existing banknotes, in response to a fraud perpetrated by
Alves dos Reis. Similarly, in 1929 the issue of postage stamps celebrating
the Millennium of Iceland's parliament, the Althing, was compromised
by the insertion of "1" on the print order, before the authorised
value of stamps to be produced (see Postage stamps and postal history
of Iceland.)
In 1926 a high-profile counterfeit scandal came to light in Hungary,
when several people were arrested in the Netherlands while attempting
to procure 10 million francs worth of fake French 1000-franc bills which
had been produced in Hungary; after 3 years, the state-sponsored industrial
scale counterfeit operation had finally collapsed. The League of Nations'
investigation found Hungary's motives were to avenge its post-WWI territorial
losses (blamed on Georges Clemenceau) and to use profits from the counterfeiting
business to boost a militarist, border-revisionist ideology. Germany
and Austria had an active role in the conspiracy, which required special
machinery. The quality of fake bills was still substandard however, due
to France's use of exotic raw paper material imported from its colonies.
During World War II, the Nazis attempted to do a similar thing to the
Allies with Operation Bernhard. The Nazis took Jewish artists in the
Sachsenhausen concentration camp and forced them to forge British pounds
and American dollars. The quality of the counterfeiting was very good,
and it was almost impossible to distinguish between the real and fake
bills. The Germans could not put their plan into action, and were forced
to dump the counterfeit bills into a lake. The bills were not recovered
until the 1950s.