In 1959, divers pulled boxes of British banknotes from the dark bottom of an Austrian lake.
The notes looked real, but every one was fake. Who had made this fortune, and why was it hidden there?
Tap a purple word for its meaning. Tap a time to play from there.
[00:00:04] Hello, hello, hello, and welcome to English Learning for Curious Minds, by Leonardo English, the show where you can listen to fascinating stories and learn weird and wonderful things about the world at the same time as improving your English.
[00:00:21] I'm Alastair Budge, and today we are going to be talking about Operation Bernhard, and the Nazi plan to bankrupt Britain.
[00:00:30] It is the story of a plan to destroy the British pound that turned into something else entirely: the biggest counterfeiting operation in history. It is the story of the men who were forced to run it, and of the strange fact that the better they did their job, the closer they came to being killed.
[00:00:51] OK then, let's not waste a minute and get right into it.
[00:00:58] In the mountains of central Austria, about an hour's drive east of Salzburg, there is a small lake called Lake Toplitz.
[00:01:09] It is not a particularly pretty lake, at least not in the way that most Austrian lakes are pretty. It is narrow and dark, squeezed between steep cliffs, and the water is almost black.
[00:01:24] It is also a very strange lake. It gets to just over 100 metres deep, but below about twenty metres, there is no oxygen in the water, so fish cannot survive down there.
[00:01:38] And halfway down, there is a layer of sunken tree trunks, floating in the dark, which makes diving through it dangerous, and in places impossible.
[00:01:49] But in the summer of 1959, a team of divers arrived at the lake. They had been sent by Stern, a German news magazine, and they were looking for something.
[00:02:05] From the bottom of the lake, they pulled up boxes. Wooden and metal boxes, sealed shut, and inside them, packed tightly together, were banknotes.
[00:02:18] Bank of England banknotes. Five pounds, ten pounds, twenty pounds, fifty pounds. Millions of pounds' worth, and despite having been kept underwater in this gloomy lake, many of them were still perfectly legible.
[00:02:36] There was just one problem with this treasure.
[00:02:40] Not a single note was real.
[00:02:44] So, today, we are going to find out where they came from. Who made these notes? How did they make them? What were they used for? And why did they end up at the bottom of a lake in Austria?
[00:03:00] Let's start at the beginning, which, for this story, is September 1939.
[00:03:07] Germany has just invaded Poland. Britain has declared war. World War II has started.
[00:03:16] Barely two weeks in, a man called Arthur Nebe put forward an idea.
[00:03:23] Nebe was then the head of the German criminal police, and his idea was simple. Germany should print vast quantities of fake British banknotes, load them into aircraft, and drop them all over Britain.
[00:03:42] The logic went like this. If the streets were suddenly full of money, people would pick it up. They would spend it. Shops would accept it. And when it became clear that nobody could tell the real notes from the fake ones, people would stop trusting paper money altogether. Prices would shoot up. The pound would collapse. And Britain would be beaten without a single German soldier ever setting foot on British soil.
[00:04:16] It was a neat idea in theory, but not everyone was convinced. Joseph Goebbels called it a grotesque plan, and the economics minister objected on the grounds that it broke international law.
[00:04:32] But Hitler said yes and ordered for the plan to be put in motion. It was given a name, Operation Andreas, and put in the hands of a man called Alfred Naujocks.
[00:04:47] Naujocks was an SS officer with a background in this kind of work, covert operations. A few weeks earlier, he had staged a fake Polish attack on a German radio station near the border, with SS men dressed in Polish uniforms, which Hitler then used as his excuse to invade. So faking things was right in his wheelhouse, it was something he was not unfamiliar with.
[00:05:18] Faking a British banknote, though, turned out to be a lot harder than faking an attack.
[00:05:26] To understand why, you need to picture what a British banknote looked like in 1939. It was very different from the colorful double-sided banknotes you find today. A five-pound note was a large sheet of white paper, printed in black ink on one side only. There was no picture of the King, no colour, no complicated pattern. Just words, a number, and in the top left corner, a picture of Britannia, the female figure who represents Britain, sitting with her shield and spear.
[00:06:06] It looked simple. And that was the trick, because every part of it was fiendishly difficult to copy.
[00:06:15] The Germans found three problems.
[00:06:18] The first was the paper. Bank of England notes were made from linen and cotton, with no wood pulp in them at all. They had a particular feel, a particular sound when you crinkled them, and under ultraviolet light they glowed in a particular way. The first German attempts glowed wrong, and any bank clerk in Britain would have spotted them instantly.
[00:06:47] The second problem was Britannia, the picture on the left-hand side. She was engraved in such fine detail that the German engravers, who were among the best in the world, spent seven months trying to copy her. And even when they were convinced their copy was perfect, some people said the eyes were still slightly wrong.
[00:07:12] The third problem was the numbers. Every note had a serial number and the printed signature of the Chief Cashier, and the Bank of England kept a record of every number it had ever issued. When a note came back to the Bank of England in London, a clerk looked it up in a huge leather-bound ledger, a kind of accounts book, and marked it as paid. So a forger couldn't simply invent numbers. They had to be numbers the Bank would recognise, and numbers that were not already marked as paid.
[00:07:50] The Germans worked away at this for about two years. They printed some notes, but the quality was patchy, and the man in charge of the operation, Naujocks, fell out with his superiors. By early 1942, Operation Andreas was quietly shut down.
[00:08:11] But later that year, in July 1942, the SS decided to try again. This time, the man in charge was an SS Major called Bernhard Krüger, and the operation was named after him: Operation Bernhard.
[00:08:32] It is the name that history remembers for the whole story, though strictly speaking it was only the second half of it.
[00:08:40] The mechanism was the same, make fake pounds, but the purpose for doing so was very different.
[00:08:49] By 1942, the world had changed. Germany had lost the Battle of Britain, and the British controlled the airspace over their own island.
[00:09:02] And even if the Germans could somehow drop millions of pounds down on England, the government would know within hours, announce it on the radio, and within days every high-value note in the country would be called in and checked, one serial number at a time.
[00:09:20] And Germany, strangely enough, needed British pounds for herself. The SS had an extensive spy network across Europe, buying information and weapons, and given that the German currency was largely worthless internationally and tightly restricted, it tended to pay overseas spies and informants in foreign currency: pounds and dollars. So the new purpose of the operation was to print money that Germany could spend.
[00:09:54] Krüger also had a different idea about who should do the printing.
[00:10:01] His predecessors had used German technicians. Krüger went looking somewhere else. He toured the concentration camps, and he asked for lists.
[00:10:13] He wanted printers, engravers, typesetters, paper makers, bankers, anyone who had worked with money or with printing presses.
[00:10:24] On Himmler’s orders, they were all to be Jewish prisoners. They could be kept completely isolated, and the SS intended to kill them once they were no longer useful, leaving nobody alive to reveal the operation.
[00:10:41] In September 1942, the first twenty-six of them arrived at Sachsenhausen concentration camp, just north of Berlin. Over the following months, more arrived, and by the end there were around a hundred and forty men working in the operation.
[00:11:01] They were put in two barracks, Block 18 and Block 19, at the edge of the camp. Around these two blocks, the SS built a second fence, with barbed wire and its own guards. Nobody else in the camp was to be allowed in.
[00:11:20] And inside that fence, the prisoners found something they had not expected.
[00:11:26] They found decent food. More of it than anyone else in the camp got, at any rate. They found cigarettes and newspapers. They found a radio. There was a ping-pong table, and the prisoners sometimes played against the guards. The men were not beaten. Krüger addressed them as "Sie", the polite, formal form of "you" in German, rather than the "du" that guards would usually use to talk to prisoners. He arranged for musicians to visit. There were even amateur theatre performances.
[00:12:01] To a man who had come from Auschwitz, it must have felt like another planet.
[00:12:07] They must surely have known what it meant. They were being kept alive and treated well because they were useful. The moment they stopped being useful or the moment the operation ended, well, they probably knew what fate awaited them.
[00:12:24] So, what did the work actually look like?
[00:12:28] Well, by late 1942, the three principal problems with counterfeiting the pound, the manufacturing of paper, the copying of Britannia, and the numbering, they had all largely been cracked.
[00:12:42] Now, the real work could start.
[00:12:46] The paper came in from a German mill called Hahnemühle in big sheets, four notes to a sheet. The prisoners printed them on six presses, checked every one against a real note under a magnifying glass, added the serial numbers and the cashier's signature, and cut them up.
[00:13:06] But a freshly printed banknote was just the start; it wasn't "real money". A brand-new note is suspicious. Real money has been in wallets and pockets and been dropped in puddles.
[00:13:21] So, forty or fifty prisoners spent their days doing nothing but making new notes look old. They folded them and unfolded them.
