. inevitably, jane foster and paul child became caught in the buzz saw of mccarthy's red spy hunt. on april 7, 1955, paul received an urgent telegram summoning him to washington. their old friend, the reckless and flamboyant jane foster, was being investigated by the fbi as a russian spy.

when she was awe rested -- arrested in paris, the authorities had ransacked her apartment and found paul child's name in her address book. paul and julia found themselves then in the middle of a terrifying nightmare; full-scale fbi espionage investigation, lengthy interrogations and a drawn-out, dispiriting state department loyalty inquiry. friends, family, neighbors and former employers were questioned about paul's past. his communist proclivities, his loose bohemian lifestyle and his latent homosexual tendencies. if you want to have some verbal fun, he wrote julia in despair, try to prove to two fbi guys that you aren't a lesbian. how do you prove it? julia and paul can decided they would not be intimidated, and they chose to stand by their friends and their principles no matter what the coast. in the -- cost.

in the chaotic months to come, they would have to endure the shame of being accused as well as the at the same time of suspicion that would always place a black mark by paul's name and sur tail his career -- curtail his career advancement,ment ultimately, they would also have to come to a painful decision about whether jane was a soviet spy or the victim of an overzealous fbi and an unscrupulous double agent. without giving away the whole story, i'd like to say that the point of this book was to examine the complex issues that this close-knit group had to face in that controversial, historical era, and to explore the intriguing ways that personality becomes destiny and how these two very adventurous california girls who came to be wartime friends and intelligence colleagues came to meet such different fates. one becoming a beloved american icon, and the other ending up a lonely exile in france. thank you.

[applause] do we have any questions? no questions? great. well, that's -- yes. >> wait for the microphone. >> how long did it take you to write the book? >> it took probably about three years. i had done the previous book was about the oss, so i, i had a great deal of material which helped speed up the process, and i was very read into the period and the characters. but the last book i did was really from the british side, and so this one was more from the american side, and it really is based on paul and julia's diaries and letters. but there's such a wonderful correspondence between the two that i had a vast and very colorful archive to work with.

>> [inaudible] the family, were they any help to you? >> yes. um, all the families were very cooperative, and, in fact, some of the families even of minor characters in the book who were oss colleagues of theirs who were on the book to india, worked with them in china, people gave me their letters and diaries. so the very vivid descriptions you get in the book, you get a lot of dialogue, and you have a lot of scenes that make you feel as though you're there. and the reason is they're drawn from so many diaries. because i had so many characters. i limited the number of characters that i name, but all of the incidents were true and happened. and julia stood out for obvious reasons, for her height and her vivacious personality, and jane was she was outrageous and infamous during her time there. so almost everybody had a story to tell and an anecdote that

they remembered. >> that was kind of my question as well, where did you get all the letter. they were from families? >> they were from families. after that jane foster's family offered me personal letters and diaries. there's that huge archive that paul and julia child left to harvard. other families also provided me with letters and diaries. and then i did an enormous amount of research in the military libraries and repositories where i found all the telegrams and intelligence reports that they filed. many of julia's memos, janes foster's reports, all of their superiors' reports about them. and so i could really tell you where they were and what they were doing much of the time they were abroad. and, um, and then they all stayed such close friends, and they kept exchanging letters throughout the '50s. so even after the war i was able to keep up with them. and they were very frank in

these letters. they're very moving about their fear of losing their jobs and what's happening to their friends. so you can really get a feeling for the time. >> wait for the microphone, please. >> during the time of the inquisition in washington, were people sympathetic, were the american people sympathetic to julia child? is there any record of how they responded to her being taken in on the of -- >> it was paul that was taken in for the full loyalty inquiry and, actually, because they didn't know what was happening, julia was still in europe. they were living in germany at the time, and he got this telegram summoning him back. and the telegram was very vague. in fact, they even thought in the beginning that perhaps he was going to be offered a promotion. and then when he got there, nobody would meet his eyes or tell him what he was doing there, and it finally became clear that he was in some sort of serious trouble. and then he was pulled in for

this very long fbi interrogation. and he cabled julia in germany saying i don't know what's going to become of me. and that went on for almost a month. and then they were able to unite again in paris, and it was several more months until he managed to get himself cleared, though, in fact, they continually investigated him for the next year. so it didn't become public in that sense that there weren't headlines about it. in fact, you know, the sad thing is hundreds and hundreds of people were under investigation in the '50s. remember, the hollywood ten had already happened. charlie chaplin had been under investigation for months and had fled to europe. so you had very high-profile people that were under investigation every day. and so paul child did not make the news. julia was not famous yet. she hadn't published her cook book. they weren't celebrities, but

