Following Heydrich’s assassination and the appointment of Ernst
Kaltenbrunner as his successor, the project became reconstituted
in 1942 as Operation bernhard. Because of Germany’s worsening
military situation, the counterfeit money, originally intended merely
for general circulation, would be used to make critical purchases in
neutral countries and to finance foreign intelligence operations, such
as the Cicero Affair. Production fell to the forgery unit (now VI F
4), headed by Najocks’s highly competent former assistant Bern-
hard Krüger, from whom the operation derived its new code name.
Krüger received not only expanded workspace at Sachsenhausen,
the concentration camp just north of Berlin, but also an additional
supply of skilled workers drawn from the ranks of the inmates, as
government ministries and banks had refused any cooperation in
this endeavor. With a staff of some 140 workers, the production unit
soon reached an output of 400,000 bills a month. In the interest of
economic stability, military authorities opposed the distribution of
the currency in Nazi-occupied countries, but intelligence operations
faced a critical shortage of foreign currencies and therefore relied
heavily on these counterfeit bills throughout Europe, especially in
Italy and Yugoslavia.
At the suggestion of Heinrich Himmler, designs for caricatured
British postage stamps—presumably to indicate smoldering domestic
and colonial discontent—were also produced, but Schellenberg had
little enthusiasm for the idea and delayed any further action. More
serious was Kaltenbrunner’s order to start production of U.S. cur-
rency, even though Krüger thought the move came too late to have
a significant impact. Nevertheless, the difficult duplication process
commenced in fall 1944, and the first specimens, while not of the
same high quality as the British notes, appeared early the following
year.
By that time, however, Sachsenhausen appeared increasingly
vulnerable to air raids and ground attacks. Rather than terminate the
operation, as Himmler originally proposed, Krüger recommended a
transfer of the staff and equipment to Austria, and both Himmler and
Hitler concurred. Hardly had printing resumed the following April at
the new facilities in Redl-Zipf than Himmler ordered the immediate
destruction of everything connected to the operation, including all
records, plates, supplies, and prisoner personnel. Delegating this task34 • BERNHARD