SWITZERLAND: Knickknackers

Every counterfeiter likes to think that the stuff he turns out is just as good as the government’s, but the government usually has the last word about that. Last week a Swiss court reviewed the case of two alleged counterfeiters, Yugoslav Zdravko Beraha and Italian Giuseppi Bernardi, who for months in Milan had been manufacturing British sovereigns* just as good as those once coined by the Royal Mint. With five helpers, the pair had turned out the coins at a rate of 1,000 a day from gold exactly as pure as that used in the real thing. Each coin had netted them a tidy profit of some 1,750 lire ($2.80). How did they make their profit?

Coined gold, which in time of trouble can be handily tucked away while heavy ingots would be conspicuous, fetches more money than bulk gold. In postwar Europe, hoarders have willingly paid 20% more than the price of bulk gold for old coins (French napoleons, British sovereigns, U.S. double eagles). Many a European goldsmith and even a few enterprising governments have taken advantage of this fact to make an easy buck. In recent months, the Austrian government has minted golden ducats dating from the reign of Franz Joseph I for the benefit of hoarders willing to pay the price.

Does such enterprise come under the head of counterfeiting? The Swiss court last week decided that it did not. On the grounds that the British gold sovereign, whether made in Britain or Milan, was no longer legal tender, and hence not really money at all, the court refused to extradite Money-Makers Beraha and Bernardi to Italy, upholding the defense lawyer’s claim that his clients were only making “knickknacks.”

*The gold equivalent of the pound sterling, not minted for circulation since 1917.