[00:13:33] They rubbed dirt into them. They passed them from hand to hand until they were soft with sweat. Some were pinned together in bundles, the way British bank clerks did, and then unpinned, leaving the right little holes in the right place.
[00:13:49] Then every note was inspected, and sorted into grades.
[00:13:56] The best ones, the ones no expert could fault, were set aside for paying spies and for buying things in neutral countries, where the notes would be examined closely.
[00:14:08] The second grade went to collaborators and agents in occupied countries.
[00:14:14] A third grade had small flaws, and was kept in case anyone ever did want to drop money out of aeroplanes. And the worst were destroyed.
[00:14:25] At its peak, in 1943 and 1944, the workshop was producing several hundred thousand notes a month, on six printing presses.
[00:14:37] In total, the prisoners printed just under nine million banknotes, with a face value of more than 130 million pounds.
[00:14:49] To give you some idea of what that meant, the total value of Bank of England notes in circulation at the time was around a billion pounds. So a hundred and thirty million pounds was more than a tenth of all the paper money in Britain, produced by a hundred and forty men in two wooden huts.
[00:15:12] Now, printing money is one thing. Spending it is another.
[00:15:18] The man in charge of that was a businessman, smuggler and currency dealer working for the SS called Friedrich Schwend. His operation was somewhat strange. He ran it from a castle in northern Italy.
[00:15:34] From there, he sent couriers out across Europe with suitcases of fake pounds, into Switzerland, Spain, Portugal, Sweden and Turkey, anywhere the notes could be exchanged for real money, or gold, or goods.
[00:15:51] This was, it turned out, pretty good business for Schwend, who took a cut of every transaction and, most likely, helped himself to more on the side. He bought weapons from partisans in Yugoslavia, who had captured them from the Allies, and sold them on. He bought luxuries for himself. He was, essentially, a man running a money-laundering business from a beautiful castle, except that the money he was laundering had been printed by prisoners in concentration camps.
[00:16:22] And some of the notes went to fund the most famous German spy of the war.
[00:16:29] In Ankara, the capital of neutral Turkey, the British ambassador had a valet, a personal servant, called Elyesa Bazna. In 1943, Bazna began photographing the secret documents that the ambassador kept in his safe, and selling the photographs to the Germans.
[00:16:51] The Germans gave him the codename of Cicero, and paid him around three hundred thousand pounds for his work, an enormous sum, enough to buy several large houses in London.
[00:17:04] Most of what he was paid with was fake.
[00:17:08] Bazna only discovered this after the war, when he tried to use his fortune to build a hotel, and the money was examined. He spent years afterwards writing letters to the West German government, asking to be compensated. He never was.
[00:17:25] Now, you might be wondering what the Bank of England was doing while all this was going on.
[00:17:32] Well, it knew something was coming. As early as November 1939, the British had intelligence that the Germans were planning to forge the pound, and the Bank was told.
[00:17:45] Its response, more or less, was that its notes were too good to copy.
[00:17:51] But in 1943, a forged note came in. It had been handed in at a British bank in Morocco, and it made its way to London, where a clerk opened his ledger to mark the serial number as paid.
[00:18:07] The number was already marked as paid.
[00:18:11] The Bank had a look at the note, and realised that its diagnosis that the notes were too hard to copy might have been a little arrogant. This was no crude forgery; it was, in the Bank's opinion, the most impressive forgery they had ever come across.
[00:18:28] The only reliable way to tell it apart was the watermark, and even that took an expert.
[00:18:36] And as for the question of how much fake currency there actually was, some retellings of this story say that by the end of the war, one in three pound notes in circulation was a German fake. There doesn't seem to be any real evidence for this. The Bank's own records show that in the whole of the war, it identified around 33,000 forged notes, most of which were German.
[00:19:05] Its estimate of how many were actually out in the world was higher, somewhere between fifteen and twenty million pounds' worth, so almost a billion pounds in today's money. It's a lot, of course, but nowhere near one in three.
[00:19:21] Now, when the British realised what the Germans had planned, they did something drastic.
[00:19:29] In April 1943, the Chancellor of the Exchequer, the British finance minister, announced that the Bank would stop issuing any note above five pounds.
[00:19:41] The ten, the twenty and the fifty: they were all withdrawn.
[00:19:46] And they stayed withdrawn for a very long time. Britain did not get a ten-pound note back until 1964. The twenty came back in 1970. The fifty-pound note did not return until 1981.
[00:20:01] The withdrawal hurt the Germans too. Nobody abroad wanted to touch a large British note any more, and the pound was becoming harder to spend. The dollar, on the other hand, was the currency everyone wanted.
[00:20:18] So, back in Sachsenhausen, the SS decided that if the prisoners could forge the pound, they could forge the dollar too.
[00:20:27] The order came in May 1944, and it was for hundred-dollar bills. This was harder still. American notes were printed in a different way, with raised ink, and the paper had tiny silk threads in it.
[00:20:46] And here the prisoners made a decision.
[00:20:49] They understood that the dollar project was the only thing keeping them alive; if they went too fast, or made it look too easy, they were expendable.
[00:21:00] So they worked slowly. They found problems that took weeks to solve.
[00:21:05] They produced samples that were almost right, but not quite. It was dangerous, because a prisoner suspected of sabotage would be shot.
[00:21:16] But it bought time.
[00:21:19] By February 1945, the first sheets of hundred-dollar bills were finally coming off the press.
[00:21:26] But by then, it no longer mattered. The tide had turned.
[00:21:32] The Russians were approaching, and were less than fifty miles from Berlin. In the last days of February, the order came to pack up.
[00:21:42] The presses, the plates, the paper and the prisoners were loaded up and sent south, first to Mauthausen concentration camp in Austria, then to a tunnel complex in the hills nearby, where Krüger hoped to start printing again.
[00:21:59] That never happened. Instead, the prisoners were ordered to destroy the money. They burned what they could. What they couldn't burn was loaded onto lorries, driven to the shore of a small, dark Austrian lake, and pushed into the water.
[00:22:18] And then there was the question of the prisoners themselves. This was Nazi Germany, so there was no pardon or thank you for your excellent work. The men were moved in three groups, to another concentration camp, called Ebensee, where they were to be executed.
[00:22:37] The order was specific. All the prisoners were to be killed together, so that nobody could be left alive to tell the story.
[00:22:48] The first two groups arrived. The third did not, because the lorry carrying it had broken down on the road.
[00:22:57] So the guards at Ebensee waited. And while they waited, the war was collapsing around them.
[00:23:07] After two days, the guards gave up, and they moved the first two groups into the main camp, spread among thousands of other prisoners.
[00:23:17] Then the third lorry finally arrived. Its guards asked where the others were, and were told they had already been released.
[00:23:27] So they released their prisoners too. And then the guards themselves ran, before the Allied soldiers could arrive.
[00:23:36] The next morning, the 6th of May 1945, American soldiers arrived at Ebensee, and liberated the prisoners.
[00:23:45] Amazingly enough, almost every man from Blocks 18 and 19 survived the war.
[00:23:53] Bernhard Krüger hid for a year and a half, and then handed himself in to the British in November 1946. He was never charged with anything. Forging an enemy's currency in wartime, it turned out, was not a war crime.
[00:24:10] When he faced a German court after the war, several of his former prisoners spoke up for him, and said he had saved their lives. He went to work for Hahnemühle, the company that had supplied his paper, and he died in 1989.
[00:24:28] As for the lake, it never quite let go of its secrets.
[00:24:33] After the Stern divers brought up their boxes in 1959, the rumours started. If there were banknotes down there, what else was there? Gold? Documents? Nazi treasure of some kind?
[00:24:50] In 1963, a nineteen-year-old German went diving in Lake Toplitz to find out. He never came back, and it took four weeks to recover his body. Afterwards the Austrian authorities banned diving in the lake for twenty years.
[00:25:08] In 2000, an American company brought a small submarine to the lake, with a television crew and one of the former forgers, then in his eighties, watching from the shore. They brought up more banknotes.
[00:25:23] After fifty-five years in the water, they were so soft that they had to be sent to specialists to be preserved, but the former prisoner, a man named Adolf Burger, looked at them and recognised his own work.
[00:25:38] There have been more expeditions since. They have found rockets, torpedo parts, what appeared to be the wreck of a seaplane, and a box of beer bottle caps that somebody dropped in as a joke.
[00:25:52] And, of course, more banknotes.
[00:25:55] Millions of pounds of them, printed to perfection by men who expected to die for it, sitting in the dark at the bottom of an Austrian lake, and worth exactly nothing.
[00:26:09] OK, then, that is it for today's episode on Operation Bernhard, and the Nazi plan to bankrupt Britain.
[00:26:17] I hope it's been an interesting one and that you've learnt something new.
[00:26:21] You've been listening to English Learning for Curious Minds by Leonardo English.
