The German Spy in America / The Secret Plotting of German Spies in the United States and the Inside Story of the Sinking of the Lusitania

Wolf von Igel, von Papen’s Man Friday and custodian of his secret documents, was hustling about his private office on the twenty-fifth floor of 60, Wall Street, on the morning of April 19, 1916. He was hurried. His full, grey eyes glistened with excitement and he curled his stubby moustache as he glanced upon heaps of papers carefully arranged on the long council table and on the floor. Then squaring his stocky shoulders, he turned again to the big safe, bearing the seal of the Imperial German Government, and swinging back the heavy doors, extracted another bundle of papers which he ranged among the other sheets with military precision.

“It’s eleven o’clock and Koenig should be here now,” he said in German to another employé of von Papen’s who was with him. “These papers must be packed up at once.”

He paused and then began a mental inventory of each stack of papers to make sure none was missing. All these documents—there were hundreds of them, and their weight, as revealed by a government agent, was seventy pounds—had belonged to von Papen. They revealed the inner workings of the German spy system in America and a great part of the world. They told many of the details. Those papers, connecting the German Government with violators of law in America, were a vast responsibility for any officer of von Igel’s age. Naturally, the young man was keyed to a high pitch of excitement; for hitherto they had come from the safe only piecemeal, and to permit daylight to reach so many at one time was almost a little more than von Igel’s nerve could stand.

Perhaps he had a presentiment. In fact, secret agencies had been at work to instil in him a feeling of uneasiness. Von Igel, stopping again and again to twirl his moustache, knew that von Papen and Captain Tauscher had been indicted on a charge of plotting to blow up Welland Canal. Word also had come to him that still more ominous events were portending and the idea—by stealthy prearrangement—had been given to him to ship all the documents to Washington, where they would be absolutely safe. Therefore von Igel was both busy with his packing and intensely perturbed.

“A man to see you, Herr von Igel,” announced a stout German attendant. “He refuses to tell his business except that it is important.”

Von Igel was gruffly directing his agent to make the stranger specify his name and mission when the door was flung open. In dashed Joseph A. Baker, of the Department of Justice, in charge of Federal Agents Storck, Underhill and Grgurevich.

“I have a warrant for your arrest!” shouted Baker, who had a warrant charging the German with complicity in the Welland Canal enterprise. Von Igel eyed the intruders for the fraction of a second. With one spring he reached the safe, and swinging the doors shut, was turning the combination when Baker leaped upon him bearing him to the floor. Then followed a battle of four Americans against two Germans, the attendant having been quieted by the flash of revolvers.

“This means war,” yelled von Igel. “This is a part of the German Embassy and is German territory. You’ve no right here.”

“You’re under arrest,” said Baker soothingly, as he pulled a revolver.

“You shoot and there’ll be war,” answered von Igel, while Storck and Underhill grappled with a third. “I’m connected with the Embassy and you can’t arrest me.” The first skirmish was quickly ended by von Igel, realizing the importance of the documents entrusted to his care and straining every resource to outwit his captors, he fought again and again, facing revolvers and braving fists to reach the telephone to call for the help of the German Ambassador and prevent the officers from gathering up the documents. But he was unsuccessful. As the agents led him from the office, they met Koenig, von Igel’s associate, and von Papen’s agent in many enterprises just entering. Koenig, who was already facing three charges growing out of his activities, was rendered speechless by the sight of von Igel in custody and some of his documents in possession of the government.

The mass of documents—it makes no difference whether the Secretary of State, for reasons of State or of law, orders their return—not only set forth the secrets of Germany’s activities in this country; but they also told what part von Igel and Koenig played in the invisible war in America. They show how both men were errand boys, carriers of cash and of messages for von Papen and Boy-Ed.

Concerning young von Igel there is much mystery. At the outbreak of the war he was reported to be wandering around looking for a job, willing to work for any wages. Then von Papen picked him up, paying him a salary of $238 a month. There is a rumour, too, that he is a grandson of Graf von Waldersee, one time Germany’s Chief of Staff. That he is a man of importance is indicated by the manner in which he was trusted by von Papen, Boy-Ed, and Dr. Albert. When in an automobile ride from Captain Tauscher’s home on Long Island with von Papen and Dr. Albert, he met with an injury, he was hurried secretly to a hospital. Every effort was made to hide his identity; but Dr. Albert and von Papen visited him frequently. Von Papen paid the hospital bills and charged them up to “War Intelligence.”