their friends all knew. everybody in the state department knew. and it was humiliating and terrifying. and they -- paul rightly predicted that his career would probably not recover from it. >> was paul brought before the committee itself or just by the, by the committee investigators? >> he was subjected to a full loyalty inquiry, that was the fbi investigated him. the united states information service investigated him. his past, going back ten years and all of that. but he wasn't dragged before a senate subcommittee. in the end, even though they thought he was about as liberal as you could get without being a communist, and they thought he was probably a homosexual and accused him of all kinds of

other sort of nefarious acts, julia was from a very wealthy right-wing family, and her father was one of the early supporters of nixon. and she pulled every string she could in washington, and he was finally cleared. >> what role did paul play -- what role did paul play in the her celebrity? >> that's an interesting question and a complicated question to answer. if you, if you look at the arc of their relationship, she was really a very insecure -- as he put it -- unexperienced girl when he met her. and she turned herself inside out to become someone that he would like and admire and perhaps one day love. and so he really, in a way, became her mentor. he educated her, he shaped her

interests, and through that she took up cooking and fell in love with french cuisine. and she emerged from all of that a completely different person, a much more confident, outspoken, really charismatic individual. and she really credited him so much with that that when she became a celebrity virtually overnight with the publication of her cookbook, you know, she worked on it while he supported her for about ten years, it took, the first cookbook. and it came out, and it was an overnight success. and she literally stepped from being a nobody into the limelight and becoming a celebrity. and it was interesting, she would always use the plural, we. we did this, we did that. in referring to herself and paul. because, i think, of the enormous debt of gratitude she felt she owed him. >> how did you get interested in this genre? you know, this his to historica?

>> oh, that's a good question, you know? i'm from are a war family. my grandfather, james conant, was the president of harvard in the early days of world war ii, and he was appointed by president roosevelt to be one of the men that led the organization of the manhattan project and the development of the bomb. so i grew up in the far east and in cambridge surrounded by wartime scientists and politicians and the men that led the war effort. so i think i got hooked on war stories at an early age, on war movies at an early age. and it just stuck. [laughter] >> [inaudible] >> what other books have you written? >> i wrote a book called "tuxedo park," and that was about a group of physicists who congregate inside a secret laboratory in tuxedo park, new york, and began experimenting with radar and, ultimately, they

would lead the wartime project that developed all of the radar systems that helped win the war in europe. then i wrote a book about the development of the bomb in los alamos called "109 east palace." and then i wrote a book about british spies and the development of the oss, and that was called "the irregulars. "so you can sort of see a theme. [laughter] the lady in pink, yeah. >> what happened to jane? >> well, i can't tell you that. you have to read the book. [laughter] but i'm glad you're curious. you have to find out. any other questions? yes, sir. >> yeah. after these investigations were over, did they have bitter feelings towards the u.s.?

>> i think that's one of the things that's sort of very nice about the book is you see different people's reactions. betty mcdonald went through this whole process as well. in fact, she was married to colonel hefner who had been their boss, and he helped donovan burn the fbi -- burn the papers of the oss personnel before the fbi could come and get themful but she as well as julia and paul never became bitter about the u.s. they were very bitter about that period, and they really hated mccarthy. but they stayed very optimistic in the ability of people to learn and change, and they, after all, they all returned to the united states and lived very happily in the united states from 1960 on. so they weren't bitter about that, but they did have very sad and complicated feelings about the 1950s even though that' when so much good happened --

that's when so much good happened to julia in her career. she would always have very mixed feelings about that period of time. >> we have time for a couple more questions. >> how helpful was the government? oh, sorry. how helpful was the government to you in getting information? [laughter] or unhelpful? [laughter] >> well, you don't want to say unhelpful. that's kind of an active term. they, they make it hard for you. i had to order all the oss documents, and then for almost every character in the book the fbi files. now, jane foster's fbi file is more than 65,000 pages. if you can imagine. now, as you get further in the book, you'll meet a number of other characters whose fbi files are longer. so you get these papers in sort

of packets of 200 at a time. every time you need to request them, you need to double check, you need to wait, and it takes about three months. >> [inaudible] >> um, it's just a very arduous process to go through what we call the foia request, the freedom of information act. it takes the patience of a saint, and you don't get everything. and when you do get the fbi files, they're redacted. a lot is blacked out, whole sections are whited out. then you can go through a whole other set of appeals to argue that they should give you those papers. so it's a never ending process. i have a feeling i'm going to be receiving fbi files on paul and jane, you know, for years to come. [laughter] i hope i don't find anything shocking in there. yes. >> since they were such letter writers, did julia or paul ever write a letter to mccarthy? >> no. not that i know of. so it's possible.

