Funny Money — The Amazing History of Wartime Counterfeiting

Forged currency has been a weapon in warfare for more than 250 years. (Image source: www.pegasusarchive.org)

“For more than 200 years, counterfeiting has been a part of the wartime strategies of a number of countries.” 

DURING THE 1990s, U.S. national security experts began tracking a new and rather unusual threat.

Some individual or group was purposely  flooding the world’s economy with millions of phoney American $100 bills. The facsimiles, dubbed ‘superdollars’ because of their superior production quality, were printed with the highest quality inks on near perfect reproductions of the cotton/linen paper blend used in the manufacture of American greenbacks. They were even run on an intaglio press, just like the U.S. Mint’s own equipment. Even security features, like the embedded red and blue fibres and watermarks, were faithfully reproduced. The bills were virtually perfect.

Over the next 15 years, at least 19 superdollar variants were identified, with each new version improving on the design of the last. In one year alone, an estimated $25 million worth of the phoney notes were released annually into the global economy. Eventually, as many as one in every 10,000 American $100 bills was a superdollar. Investigators speculated that Russian or Chinese crime syndicates were responsible for the bogus currency. Others blamed North Korea.

Some with the intelligence community theorized that cash-strapped Pyongyang first hatched the scheme following the break-up of the Soviet Union in 1992. It did so with two possible objectives: to financially weaken the U.S. and to provide hard currency needed to shore up North Korea’s anemic economy. Washington even identified a suspected trafficker of the bogus bills. In 2005, British police arrested a 71-year-old former IRA activist named Sean Garland for allegedly collecting and distributing the superdollars from the North Korean embassy in Moscow. American officials fought unsuccessfully in 2011 to have Garland extradited to the U.S. to face charges for his suspected role in the scheme.

If North Korea really was behind the superdollars, it certainly wouldn’t be the first time a world power has used forged currency to damage an opponent. In fact, for more than 200 years, counterfeiting has been a part of the wartime strategies of a number of countries. According to one source, during the Seven Years War both the Austrian and Russian armies dispersed bogus Polish money while on campaign as a means to further weaken the enemy. It was a strategy revived by Napoleon when he wanted to undermine the economies of Austria, Russia and Great Britain.

Here are some other examples:

British troops tried to break the rebellion in the 13 Colonies on the battlefield, while spies sought to cripple the burgeoning American economy. (Image source: WikiCommons)

The King’s Shovers

When the British were looking for ways to hobble the fledgling American economy during the War of Independence, they turned to two Tory agents in America for help: David Farnsworth and John Blair. The pair travelled the 13 colonies dispersing wads of imitation Continental dollars into circulation.

Colonial currency, like this bill from New Jersey, wouldn’t have been too difficult to forge. (image source: WikiCommons)

At the time, the practice was called “shoving.” The British hoped that the forgeries would undermine colonists’ faith in the rebel currency thus disrupting Congress’ ability to fund the war and possibly even bring about a complete collapse of the American economy. Farnsworth and Blair were arrested by rebel agents with more than $10,000 of bogus bank notes in their possession. George Washington ordered them hanged.

Meet the Yankee who got rich printing his own Confederate money during the Civil War. (Image source: WikiCommons)

Sam’s Southern Dollars

Samuel Upham made a fortune printing thousands of replica Confederate $5 bills during the American Civil War. But the Philadelphia-based writer and entrepreneur, known as “Honest Sam,” wasn’t a crook, nor was he trying to defeat the secessionists – his funny money was sold as a novelty. In fact, souvenir hunters and collectors could pick up his fake rebel fivers for one cent a piece. Upham was so proud of his forgeries, which were of far better quality than actual Confederate bills, he printed his name and address on them. Upham even advertised the dollars as “mementos of the rebellion” in Harper’s Weekly and The New York Tribune.

A sample of one of Samuel Upham’s novelty Confederate dollars.

Ironically, some of his biggest customers were Southerners who secretly bought up whole sheets of the novelty scrip for use in transactions below the Mason Dixon Line. Soon Upham’s bills became ubiquitous throughout the Confederacy causing, according to one Southern senator, more damage to the rebellion than the entire Union army. [1] The Confederates even put a $10,000 bounty on Upham and threatened to hang all counterfeiters it caught. Amazingly, it was officials in Washington that finally forced Upham to cease and desist selling his bogus banknotes. The White House feared that if the rebels suspected that the forged currency was part of some grand Yankee strategy, the South might retaliate in kind, which would do harm to the national economy. Federal investigators even pondered charging Upham with a crime, but since Washington never recognized the government in Richmond, he hadn’t broken any law. Upham ended up printing stationery instead.

The Nazis used concentration camp inmates to print a king’s ransom in British currency during World War Two. (Image source: WikiCommons)

Operation Bernhard

When it became clear to the Nazis that they weren’t going to break Britain on the battlefield, Berlin decided to try to destroy England’s economy instead with counterfeit currency. In 1942, a SS major named Bernhard Kruger conscripted 142 concentration camp inmates to forge £5, £10, £ 20 and £50 notes. It was hoped that the bills would shake the world’s confidence in the British treasury. From the start of the project, dubbed Operation Bernhard, to its conclusion April 1945, nearly 9 million bills were printed totalling more than £134 million.

A fake British £5 note forged by concentration camp inmates. (Image source: WikiCommons)

The plan at first was to scatter the fake money over British cities using Luftwaffe bombers. Instead, the funds were passed through agents at international branches of British banks. Even German spies working abroad were paid using the phoney money. In 1945, plans were underway to expand the operation to include American $100 bills, but with the war coming to end, the scheme was suspended. As Allied troops began liberating concentration camps, Nazi officials ordered Bernhard’s forgers to be trucked to a more secure camp and then killed. Fortunately, the camp was liberated before the death sentences could be carried out. The Nazi bills continued to be circulated in the U.K. for years after the war. Large stockpiles stashed by concentration camp inmates even helped finance the migration of Jews to Palestine. Operation Bernhard was the subject of the 2007 Austrian film The Counterfeiters.

Coalition forces in the 1991 Persian Gulf War wanted to make it easy for Iraqi troops to surrender en masse. To help, they scattered leaflets encouraging soldiers to give up that were disguised as Iraqi money.

Surrender Bucks

The United States and its Allies famously used counterfeit Iraqi money during the 1991 Gulf War, not to undermine Saddam’s economy, but to break the fighting spirit of his soldiers. Millions of propaganda leaflets printed in Arabic on the backs of replica Iraqi dinars were dropped by American planes throughout the region prior to and during the liberation of Kuwait. “Saddam lives in luxury while you and your family starve,” read one such note.

A ‘safe conduct’ leaflet from the 1991 Gulf War. The other side of this slip resembled an Iraqi bill.

Others included ‘safe conduct’ passes that described the steps an Iraqi soldier should follow to safely surrender to Coalition personnel, as well as details on the food, water and medicine that waited for them if they called it quits. American planners opted to disguise the leaflets as money because loose bills on the ground are more likely to attract attention and be picked up. Furthermore, safe conduct passes disguised as money could be more easily hidden in a soldier’s wallet.

In this footage, Iraqi soldiers can be seen waving the bills as they surrendered.

(ORIGINALLY PUBLISHED on APRIL, 15, 2013)

1 comment for “Funny Money — The Amazing History of Wartime Counterfeiting

  1. Boris
    8 August, 2014 at 1:29 am

    Nice article. I would be very happy if you could write something about the economic situation before and after the rise of Hitler. It always surprises me how he drove out the Germans out of the 1930’s Economic Crisis and boosted the military industry.
    Thank you very much, Boris from Slovak Republic 😀

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