Everything Everywhere Daily: History, Science, Geography & More - Operation Bernhard

Starting point is 00:00:00 Wars can be fought in many different ways. Ultimately, they're resolved on the battlefield. However, there are other ways to try to influence the outcome of a conflict. You can try to destroy their logistical support for their troops. You can attempt to destroy their economic base by burning their agricultural fields or destroying their factories. However, one relatively recent innovation has been to try to destroy an enemy's money supply. Learn more about Operation Bernard and the Nazi operation to counterfeit the British pound on this episode of Everything Everywhere Daily. Fear is the virus is trending on TikTok.

Starting point is 00:00:48 Vaccines are poison. Then your yoga teacher says that sex traffic children are being sacrificed by satanic liberals, but it's all okay. The Great Awakening is coming. What is happening? Every week on Conspirality Podcast, we explore the fever dreams that suck friends, family, and wellness gurus down the right-wing cult spiral in a search for salvation. You've probably heard the phrase, all's fair in love and war. Despite 20th century attempts to

Starting point is 00:01:25 make more war civilized and to create rules for armed conflicts, belligerent parties have tried anything and everything to gain advantage over their opponents. In the ancient world, corpses would sometimes be thrown over walls when laying siege to a city in an attempt to spread disease to the defenders. Gingus Khan famously tied flames to the tails of cats and sparrows to burn down a city. The entire North Atlantic campaign during the Second World War was an attempt to starve out Britain, and the Allied bombing campaigns were an attempt to destroy Germany's industrial base. It was in this spirit that the Nazis hatched a plan to destroy the British pound in the midst of the Second World War. Debasing the British pound would effectively throw the British economy into chaos and massively hinder their war.

Starting point is 00:02:11 effort. The idea of destroying a currency as a military tactic wasn't new, but it also wasn't an ancient concept. These efforts were rarely intended to collapse a currency outright, which is extremely difficult, but rather to sow distrust, create inflationary pressure, finance covert operations, or simply to undermine an enemy's financial stability. One of the earliest and most famous examples occurred during the American Revolution, when the British authorities flooded the rebellious colonies with counterfeit continental dollars. The Continental Congress was already printing money without sufficient backing, so British agents saw an opportunity to worsen the inevitable depreciation. Ships, loyalist printers, and even financial networks within the colonies,

Starting point is 00:02:55 helped distribute large batches of counterfeit bills, contributing to the broader collapse and confidence that made the phrase, not worth a continental, a common insult for worthless money. During the American Civil War, the Confederacy faced a similar problem. The Union didn't need to forge Confederate money to destabilize it because the Confederate government printed so much of its own currency that inflation became unavoidable. Nonetheless, union operatives and private counterfeiters in the North did produce large amounts of fake Confederate notes, which entered circulation through captured territory and black market activity. The union tolerated and sometimes quietly encouraged this phenomenon,

Starting point is 00:03:35 since the already fragile Confederate financial system could be stressed further with very little effort. Japan attempted a more formal state directive currency sabotage program during its war in China in the 1930s. Japanese intelligence forged Chinese nationalist currency, especially the widely used fobby notes, as a way of undermining Shanghai Czech's financial base. Japan distributed the forgeries in occupied areas and through its controlled banks. Since the nationalist government was struggling to stabilize its currency even before, the invasion, the influx of Japanese forgeries added to inflationary pressures and helped erode public confidence in nationalist fiscal management. With that, the Nazi scheme began in 1939

Starting point is 00:04:19 when the idea emerged within German intelligence circles. In early 1940, the Nazi National Security Service initiated what became known as Operation Andreas, named for either the Cross of St. Andrew on the British flag or simply as a cryptic code designation. Reinhard-Hydrick received Hitler's approval and established a counterfeiting unit with explicit instructions that the notes must be perfect copies, indistinguishable, even to expert examination. The operation was placed under SS major Alfred Naoyox, with daily operations managed by Albert Longer, a mathematician and codebreaker. Nowyox was already notorious as the man allegedly responsible for staging the false flag

Starting point is 00:05:02 operation that provided Germany's pretext for invading Poland. His team faced three monumental challenges. One, replicating the distinctive rag paper used by the Bank of England. Two, creating identical printing plates. And three, cracking the complex alphanumeric serial numbering system. The British pound notes of the era presented both opportunities and obstacles. The design had remained largely unchanged since 1855, featuring simple black-pournotes of the era. The design had remained largely unchanged since 1855, featuring simple black printing on white cotton-rague paper with an image of Britannia. This simplicity made the notes easier to study, but achieving perfection proved extraordinarily difficult. The German engravers struggled particularly with reproducing the vignette of Britannia,

