From: mpcgram-owner@papermoneyworld.net on behalf of MPCgram [mpcgram@yahoo.com] Sent: Monday, August 28, 2006 9:46 AM To: mpcgram@papermoneyworld.net Subject: MPCGram 1498 ------------------------ / MPC Gram News Letter / ----------------------- =========================================== MPC GRAM =========================================== Vol 7, no 1498 Monday August 28, 2006 WWII OSS Counterfeiting by Jim Downey As early as June 1942, the OSS was developing plans for counterfeiting currency of the Axis and Axis-occupied countries. A June 13, 1943 memo to Hugh Wilson and Allen Dulles from Murray I. Gurfein outlined a plan to establish a secret printing operation in an “isolated district” for the purpose of counterfeiting documents and currency for use by OSS directed operatives in Axis-controlled areas. (Ironically, Gurfein who began his government career in the OSS, later served as a federal judge and issued the District Court decision in the Pentagon Papers case that permitted the New York Times to print classified documents leaked to it concerning the Vietnam War.) The production and use of counterfeit currency to cause economic disruption was only a secondary thought at this time. The primary purpose of the currency was to provide financial support to US operatives. The memo discusses places where the OSS could obtain examples of foreign currency including Axis-controlled banks in the United States such as the New York branch of the Banco di Napoli and through US agents in neutral countries. A proposal to fund the Yugoslav partisan leader General Mikhailovitch by this means is discussed in the memo. Discussions on counterfeiting German and Italian currency continued into 1943. The success of the invasion of Italy in 1943 and the subsequent issue of the allied military lire mad the counterfeiting of Italian notes unnecessary. It was also suggested that the Italian economy was already too unstable for disruption by counterfeiting. The Allies were concerned that the Italian economy would have enough trouble recovering from the natural effects of the war that it did not need further disruption. Counterfeiting German currency was also rejected by the US. A plan to counterfeit German currency for economic disruption was turned down by the United States Treasury Department. Post-war inflation and its effect on reconstruction formed the basis of the Treasury’s rejection of the plan. Despite its rejection, the analysis of the OSS plan for counterfeiting and distributing German currency bears review here. A June 27, 1944 memo entitled “General Plan for Morale Operations Against Germans as Holders of Cash” contains a discussion of the plan. The estimated time for production of the notes is six months – three months to develop the plates and three more months for printing. It notes that dropping money by air is the only feasible method of delivering the currency. The memo further discussed the amount of currency necessary to disrupt the economy and the ability to deliver it. At the end of 1943 they estimated there was RM 36.5 billion in circulation and deposits of RM 151.8 billion. Based on the size and weight of the notes (it was estimated that 800,000 notes weighed 2,000 pounds and would occupy 14 cubic feet) 1,000 bomber loads carrying 2.5 tons of currency each could deliver RM 100 billion. The OSS analysis (as opposed to the Treasury analysis of inflationary fears) was that the main drawback to the plan was the fear of retaliation “currency bombing” by the Germans of England. It notes that while this is technically possible, the probability of the Germans risking their bombers for this purpose made it unlikely in the eyes of the OSS. Even the threat of German retaliation was dismissed by the OSS as they lobbied to engage in any activity that could shorten the war. The memo also notes that the Germans believed the Allies were already capable of engaging in “counterfeit warfare” to the extent that the Germans threatened specific reprisals against Allied airmen who engaged in currency bombing. (This is ironic considering the fact that Operation Bernhard had been active for almost two full years by this point.) Despite the rejection by the Treasury Department of the counterfeiting plan, the OSS continued scheming for ways to disrupt the German economy and demoralize the German populace through economic propaganda. This scheme is outlined in the June 27, 1944 memo identified above. The plan consisted of five elements: (1) rumors, (2) black radio, (3) false leaflets, (4) U.S. food certificates, and (5) U.S. postage stamps and coins. Item (5) was discussed in a previous column. The other elements of the plan will be discussed in future installments. ***************************************************** Championship Question Corner Question: Where was the first Nazi contration camp? Question 155, difficulty 2. Yesterday's Question: Where was the SS contration camp in Italy? Question 154, difficulty 3. Comments from the field: Bill Myers wrote: Bozen. ========================================== Editorial ========================================== We are about to hit the road for the last day of our two-week ANA journey. As always, it has been a very good trip, but I am looking forward to getting home. I am sure that the mail will have some treasures--and bombs. ========================================= Mail Call =========================================== Dear Gram, I needed to get a value for my stereo microscope for the movers, and could not find it on the Nikon site - way too old. So I checked eBay. There are TWO of them (search on Nikon SMZ-2) currently selling for under $500 (one is under $200). That is a steal - if one or two of you have been needing a scope, jump on these. These auctions close on Sunday and Tuesday. (I have my scope insured for $1400.) Joe Dear Joe, Thanks for the tip. I really goofed it up. First I chuckled at your naive approach because I am so wise that I knew that these would go much higer in the last minute of the auction. I also wanted to dress up your tip with the auction numbers to make it easier to use. Well, shame on me. The first one SOLD for less than $300. Now that I run your letter the under $500 price on the other does not seem like such a bargain, but rather than compound the problem, here it is. Thanks and sorry. Editor ========================================== Calendar =========================================== 2006 The London Paper Money Fair has moved to: Victory Services Club, 63 Seymour Street, off Edgware Road, Marble Arch London and the dates are: Nov 26. see: www.britishnotes.co.uk or www.londonpapermoneyfair.co.uk 16-20 August ANA convention, Denver (mini Fest at IBNS meeting?) September 14th-16th, Long Beach, mini fest to be annuonced The World Paper Money Fair, organised by the London chapter of the IBNS will be September 30/October 1 at the new venue: Hotel Russell, Russell Square, Bloomsbury, London.  see: www.ibnslondon.org.uk Oct/Nov Pcda St Louis 2007 MPCFest: TBA Memphis 21-23 June. ANA Summer semnar Session I: June 24-29, 2007* Session II: June 30-July 6, 2007 ANA Convention, Milwaukee. ========================================== for dealer Hot Contact list, ANA MPC museum holdings and other static information please click this link: http://www.papermoneyworld.net/Gramattichments.htm ========================================= POST / BASE EXCHANGE(PX/BX/NEX) Dump your dupes! Your classified advertisement for items for sale, purchase or trade will be run here for free. Send your ads to the gram. This service is for everyone, most humble dealer or most advanced collector. The point is to make the gram more interesting. In all cases confirm your order via email first. WANTED SECTION: Collectors may submit lists of items wanted for their collections for listing here. Dealers and collectors who have these items, are then encouraged to list them for sale in the above section as a reply. Wanted listings will run for a period of 1 month. ============================================= MPC Gram Staff: Publisher, editor: Fred Schwan fred@papermoneyworld.net; Subscription Manager:Doug Bell- doug@papermoneyworld.net Tuesday Columnist : JoeBoling- JoeBoling@aol.com Friday Columnist: Warner Talso: wtalso@aol.com Fest Auctioneer: Larry "Ski"Smulczenski - skitex@cox.net, Critic:Harold Kroll - HARBONS@aol.com Scholarship Coordinator: Marcus Turner- marucs@papermoneyworld.net; Webmaster and Technical Advisors:Doug Bell "Wiz" - doug@papermoneyworld.net Russ Walsh - russ.walsh@gte.net Fact Checker: Warner Talso -Calendar Coordinator: John and Nancy Wilson -The Boss: Judy Schwan MPC Gram is published by BNR Press and papermoneyworld.com as a free service to the community of military money collectors. Your suggestions, criticisms, complaints, editorial contributions, letters, and even praise are very welcome. 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