[00:26:26] I'm Alastair Budge, you stay safe, and I'll catch you in the next episode.
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In 1959, divers pulled boxes of British banknotes from the dark bottom of an Austrian lake.
The notes looked real, but every one was fake. Who had made this fortune, and why was it hidden there?
[00:00:04] Hello, hello, hello, and welcome to English Learning for Curious Minds, by Leonardo English, the show where you can listen to fascinating stories and learn weird and wonderful things about the world at the same time as improving your English.
[00:00:21] I'm Alastair Budge, and today we are going to be talking about Operation Bernhard, and the Nazi plan to bankrupt Britain.
[00:00:30] It is the story of a plan to destroy the British pound that turned into something else entirely: the biggest counterfeiting operation in history. It is the story of the men who were forced to run it, and of the strange fact that the better they did their job, the closer they came to being killed.
[00:00:51] OK then, let's not waste a minute and get right into it.
[00:00:58] In the mountains of central Austria, about an hour's drive east of Salzburg, there is a small lake called Lake Toplitz.
[00:01:09] It is not a particularly pretty lake, at least not in the way that most Austrian lakes are pretty. It is narrow and dark, squeezed between steep cliffs, and the water is almost black.
[00:01:24] It is also a very strange lake. It gets to just over 100 metres deep, but below about twenty metres, there is no oxygen in the water, so fish cannot survive down there.
[00:01:38] And halfway down, there is a layer of sunken tree trunks, floating in the dark, which makes diving through it dangerous, and in places impossible.
[00:01:49] But in the summer of 1959, a team of divers arrived at the lake. They had been sent by Stern, a German news magazine, and they were looking for something.
[00:02:05] From the bottom of the lake, they pulled up boxes. Wooden and metal boxes, sealed shut, and inside them, packed tightly together, were banknotes.
[00:02:18] Bank of England banknotes. Five pounds, ten pounds, twenty pounds, fifty pounds. Millions of pounds' worth, and despite having been kept underwater in this gloomy lake, many of them were still perfectly legible.
[00:02:36] There was just one problem with this treasure.
[00:02:40] Not a single note was real.
[00:02:44] So, today, we are going to find out where they came from. Who made these notes? How did they make them? What were they used for? And why did they end up at the bottom of a lake in Austria?
[00:03:00] Let's start at the beginning, which, for this story, is September 1939.
[00:03:07] Germany has just invaded Poland. Britain has declared war. World War II has started.
[00:03:16] Barely two weeks in, a man called Arthur Nebe put forward an idea.
[00:03:23] Nebe was then the head of the German criminal police, and his idea was simple. Germany should print vast quantities of fake British banknotes, load them into aircraft, and drop them all over Britain.
[00:03:42] The logic went like this. If the streets were suddenly full of money, people would pick it up. They would spend it. Shops would accept it. And when it became clear that nobody could tell the real notes from the fake ones, people would stop trusting paper money altogether. Prices would shoot up. The pound would collapse. And Britain would be beaten without a single German soldier ever setting foot on British soil.
[00:04:16] It was a neat idea in theory, but not everyone was convinced. Joseph Goebbels called it a grotesque plan, and the economics minister objected on the grounds that it broke international law.
[00:04:32] But Hitler said yes and ordered for the plan to be put in motion. It was given a name, Operation Andreas, and put in the hands of a man called Alfred Naujocks.
[00:04:47] Naujocks was an SS officer with a background in this kind of work, covert operations. A few weeks earlier, he had staged a fake Polish attack on a German radio station near the border, with SS men dressed in Polish uniforms, which Hitler then used as his excuse to invade. So faking things was right in his wheelhouse, it was something he was not unfamiliar with.
[00:05:18] Faking a British banknote, though, turned out to be a lot harder than faking an attack.
[00:05:26] To understand why, you need to picture what a British banknote looked like in 1939. It was very different from the colorful double-sided banknotes you find today. A five-pound note was a large sheet of white paper, printed in black ink on one side only. There was no picture of the King, no colour, no complicated pattern. Just words, a number, and in the top left corner, a picture of Britannia, the female figure who represents Britain, sitting with her shield and spear.
[00:06:06] It looked simple. And that was the trick, because every part of it was fiendishly difficult to copy.
[00:06:15] The Germans found three problems.
[00:06:18] The first was the paper. Bank of England notes were made from linen and cotton, with no wood pulp in them at all. They had a particular feel, a particular sound when you crinkled them, and under ultraviolet light they glowed in a particular way. The first German attempts glowed wrong, and any bank clerk in Britain would have spotted them instantly.
[00:06:47] The second problem was Britannia, the picture on the left-hand side. She was engraved in such fine detail that the German engravers, who were among the best in the world, spent seven months trying to copy her. And even when they were convinced their copy was perfect, some people said the eyes were still slightly wrong.
[00:07:12] The third problem was the numbers. Every note had a serial number and the printed signature of the Chief Cashier, and the Bank of England kept a record of every number it had ever issued. When a note came back to the Bank of England in London, a clerk looked it up in a huge leather-bound ledger, a kind of accounts book, and marked it as paid. So a forger couldn't simply invent numbers. They had to be numbers the Bank would recognise, and numbers that were not already marked as paid.
[00:07:50] The Germans worked away at this for about two years. They printed some notes, but the quality was patchy, and the man in charge of the operation, Naujocks, fell out with his superiors. By early 1942, Operation Andreas was quietly shut down.
[00:08:11] But later that year, in July 1942, the SS decided to try again. This time, the man in charge was an SS Major called Bernhard Krüger, and the operation was named after him: Operation Bernhard.
[00:08:32] It is the name that history remembers for the whole story, though strictly speaking it was only the second half of it.
[00:08:40] The mechanism was the same, make fake pounds, but the purpose for doing so was very different.
[00:08:49] By 1942, the world had changed. Germany had lost the Battle of Britain, and the British controlled the airspace over their own island.
[00:09:02] And even if the Germans could somehow drop millions of pounds down on England, the government would know within hours, announce it on the radio, and within days every high-value note in the country would be called in and checked, one serial number at a time.
[00:09:20] And Germany, strangely enough, needed British pounds for herself. The SS had an extensive spy network across Europe, buying information and weapons, and given that the German currency was largely worthless internationally and tightly restricted, it tended to pay overseas spies and informants in foreign currency: pounds and dollars. So the new purpose of the operation was to print money that Germany could spend.
[00:09:54] Krüger also had a different idea about who should do the printing.
[00:10:01] His predecessors had used German technicians. Krüger went looking somewhere else. He toured the concentration camps, and he asked for lists.
[00:10:13] He wanted printers, engravers, typesetters, paper makers, bankers, anyone who had worked with money or with printing presses.
[00:10:24] On Himmler’s orders, they were all to be Jewish prisoners. They could be kept completely isolated, and the SS intended to kill them once they were no longer useful, leaving nobody alive to reveal the operation.
[00:10:41] In September 1942, the first twenty-six of them arrived at Sachsenhausen concentration camp, just north of Berlin. Over the following months, more arrived, and by the end there were around a hundred and forty men working in the operation.
[00:11:01] They were put in two barracks, Block 18 and Block 19, at the edge of the camp. Around these two blocks, the SS built a second fence, with barbed wire and its own guards. Nobody else in the camp was to be allowed in.
[00:11:20] And inside that fence, the prisoners found something they had not expected.
[00:11:26] They found decent food. More of it than anyone else in the camp got, at any rate. They found cigarettes and newspapers. They found a radio. There was a ping-pong table, and the prisoners sometimes played against the guards. The men were not beaten. Krüger addressed them as "Sie", the polite, formal form of "you" in German, rather than the "du" that guards would usually use to talk to prisoners. He arranged for musicians to visit. There were even amateur theatre performances.
[00:12:01] To a man who had come from Auschwitz, it must have felt like another planet.
[00:12:07] They must surely have known what it meant. They were being kept alive and treated well because they were useful. The moment they stopped being useful or the moment the operation ended, well, they probably knew what fate awaited them.
[00:12:24] So, what did the work actually look like?
[00:12:28] Well, by late 1942, the three principal problems with counterfeiting the pound, the manufacturing of paper, the copying of Britannia, and the numbering, they had all largely been cracked.
[00:12:42] Now, the real work could start.
[00:12:46] The paper came in from a German mill called Hahnemühle in big sheets, four notes to a sheet. The prisoners printed them on six presses, checked every one against a real note under a magnifying glass, added the serial numbers and the cashier's signature, and cut them up.
[00:13:06] But a freshly printed banknote was just the start; it wasn't "real money". A brand-new note is suspicious. Real money has been in wallets and pockets and been dropped in puddles.
[00:13:21] So, forty or fifty prisoners spent their days doing nothing but making new notes look old. They folded them and unfolded them.
