When Hungary tried to bankrupt France

It was an attempt to avenge the peace treaty of Trianon giving 2/3rd of the former Kingdom of Hungary to neighbouring countries together with more than 3 million Hungarian nationals. It resulted in an international scandal, and even the PM and the former PM got involved in it destroying Hungary’s hard-won and still weak international reputation.

It all started on 19 December 1925 when the Hungarian News Agency (MTI) reported from the Hague that a Hungarian colonel, named Arisztid Jankovich, was taken into custody for having 10 million of forged French franc. With the help of the French secret service, further investigation revealed that there are many Hungarian nationals in many big cities of Europe obtaining billions of the forged francs and planning to inundate the market with them.

Since even the PM of Hungary, István Bethlen, fell under suspicion in the issue causing an international scandal those days

many details are unclear even today.

For sure, we know that it was prince Lajos Windischgrätz – grandson of the prince who attacked Hungary in 1848 with the Austrian army – who was behind the whole operation, but we do not know whether he or somebody else was the mastermind. Allegedly, the prince was experimenting with printing fake francs already in 1922 in his estate near Sárospatak, but he was not successful.

Therefore, he hired Arthur Schultze, a German expert, who already printed fake Deutsche marks in the Ruhr district after France invaded it. When major László Gerő joined the team, they

started to work in the Hungarian Institute of Cartography

where they produced where the Hungarian Ministry of Finance ordered the machines with which they could print fake francs.

Since the many security elements of the franc, it was tough to print convincing banknotes of the largest bill (1000). 

The original banknote.

Finally, they produced 30,000 banknotes of which 4,400 were of good, 9,000 were of medium and 16,000 of bad quality. Mr Jankovich was caught in the 0. phase of the whole operation in the Hague: his task was to give two bags of fake money to two local Hungarians, but before doing so he went into a currency exchange office and tried to change a fake franc.

The trial that followed the international scandal in Hungary was silent. Those who took part in the tragicomical “operation” were sentenced to 2 and 3 years in prison but, for example, prince

Lajos Windischgrärt “served” his punishment in the Park Hotel of Budapest.

This was because the Hungarian public opinion stood on the side of the criminals because it was a common belief (and otherwise true) that France was behind the partition of Hungary in the peace treaty of Trianon since Paris wanted a strong Romania, Czechoslovakia and Yugoslavia to form a mighty alliance behind the back of Germany.

Historians agree that PM István Bethlen had to know about the operation together with former PM Pál Teleki, but it will probably never come to light to what extent they were involved in the case. However, we know it for sure that even though France was an enemy of Hungary they (together with Great-Britain) did not want the Bethlen-government to resign because the alternative would have been the extreme right sympathizing with Mussolini’s Italy or the legitimists longing for a Habsburg restoration unacceptable for the neighbouring countries. 

Therefore, the whole issue sank quickly, even though it could cause serious financial problems in France if it were successful.