CHAPTER IX
DR. HEINRICH F. ALBERT, GERMANY’S BAGMAN AND BLOCKADE RUNNER
“And tell him that the struggle on the American front is sometimes very hard.”—Dr. Albert.
To outwit John Bull on the high seas by running his blockade is a big task. To compete against the combined commercial generals of England, Russia, France and Italy in seeking trade in the Americas is a still larger undertaking. But for one man to attempt both, while incidentally keeping watch on the industrial growth of the United States and being a big factor in Germany’s spy system, seems like a pigmy grappling with a Hercules. The qualities requisite for the man who would accept such a battle are diplomatic finesse of the highest degree, strength compared to one of America’s kings of industry, a vast economic knowledge, the shrewdness of a Yankee and the cleverness of the Kaiser’s ablest strategist. Yet the responsibilities of such a manifold enterprise, romantic in its infinite details and its vastness, were assumed by one German.
You could find him almost any day until the break with Germany in a small office in the Hamburg-American Building, the Kaiser’s beehive of secret agents, at No. 45, Broadway, New York. He was a tall, slender man, wonderfully supple-looking in spite of the conventional frock coat and the dignified dress of a European business man. His clear, blue eyes, his smooth face, thoughtful and refined, his blonde hair, and his regular features suggested a man of thirty-eight, or even younger, though you would look for a middle-aged or older man as selected for a position requiring so many nice decisions. When you entered his room—and few persons gained admission—he would rise and bow low and most courteously. He spoke in a soft, melodious voice, was deliberate in the choice of his words and encouraged conversation rather than made it. He was the quintessence of politeness, a marked contrast to the clear-cut, energetic, brusque, American business man—a smooth polished cog in the steel machinery of Prussian militarism.
Yet this man was the centre of Germany’s business activities in America. Upon him has rested the task of spending between $2,000,000 and $3,000,000 a week for the German Government in the purchase of supplies and in propaganda. His expenditure in furthering the cause has cost him thirty millions of dollars outside the vast amounts spent in the purchase of supplies, and he admits he wasted a half million or more dollars.
He was Dr. Heinrich F. Albert, privy councillor to the German Embassy and fiscal agent in America for the German Government. He was the source of the funds used by the representatives of Germany, her secret diplomatic and consular agents. He was the channel through whom money flowed from the Imperial exchequer—unwittingly it may have been on his part—to men who, in the interest of Germany, have violated American laws.
His job was a big one because this war has demanded the help of industry, as no other previous war. Just as it has resolved itself into an enormous race between the industries of the combating nations in turning out shells and arms, so Geheimrath Albert’s duties became all the more multitudinous, really a part of the great conflict itself.
Dr. Albert had just as important work as his colleagues, the military and naval attachés, but in a different field. With industrial preparedness of greater importance in this than in any other war it is natural that the commercial attaché and his staff of agents should prove a most important asset to Germany’s secret service in America. Geheimrath Albert’s duties in the economic field have been bound inextricably with the aims of the Fatherland’s secret service. While directing and financing the collection of data for use in the preparation of reports to the home government, he has also worked side by side with the other representatives of his Government.
THE EQUIPMENT OF A COLOSSUS
Albert was equipped for the gigantic task, as few men in the world have been equipped. He knew finance, the economy of industry, the finesse of diplomacy and the odd, yet scientific twists of the inventor’s mind. He had been trained in the things that interested kings and the problems that appealed to the labouring man. His field of knowledge was broad, for in preparation for his tasks he had to seek the best commercial, banking, industrial methods and inventions of the world to help Germany. So successful was he that his friends have termed him “The German Yankee.”
Around no German official in America has there hovered so much mystery. A great bulwark of Germany’s propaganda—though no participation in any illegal or criminal acts has been charged against him—he might have remained the greater part of the war under cover had it not been for the activity of secret service agents and for a little nap which Geheimrath Albert, the courteous and overworked, took upon an elevated train one day. When he awoke, his dossier was gone. That portfolio contained a mass of wonderfully illuminating documents, so many and so varied that if the privy councillor is accustomed to take up in one day so many diverse matters it almost staggers the imagination to try to conceive of the tasks which this war brought him. Through them public and official attention was fastened upon him, serving to deepen the folds of mystery about him. Through them the public in America first learned of the vastness of German propaganda. Dr. Albert lost his portfolio in August, 1915.
In the quietness of his little office above humming Broadway and within calling distance of the gold-lined Wall Street into which he so constantly pried, Geheimrath Albert discussed momentous economic problems with Germany’s other big men. In the German Club in the evenings he continued those consultations. In trips to Washington and Chicago and New Orleans and San Francisco, he and his agents conferred with big German business men.
His close confidant was Count von Bernstorff, with whom he had a joint account of several millions of dollars in the Chase National Bank, New York. His two active colleagues were Captain von Papen and Captain Boy-Ed. The association with these men must have been very close and keen; for on von Papen’s recall Dr. Albert wrote him: “I shall feel your departure most keenly; our work together was excellent and was always a great pleasure to me. I hope that in the Fatherland you will have an opportunity for making use of your extraordinary talent in dealing with economic questions. When I think of your and Boy-Ed’s departure and that I alone remain behind in New York, I could—well, better not!”
