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Tuesday 2 December 2008

Currency Wars: Forging Money to Break Economies

Sounding a false note

William Leith on John K. Cooley's new book

Probably the best known effort to use counterfeit money as a weapon was Hitler’s attempt to damage sterling in the war. Cooley tells this story well; if you’ve seen the recent movie The Counterfeiters, this account adds to the story rather nicely. The scheme was invented by an SS officer called Alfred Naujocks, a master of dirty tricks, who wanted the Luftwaffe to drop a billion fake pounds over the British Isles. He reckoned that, even if some people handed the notes they found to the authorities, plenty of others would spend them, causing food shortages and general mayhem.

The scheme never quite worked, partly because, after the Battle of Britain, the Luftwaffe lost control of the skies over the channel, and couldn’t spare the planes. Later, famously, the Nazis recruited Jewish printers from concentration camps, who made fake money, and then sabotaged their own efforts, in a special section of the Sachsenhausen camp. The scheme was halted in 1945 as the Allies approached.

In the end, Cooley says, counterfeiting is not as good a weapon as one might imagine. ‘Indeed,’ he says, ‘a majority of the players of false currency games have lost their wars.’ Why? There must, I think, be at least three reasons why this appears to be true. First, it is close to impossible, by stealth, to inject enough fake paper money into an economy to ruin it. Second, if you are faking your enemy’s currency, the chances are that he is faking yours. And third, the idea that counterfeiting is not a good weapon can only be a supposition — for obvious reasons, war crimes, including forgery, are always more visible on the losing side. You never really get to know what the winners did. But even if this is an impossibly murky area, full of difficult detail, it is still an impressive piece of research. I shall look out for Cooley’s other books.

In Peregrine Worsthorne’s review of Stephen Robinson’s biography of Bill Deedes last week, the reviewer asserted on his own initiative that Max Hastings was sacked as editor of the Daily Telegraph. In reality, Hastings left the Telegraph by his own choice in October 1995, without compensation, to become editor of the Evening Standard. We regret suggesting otherwise.

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