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Death by Derivatives

The opening of a canal in 1848 led to the birth of modern financial derivatives, and the early demise of some of the men who traded them
Written by Michael Durbin • 13 minute read


Scraping Bottom

When Germany was divided in two after the Second World War, military leaders recognized the need for liaison between the Soviet-occupied East Germany and the US/British occupied West Germany. To this end, the military governments agreed to exchange a fixed number of representatives who would have the freedom to live and move somewhat freely throughout the country. These representatives would serve to facilitate communication, as well as preventing possible hostilities. Naturally, enterprising spy agencies saw these individuals as vectors for intelligence-gathering.

The British liaison mission was known as British Commanders’-in-Chief Mission to the Soviet Forces in Germany (BRIXMIS), and one of their favorite means of information-gathering was to “tamarisk,” a bit of British jargon referring to the practice of sifting through military trash for interesting documents. As the early days of the Cold War unfolded, BRIXMIS officials began to realize that the quantity of useful tamarisk discoveries was inversely correlated with the Soviets’ supply of toilet paper. Evidently, whenever East Germany’s sanitary supplies dwindled, Soviet soldiers tended to improvise by moving stacks of bureaucratic documents from the filing cabinets to the Wasserklosetts. The Soviets knew it would clog the drains to flush the used sheets, so they installed special bins to hold soiled manuals, tainted code sheets, redacted correspondence, and so on. These were periodically emptied into the general trash, their aromatic contents eventually making their way to British intelligence. Upon discovering the cause of these irregular intelligence windfalls, British and US spy agencies began making surreptitious efforts to disrupt East German supplies of toilet paper from time to time.

On the whole, Operation Tamarisk was among the most fruitful intelligence-gathering operations of the entire Cold War. Professor Richard Aldrich, a specialist in Cold War intelligence, said of the effort: “Those used pieces of Russian toilet paper were absolute gold dust in terms of the information they contained.”


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