Dr. Albert learned the output of the steel industries and the financial connections of the big corporations. He had accurate information about the electrical manufacturing concerns in this country, their output, their inventions, the ability and the accomplishments of the engineers at the head of those plants, their training and personal history. He knew all about America’s transportation systems, their financial strength and the real mechanical and constructive ability of the scientific men connected with those systems. His information was as broad as his American activities. Suffice it to say that it was Dr. Albert’s business to get these facts—and he did so.
HIS VIEW OF THE FUTURE
How Dr. Albert looked to the future is set forth in a report which was prepared for him on June 3, 1915, by a trade representative in the German General Consulate, New York, on the effect of the British embargo. This document, compiled by a scientist, was undoubtedly only one of hundreds of such instruments worked out by Germans in this country for the help of the Fatherland. In this paper the writer, named Waetzoldt, says:
“There can be no doubt that the British Government will bring into play all power and pressure possible in order to complete the total blockade of Germany from her foreign markets, and that the Government of the United States will not make a strenuous effort to maintain its trade with Germany....
“It has been positively demonstrated during this time that the falling off of imports caused by the war in Europe will in the future be principally covered by American industry....
“The complete stopping of importation of German products will, in truth, to a limited extent, especially in the first part of the blockade, help the sale of English or French products, but the damage which will be done to us in this way will not be great....
“The Lusitania case did, in fact, give the English efforts in this direction a new and powerful impetus, and at first the vehemence with which the anti-German movement began anew awakened serious misgivings, but this case also will have a lasting effect, which, unless fresh complications arise, we may be able to turn to the advantage of the sale of German goods....
“The war will certainly have this effect, that the American business world will devote all its energy toward making itself independent of the importation of foreign products as far as possible....
“If the decision is again brought home to German industry it should not be forgotten what position the United States took with reference to Germany in this war. Above all, it should not be forgotten that the ‘ultimate ratio’ of the United States is not the war with arms, but a complete prohibition of trade with Germany, and, in fact, through legislation. That was brought out very clearly and sharply in connection with the still pending negotiations regarding the Lusitania case.”
Dr. Albert received among many reports one giving an analysis of the trade here in war materials:
“The large war orders, as the professional journals also print, have become the great means of saving American business institutions from idleness and financial ruin.
“The fact that institutions of the size and international influence of those mentioned could not find sufficient regular business to keep them to some extent occupied, throws a harsh light upon the sad condition in which American business would have found itself had it not been for the war orders. The ground which induced these large interests to accept war orders rests entirely upon an economical basis and can be explained by the above-mentioned conditions which were produced by the lack of regular business.... These difficulties resulting from the dividing up of the contracts are held to have been augmented, as stated in business circles, by the fact that certain agents working in German interest succeeded in further delaying and making worse American deliveries....
“So many contracts for the production of picric acid have been placed that they can only be filled to a very small part.”
A MAN OF MYSTERY
Naturally one of the most vital problems that stirred Dr. Albert was the British Order in Council in regard to the blockade of Germany from which resulted the seizure of meat and food supplies and cotton by British war vessels. He was always on the alert for information as to what was the attitude of the Administration and the people of the United States toward the blockade. That he used secret and perhaps devious means to get it is revealed by a confidential report which he received under most mysterious circumstances concerning an interview by a man referred to as “M. P.” with President Wilson and Secretary Lansing. “M. P.,” according to the conversation, claimed to have received from the President “a candid, confidential statement in order to make clear not only his own opposition, but also necessarily the political opportunity.” A striking part of this conversation follows:
“L. advises regarding a conference with M. P. Thereafter M. P. saw Lansing as well as Wilson. He informed both of them that an American syndicate had approached him which had strong German relations. This syndicate wishes to buy up cotton for Germany in great style, thereby to relieve the cotton situation, and at the same time to provide Germany with cotton. The relations of the American syndicate with Germany are very strong, so that they might even possibly be able to influence the position of Germany in the general political question. M. P. therefore asked for a candid, confidential statement in order to make clear not only his own position, but also necessarily the political opportunity. The result of the conversation was as follows:
“1. The note of protest to England will go in any event whether Germany answers satisfactorily or not.
“2. Should it be possible to settle satisfactorily the Lusitania case, the President will bind himself to carry the protest against England through to the uttermost.
“3. The continuance of the difference with Germany over the Lusitania case is ‘embarrassing’ for the President in carrying out the protest against England....
“4. A contemplated English proposal to buy cotton in great style and invest the proceeds in America would not satisfy the President as an answer to the protest....
“5. The President, in order to ascertain from Mr. M. P. how strong the German influence of this syndicate is, would like to have the trend of the German note before the note is officially sent, and declares himself ready, before the answer is drafted, to discuss it with M. P., and eventually to so influence it that there will be an agreement for its reception, and also to be ready to influence the press through a wink.
“6. As far as the note itself is concerned, which he awaits, so he awaits another expression of regret, which was not followed in the last note—regret together with the statement that nobody had expected that human lives would be lost and that the ship would sink so quickly.