Almost immediately upon beginning service under von Papen, he leased the offices in Wall Street, putting down in the contract “advertising” as the purpose to which the rooms were to be devoted and never making any statement as to his connection with the German Embassy. He quickly gave von Papen every reason to trust him fully and won the respect of the reckless attaché. Though he did not begin work for von Papen until September, 1914, he had, it is charged, a hand in the first Welland Canal enterprise.

HANDLING MONEY FOR EVIL ENDS

Von Igel also handled money for von Papen. For instance, on March 27, 1915, the latter gave to his secretary a cheque payable to his order for $1,000 and on the counterfoil of his cheque-book he wrote “for A. Kaltschmidt, Detroit,” who since has been accused by the Canadian authorities as an accomplice in the project against Canadian armouries and munition factories. It was von Igel, furthermore, who cashed many cheques for von Papen, the proceeds of which were to go to secret agents starting on missions to the enemy’s country. He carried confidential messages which von Papen would not put in writing. He handled the code books in compiling and deciphering messages. He carried orders to Koenig, conferring with him and directing him when to meet von Papen.

When von Papen was preparing to leave the country at the request of President Wilson, he began to turn over his documents to von Igel for safe keeping. He gave him instructions as to the custody of the papers and the cleaning up of work left undone. In his regard, he undoubtedly followed Dr. Albert’s instructions put in a letter from San Francisco: “If you should leave New York before my return, we must try to come to some agreement about pending questions by writing. Please instruct Mr. Amanuensis Igel as precisely as possible. You will then receive in Germany the long-intended report of the expenses paid through my account on your behalf.”

So von Igel, as a trusted clerk, took unto himself the duties of confidential man for von Papen and for other big Germans who began but were obliged to leave unfinished certain projects in this country. There were many lines of information and activities converging to von Papen, afterwards to von Igel. After von Rintelen left this country, part of his schemes were entrusted to von Igel, who saw men with whom von Rintelen or his assistants had dealt. For instance, he has been indicted jointly with Dr. Scheele, Captain Gustave Steinberg, von Rintelen’s aid, for complicity in a plan to ship articles abroad under fraudulent manifests and thus deceive the Allies. One of these schemes was to export lubricating oil, much needed in Germany, to Sweden as fertilizer. Some of the payments for this purpose were made after von Rintelen sailed for home.

With von Papen gone and Koenig arrested, von Igel became a somewhat important person, taking upon himself the attaché’s prestige and a lot of Koenig’s work after the latter’s arrest. Many, many cheques were cashed by von Igel in the four months intervening between the attaché’s departure and the former’s arrest. He carried on von Papen’s work in a miniature way, conferring with many secret agents, giving orders and preparing reports in code for despatching to Germany.

While von Igel, in point of family, education and confidential association with the big German agents in America, is an important link in the Teutonic spy chain, Paul Koenig (“P. K.”), is more striking because of his rough activities, his underground connections and his associations with law-breakers. He was a sort of business manager of Germany’s secret service in the eastern part of America.

“P.K.”

“P. K.,” as his hirelings called him, was a sort of boss, an unmerciful autocrat in the lower world, physically fearless, trusting no man and driving every man to work by the use of violent abusive language, boastful of his skill, physical prowess and his craft. In appearance, he gives this impression. A tall, broad-shouldered man, he has bony fingers and arms long and powerful reaching almost to his knees. His dark, sharp eyes dart suspiciously at you from beneath black, arching eyebrows, showing defiance and yet a certain caution. A truly typical person he is for the work for which he was selected, and though perhaps a little too boastful, such supreme confidence undoubtedly is a necessary attribute of any man who would acquire any degree of success in such undertakings.

Koenig is another product of the Hamburg-American Steamship Line—the Kaiser’s very own. Prior to the war he was superintendent of the company’s police, having a half-score men under him and keeping watch on the pier workers or investigating complaints received by the management. He had grown to that task from similar training in the Atlas Service, a subsidiary corporation. He had spent years among longshoremen, bossing them and cursing them. He knew wharf rats, water-front crooks, and was thoroughly acquainted with their schemes—as naturally such a man would be. He understood thoroughly how to handle men of the rough type.

When the war started and von Papen was searching for an assistant organizer, he found in Koenig’s little police force a splendid nucleus of just what he needed. At his request the Hamburg-American Line quickly put Koenig at von Papen’s disposal and straightway von Papen began to link up to Koenig’s police a number of channels of information, to supply him with reservists for special assignments, to suggest to him how to spread out and instal spies in various places to gather important facts. Koenig accordingly became the business manager of a part of Germany’s secret service, not only gathering information, but acting as a link in the labyrinth system employed by von Papen in communicating with the reservist or agent selected to do certain work in behalf of the Fatherland.

