Free Krueger's Men by Lawrence Malkin Page A

re-election platform. It would have been characteristic of Roosevelt to utter some sort of emollient remark like this in lieu of thanks, although whether Steinbeck would have remembered it with precision is another matter. Roosevelt’s remark nevertheless passed into the record through a
Collier’s
magazine article Steinbeck wrote twelve years later, where he recycled the idea for use against the Soviet Union — whose leaders hardly believed in money at all! — and wondered why the United States would not dare try it out. (He was wrong. In 1950, the newly organized Central Intelligence Agency had the idea on its secret list of things to think about for the next war.)
    While all this was going on, public alarm was sounded about the threat of counterfeit American currency. The U.S. Secret Service, breaking with the tradition embedded in its name, intensified its nationwide “Know Your Money” campaign to inform the public how to recognize fake bills. Anticounterfeiting educational films were prepared in 1940, and when America entered the war the Treasury Department staged exhibits of counterfeit bills, starting in New York’s Rockefeller Center and moving across the country. These inspired an article in
Life
magazine giving the Treasury view that “sometime soon Germany and Japan may try to panic this country by passing out great quantities of counterfeit money.” A front-page article in the
New York Times
of January 25, 1940, reported the Secret Service’s suspicions that the Nazis were counterfeiting dollars and circulating them in Italy, Egypt, and the Balkans. This sent the German chargé d’affaires, Hans Thomsen, to the State Department the very next day to object that his government was doing no such thing. Because the United States and Germany were not yet at war, diplomats tried to mollify Thomsen.
    Officials clipped the newspapers for stories on counterfeits and paid particular attention to a report by the Turkish ambassador that counterfeit dollars were being used by the Nazis to buy oil in Romania. This report, almost certainly false, was spread throughout the State Department. Although counterfeit dollars were reported in wide circulation throughout Europe, it was assumed by American officials that they probably did not originate as wartime weapons, but through an underground network of what a
New York Times
reporter called “black bourses.” These usually unscrupulous money changers had been feeding for some years on refugees, exiles, and others hunted by the totalitarian regimes of the era. The fleeing buyers had little recourse after they discovered they had been stung, and likewise every incentive to pass on what was in effect hot money.
    At almost the same time, early in April 1940, Herschel Johnson’s London memorandum about a real plot to counterfeit British pounds was passed to the U.S. Treasury and virtually ignored. Johnson, a career diplomat from an old Southern political family, was so highly regarded by the British that he was remembered into the twenty-first century by the Churchill biographer and British statesman Roy Jenkins. Nevertheless, the American embassy was told curtly by State Department officials that they were “cognizant of such stories as have appeared in the press, but have been unable to substantiate them” — because no one had tried to pass counterfeit pounds in Washington! Among those initialing that inane memo was the State Department’s senior economic official, Adolf A. Berle, who had joined the New Deal in 1933 from Columbia University as one of the professors in what became known as Roosevelt’s idea-spinning brain trust.
    Then, over New Year’s of 1941, came a sign that some sort of forgery operation really was happening in Germany. As many as two dozen members of a gang were arrested in neutral Turkey for passing counterfeits in denominations of one, five, and ten pounds. The gang included a Chilean diplomat and a number of attractive women with false