Who hasn’t heard of Operation Bernhard or the counterfeit operation, the evil plan of Nazi-Germany to ruin the British economy? Well, with this plan Hitler hoped that the £134milion of counterfeit notes he produced in Operation Bernhard would force a huge hike in inflation and spark a cash crisis if introduced to wartime Britain.
It all started in the middle of the second World War, in 1942
The war was still going well for the Nazis, the battle of Stalingrad had not yet started, but the Third Reich was already starting to overstretch its forces and resources. Since the attack on Pearl Harbor the United States had joined the war and supported the British in their fight against Germany more and more. At this point an invasion of Great Britain was not very likely anymore, so the Reichssicherheitshauptamt (Reich Main Security Office) of the SS came up with another idea to destabilize Great Britain and its economy: Mass counterfeiting of British pound notes.
The idea was to produce a perfect copy of the British pound, print it in great quantities and to actually just throw them down over Britain with bombers, dropping money instead of bombs. The hope was that the British would use that money, start massive spending and cause big inflation in the country, destabilizing the economy and the faith in the British pound throughout the world.
The memory of the hyperinflation of the early 20’s in Germany was still fresh, success seemed possible and so the SS started the biggest counterfeit operation the world has seen until this day.
It was called ‘Operation Bernhard’ after SS Major Bernhard Krüger, who was in charge of the whole operation. He decided to use the Sachsenhausen Concentration Camp north of Berlin to set up the operation and requested the use of Baracks 18 & 19 in the ‘small camp’, the first expansion of Sachsenhausen. He also requested more than 140 Jewish prisoners from Sachsenhausen, mostly printers, engravers and bankers to work in those barracks. Later on, he also requested specialists from other camps like Auschwitz that the SS considered useful.
Since those specialists were needed, the SS started to treat them a lot better than they had been treated before: they were allowed to wear civilian clothes, got a lot more and better food and could sleep in real beds with linen bedsheets. The whole operation was ‘Top Secret’, to make sure that no other prisoner would find out what happened in those two barracks they were surrounded by an extra fence with barbed wire, the windows were overpainted with white paint and an extra group of SS guards were assigned to those barracks. Because of the high fence surrounding the two barracks other prisoners started to call the area the ‘chicken cage’.
The work was extremely difficult: the prisoners had to break the code to generate valid serial numbers, the printing plates had to be engraved and they had to find out what material the notes were originally made of.
Of course the prisoners knew that with their work there would not only help the Nazis in their war effort, but that they would also not be needed after they were succesful and would most likely be killed after that.
They tried to slow down the whole process, but SS Major Krüger in the end gave them an ultimatum and threatened to kill some of them if they were not finished by the date he set.
On the final day of the ultimatum, Krüger had already lined up the men, had shown them the bullets and the gun, the prisoner presented them with their final product.
Krüger was impressed with the quality of the work, but before starting a mass production he selected the best prints to be tested by independent authorities. An SS agent was sent to a bank in Switzerland to open an account with the counterfeit notes. A German with a brief case full of fresh British pound notes in a Swiss bank – of course they said: “I hope you don’t mind our experts checking the authenticity of those notes…”
He did not mind it at all, quite the contrary.
After half an hour he got the result: the experts were sure that they had genuine British pound notes in front of them.
But to the suprise of the bankers the SS man said: “That is good to hear, because to be honest: my source for this money is a little dubious. Is there anything else you can do to check their authenticity?”
“Well, we’ve done every test we have here, but if you want we can send some notes to London and let the Bank of England check them.” That’s exactly what he had aimed for.
A few weeks later SS Major Krüger came to the barracks in Sachsenhausen and read them a letter from the Bank of England in which it guaranteed the authenticity of the notes sent to them by the Swiss bank. The prisoners had done it: they had created a 100% perfect copy of the British pound!
As a reward for their good work the prisoners were given a ping pong table from Major Krüger.
Mass production started in Sachsenhausen
But at this point the war had already turned for the worse for the Nazis. It was by now very unlikely that they could drop enough pound notes on Britain with their bombers to really start an inflation, so the original plan was abandoned. But of course the money could still be used to buy goods, pay spies and use them all around the world.
The case of the spy Elyesa Bazna, codename Cicero, became especially famous, who was paid £ 300,000 in counterfeits from the Nazi intelligence service and who unsuccesfully sued Germany after the war for correct payment.
To make sure that the operation was not terminated and Major Krüger himself maybe sent to the front lines he proposed another project: forging the US dollar as well.
They were succesful once more: at the end of February ’45 they printed the first examples of $100 notes and scheduled more printing for the next day. But at this point the liberation of the camp was actually just two months away, the Russians were coming closer and closer to Berlin and Sachsenhausen. So the press was dismantled and relocated to one of the subsidiary camps of the Mauthausen concentration camp in Austria, the prisoners followed soon after that.
At the beginning of May 1945 the order was given to bring them all to another subsidiary camp and to execute them all. Fortunately the truck that brought them there broke down on the last trip and the last third of the prisoners had to walk to that camp. The order had stated that they should all be executed together, but the last prisoners arrived with so much delay that a revolt had started in that subsidiary camp and the guards had already fled. The prisoners just dispersed among the other prisoners there and luckily all survived!
The printing plates and a big part of the fake bank notes were dumped in Lake Toplitz in Austria close to the final concentration camp. Divers brought up most of them in 1959.
The Bank of England had big problems finding the counterfeits and telling them apart from the real ones. One of the former prisoners was brought to London to help in that effort. He was presented two notes, just held them against the light and immediately said: “This one’s real, this one’s fake!” He was right, but the bankers said, that he had just guessed. They were unable to tell the difference, so how could he have done it in seconds?
Now he told him the little secret of the counterfeiters: they had wanted to sabotage the notes, but had to do it in such a subtle way that nobody would notice it in the beginning. To make the notes look more realistic they also tried to make them look used. So they asked a couple of British soldiers that were kept in the special Gestapo-prison in Sachsenhausen about how they handled their money in daily life.
Back then notes were normally pinned together with a security pin that of course left small holes in the notes. But, as they were told, no British patriot would put the pin through the coat of arms on that note!
That’s exactly were the prisoners pushed it through, enabling them to distinguish between real and fake notes.
The Bank of England still decided to recall all bank notes of that time and replace with new series in another color.
Still today some of those notes resurface from time to time. A big number was actually found in a Swiss bank in 1995. If a Swiss numbered account is not accessed in fifty years the bank is allowed to open it and eventually seize its contents.
Even up until this day ‘Operation Bernhard’ was the biggest counterfeit operation of the world.
Die Fälscher (The Counterfeiters)
The 2007 Oscar-winning Austrian film, The Counterfeiters (Die Fälscher), tells the story of Salomon Sorowitsch, loosely based on the lives of counterfeiter Salomon Smolianoff and Adolf Burger, a Jewish Slovak book printer who was put to work on Operation Bernhard in Sachsenhausen concentration camp and whose memoirs were turned into the screenplay. This is one of my favorite films and some people tell me I look like Salomon Sorowitsch. Not by face but because I make repro paperwork. To be honest, I sometimes dream of having those machines, as shown in the film myself so I could make the best possible repros myself. Anyway, if you are interested in paperwork of the second World War, I highly recommend you view the true story about the creation of these British banknotes in the award winning film.
An exclusive interview with 92-year old Adolf Burger in 2007, the real life counterfeiter and holocaust survivor upon wose memoirs the fantastic new feature film THE COUNTERFEITERS is based.