The Schlüsselgerät 41 cryptographic machine, shown in full. It looks kind of like a typewriter, and it has a handle crank on its right side.

During the summer, when auction schedules slow down, The Hot Bid showcases world auction records.

What you see: A Schlüsselgerät 41 (SG 41) encryption machine, dating from World War II. Hermann Historica sold it for €122,500, or about $137,000, a world auction record for this rare machine.

The expert: Bernhard Pacher, executive managing director of Hermann Historica.

What does “Schlüsselgerät” mean in English? It’s a very simple technical term. Schlüssel means key, or cipher. Gerät is a piece of hardware. It literally means “cypher machine” or “encryption machine”.

How did it improve on the Enigma encryption machine that the German military relied on in World War II? If you look at the layout, the standard Enigma machine used by all but the German navy used three wheels. Three wheels gives you a certain number of combinations. The navy had Enigmas with four wheels. The Schlüsselgerät 41, from the beginning, had five wheels, and the top wheel, a sixth wheel, performed “not” operations. If it expected a certain operation [a particular pattern of encryption] based on the five wheels, the sixth wheel could say, “not going to do that.” The sixth wheel added extreme irregularity, making decryption very hard. Also, the Enigma, when it encoded an “A”, it could never be [it could never stand for] an “A”. On the SG 41, an “A” could be an “A.” It could be anything.

Were the Germans aware that the Allies had cracked the Enigma code when it started work on the Schlüsselgerät 41 in 1941? No. Their own encryption guys analyzed the Enigma for flaws in its design. When it was designed, it had way more options [for encryption] than the final, simplified one. [They saw the] inherent problem that an “A” can never be an “A”. [They realized] if you really analyzed that thing, you could come up with a chance to decipher it, and they needed something new. The Germans thought, even with the flaws, it would take the Allies three or four weeks to decipher the messages, and by then, who cares? They could not imagine the British could come up with a machine that goes through all the permutations in 30 minutes. They still somehow convinced themselves that the Enigma would be enough. Somehow the Schlüsselgerät 41 wasn’t given the priority it should have had.

Did the Schlüsselgerät 41 really weigh 13 kilos (28.6 pounds)? Yes, it did, and that’s the problem. This one doesn’t have a cover. Without it, it’s 11 kilos [24.2 pounds]. For that, it was considered too heavy for front-line use. It’s a bit crazy, because the Enigma was almost the same weight.

I understand the Schlüsselgerät 41 was made of steel. Was that an issue that might have delayed its production? Steel was one of the few materials that was not really in short supply [during World War II]. It came from all over the Reich. What should have made it lighter–aluminum, magnesium–was in short supply, and that was needed for the aircraft industry.

What did the crank on the right-hand side of the SG 41 do? That crank did what the motor did in the Enigma. You pushed a key, turned the crank, and got a result. It was a one by one by one operation. There was no battery needed, no electrics, but it slowed things down a bit. If the Schlüsselgerät 41 had an electric motor and a battery, taking over the job of the crank, that would add, easily, three kilos to the machine, and it really would have gotten out of hand. And it’s a delicate machine. You can’t push the crank full speed. You have to go fairly slowly.

The Enigma was more sturdy? Yes. It was all-electric. It was much quicker and much easier.

The lot notes say about 500 SG 41 units were built. Do we know how many survive? In April and May 1945, the order to destroy them went out. A total of 10 survived the war in operable condition.

How did this one survive? We can only trace it back to 1955, when the previous owner purchased it from a private collector. The speculation is the guy was supposed to destroy it [but] took it back home. For 30 years, it was given to a Swiss military museum as a loan. It was there until last year, when it was retrieved.

And this is the first one to go to auction? Yes. There was one on eBay 10 years ago at a fairly high price, which didn’t sell. It was in way worse condition than the one we had.

How did you set the estimate of €75,000 [$84,300]? Did you look at Enigma auction results? That was the minimum the consigner said they’d expect to receive. I personally would have given it a six-digit estimate. I was very, very disappointed it didn’t make €100,000 as the hammer price. We’ve sold Enigmas for €150,000, €160,000. A Schlüsselgerät 41 in perfect working condition should get at least what an Enigma gets.

It was in perfect condition? There were a few little pieces missing. That’s it. It’s not tampered with. There are no nicks, no dings, no scratches. The only thing missing is the cover.

A closer shot of the Schlüsselgerät 41, with its keyboard visible. The bottom door is open, showing a spool of white paper.

How did you describe its condition? I actually said it was almost “as new” with very few traces of wear and tear. It was built at the end of 1944. It didn’t see much operation. It probably sat in an office for five months. Then the guy got his hands on it in 1945, and we’re pretty sure that guy hid the machine. By 1955, he was probably happy to get rid of it.

Why not give an estimate range? We never give a range. How do you give a range for an object that’s absolutely unique? It’s another reason the result is damaging. If another Schlüsselgerät 41 pops up, [people will think] “Ah, that’s what it’s worth.” Wrong! That’s not what it’s worth. It’s what the top bidder was willing to pay, and no one was willing to bid higher than that. It should have been a bit higher than Enigmas we’ve sold, not just because of the rarity, but its complexity. It’s on a different level than the Enigma ever was. And to achieve that with moving parts is astonishing. It took until the 1960s to have a similar encryption in software. That thing was really good.

What does it sound like? It has a really nice mechanical sound. [You can hear some of its native audio around the 1:09 mark in this video that Hermann Historica made about the Schlüsselgerät 41.]

Were you in the sale room when the SG 41 came to the auction block? Emotionally, I was so tied to it, I needed to auction it myself. It didn’t quite work as I planned.

What do you recall of the actual sale? There were two people on the phone, bidding against each other, and I had a written bid. I had to disclose the highest written bid. The man on the phone went one step higher, and it was his. I tried to stimulate the Internet–there were so many bidders logged in, I was sure someone would bid. I was very disappointed it didn’t get past an Enigma machine. It didn’t come close.

Did the Schlüsselgerät 41 have any effect on World War II, at all? It would have changed the war if it was available in 1941. By then, the blitzkrieg strategy was working. By the time the units were delivered, the Manhattan Project was underway. We should be happy they weren’t deployed in larger numbers. It would have cost many more lives by not doing any good. It wouldn’t be a game-changer. It would be a war-extender. It would make the war last long enough to drop Fat Man and Little Boy on Berlin.

Why will the Schlüsselgerät 41 stick in your memory? Technical fascination. I have a background of 15 years in the computer business. Seeing binary code when no one was yet thinking in binary code–a living piece of mechanical software–is fascinating. That’s why I like it. It’s fascinating not just for its accuracy, it allows [for] translating binary thinking into mechanical action.

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Image is courtesy of Hermann Historica.

In case you missed it above, here’s the video that Hermann Historica created about the Schlüsselgerät 41.

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