but i wouldn't think so because they pretty much hated him on sight from the beginning, and it only got worse. they wrote an awful lot of letters about him though. i mean, there's just reames and reames of sort of angry screams existence him in the let -- against him in the letters and diaries. and it's, actually, just fascinating to read how it darkens from the 1940s through the hollywood ten when they watched all of that persecution of the artists and directors and actors in hollywood. and then he moved and set his sights on the state department. you see their fear and anxiety deepen, and it's really, it's really compelling reading. thank you all so much for coming today. [applause] >> you're watching booktv on c-span2. 48 hours of nonfiction authors and books every weekend.

>> who is owen sullivan? >> one of the most notorious counterfeiters in colonial america. he came to this country in 1740s from ireland, and he ends up in boston in 1749 as a silversmith, and that's where he begins to counterfeit colonial montana notes and over the next five or six years builds a huge network that spans from rhode island, new hampshire, massachusetts, all over. >> host: how easy was it to counterfeit? at that time? >> guest: well, the printing quality of the bills was fairly primitive by our standards, but it did require tremendous skills as an engraver. one of the things you see in the early period most counterfeiters are silversmiths or engravers because it takes tremendous physical dexterity to engrave a copperplate in reverse because that's what was required. >> host: how much -- well, first of all, was there a national

currency? was, were there 13 different types of currency that were official? >> guest: in the colonial era, there are 13 different types of currency, and of after the revolution it becomes even more confusing because instead of colonial governments, you have private banks all across the country all printing their own notes. so first hundreds, and then later thousands. and the peak of it is more than 10,000 different types of notes in the 1850s circulating all over the country. >> host: how did that system work? if somebody lived in massachusetts at the time and wanted to go to a store or a mercantile? >> guest: it's really, it's so confusing. i think this was the biggest discovery for me in my research was just to think of it from the ground's eye view. if you wanted to buy an apple from a local merchant, you could show up and present one of 10,000 different types of money. so there were ways to manage it. one of the things that happens in this period, they have something called a bank note reporter. so you can actually look up twice a week in the mail in a little magazine the differing

values of different notes and also which are counterfeit, you know, that there are certain counterfeit detectors. if this stroke is a little too thin, this one's a little too thick, you might be dealing with a forged note. so was it a, was it a common, everyday thing to have money passed, forged money passed? >> guest: extremely common. the one statistic we have which is fairly rough is that at the height of counterfeiting in the america around the time of the civil war, you have between a third and a half of all currency in circulation is forged. that's a fairly rough estimate, but even if it's half of that, that's a tremendous amount of fake money in circulation. >> host: well, ben tarnoff, how did you find the story when you were writing "moneymakers"? >> guest: i started researching the book during the recent financial crisis. i was reading a lot about the history of american currency and finance and struck by the powerful parallels between the

past and the present. and these three characters seemed like excellent windows into our very tumultuous financial past. >> host: did owen sullivan make a lot of money in his lifetime? >> guest: he certainly did. it's probably in the vicinity of hundreds of thousands of pounds, colonial currency. but differing estimates especially because if he engraves a plate, his accomplices can use long after he uses a particular community. so it's not just what he prints himself, but his tremendously diffuse network. >> host: so money was localized at the timing? >> well, it was. you could have different types of currency in different communities n. the colonial period you could have different currencies passing in a single kohl gnu. so you didn't need to be in massachusetts money. montana, for instance, to spend >> host: if somebody was traveling from philadelphia to new york city, what would they bring with them? >> guest: well, it depends. in the early republic period what you'd want to do was buy

city paper which was bank notes printed by reputable banks in the east, places like boston, new york and philadelphia. but if you were traveling particularly to the west, you would see quite a bit of what's called western paper which was passed at a discount. it was shaved a certain percentage based on the reputation of the bank that issued it. so you'd want to have, essentially, the strongest paper currency with you, and you'd be able to buy up the cheap paper at a discount. >> host: did the continental congresses or the constitutional convention address the issue of money? >> guest: well, the continental congress gets into a lot of trouble during the revolution because they start printing their own paper currency to fund the war. they are, they need money. i mean, there's really no options for them. they're isolated by a british blockade, they can't tax the states, so they start printing a legal tender currency which becomes hugely inflationary and almost sinks the revolutionary effort and becomes a major disaster in that revolutionary period.