[00:13:33] They rubbed dirt into them. They passed them from hand to hand until they were soft with sweat. Some were pinned together in bundles, the way British bank clerks did, and then unpinned, leaving the right little holes in the right place.
[00:13:49] Then every note was inspected, and sorted into grades.
[00:13:56] The best ones, the ones no expert could fault, were set aside for paying spies and for buying things in neutral countries, where the notes would be examined closely.
[00:14:08] The second grade went to collaborators and agents in occupied countries.
[00:14:14] A third grade had small flaws, and was kept in case anyone ever did want to drop money out of aeroplanes. And the worst were destroyed.
[00:14:25] At its peak, in 1943 and 1944, the workshop was producing several hundred thousand notes a month, on six printing presses.
[00:14:37] In total, the prisoners printed just under nine million banknotes, with a face value of more than 130 million pounds.
[00:14:49] To give you some idea of what that meant, the total value of Bank of England notes in circulation at the time was around a billion pounds. So a hundred and thirty million pounds was more than a tenth of all the paper money in Britain, produced by a hundred and forty men in two wooden huts.
[00:15:12] Now, printing money is one thing. Spending it is another.
[00:15:18] The man in charge of that was a businessman, smuggler and currency dealer working for the SS called Friedrich Schwend. His operation was somewhat strange. He ran it from a castle in northern Italy.
[00:15:34] From there, he sent couriers out across Europe with suitcases of fake pounds, into Switzerland, Spain, Portugal, Sweden and Turkey, anywhere the notes could be exchanged for real money, or gold, or goods.
[00:15:51] This was, it turned out, pretty good business for Schwend, who took a cut of every transaction and, most likely, helped himself to more on the side. He bought weapons from partisans in Yugoslavia, who had captured them from the Allies, and sold them on. He bought luxuries for himself. He was, essentially, a man running a money-laundering business from a beautiful castle, except that the money he was laundering had been printed by prisoners in concentration camps.
[00:16:22] And some of the notes went to fund the most famous German spy of the war.
[00:16:29] In Ankara, the capital of neutral Turkey, the British ambassador had a valet, a personal servant, called Elyesa Bazna. In 1943, Bazna began photographing the secret documents that the ambassador kept in his safe, and selling the photographs to the Germans.
[00:16:51] The Germans gave him the codename of Cicero, and paid him around three hundred thousand pounds for his work, an enormous sum, enough to buy several large houses in London.
[00:17:04] Most of what he was paid with was fake.
[00:17:08] Bazna only discovered this after the war, when he tried to use his fortune to build a hotel, and the money was examined. He spent years afterwards writing letters to the West German government, asking to be compensated. He never was.
[00:17:25] Now, you might be wondering what the Bank of England was doing while all this was going on.
[00:17:32] Well, it knew something was coming. As early as November 1939, the British had intelligence that the Germans were planning to forge the pound, and the Bank was told.
[00:17:45] Its response, more or less, was that its notes were too good to copy.
[00:17:51] But in 1943, a forged note came in. It had been handed in at a British bank in Morocco, and it made its way to London, where a clerk opened his ledger to mark the serial number as paid.
[00:18:07] The number was already marked as paid.
[00:18:11] The Bank had a look at the note, and realised that its diagnosis that the notes were too hard to copy might have been a little arrogant. This was no crude forgery; it was, in the Bank's opinion, the most impressive forgery they had ever come across.
[00:18:28] The only reliable way to tell it apart was the watermark, and even that took an expert.
[00:18:36] And as for the question of how much fake currency there actually was, some retellings of this story say that by the end of the war, one in three pound notes in circulation was a German fake. There doesn't seem to be any real evidence for this. The Bank's own records show that in the whole of the war, it identified around 33,000 forged notes, most of which were German.
[00:19:05] Its estimate of how many were actually out in the world was higher, somewhere between fifteen and twenty million pounds' worth, so almost a billion pounds in today's money. It's a lot, of course, but nowhere near one in three.
[00:19:21] Now, when the British realised what the Germans had planned, they did something drastic.
[00:19:29] In April 1943, the Chancellor of the Exchequer, the British finance minister, announced that the Bank would stop issuing any note above five pounds.
[00:19:41] The ten, the twenty and the fifty: they were all withdrawn.
[00:19:46] And they stayed withdrawn for a very long time. Britain did not get a ten-pound note back until 1964. The twenty came back in 1970. The fifty-pound note did not return until 1981.
[00:20:01] The withdrawal hurt the Germans too. Nobody abroad wanted to touch a large British note any more, and the pound was becoming harder to spend. The dollar, on the other hand, was the currency everyone wanted.
[00:20:18] So, back in Sachsenhausen, the SS decided that if the prisoners could forge the pound, they could forge the dollar too.
[00:20:27] The order came in May 1944, and it was for hundred-dollar bills. This was harder still. American notes were printed in a different way, with raised ink, and the paper had tiny silk threads in it.
[00:20:46] And here the prisoners made a decision.
[00:20:49] They understood that the dollar project was the only thing keeping them alive; if they went too fast, or made it look too easy, they were expendable.
[00:21:00] So they worked slowly. They found problems that took weeks to solve.
[00:21:05] They produced samples that were almost right, but not quite. It was dangerous, because a prisoner suspected of sabotage would be shot.
[00:21:16] But it bought time.
[00:21:19] By February 1945, the first sheets of hundred-dollar bills were finally coming off the press.
[00:21:26] But by then, it no longer mattered. The tide had turned.
[00:21:32] The Russians were approaching, and were less than fifty miles from Berlin. In the last days of February, the order came to pack up.
[00:21:42] The presses, the plates, the paper and the prisoners were loaded up and sent south, first to Mauthausen concentration camp in Austria, then to a tunnel complex in the hills nearby, where Krüger hoped to start printing again.
[00:21:59] That never happened. Instead, the prisoners were ordered to destroy the money. They burned what they could. What they couldn't burn was loaded onto lorries, driven to the shore of a small, dark Austrian lake, and pushed into the water.
[00:22:18] And then there was the question of the prisoners themselves. This was Nazi Germany, so there was no pardon or thank you for your excellent work. The men were moved in three groups, to another concentration camp, called Ebensee, where they were to be executed.
[00:22:37] The order was specific. All the prisoners were to be killed together, so that nobody could be left alive to tell the story.
[00:22:48] The first two groups arrived. The third did not, because the lorry carrying it had broken down on the road.
[00:22:57] So the guards at Ebensee waited. And while they waited, the war was collapsing around them.
[00:23:07] After two days, the guards gave up, and they moved the first two groups into the main camp, spread among thousands of other prisoners.
[00:23:17] Then the third lorry finally arrived. Its guards asked where the others were, and were told they had already been released.
[00:23:27] So they released their prisoners too. And then the guards themselves ran, before the Allied soldiers could arrive.
[00:23:36] The next morning, the 6th of May 1945, American soldiers arrived at Ebensee, and liberated the prisoners.
[00:23:45] Amazingly enough, almost every man from Blocks 18 and 19 survived the war.
[00:23:53] Bernhard Krüger hid for a year and a half, and then handed himself in to the British in November 1946. He was never charged with anything. Forging an enemy's currency in wartime, it turned out, was not a war crime.
[00:24:10] When he faced a German court after the war, several of his former prisoners spoke up for him, and said he had saved their lives. He went to work for Hahnemühle, the company that had supplied his paper, and he died in 1989.
[00:24:28] As for the lake, it never quite let go of its secrets.
[00:24:33] After the Stern divers brought up their boxes in 1959, the rumours started. If there were banknotes down there, what else was there? Gold? Documents? Nazi treasure of some kind?
[00:24:50] In 1963, a nineteen-year-old German went diving in Lake Toplitz to find out. He never came back, and it took four weeks to recover his body. Afterwards the Austrian authorities banned diving in the lake for twenty years.
[00:25:08] In 2000, an American company brought a small submarine to the lake, with a television crew and one of the former forgers, then in his eighties, watching from the shore. They brought up more banknotes.
[00:25:23] After fifty-five years in the water, they were so soft that they had to be sent to specialists to be preserved, but the former prisoner, a man named Adolf Burger, looked at them and recognised his own work.
[00:25:38] There have been more expeditions since. They have found rockets, torpedo parts, what appeared to be the wreck of a seaplane, and a box of beer bottle caps that somebody dropped in as a joke.
[00:25:52] And, of course, more banknotes.
[00:25:55] Millions of pounds of them, printed to perfection by men who expected to die for it, sitting in the dark at the bottom of an Austrian lake, and worth exactly nothing.
[00:26:09] OK, then, that is it for today's episode on Operation Bernhard, and the Nazi plan to bankrupt Britain.
[00:26:17] I hope it's been an interesting one and that you've learnt something new.
