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A Nazi Counterfeit in the National Bank

The object we present you this month is a note you would not expect in the National Bank. It is indeed the only false note in the Museum’s showcases. To understand its presence, we have to dig into Europe’s past, in the history of World War II to be precise. This note is part of one of the most important forgeries ever set up and this counterfeiting was engineered by Nazi Germany.

Operations Andreas and Bernhard

“Unternehmen Bernhard” and its predecessor “Unternehmen Andreas” were secret German projects meant to destabilize the British economy by flooding the nation with counterfeit notes. Dropping masses of false pound notes on the British Isles would discredit the English currency and eventually provoke hyperinflation. The Germans knew perfectly well what monetary depreciation could mean to the economy, as they suffered themselves a serious hyperinflation after World War I. Hitler was pleased with the idea and gave his go-ahead. He was certainly not the first to venture money counterfeiting. Napoleon once did the same and when the French revolutionaries printed assignats, the English dumped copies of them to such an extent that a terrible inflation added to the problems of the rebels. Thus, there was sufficient historical precedent to inspire Hitler and his collaborators.

The Germans set to work. One of the problems to be dealt with was the production of paper comparable to that produced by the Portal paper mill and used by the Bank of England. Several five pound notes were obtained, cut into narrow strips and sent to labs and universities for scientific analysis. When the Germans discovered that the paper was made from soiled and laundried linen and handmade, the major problems were eliminated and henceforth they were capable of reproducing comparable English banknote paper. Much of the research was done by the initial Operation Andreas.

nazi1The successive counterfeiting teams set out to solve the problems of detecting all the security marks of the genuine notes. After the banknotes had been photographed, clichés were enlarged for detailed studies. The engravers learned that there were at least 150 security marks on the authentic notes. The crew discovered that minor defects which counterfeiters in the past had attributed to printing flaws were actually England’s security checking system. They copied all the ‘errors’ and thus provided most of the proper security elements. As an example, they discovered that the small spot in the middle of the “I” of the word FIVE was in all notes of a particular issue.

Once the notes were printed, one thing remained to be done: they had to be aged. It was soon learned that the only way to make the notes really look like they had been used was to use them. Some “agers” rubbed the notes, some folded them in the usual manner, some put pinholes in them, some hand stamped names of local banks in England on the reverse, etc. And all these operations were done with dirty hands! To further age the counterfeits, some tore small chips out of the notes in the same way as it was done for years by British bankers.

While the counterfeit notes looked as if they would pass in any bank, someone had to test them through a bank which would question them. Rumour has it that an agent was sent to a bank in Basle with a large stack of the counterfeit notes. With him was a letter, supposedly from the Reichsbank, asking the Swiss bank to determine if these “doubtful British notes” were genuine. The answer of the bank was that they indeed were. This answer though did not satisfy the Germans and they requested the notes be checked with the Bank of England in London. After three days the reply was that almost all of them, 90 per cent to be precise, were judged authentic.

However, one major risk could not be eliminated. As the Germans were initially not able to break the numbering system, they were forced to repeat numbers. Thus careful though they were, there was the distinct possibility of notes with identical numbers ending up in one bank.

A counterfeiting workshop in a concentration camp

Unternehmen Andreas had its headquarters in Charlottenburg, just south of Berlin. This location had been an old training centre of the Nazi Security Service (Sicherheitsdienst). When the Operation Bernhard took over in 1942 a new team of men with banking experience, engravers, graphic composers and expert printers was assembled in Oranienburg, which had been a concentration camp in the early 1930’s. All team members were Jewish and in August 1942 they all moved to the concentration camp of Sachsenhausen just north of Berlin. The operation was now in charge of Bernhard Krüger, whose forename distinguished the undertaking. He was an SS major who had been head of the Security Service operation which produced fake documents at the time “Andreas” was started.

nazi2Were the counterfeit notes initially meant to collapse the British economy, some people involved convinced the Nazi intelligence community this money could also be used to purchase war material, gold, jewelry, foreign currencies or to finance the spying and sabotage of the intelligence network around the world. But for doing so, the forged notes needed to be converted into real money. Not exactly small matter.

When the war came to an end, the Germans wanted all evidence of this large scale forgery of English pound notes to be destroyed. Notes, printing plates etc. were put into cases and dumped into the Ems and Traun rivers and into the Toplitzsee, a lake in between Innsbruck and Salzburg.

And how did England react?

The Bank of England was first alerted to the likelihood that the German Government was proceeding with plans to forge British banknotes by information from the Embassy in Paris in December 1939, passed on by the Treasury. The first forgeries to be classified as German forgeries turned up in September 1942 but it is worth noting that those notes were initially carefully inspected by Bank inspectors and adjudged genuine. In 1943 the Chancellor of the Exchequer announced to the House of Commons that the Bank would no longer issue notes of ten pounds and above. In this way Bank of England notes circulating abroad could be isolated. Due to a lack of time to produce immediately a completely new five pound note, the Bank of England decided to insert a metal thread in it, a security precaution which was already in use for the lower denominations. It took more than ten years to change the black and white design of the five pound note into a more colourful one (1957).

Coralie Boeykens
Museum guide