>> host: but no addressing of the thousands of different types of currency? >> guest: well, what happens is when they sit down to write the constitution, the memory of both all of those colonial currencies and more vividly the crisis with the continental currency means that virtually none of america's leading men in the revolution advocate a paper money. so the constitution explicitly prohibits states from printing their own paper currency. >> host: what happened to owen sullivan? >> guest: well, owen sullivan did very well for a period and then is tracked down by a posse of vigilantes and is the eventually execute inside 1756 in new york in what is now city hall park actually. >> host: now, who were the vigilantes who tracked him down? >> guest: well, that's the thing, in this period law enforcement is very amateurish. so if you want someone who's willing to do what it takes and travel across many jurisdictions to find a counterfeiter, you need to pay him pretty well. and there's a man named beecher who's from connecticut and who

was paid by the legislature to track down sullivan and bring him to justice. >> host: you profile two other counterfeiters of the time. one was dade lewis. who was he? >> guest: david lewis was born in the allegheny back country of pennsylvania in 1788, and he learned the counterfitting trade in the money-making enclaves along the border between canada and the united states which is a major counterfeiting hot spot during this period. he returns to bah just in time, in 1814 or so, when the state charters a bunch of new banks which is part of this broader movement in the first few decades after the revolution. an explosion of both banks and bank notes across the country which really opens up the opportunities for counterfeiters. so lewis is perfectly poised to take advantage of the new events. >> host: samuel upham. >> guest: yeah, he is probably my favorite of the three because he's the least conventional. he's not a bandit. he's a shopkeeper in the downtown philadelphia.

he runs a stationer in store on -- stationary store on chestnut. and when the civil war comes, he starts to print confederate currency which he sees reproduced on the cover of the "philadelphia inquirer". now, he sells these notes from his shop, and he doesn't call them counterfeits, he calls them facsimiles. and his idea is they're going to be souvenirs, essentially, because -- which was credible because people mostly thought that the rebellion would be crushed fairly quickly. but as the war goes on and becomes more serious, he expands his enterprise to become a major, major counterfeiting operation. >> host: and did he get caught or punished at the end? >> guest: he's never punished. the south hates him. i mean, his name appears in a ton of richmond newspapers. but he is never punished because he is counterfeiting the currency of a government that is emphatically not recognized by the union. and the federal government certainly knew what he was doing. there's endless speculation and conspiracy theories about whether he may have received

funding from the secretary of war, but there's really no evidence either way. they probably just let it happen. >> host: at what point, ben tarnoff, did this country get to a single currency? is. >> guest: well, it happens during the civil war. and there's a number of remarkable and unprecedented steps the federal government takes in the 1860s which really wouldn't have been politically possible without the civil war. so before the war, as we've said, you had more than 10,000 types of currency. after the war the only paper money is federal. it's either printed directly by the treasury in the form of greenbacks, or it's printed by a system of federally-chartered banks. and counterfeiting, subsequently, decline quite traumatically. not only because of that, you have the finding of the secret service in 1865 whose original mandate is to ayes, sirrively go after counterfeiters. >> host: was it controversial to get to a single currency? >> guest: extremely. because there's a number of

steps the federal government has to take. the most dramatic is to break the power of the state banks which are deeply entrenched interests. you know, states like new york and pennsylvania have congressmen and senators who advocate very ayes, sir i havely for these -- aggressively for these interests because they benefit enormously from the chaotic monetary system. >> host: ben tarnoff is the author of "moneymakers: the wicked lives and surprising adventures of three notorious counterfeiters." >> this june on "in depth, "the balance between security and liberty, the difficulties of a climate change treaty and the limits of international law. your questions for author and university of chicago law professor eric posner. his books include "law and social norms" and "the perils of global legalism."