How varied and steady was his work for von Papen is revealed by the latter’s cheques. Here are a few excerpts: “March 29, 1915, Paul Koenig (Secret Service bill), $509.11; ... April 18, Paul Koenig (Secret Service bill), $90.94; ... May 11, Paul Koenig (Secret Service), $66.71; ... July 16, Paul Koenig (compensation for F. J. Busse), $150; ... August 4, Paul Koenig (5 bills Secret Service), $118.92,” and so on. Remember also that von Papen only paid from his cheque account for a part of Koenig’s expenses, other German officials who employed him receiving a bill for the special work.

KEEPING WATCH ON SPIES

“P. K.” also kept a most carefully prepared note-book of his spies and of persons in New York, Boston and other cities who were useful in furnishing him information. In another book he kept a complete record of the assignments on which he sent his men, the purpose and the cost. In this book of names were several hundred persons—German reservists, German-Americans and American clerks, scientists and city and Federal employés—showing that his district was very large and that his range for picking facts and for supervising other pro-German propaganda was broad. For his own hirelings or reservists, over whom he domineered, he had specially worked out a system of numbers and initials to be used in communicating with them. These numbers were changed at regular intervals and a system of progression was devised by which the agent would know when his number changed. He also employed suitable aliases for his workers. These men likewise had codes for writing letters and for telephone communication, and they knew that on fixed days these codes changed.

Always alert for a listening ear or a watchful eye—because playing the eavesdropper was his job—he looked for spies on himself. He believed that his telephone wire was tapped and that he was overheard when he spoke over the telephone. Accordingly, he instructed his men in various code words. For instance, if he told an agent to meet him at five o’clock at South Ferry that meant: “Meet me at seven o’clock at Forty-second Street and Broadway.”

His wire was not tapped, but P. K. kept the men who were spying on him exceeding busy and worried. He would receive a call on the telephone and would direct the man at the other end of the wire to meet him in fifteen minutes at Pabst’s, Harlem. Now from Koenig’s office in the Hamburg-American Building to 125th Street, it is practically impossible to make the journey in a quarter of an hour; but his watchers learned that Pabst’s, Harlem, meant Borough Hall, Brooklyn. Just as he eluded espionage for days and months, this man, skilled in shadowing others and in doing the vanishing act whenever necessary, boasted that the Federal authorities or the police never would get him. “They did get Dr. Albert’s portfolio,” he said one day, “but they never will get mine, for I won’t carry one.”

SHADOWS FOLLOWING SHADOWS

He sought likewise to elude Americans trailing him. He never went out in the daytime that he did not have one or two of his agents trailing him to see whether he was being shadowed. He used to turn a corner suddenly and stand still so that a detective following came unexpectedly face to face with him and betrayed his identity. Koenig would laugh heartily and pass on. He loved to jibe the American authorities and ofttimes he would dodge around a corner and then reappear to confront the detective with a merry jest and pass on. By that means he came to know many agents of the Department of Justice and many New York detectives. When he started out at night he used to have three of his own men follow him, and by a prearranged system of signals inform him if any strangers were following him.

The task, consequently, of keeping watch of Koenig’s movements was most difficult and required clever guessing and keen-headed work on the part of the New York police. So elusive did Koenig become that it was necessary for Captain Tunney to evolve a new system for shadowing Koenig and yet not betray to him the fact that he was under surveillance. One detective, accordingly, would be stationed several blocks away and would start out ahead of Koenig. The “front shadow” was kept informed by a series of signals whenever Koenig turned a corner so that the man in front might dart down the street beyond and by a series of manœuvres again get ahead of him. If Koenig boarded a street car, the man ahead would hail the car several blocks beyond, thus avoiding any suspicion from Koenig. In other instances, detectives, guessing that he was about to take a car would board it several blocks before it got abreast of Koenig. Because of his alertness, he kept Detectives Barnitz, Coy, Terra and Corell always on the edge; but they finally ran him down.

It was never possible to overhear any conversation between Koenig and any man to whom he was giving instructions. Koenig always made it a point to meet his agents—some of his workers he never permitted to meet him at all—in the open, in parks in broad daylight, in the Pennsylvania Station, or the Grand Central Station. There, as he talked to them, he could make sure that nobody was eavesdropping. In the open he met many a man for the first time, talked with him and then said:

“Be at Third Avenue and Fifty-ninth Street at 2.30 to-morrow afternoon beside a public telephone booth there. When the telephone rings, you answer it.”