[00:26:21] You've been listening to English Learning for Curious Minds by Leonardo English.
[00:26:26] I'm Alastair Budge, you stay safe, and I'll catch you in the next episode.
[00:00:04] Hello, hello, hello, and welcome to English Learning for Curious Minds, by Leonardo English, the show where you can listen to fascinating stories and learn weird and wonderful things about the world at the same time as improving your English.
[00:00:21] I'm Alastair Budge, and today we are going to be talking about Operation Bernhard, and the Nazi plan to bankrupt Britain.
[00:00:30] It is the story of a plan to destroy the British pound that turned into something else entirely: the biggest counterfeiting operation in history. It is the story of the men who were forced to run it, and of the strange fact that the better they did their job, the closer they came to being killed.
[00:00:51] OK then, let's not waste a minute and get right into it.
[00:00:58] In the mountains of central Austria, about an hour's drive east of Salzburg, there is a small lake called Lake Toplitz.
[00:01:09] It is not a particularly pretty lake, at least not in the way that most Austrian lakes are pretty. It is narrow and dark, squeezed between steep cliffs, and the water is almost black.
[00:01:24] It is also a very strange lake. It gets to just over 100 metres deep, but below about twenty metres, there is no oxygen in the water, so fish cannot survive down there.
[00:01:38] And halfway down, there is a layer of sunken tree trunks, floating in the dark, which makes diving through it dangerous, and in places impossible.
[00:01:49] But in the summer of 1959, a team of divers arrived at the lake. They had been sent by Stern, a German news magazine, and they were looking for something.
[00:02:05] From the bottom of the lake, they pulled up boxes. Wooden and metal boxes, sealed shut, and inside them, packed tightly together, were banknotes.
[00:02:18] Bank of England banknotes. Five pounds, ten pounds, twenty pounds, fifty pounds. Millions of pounds' worth, and despite having been kept underwater in this gloomy lake, many of them were still perfectly legible.
[00:02:36] There was just one problem with this treasure.
[00:02:40] Not a single note was real.
[00:02:44] So, today, we are going to find out where they came from. Who made these notes? How did they make them? What were they used for? And why did they end up at the bottom of a lake in Austria?
[00:03:00] Let's start at the beginning, which, for this story, is September 1939.
[00:03:07] Germany has just invaded Poland. Britain has declared war. World War II has started.
[00:03:16] Barely two weeks in, a man called Arthur Nebe put forward an idea.
[00:03:23] Nebe was then the head of the German criminal police, and his idea was simple. Germany should print vast quantities of fake British banknotes, load them into aircraft, and drop them all over Britain.
[00:03:42] The logic went like this. If the streets were suddenly full of money, people would pick it up. They would spend it. Shops would accept it. And when it became clear that nobody could tell the real notes from the fake ones, people would stop trusting paper money altogether. Prices would shoot up. The pound would collapse. And Britain would be beaten without a single German soldier ever setting foot on British soil.
[00:04:16] It was a neat idea in theory, but not everyone was convinced. Joseph Goebbels called it a grotesque plan, and the economics minister objected on the grounds that it broke international law.
[00:04:32] But Hitler said yes and ordered for the plan to be put in motion. It was given a name, Operation Andreas, and put in the hands of a man called Alfred Naujocks.
[00:04:47] Naujocks was an SS officer with a background in this kind of work, covert operations. A few weeks earlier, he had staged a fake Polish attack on a German radio station near the border, with SS men dressed in Polish uniforms, which Hitler then used as his excuse to invade. So faking things was right in his wheelhouse, it was something he was not unfamiliar with.
[00:05:18] Faking a British banknote, though, turned out to be a lot harder than faking an attack.
[00:05:26] To understand why, you need to picture what a British banknote looked like in 1939. It was very different from the colorful double-sided banknotes you find today. A five-pound note was a large sheet of white paper, printed in black ink on one side only. There was no picture of the King, no colour, no complicated pattern. Just words, a number, and in the top left corner, a picture of Britannia, the female figure who represents Britain, sitting with her shield and spear.
[00:06:06] It looked simple. And that was the trick, because every part of it was fiendishly difficult to copy.
[00:06:15] The Germans found three problems.
[00:06:18] The first was the paper. Bank of England notes were made from linen and cotton, with no wood pulp in them at all. They had a particular feel, a particular sound when you crinkled them, and under ultraviolet light they glowed in a particular way. The first German attempts glowed wrong, and any bank clerk in Britain would have spotted them instantly.
[00:06:47] The second problem was Britannia, the picture on the left-hand side. She was engraved in such fine detail that the German engravers, who were among the best in the world, spent seven months trying to copy her. And even when they were convinced their copy was perfect, some people said the eyes were still slightly wrong.
[00:07:12] The third problem was the numbers. Every note had a serial number and the printed signature of the Chief Cashier, and the Bank of England kept a record of every number it had ever issued. When a note came back to the Bank of England in London, a clerk looked it up in a huge leather-bound ledger, a kind of accounts book, and marked it as paid. So a forger couldn't simply invent numbers. They had to be numbers the Bank would recognise, and numbers that were not already marked as paid.
[00:07:50] The Germans worked away at this for about two years. They printed some notes, but the quality was patchy, and the man in charge of the operation, Naujocks, fell out with his superiors. By early 1942, Operation Andreas was quietly shut down.
[00:08:11] But later that year, in July 1942, the SS decided to try again. This time, the man in charge was an SS Major called Bernhard Krüger, and the operation was named after him: Operation Bernhard.
[00:08:32] It is the name that history remembers for the whole story, though strictly speaking it was only the second half of it.
[00:08:40] The mechanism was the same, make fake pounds, but the purpose for doing so was very different.
[00:08:49] By 1942, the world had changed. Germany had lost the Battle of Britain, and the British controlled the airspace over their own island.
[00:09:02] And even if the Germans could somehow drop millions of pounds down on England, the government would know within hours, announce it on the radio, and within days every high-value note in the country would be called in and checked, one serial number at a time.
[00:09:20] And Germany, strangely enough, needed British pounds for herself. The SS had an extensive spy network across Europe, buying information and weapons, and given that the German currency was largely worthless internationally and tightly restricted, it tended to pay overseas spies and informants in foreign currency: pounds and dollars. So the new purpose of the operation was to print money that Germany could spend.
[00:09:54] Krüger also had a different idea about who should do the printing.
[00:10:01] His predecessors had used German technicians. Krüger went looking somewhere else. He toured the concentration camps, and he asked for lists.
[00:10:13] He wanted printers, engravers, typesetters, paper makers, bankers, anyone who had worked with money or with printing presses.
[00:10:24] On Himmler’s orders, they were all to be Jewish prisoners. They could be kept completely isolated, and the SS intended to kill them once they were no longer useful, leaving nobody alive to reveal the operation.
[00:10:41] In September 1942, the first twenty-six of them arrived at Sachsenhausen concentration camp, just north of Berlin. Over the following months, more arrived, and by the end there were around a hundred and forty men working in the operation.
[00:11:01] They were put in two barracks, Block 18 and Block 19, at the edge of the camp. Around these two blocks, the SS built a second fence, with barbed wire and its own guards. Nobody else in the camp was to be allowed in.
[00:11:20] And inside that fence, the prisoners found something they had not expected.
[00:11:26] They found decent food. More of it than anyone else in the camp got, at any rate. They found cigarettes and newspapers. They found a radio. There was a ping-pong table, and the prisoners sometimes played against the guards. The men were not beaten. Krüger addressed them as "Sie", the polite, formal form of "you" in German, rather than the "du" that guards would usually use to talk to prisoners. He arranged for musicians to visit. There were even amateur theatre performances.
[00:12:01] To a man who had come from Auschwitz, it must have felt like another planet.
[00:12:07] They must surely have known what it meant. They were being kept alive and treated well because they were useful. The moment they stopped being useful or the moment the operation ended, well, they probably knew what fate awaited them.
[00:12:24] So, what did the work actually look like?
[00:12:28] Well, by late 1942, the three principal problems with counterfeiting the pound, the manufacturing of paper, the copying of Britannia, and the numbering, they had all largely been cracked.
[00:12:42] Now, the real work could start.
[00:12:46] The paper came in from a German mill called Hahnemühle in big sheets, four notes to a sheet. The prisoners printed them on six presses, checked every one against a real note under a magnifying glass, added the serial numbers and the cashier's signature, and cut them up.
[00:13:06] But a freshly printed banknote was just the start; it wasn't "real money". A brand-new note is suspicious. Real money has been in wallets and pockets and been dropped in puddles.
[00:13:21] So, forty or fifty prisoners spent their days doing nothing but making new notes look old. They folded them and unfolded them.