Starting point is 00:05:48 which they frustratingly nicknamed Bloody Britannia because of its intricate detail. After seven months of intensive work, the team produced counterfeits that were examined by Swiss banks and even the Bank of England itself, with 90% deemed authentic. They discovered that the distinctive paper came from used and cleansed pure linen rags, and they painstakingly matched even the water chemistry to ensure proper appearance under ultraviolet light. However, Operation Andreas proved short-lived. By 1940, Nauyaks fell out a favor with Hydric and was removed from his position, subsequently being sent to the Eastern Front.

Starting point is 00:06:28 The operation limped along under Albert Longer until early 1942 when it was shut down entirely. Estimates suggest the operation produced between a half a million and three million pounds in counterfeit notes, most of which never entered circulation. In July 1942, Reichsfeer Heinrich Himmler revived the counterfeiting scheme with a fundamentally different purpose. Rather than attempting to collapse the British economy by aerial bombardment with fake currency, A plan the Luftwaffe lacked the resources to execute, the new objective was to finance German intelligence operations. Himmler's security services were chronically underfunded, and counterfeit currency offered an attractive means of covering financial shortfalls.

Starting point is 00:07:13 The operation was renamed after its new commander, SS major Bernhard Kruger, who inherited the remnants of Operation Andreas. Searching through the old offices, Kruger found the copper engraving plates and machinery, though some of the watermark gauzes were damaged. More significantly, he received orders to staff the operation using Jewish prisoners from Nazi concentration camps, a decision that would prove both pragmatic and sinister. Kruger visited several concentration camps to assemble his team, selecting prisoners with skills in draftsmanship, engraving, printing, and banking. By September 1942, the first 26 prisoners arrived at Zoxenhausen concentration camp with

Starting point is 00:07:54 80 more following in December. Eventually, the operation employed approximately 140 prisoners, housed in specially isolated blocks separated from the rest of the camp by barbed wire fencing. When Kruger met the prisoners, he addressed them using the formal and polite Z rather than the demeaning do, typically used by Nazis when addressing Jews. This relatively respectful treatment continued throughout the operation. The prisoners received extraordinary privileges by concentration camp standards. They received cigarettes, newspapers, extra food rations,

Starting point is 00:08:28 a radio, and even a ping pong table. Amateur theatrical performances were staged with both guards and prisoners attending, and Kruger provided musicians for entertainment. This seemingly humane treatment served a calculated purpose. The survival of the inmates rested entirely on being useful to their captors,

Starting point is 00:08:48 which created a grim paradox. They had to produce counterfeit notes skillfully enough to prove their worth, yet not so perfect or abundant that the SS might decide that the operation no longer needed them and eliminate them. And this balance was not lost on the prisoners themselves. The work itself was painstaking and sophisticated. Prisoners examined huge qualities of genuine British banknotes in minute detail, discovering over 150 tiny security marks used by the Bank of England as anti-fraud measures, which they in turn incorporated into their counterfeits. Teams specialized in different aspects. Some worked on paper production, others on printing,

Starting point is 00:09:31 and still others on aging the notes to make them look circulated. Fresh prints were aged by prisoners with dirty fingers who would shuffle, thumb, fold, and crumple the notes, with clerks adding typical British names or bank notations in pencil. Production began in earnest in January of 1943. By 1944, roughly 65,000 forged notes were rolling off the presses every month. The operation achieved remarkable technical success. By the time Zaxenhausen was evacuated in April of 1945, the printing press had produced 8,965,080 banknotes with a total value of over 134 million pounds, though some estimates placed the total production as high as 300 million pounds. The counterfeit pounds were sorted by quality into categories,

Starting point is 00:10:23 with the highest quality designated for shipment to England through intermediaries in Chicago and Switzerland. The money laundering operation was headed by SS major Friedrich Schwendt, who converted the forged currency into genuine Swiss francs, US dollars, and other assets through neutral countries, including Switzerland, Sweden, and Turkey. The counterfeit money financed various Nazi intelligence operations. For example, counterfeit notes were used to pay Turkish agent Alisa Bosna, codename Cicero, for obtaining British secrets from the British ambassador in Ankara. Reports suggest that 100,000 pounds in Operation Burnhard currency

Starting point is 00:11:00 helped finance the daring Grand Saso raid that freed Italian dictator Benito Mussolini in September of 1943, although this is disputed. British intelligence received early warning about the counterfeiting scheme from an exile, with the information then passed to the U.S. Treasury and the Bank of England. The bank initially believed existing security measures were adequate, but implemented additional safeguards in 1940, including a blue emergency one-pound note with a metal security thread. The first counterfeit note was definitively detected in 1943 when it passed through a British bank in Morocco.