The man would obey the request. Promptly at the minute named, the telephone rang and the man answered the telephone. A strange voice spoke to him and told him to do certain things, perhaps to be at a similar place on the following day and receive a message, or he would receive instructions as to what he should do and where he should go to meet another man, who would give him money and instructions as to what he should do. The voice at the other end of the wire was speaking from a public telephone booth and was thus reasonably sure also that the wire was not tapped.

Koenig trusted no man. He never sent an agent out on a job without detailing another man to follow that man and report back to him the movements of the agent and the person whom that man met. He was severe with his men when they made their reports to him, and always insisted that they do exactly what he told them and never permitted them to use their own initiative. So stubborn was he in sticking to his own ideas that some of his men used to call him “the Westphalian, bull-headed Dutchman.”

As to the outline of Koenig’s activities, his book of spies, the great mass of information gained by trailing him, and by study of the documents seized in his office, show that he had spies along the water front on every big steamship pier. He had eavesdroppers in hotels, telephone switchboards, among porters, window-cleaners, among bank clerks, corporation employés and in the Police Department.

To Roger B. Wood, formerly assistant United States District-Attorney in New York, is due the credit for the unfolding of the intricate and varied schemes charged against Koenig. He studied the evidence for months as it was developed by Federal agents under Superintendent Offley of the New York office and Captain Tunney, and prepared for trial the cases against the German agent.

One of Koenig’s spies was listed in his book as “Special Agent A. S.,” namely Otto F. Mottola, a detective in the warrant squad of the New York police force whom he paid for special work. The note-book revealed Mottola as Antonio Marino, afterwards changed to Antonio Salvatore. Evidence was produced at Mottola’s trial at Police Headquarters that Koenig paid him for investigating a passenger who sailed on the Bergensfjord; that he often called up Mottola, asked questions and received answers which Koenig’s stenographer took down in shorthand. In other words, Koenig sought to keep closely informed as to the developments at Police Headquarters, and to be advised, perhaps, of the inquiry being made by the police into the activities of the Germans. Mottola was dismissed from the force because of false statements made to his superiors when asked about Koenig.

STARTING TROUBLE IN CANADA

“P. K.” also despatched men to Canada to gain information concerning the Canadian preparations for war, and facts that could be used by the Germans here in planning attacks upon munition factories, railroads and transportation facilities in the Dominion. An Irish employé of the Atlas Line has been arrested on a charge of planning with Koenig to start a “military enterprise” against the Dominion. The employé, named Justice, is accused of going to Quebec to ascertain the number of troops which were being transported by the Dominion of Canada to ports in France and Great Britain; the names of the steamships on which said troops were being transported; the kind and quantity of supplies which were being shipped from the Dominion to France and Great Britain, and other information which would or might be of value to the German Government, and which would assist the military operations of the German Government.

The complaint stated that the undertaking was one of hazard, and came within the purview of the statute forbidding the undertaking of any military venture with this country as a basis of operation. It says, further, that Justice and Metzler, Koenig’s secretary, left New York on September 15, 1914, and went to Quebec; that Koenig left New York on September 18 and met Metzler in Portland, Me., and that he went to Burlington, Vt., where on September 25 he conferred with Justice. The authorities also say that Metzler and Justice gained a varied assortment of information in Quebec; that they inspected the fortifications there, went to the training camps, observed the number of men, the condition of the men and estimated the time when they would be sent to the front.

In his meetings with various persons who had been picked for some daring enterprise, Koenig is accused of having employed various names. The Federal authorities give him at least thirteen, among which are Wegenkamp, Wegener, Kelly, Winter, Perkins, Stemler, Rectorberg, Boehm, Kennedy, James, Smith, Murphy and W. T. Munday.

After indictments had been returned against some of the Hamburg-American officials for conspiring to defraud the United States of legal clearance papers, Koenig, assisted by a private detective in the pay of Captain Boy-Ed, developed a scheme to get affidavits from tugboat captains to the effect that they had supplied English war vessels patrolling off Sandy Hook with provisions.

The plan was to turn sentiment against the British by proving that the British were doing the same thing that had been charged to the Germans. Accordingly, Koenig called a number of tugboat captains to a room in the Great Eastern Hotel, New York, and offered them a contract to haul provisions to the English cruisers. He told them that the captains were extremely suspicious of boats approaching the war vessels, and the affidavits were necessary to allay their fears that the tugboats might have a few Germans with bombs on board. So, in return for sworn statements from them to the effect that they already had been carrying supplies out to other English cruisers, he, Koenig, was to give them a monthly contract to do the work. Many of the tugboat captains signed the affidavits; but the scheme was exposed before the Germans really made any use of the documents. So carefully did Koenig work that he made the stenographers who took the statements transcribe the notes in his presence, give him the shorthand notes and he immediately destroyed them.