[00:13:33] They rubbed dirt into them. They passed them from hand to hand until they were soft with sweat. Some were pinned together in bundles, the way British bank clerks did, and then unpinned, leaving the right little holes in the right place.
[00:13:49] Then every note was inspected, and sorted into grades.
[00:13:56] The best ones, the ones no expert could fault, were set aside for paying spies and for buying things in neutral countries, where the notes would be examined closely.
[00:14:08] The second grade went to collaborators and agents in occupied countries.
[00:14:14] A third grade had small flaws, and was kept in case anyone ever did want to drop money out of aeroplanes. And the worst were destroyed.
[00:14:25] At its peak, in 1943 and 1944, the workshop was producing several hundred thousand notes a month, on six printing presses.
[00:14:37] In total, the prisoners printed just under nine million banknotes, with a face value of more than 130 million pounds.
[00:14:49] To give you some idea of what that meant, the total value of Bank of England notes in circulation at the time was around a billion pounds. So a hundred and thirty million pounds was more than a tenth of all the paper money in Britain, produced by a hundred and forty men in two wooden huts.
[00:15:12] Now, printing money is one thing. Spending it is another.
[00:15:18] The man in charge of that was a businessman, smuggler and currency dealer working for the SS called Friedrich Schwend. His operation was somewhat strange. He ran it from a castle in northern Italy.
[00:15:34] From there, he sent couriers out across Europe with suitcases of fake pounds, into Switzerland, Spain, Portugal, Sweden and Turkey, anywhere the notes could be exchanged for real money, or gold, or goods.
[00:15:51] This was, it turned out, pretty good business for Schwend, who took a cut of every transaction and, most likely, helped himself to more on the side. He bought weapons from partisans in Yugoslavia, who had captured them from the Allies, and sold them on. He bought luxuries for himself. He was, essentially, a man running a money-laundering business from a beautiful castle, except that the money he was laundering had been printed by prisoners in concentration camps.
[00:16:22] And some of the notes went to fund the most famous German spy of the war.
[00:16:29] In Ankara, the capital of neutral Turkey, the British ambassador had a valet, a personal servant, called Elyesa Bazna. In 1943, Bazna began photographing the secret documents that the ambassador kept in his safe, and selling the photographs to the Germans.
[00:16:51] The Germans gave him the codename of Cicero, and paid him around three hundred thousand pounds for his work, an enormous sum, enough to buy several large houses in London.
[00:17:04] Most of what he was paid with was fake.
[00:17:08] Bazna only discovered this after the war, when he tried to use his fortune to build a hotel, and the money was examined. He spent years afterwards writing letters to the West German government, asking to be compensated. He never was.
[00:17:25] Now, you might be wondering what the Bank of England was doing while all this was going on.
[00:17:32] Well, it knew something was coming. As early as November 1939, the British had intelligence that the Germans were planning to forge the pound, and the Bank was told.
[00:17:45] Its response, more or less, was that its notes were too good to copy.
[00:17:51] But in 1943, a forged note came in. It had been handed in at a British bank in Morocco, and it made its way to London, where a clerk opened his ledger to mark the serial number as paid.
[00:18:07] The number was already marked as paid.
[00:18:11] The Bank had a look at the note, and realised that its diagnosis that the notes were too hard to copy might have been a little arrogant. This was no crude forgery; it was, in the Bank's opinion, the most impressive forgery they had ever come across.
[00:18:28] The only reliable way to tell it apart was the watermark, and even that took an expert.
[00:18:36] And as for the question of how much fake currency there actually was, some retellings of this story say that by the end of the war, one in three pound notes in circulation was a German fake. There doesn't seem to be any real evidence for this. The Bank's own records show that in the whole of the war, it identified around 33,000 forged notes, most of which were German.
[00:19:05] Its estimate of how many were actually out in the world was higher, somewhere between fifteen and twenty million pounds' worth, so almost a billion pounds in today's money. It's a lot, of course, but nowhere near one in three.
[00:19:21] Now, when the British realised what the Germans had planned, they did something drastic.
[00:19:29] In April 1943, the Chancellor of the Exchequer, the British finance minister, announced that the Bank would stop issuing any note above five pounds.
[00:19:41] The ten, the twenty and the fifty: they were all withdrawn.
[00:19:46] And they stayed withdrawn for a very long time. Britain did not get a ten-pound note back until 1964. The twenty came back in 1970. The fifty-pound note did not return until 1981.
[00:20:01] The withdrawal hurt the Germans too. Nobody abroad wanted to touch a large British note any more, and the pound was becoming harder to spend. The dollar, on the other hand, was the currency everyone wanted.
[00:20:18] So, back in Sachsenhausen, the SS decided that if the prisoners could forge the pound, they could forge the dollar too.
[00:20:27] The order came in May 1944, and it was for hundred-dollar bills. This was harder still. American notes were printed in a different way, with raised ink, and the paper had tiny silk threads in it.
[00:20:46] And here the prisoners made a decision.
[00:20:49] They understood that the dollar project was the only thing keeping them alive; if they went too fast, or made it look too easy, they were expendable.
[00:21:00] So they worked slowly. They found problems that took weeks to solve.
[00:21:05] They produced samples that were almost right, but not quite. It was dangerous, because a prisoner suspected of sabotage would be shot.
[00:21:16] But it bought time.
[00:21:19] By February 1945, the first sheets of hundred-dollar bills were finally coming off the press.
[00:21:26] But by then, it no longer mattered. The tide had turned.
[00:21:32] The Russians were approaching, and were less than fifty miles from Berlin. In the last days of February, the order came to pack up.
[00:21:42] The presses, the plates, the paper and the prisoners were loaded up and sent south, first to Mauthausen concentration camp in Austria, then to a tunnel complex in the hills nearby, where Krüger hoped to start printing again.
[00:21:59] That never happened. Instead, the prisoners were ordered to destroy the money. They burned what they could. What they couldn't burn was loaded onto lorries, driven to the shore of a small, dark Austrian lake, and pushed into the water.
[00:22:18] And then there was the question of the prisoners themselves. This was Nazi Germany, so there was no pardon or thank you for your excellent work. The men were moved in three groups, to another concentration camp, called Ebensee, where they were to be executed.
[00:22:37] The order was specific. All the prisoners were to be killed together, so that nobody could be left alive to tell the story.
[00:22:48] The first two groups arrived. The third did not, because the lorry carrying it had broken down on the road.
[00:22:57] So the guards at Ebensee waited. And while they waited, the war was collapsing around them.
[00:23:07] After two days, the guards gave up, and they moved the first two groups into the main camp, spread among thousands of other prisoners.
[00:23:17] Then the third lorry finally arrived. Its guards asked where the others were, and were told they had already been released.
[00:23:27] So they released their prisoners too. And then the guards themselves ran, before the Allied soldiers could arrive.
[00:23:36] The next morning, the 6th of May 1945, American soldiers arrived at Ebensee, and liberated the prisoners.
[00:23:45] Amazingly enough, almost every man from Blocks 18 and 19 survived the war.
[00:23:53] Bernhard Krüger hid for a year and a half, and then handed himself in to the British in November 1946. He was never charged with anything. Forging an enemy's currency in wartime, it turned out, was not a war crime.
[00:24:10] When he faced a German court after the war, several of his former prisoners spoke up for him, and said he had saved their lives. He went to work for Hahnemühle, the company that had supplied his paper, and he died in 1989.
[00:24:28] As for the lake, it never quite let go of its secrets.
[00:24:33] After the Stern divers brought up their boxes in 1959, the rumours started. If there were banknotes down there, what else was there? Gold? Documents? Nazi treasure of some kind?
[00:24:50] In 1963, a nineteen-year-old German went diving in Lake Toplitz to find out. He never came back, and it took four weeks to recover his body. Afterwards the Austrian authorities banned diving in the lake for twenty years.
[00:25:08] In 2000, an American company brought a small submarine to the lake, with a television crew and one of the former forgers, then in his eighties, watching from the shore. They brought up more banknotes.
[00:25:23] After fifty-five years in the water, they were so soft that they had to be sent to specialists to be preserved, but the former prisoner, a man named Adolf Burger, looked at them and recognised his own work.
[00:25:38] There have been more expeditions since. They have found rockets, torpedo parts, what appeared to be the wreck of a seaplane, and a box of beer bottle caps that somebody dropped in as a joke.
[00:25:52] And, of course, more banknotes.
[00:25:55] Millions of pounds of them, printed to perfection by men who expected to die for it, sitting in the dark at the bottom of an Austrian lake, and worth exactly nothing.
[00:26:09] OK, then, that is it for today's episode on Operation Bernhard, and the Nazi plan to bankrupt Britain.
[00:26:17] I hope it's been an interesting one and that you've learnt something new.
[00:26:21] You've been listening to English Learning for Curious Minds by Leonardo English.