Starting point is 00:11:38 An eagle-eyed bank clerk noticed that the series, serial number had already been recorded as paid in the handwritten ledgers, where every Bank of England note was meticulously tracked. This discovery revealed the operation's fatal flaw. Despite their technical brilliance in making the physical notes, the Nazis had been unable to crack the Bank of England's serial numbering scheme. They were forced to reuse serial numbers from genuine notes. Bank officials declared these counterfeits the most dangerous they'd ever seen. In response, the bank took dramatic action. In 1943, it banned the import of pound notes for the duration of the war, stopping production of new five-pound notes and warn the public about

Starting point is 00:12:18 counterfeit currency. Most significantly, the bank withdrew from circulation all notes with a face value higher than five pounds, a drastic measure that wouldn't be reversed for decades. New 10-pound notes weren't reintroduced until 1964, followed by 20-pound notes in 1970, and 50-pound notes in 1981. Impressed by the success with British pounds, Himmler expanded the mission in 1944 to include counterfeiting American $100 bills. This presented even greater challenges. The U.S. currency paper contained minute red and blue silk fibers.

Starting point is 00:12:57 The artwork was more complex than the British Stirling, and the intaglio printing process added small ridges to the paper. In August 1944, Solomon's symbolized. Molianoff, a convicted forger who had been counterfeiting currency since 1927, was brought to Zaxenhausen to assist with the Dollar Project. His arrival caused tensions among the prisoners, many of whom were professional or political detainees who resented working alongside a common criminal. As Allied forces closed in during early 1945, Operation Bernhardt entered its final phase. Between late February and early March, 1945, all production at Zaxenhausen ceased.

Starting point is 00:13:35 The equipment, supplies, and prisoners were packed and transported to Mauthausen-Guzen concentration camp in Austria, arriving on March 12. There they were then moved to a series of tunnels to restart production, but the order was quickly rescinded. Prisoners were ordered to destroy the cases of money, with undestroyed notes and printing equipment loaded it onto trucks and sunk in Lake Toplitz and Lake Grindelzee. At the start of May, Operation Bernhard was officially terminated, and the prisoners were transported to the Ebenzzi concentration camp. The final chapter of the story nearly ended in tragedy.

Starting point is 00:14:13 Orders were issued for all of the counterfeiters to be killed together at Ebenz, but the SS guards only had one truck requiring three round trips. On the third trip, the truck broke down, forcing the last group of prisoners to march to Ebenz, arriving on May 4, 1945. By then, guards of the first two groups had fled. as U.S. forces were approaching, and the prisoners had dispersed among the 16,000 inmates at Ebenzzi. Because the order specified that all counterfeiters be executed together, the delayed arrival of the third batch saved everyone's lives. U.S. forces liberated Ebenzzi on May 5, 1945.

Starting point is 00:14:56 Operation Bernhardt remains the largest and most sophisticated counterfeiting operation ever attempted in history. The notes that were produced were taken. technically brilliant. Modern currency experts can identify them, but only through careful examination of very specific characteristics. While it failed to achieve its original goal of collapsing the British economy, it successfully financed German intelligence operations and left a lasting impact on counterfeiting security measures that persist to this day. The executive producer of Everything Everywhere Daily is Charles Daniel. The associate producers are Austin Otkin and Cameron Kiefer. My big thanks go to everyone who supports the show

Starting point is 00:15:38 for on Patreon. Your support helps make this podcast possible. And I also want to remind everyone about the community groups on Facebook and Discord. That's where everything happens that's outside the podcast. And links to those are available in the show notes. As always, if you leave a review on any major podcast app or in the above community groups, you too can have it read in the show.

Everything Everywhere Daily: History, Science, Geography & More - Operation Bernhard

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