SPIES IN BANKS

Through the arrest of Koenig and the facts obtained thereby, one of the mysteries concerning the Germans’ method of getting information about the shipment of munitions of war to the Allies was cleared. They knew the number of the freight car rushing to the Atlantic seaboard and its exact contents. They knew the ship’s hold into which that product was to be placed; but how they got this data was a mystery until Koenig was caught. Then Metzler, Koenig’s secretary, made a confession that cleared the mystery. Agent Adams got the confession.

Besides having spies in some of the factories throughout the country, the Germans had one great fountain of information in the foreign department of the National City Bank, an institution that has carried hundreds of millions of dollars in financing the purchase of supplies for the Entente Powers. That source was Frederick Schleindl, a German who has since been convicted of selling stolen information and sentenced to three years in a New York State prison.

Schleindl, only twenty-three years old, came to this country from Germany several years ago, obtained work with a private banking firm, and after the war started was shifted to the National City Bank. He had influence to get the position, and, incidentally, it may be said, that for years prior to the war German agents, trained financiers, have been stationed in New York, making friends and learning conditions, so that at the critical time they could, by underground means, succeed in getting positions for such men as Schleindl who would betray their trust.

When the war started Schleindl registered with the German Consul, giving his address and his place of business. One day word reached him that a German wished to see him, and going to the Hotel Manhattan he was approached by a man who introduced himself as Koenig. The latter sounded him thoroughly as to his sentiments on the war, and then outlined the scheme by which Schleindl was to help Germany and make $25 a week. Schleindl was to keep his eyes open for all letters and cable messages bearing on the deposits of the Allies with the bank, the payments of orders and other facts bearing on the war.

The bank clerk succumbed, either through patriotism or love of money. And Koenig had placed his finger on exactly the right spot; so accurate was he that there seems no doubt that he received guidance from a master spy higher up, who knew banking operations thoroughly, and where to go for information. It quickly developed that Schleindl could obtain information of two very important kinds.

First, he received in his department cable messages bearing on war orders and deposits by the Allies. The day he was arrested he had in his pocket certain messages and letters addressed to the National City Bank. One had come from the Banque Belge pour Etrangers in regard to a shipment of two million rifles that was being handled through the Hudson Trust Company. Another message that he picked up and handed over to Koenig had come from the Russian Government, directing the bank to place at the disposal of Colonel Golejewski, a Russian naval attaché, a large amount of money for the purchase of war materials.

Secondly, the bank paid for orders of goods as soon as they had been inspected and delivered on board ships at the seaboard. The manufacturers sent their bills of lading to the bank, showing the carload shipments and the vessel to which they were consigned. Thus accurate information was obtained as to every item, the railroad route of shipment and the name of the vessel. All this information was turned over to Koenig, who passed it along for dissemination to the proper persons. Consequently, the Germans knew exactly what ships to attack; in what vessels to place their fire bombs or other explosives.

Schleindl was accustomed to meet Koenig almost every night and hand him papers. Sometimes he would go to Koenig’s office, where “P. K.,” Metzler and Schleindl would spend many hours copying the documents. Other times Schleindl would give the papers to Koenig and receive them on his way to work, so that they would be in their proper place the moment any bank official desired them. Koenig pleaded guilty in the Court of Special Sessions to an information charging him with having corrupted the boy to sell such information. Koenig was set free on a suspended sentence.

The National City Bank leak is only one of a hundred channels through which Koenig and his agents received information. Koenig compiled it with the aid of his secretary, conferred with von Papen or Boy-Ed. He would spend a few weeks gathering facts, and then he would pack hundreds of papers into a trunk and run down to Washington. Arriving there, he would take a taxi to a rooming house, where he would unpack his trunk, and put the contents into another trunk in an adjoining room.

As weeks went by and Koenig believed he was escaping police and Federal espionage, he grew bolder, more defiant of the authorities, and louder in his talk. He treated his employés with less consideration. He always followed a principle of never hiring the same reservist for a second job. Then he quarrelled with George Fuchs, a relative whom he had employed to go to Buffalo with him. The police heard of that quarrel, and quickly got into the confidence of Fuchs, obtained his confession, and enough information on which to arrest Koenig. He has been indicted by the Federal authorities twice on charges that may get him six years, if convicted.

The two men were active workers for a time. Koenig continues in New York, but von Igel sailed with Count Bernstorff when the latter was dismissed from this country.