[00:26:26] I'm Alastair Budge, you stay safe, and I'll catch you in the next episode.
[00:00:04] Hello, hello, hello, and welcome to English Learning for Curious Minds, by Leonardo English, the show where you can listen to fascinating stories and learn weird and wonderful things about the world at the same time as improving your English.
[00:00:21] I'm Alastair Budge, and today we are going to be talking about Operation Bernhard, and the Nazi plan to bankrupt Britain.
[00:00:30] It is the story of a plan to destroy the British pound that turned into something else entirely: the biggest counterfeiting operation in history. It is the story of the men who were forced to run it, and of the strange fact that the better they did their job, the closer they came to being killed.
[00:00:51] OK then, let's not waste a minute and get right into it.
[00:00:58] In the mountains of central Austria, about an hour's drive east of Salzburg, there is a small lake called Lake Toplitz.
[00:01:09] It is not a particularly pretty lake, at least not in the way that most Austrian lakes are pretty. It is narrow and dark, squeezed between steep cliffs, and the water is almost black.
[00:01:24] It is also a very strange lake. It gets to just over 100 metres deep, but below about twenty metres, there is no oxygen in the water, so fish cannot survive down there.
[00:01:38] And halfway down, there is a layer of sunken tree trunks, floating in the dark, which makes diving through it dangerous, and in places impossible.
[00:01:49] But in the summer of 1959, a team of divers arrived at the lake. They had been sent by Stern, a German news magazine, and they were looking for something.
[00:02:05] From the bottom of the lake, they pulled up boxes. Wooden and metal boxes, sealed shut, and inside them, packed tightly together, were banknotes.
[00:02:18] Bank of England banknotes. Five pounds, ten pounds, twenty pounds, fifty pounds. Millions of pounds' worth, and despite having been kept underwater in this gloomy lake, many of them were still perfectly legible.
[00:02:36] There was just one problem with this treasure.
[00:02:40] Not a single note was real.
[00:02:44] So, today, we are going to find out where they came from. Who made these notes? How did they make them? What were they used for? And why did they end up at the bottom of a lake in Austria?
[00:03:00] Let's start at the beginning, which, for this story, is September 1939.
[00:03:07] Germany has just invaded Poland. Britain has declared war. World War II has started.
[00:03:16] Barely two weeks in, a man called Arthur Nebe put forward an idea.
[00:03:23] Nebe was then the head of the German criminal police, and his idea was simple. Germany should print vast quantities of fake British banknotes, load them into aircraft, and drop them all over Britain.
[00:03:42] The logic went like this. If the streets were suddenly full of money, people would pick it up. They would spend it. Shops would accept it. And when it became clear that nobody could tell the real notes from the fake ones, people would stop trusting paper money altogether. Prices would shoot up. The pound would collapse. And Britain would be beaten without a single German soldier ever setting foot on British soil.
[00:04:16] It was a neat idea in theory, but not everyone was convinced. Joseph Goebbels called it a grotesque plan, and the economics minister objected on the grounds that it broke international law.
[00:04:32] But Hitler said yes and ordered for the plan to be put in motion. It was given a name, Operation Andreas, and put in the hands of a man called Alfred Naujocks.
[00:04:47] Naujocks was an SS officer with a background in this kind of work, covert operations. A few weeks earlier, he had staged a fake Polish attack on a German radio station near the border, with SS men dressed in Polish uniforms, which Hitler then used as his excuse to invade. So faking things was right in his wheelhouse, it was something he was not unfamiliar with.
[00:05:18] Faking a British banknote, though, turned out to be a lot harder than faking an attack.
[00:05:26] To understand why, you need to picture what a British banknote looked like in 1939. It was very different from the colorful double-sided banknotes you find today. A five-pound note was a large sheet of white paper, printed in black ink on one side only. There was no picture of the King, no colour, no complicated pattern. Just words, a number, and in the top left corner, a picture of Britannia, the female figure who represents Britain, sitting with her shield and spear.
[00:06:06] It looked simple. And that was the trick, because every part of it was fiendishly difficult to copy.
[00:06:15] The Germans found three problems.
[00:06:18] The first was the paper. Bank of England notes were made from linen and cotton, with no wood pulp in them at all. They had a particular feel, a particular sound when you crinkled them, and under ultraviolet light they glowed in a particular way. The first German attempts glowed wrong, and any bank clerk in Britain would have spotted them instantly.
[00:06:47] The second problem was Britannia, the picture on the left-hand side. She was engraved in such fine detail that the German engravers, who were among the best in the world, spent seven months trying to copy her. And even when they were convinced their copy was perfect, some people said the eyes were still slightly wrong.
[00:07:12] The third problem was the numbers. Every note had a serial number and the printed signature of the Chief Cashier, and the Bank of England kept a record of every number it had ever issued. When a note came back to the Bank of England in London, a clerk looked it up in a huge leather-bound ledger, a kind of accounts book, and marked it as paid. So a forger couldn't simply invent numbers. They had to be numbers the Bank would recognise, and numbers that were not already marked as paid.
[00:07:50] The Germans worked away at this for about two years. They printed some notes, but the quality was patchy, and the man in charge of the operation, Naujocks, fell out with his superiors. By early 1942, Operation Andreas was quietly shut down.
[00:08:11] But later that year, in July 1942, the SS decided to try again. This time, the man in charge was an SS Major called Bernhard Krüger, and the operation was named after him: Operation Bernhard.
[00:08:32] It is the name that history remembers for the whole story, though strictly speaking it was only the second half of it.
[00:08:40] The mechanism was the same, make fake pounds, but the purpose for doing so was very different.
[00:08:49] By 1942, the world had changed. Germany had lost the Battle of Britain, and the British controlled the airspace over their own island.
[00:09:02] And even if the Germans could somehow drop millions of pounds down on England, the government would know within hours, announce it on the radio, and within days every high-value note in the country would be called in and checked, one serial number at a time.
[00:09:20] And Germany, strangely enough, needed British pounds for herself. The SS had an extensive spy network across Europe, buying information and weapons, and given that the German currency was largely worthless internationally and tightly restricted, it tended to pay overseas spies and informants in foreign currency: pounds and dollars. So the new purpose of the operation was to print money that Germany could spend.
[00:09:54] Krüger also had a different idea about who should do the printing.
[00:10:01] His predecessors had used German technicians. Krüger went looking somewhere else. He toured the concentration camps, and he asked for lists.
[00:10:13] He wanted printers, engravers, typesetters, paper makers, bankers, anyone who had worked with money or with printing presses.
[00:10:24] On Himmler’s orders, they were all to be Jewish prisoners. They could be kept completely isolated, and the SS intended to kill them once they were no longer useful, leaving nobody alive to reveal the operation.
[00:10:41] In September 1942, the first twenty-six of them arrived at Sachsenhausen concentration camp, just north of Berlin. Over the following months, more arrived, and by the end there were around a hundred and forty men working in the operation.
[00:11:01] They were put in two barracks, Block 18 and Block 19, at the edge of the camp. Around these two blocks, the SS built a second fence, with barbed wire and its own guards. Nobody else in the camp was to be allowed in.
[00:11:20] And inside that fence, the prisoners found something they had not expected.
[00:11:26] They found decent food. More of it than anyone else in the camp got, at any rate. They found cigarettes and newspapers. They found a radio. There was a ping-pong table, and the prisoners sometimes played against the guards. The men were not beaten. Krüger addressed them as "Sie", the polite, formal form of "you" in German, rather than the "du" that guards would usually use to talk to prisoners. He arranged for musicians to visit. There were even amateur theatre performances.
[00:12:01] To a man who had come from Auschwitz, it must have felt like another planet.
[00:12:07] They must surely have known what it meant. They were being kept alive and treated well because they were useful. The moment they stopped being useful or the moment the operation ended, well, they probably knew what fate awaited them.
[00:12:24] So, what did the work actually look like?
[00:12:28] Well, by late 1942, the three principal problems with counterfeiting the pound, the manufacturing of paper, the copying of Britannia, and the numbering, they had all largely been cracked.
[00:12:42] Now, the real work could start.
[00:12:46] The paper came in from a German mill called Hahnemühle in big sheets, four notes to a sheet. The prisoners printed them on six presses, checked every one against a real note under a magnifying glass, added the serial numbers and the cashier's signature, and cut them up.
[00:13:06] But a freshly printed banknote was just the start; it wasn't "real money". A brand-new note is suspicious. Real money has been in wallets and pockets and been dropped in puddles.
[00:13:21] So, forty or fifty prisoners spent their days doing nothing but making new notes look old. They folded them and unfolded them.
[00:13:33] They rubbed dirt into them. They passed them from hand to hand until they were soft with sweat. Some were pinned together in bundles, the way British bank clerks did, and then unpinned, leaving the right little holes in the right place.
