Krueger's Men by Lawrence Malkin Read Free Book Online

most unlikely to skim the money or question the orders of their commander.
    Chapter 3
    W HITEHALL AND THE O LD L ADY
    I n the most celebrated of all wartime memoirs, there is no mention of a Nazi counterfeiting plot, perhaps because it does sound rather like a child’s game in the midst of a battle to the death. Less than a week after the Wilhelmstrasse meeting approved the Nazi plan, and certainly without any knowledge of it at that moment, Britain’s First Lord of the Admiralty wrote a confidential letter on stationery adorned with the traditional anchor and crown. The First Lord was the civilian politician responsible for the Royal Navy and maintained his office and private apartments in Admiralty Arch. This grand piece of imperial architecture abuts Whitehall and bridges the Mall linking Buckingham Palace with Trafalgar Square, which memorializes the Navy’s greatest victory over an earlier European dictator. The letter was carried a few hundred yards down Whitehall to the office of Sir John Simon, the chancellor of the exchequer in the cabinet of Prime Minister Neville Chamberlain.
    Private 24 September [1939]
    My dear John,
    I hear from many quarters a plan for scattering forged notes of marks in bundles or tempting little packets in Germany from our aeroplanes, like Pitt spread his assignats. I cannot fully think out the consequences of this but I should think it would be just as good as leaflets. I should very much like to know how it strikes you.
    Yours sincerely, Winston S. Churchill
The Right Honourable Sir John Simon G.C.S.I., G.C.V.O., O.B.E., K.C., M.P.
    Churchill, whose curiosity and inventiveness were rarely equaled by politicians of the twentieth or any other century, had just returned to the government in the beloved office he held during the World War of 1914–18. Simon quickly passed Churchill’s letter to David Waley, principal assistant secretary in the British Treasury, after scrawling a request on it:
“Mr. Waley for obsvns, pl. JS 28/ 9.”
Waley, who ranked near the top of the civil service meritocracy that formed Britain’s highly efficient permanent government, was the same man who two months later would receive the secret memo from Athens detailing Germany’s counterfeiting plot.
    Those who recall the daily challenges of financing the war during that critical period still cherish the close comradeship of those arduous days. They mastered the intense intellectual challenge with the help of their unpaid adviser, John Maynard Keynes, or Maynard as he was known to all, a tall, elegant conversationalist and polemicist equally familiar in the banks of the City of London and the world of British ballet. This attention to wartime finance should come as no surprise in the country that literally invented the study of political economy. Before Keynes revolutionized economic thought about tradeoffs, it was a series of indisputable propositions: the Iron Law of Wages, Say’s Law that supply creates its own demand, the Law of Comparative Advantage, and so on. They were like medieval notions of a static universe before Newton’s discovery of the laws of motion.
    The Treasury was led mainly by first-class scholars who knew and understood this intellectual history. Many had begun their careers as tax officials, which meant they had a feel for the attitude of the public toward the demands of the state. This practical experience was good training for the administration of the sacrifices demanded for the nation’s survival, and they felt themselves to be, above all, practical men. But, as Keynes wrote at the conclusion of his masterpiece,
The General Theory of Employment, Interest and Money,
“practical men, who regard themselves as quite exempt from intellectual influences, are usually the slaves of some defunct economist.” He converted them by applying his talent for argument and administration to countering the terrible forces of depression and war.
    David Waley, born Sigismund David Schloss, was a