How does Frederick trick Napoleon in Animal Farm?

Napoleon might well be the undisputed ruler of the farm, master of all he surveys, but when it comes down to it, he's not the brightest tool in the shed.

Evidence of Napoleon's stupidity can be seen when he's royally ripped off by Frederick, the operator of Pinchfield, a neighboring farm. In doing business with Frederick, Napoleon always thought he was getting an absolute bargain, that he was the one in control of negotiations.

But as it turns out, Frederick is a shrewd, sneaky old soul who's taken advantage of Napoleon's stupidity and excessive self-regard to pay for a consignment of timber with forged five-pound notes. Frederick has tricked Napoleon into accepting worthless currency in return for a valuable load of timber, something that the farm could've used.

In allegorical terms, this tawdry transaction represents the Molotov-Ribbentrop Pact of 1939, a shabby non-aggression treaty signed between Hitler's Germany and the Soviet Union under Stalin. The Soviet dictator thought that the pact was a good deal and that it would protect the USSR's Western borders. But as it turned out, Hitler reneged upon the agreement and launched a savage, all-out invasion of the USSR in 1941. Just as Napoleon was fooled by Frederick, so Stalin was taken in by Hitler.

The answer to your question can be found in chapter 8: Frederick tricks Napoleon by paying him for timber with five-pound notes that turn out to be counterfeit.

This transaction had been a complicated affair from the start, with Napoleon engaging in negotiations with both Frederick and Pilkington. Most residents of Animal Farm had been firmly opposed to the timber being sold to Frederick, as a result of rumors that he treated his animals cruelly.

As animals themselves, the workers of Animal Farm had not wanted to help Frederick in any way, and Napoleon placates them by telling them that he had never intended to conclude the transaction with Frederick, considering it “beneath his dignity” to do so. As tends to be the case with dictators, however, Napoleon does not keep his word to his subjects, and we learn later in the chapter that he has in fact sold the wood to Frederick—or so he thinks.

Having placated the others that the stories of Frederick’s cruelty were “greatly exaggerated,” Napoleon gets his just desserts three days later when it is discovered that the notes with which Frederick had paid are forgeries. Napoleon, by now, is well known for his violent streak, and it is unsurprising when he states that “Frederick should be boiled alive” upon his capture.

It is Frederick and his men, however, who make the first move after the discovery of the forged bank notes, attacking Animal Farm the very next morning.

What you are probably referring to happens in Chapter 8.

Frederick has been negotiating with Napoleon to buy the wood that Farmer Jones left behind.  Napoleon finally agrees to sell it to him rather than to Pilkington.

Frederick is going to pay by check but Napoleon wants cash.  Frederick pays in cash but we later find out that all the bills he used as payment were fake.

So the trick is that he uses fake money to buy the wood.

In addition to this, Frederick then attacks the farm and blows up the windmill that the animals had built.

How does Mr. Frederick outwit Napoleon in Animal Farm?

Napoleon is negotiating the sale of a pile of timber to help pay for grain that will get the animals on the farm through the winter.  He is going back and forth between two farmers, Mr. Frederick and Mr. Pilkerton.  The animals prefer dealing with Pilkerton to Frederick, but in the end, Napoleon agrees to sell the wood to Mr. Frederick, who agrees to pay twelve pounds (British currency) more for the timber.  However, after Mr. Frederick hauls all the wood away, Napoleon discovers that the bank-notes are forgeries.  Mr. Frederick has taken all the lumber in exchange for nothing but worthless paper.  (You can find the exact quote in Chapter 8 of the text, almost half-way through. Page 106 of the Signet edition)

How does the reader suspect Frederick's trick on Napoleon in the wood sale in Animal Farm?

Pinchfield has been accused of cheating and involved in lawsuits before, so it can be predicted that he might cheat Napoleon.

Frederick of Pinchfield is described as “a tough, shrewd man, perpetually involved in lawsuits and with a name for driving hard bargains” (ch 4).  If he has been sued before, he has probably cheated someone before.

At issue is “a pile of timber which had been stacked there ten years earlier when a beech spinney was cleared” (ch 7).  Whymper had advised Napoleon to sell it, and both of the farmers wanted to buy it.  The animals decided that Snowball was in league with first one farmer and then the other.

Of the two, Frederick was the more anxious to get hold of it, but he would not offer a reasonable price. (ch 8)

The animals distrusted Pilkington, but “feared and hated” Frederick.  Yet they did business with Frederick, and Frederick paid with fake bank notes.  The animals did not trust him, and he did trick them.  Napoleon is angry, and pronounces a death sentence on Frederick.