[00:13:49] Then every note was inspected, and sorted into grades.
[00:13:56] The best ones, the ones no expert could fault, were set aside for paying spies and for buying things in neutral countries, where the notes would be examined closely.
[00:14:08] The second grade went to collaborators and agents in occupied countries.
[00:14:14] A third grade had small flaws, and was kept in case anyone ever did want to drop money out of aeroplanes. And the worst were destroyed.
[00:14:25] At its peak, in 1943 and 1944, the workshop was producing several hundred thousand notes a month, on six printing presses.
[00:14:37] In total, the prisoners printed just under nine million banknotes, with a face value of more than 130 million pounds.
[00:14:49] To give you some idea of what that meant, the total value of Bank of England notes in circulation at the time was around a billion pounds. So a hundred and thirty million pounds was more than a tenth of all the paper money in Britain, produced by a hundred and forty men in two wooden huts.
[00:15:12] Now, printing money is one thing. Spending it is another.
[00:15:18] The man in charge of that was a businessman, smuggler and currency dealer working for the SS called Friedrich Schwend. His operation was somewhat strange. He ran it from a castle in northern Italy.
[00:15:34] From there, he sent couriers out across Europe with suitcases of fake pounds, into Switzerland, Spain, Portugal, Sweden and Turkey, anywhere the notes could be exchanged for real money, or gold, or goods.
[00:15:51] This was, it turned out, pretty good business for Schwend, who took a cut of every transaction and, most likely, helped himself to more on the side. He bought weapons from partisans in Yugoslavia, who had captured them from the Allies, and sold them on. He bought luxuries for himself. He was, essentially, a man running a money-laundering business from a beautiful castle, except that the money he was laundering had been printed by prisoners in concentration camps.
[00:16:22] And some of the notes went to fund the most famous German spy of the war.
[00:16:29] In Ankara, the capital of neutral Turkey, the British ambassador had a valet, a personal servant, called Elyesa Bazna. In 1943, Bazna began photographing the secret documents that the ambassador kept in his safe, and selling the photographs to the Germans.
[00:16:51] The Germans gave him the codename of Cicero, and paid him around three hundred thousand pounds for his work, an enormous sum, enough to buy several large houses in London.
[00:17:04] Most of what he was paid with was fake.
[00:17:08] Bazna only discovered this after the war, when he tried to use his fortune to build a hotel, and the money was examined. He spent years afterwards writing letters to the West German government, asking to be compensated. He never was.
[00:17:25] Now, you might be wondering what the Bank of England was doing while all this was going on.
[00:17:32] Well, it knew something was coming. As early as November 1939, the British had intelligence that the Germans were planning to forge the pound, and the Bank was told.
[00:17:45] Its response, more or less, was that its notes were too good to copy.
[00:17:51] But in 1943, a forged note came in. It had been handed in at a British bank in Morocco, and it made its way to London, where a clerk opened his ledger to mark the serial number as paid.
[00:18:07] The number was already marked as paid.
[00:18:11] The Bank had a look at the note, and realised that its diagnosis that the notes were too hard to copy might have been a little arrogant. This was no crude forgery; it was, in the Bank's opinion, the most impressive forgery they had ever come across.
[00:18:28] The only reliable way to tell it apart was the watermark, and even that took an expert.
[00:18:36] And as for the question of how much fake currency there actually was, some retellings of this story say that by the end of the war, one in three pound notes in circulation was a German fake. There doesn't seem to be any real evidence for this. The Bank's own records show that in the whole of the war, it identified around 33,000 forged notes, most of which were German.
[00:19:05] Its estimate of how many were actually out in the world was higher, somewhere between fifteen and twenty million pounds' worth, so almost a billion pounds in today's money. It's a lot, of course, but nowhere near one in three.
[00:19:21] Now, when the British realised what the Germans had planned, they did something drastic.
[00:19:29] In April 1943, the Chancellor of the Exchequer, the British finance minister, announced that the Bank would stop issuing any note above five pounds.
[00:19:41] The ten, the twenty and the fifty: they were all withdrawn.
[00:19:46] And they stayed withdrawn for a very long time. Britain did not get a ten-pound note back until 1964. The twenty came back in 1970. The fifty-pound note did not return until 1981.
[00:20:01] The withdrawal hurt the Germans too. Nobody abroad wanted to touch a large British note any more, and the pound was becoming harder to spend. The dollar, on the other hand, was the currency everyone wanted.
[00:20:18] So, back in Sachsenhausen, the SS decided that if the prisoners could forge the pound, they could forge the dollar too.
[00:20:27] The order came in May 1944, and it was for hundred-dollar bills. This was harder still. American notes were printed in a different way, with raised ink, and the paper had tiny silk threads in it.
[00:20:46] And here the prisoners made a decision.
[00:20:49] They understood that the dollar project was the only thing keeping them alive; if they went too fast, or made it look too easy, they were expendable.
[00:21:00] So they worked slowly. They found problems that took weeks to solve.
[00:21:05] They produced samples that were almost right, but not quite. It was dangerous, because a prisoner suspected of sabotage would be shot.
[00:21:16] But it bought time.
[00:21:19] By February 1945, the first sheets of hundred-dollar bills were finally coming off the press.
[00:21:26] But by then, it no longer mattered. The tide had turned.
[00:21:32] The Russians were approaching, and were less than fifty miles from Berlin. In the last days of February, the order came to pack up.
[00:21:42] The presses, the plates, the paper and the prisoners were loaded up and sent south, first to Mauthausen concentration camp in Austria, then to a tunnel complex in the hills nearby, where Krüger hoped to start printing again.
[00:21:59] That never happened. Instead, the prisoners were ordered to destroy the money. They burned what they could. What they couldn't burn was loaded onto lorries, driven to the shore of a small, dark Austrian lake, and pushed into the water.
[00:22:18] And then there was the question of the prisoners themselves. This was Nazi Germany, so there was no pardon or thank you for your excellent work. The men were moved in three groups, to another concentration camp, called Ebensee, where they were to be executed.
[00:22:37] The order was specific. All the prisoners were to be killed together, so that nobody could be left alive to tell the story.
[00:22:48] The first two groups arrived. The third did not, because the lorry carrying it had broken down on the road.
[00:22:57] So the guards at Ebensee waited. And while they waited, the war was collapsing around them.
[00:23:07] After two days, the guards gave up, and they moved the first two groups into the main camp, spread among thousands of other prisoners.
[00:23:17] Then the third lorry finally arrived. Its guards asked where the others were, and were told they had already been released.
[00:23:27] So they released their prisoners too. And then the guards themselves ran, before the Allied soldiers could arrive.
[00:23:36] The next morning, the 6th of May 1945, American soldiers arrived at Ebensee, and liberated the prisoners.
[00:23:45] Amazingly enough, almost every man from Blocks 18 and 19 survived the war.
[00:23:53] Bernhard Krüger hid for a year and a half, and then handed himself in to the British in November 1946. He was never charged with anything. Forging an enemy's currency in wartime, it turned out, was not a war crime.
[00:24:10] When he faced a German court after the war, several of his former prisoners spoke up for him, and said he had saved their lives. He went to work for Hahnemühle, the company that had supplied his paper, and he died in 1989.
[00:24:28] As for the lake, it never quite let go of its secrets.
[00:24:33] After the Stern divers brought up their boxes in 1959, the rumours started. If there were banknotes down there, what else was there? Gold? Documents? Nazi treasure of some kind?
[00:24:50] In 1963, a nineteen-year-old German went diving in Lake Toplitz to find out. He never came back, and it took four weeks to recover his body. Afterwards the Austrian authorities banned diving in the lake for twenty years.
[00:25:08] In 2000, an American company brought a small submarine to the lake, with a television crew and one of the former forgers, then in his eighties, watching from the shore. They brought up more banknotes.
[00:25:23] After fifty-five years in the water, they were so soft that they had to be sent to specialists to be preserved, but the former prisoner, a man named Adolf Burger, looked at them and recognised his own work.
[00:25:38] There have been more expeditions since. They have found rockets, torpedo parts, what appeared to be the wreck of a seaplane, and a box of beer bottle caps that somebody dropped in as a joke.
[00:25:52] And, of course, more banknotes.
[00:25:55] Millions of pounds of them, printed to perfection by men who expected to die for it, sitting in the dark at the bottom of an Austrian lake, and worth exactly nothing.
[00:26:09] OK, then, that is it for today's episode on Operation Bernhard, and the Nazi plan to bankrupt Britain.
[00:26:17] I hope it's been an interesting one and that you've learnt something new.
[00:26:21] You've been listening to English Learning for Curious Minds by Leonardo English.
[00:26:26] I'm Alastair Budge, you stay safe, and I'll catch you in the next episode.