“The President is said to have openly declared that he could hardly hope for a positive statement that the submarine warfare would be discontinued.”
WHAT HIS SECRET CORRESPONDENCE REVEALED
Dr. Albert also was in close communication with the American branches of German industries. This fact is apparent from secret correspondence found in his dossier, showing how after much deliberation and consultation a group of German representatives in America forbade the American branch of a German firm to fill a Russian war order. This correspondence shows that the American branch first sought information as to whether or not it should fill the order either as a means of making money or, secondly, as a means of delaying the Russian Government in getting the material. One of the Embassy staff wrote suggesting that the Ambassador approve of the acceptance of the order as a means of hindering the Allies. After a conference it was reported:
“In my opinion it would be hazardous for your firm to ship locomotives, cars, or wheels to Russia. All these transportation means would lighten the transport of troops, ammunition and provisions for the Russian Government, and your firm would, within the meaning of Paragraph 89 of the (German) Penal Code, be rendering aid to the enemy thereby.... That you are in a position to delay the delivery of the order to the prejudice of the hostile country ordering them will in no measure relieve you from liability.”
GERMANY IN THE STOCK MARKET
When it appeared that the Kaiser would not yield to demands made by the President, the prices of stocks went down and Germans bought stocks cheaply. After they loaded up a liberal supply, word would come that Germany was yielding and the stock market would become buoyant, thus allowing the German group to sell hundreds of thousands of shares on a substantial profit. There is absolutely no doubt that as a result of every crisis the German Government realized millions of dollars in the market.
An instance of how Dr. Albert had opportunity to get into the market is revealed in a secret letter written to Dr. Albert on July 8, 1915, by a well-known Board of Trade German in Chicago, and associated with a group of German traders. In this letter he refers to Dr. Albert’s “principal,” presumed to be no other than the German Government or the Kaiser himself. His letter says:
“Provisions have been horribly depressed by severe liquidation. We firmly believe that purchase of September lard will make your principal a great deal of money. September lard closes tonight at $8.65. This, with high freight added, will cost under 10 cents delivered Hamburg, where actual prices are around 35 cents per pound.
“I do not want to appear over persistent, but there never was a better proposition than buying this cheap lard for September delivery.”
One of Dr. Albert’s functions was to sift this commercial information and make recommendations to Berlin. He would confer with his coworkers on all military and naval matters having a commercial phase. That he did so is proved by the reports which they made and which went to Dr. Albert for his consideration and further recommendation. Captain von Papen, on July 7, 1915, submitted to Dr. Albert a memorandum headed, “Steps taken to Prevent the Exportation of Liquid Chlorine,” in which he tells of the efforts made by England and France to buy that chemical in America, tells of the output here, and the firms turning it out.
THE SHIP PLOTS
Another matter of importance to which he gave thought was the problem which had been in every German mind and mouth since the beginning of the war, namely, the prevention of the shipment of war supplies to the Allies. A letter mailed to Dr. Albert from Chicago under date of July 22, 1915, sets forth how zealously his agent was working on an embargo conference with the aim of arousing sentiment in this country against the export of arms and ammunition. The letter says that he had obtained the co-operation of a United States Senator, a Congressman and other Americans in this project.
One letter from Albert’s agent runs thus:
“I must refrain from communicating the above facts in my report to the Ambassador, as the matter could be too easily compromised thereby. Perhaps you will find an opportunity to inform Count von Bernstorff verbally. As soon as the matter has first gained more headway, I believe Mr. von Alvensleben, who has taken part in the whole development here, will come to New York in order to inform the Ambassador fully regarding prevailing frame of mind here as well as regarding the movement, provided, however, that is desired.”
Letters from Detroit suggested a plan for a general strike of the automobile workers in that city as a mighty protest against shipment of arms. The strike would cost about $50,000.
NEWSPAPER PROPAGANDA
To Dr. Albert also was assigned the task of studying sentiment in this country regarding the war and taking steps to influence it in favour of Germany—in other words, highly paid press work. Through Dr. Albert arrangements also were made for many German professors, either in Germany or connected with American institutions, to give up their occupations as teachers and devote themselves in America exclusively to lectures before high-class audiences. In these talks the speakers devoted themselves to showing the friendly relations between Germany and the United States, the similar aims of both countries in industry and international affairs, and to arguing for the cordial support of Germany’s cause.
A complete organization was tabulated of journalists throughout the country who were sympathetic with the German cause. These men received news for publication in various papers, also instructions. By the aid of these men a vast amount of information was gathered and shunted along to Dr. Albert. In addition Dr. Albert gave consideration to still more elaborate plans for the purchase of newspapers, the starting of news syndicates and information bureaus which, apparently neutral, should be secretly allied with the German cause and supported by German money. These facts were shown by a number of papers bearing on publicity and methods of acquiring it which were found in his dossier. The papers show that in one instance he was subsidizing a weekly paper and that in return he demanded a certain policy.
The following letter throws some light on the subject:
“I request the proposal of a suitable person who can ascertain accurately and prove the financial condition of your paper. From the moment when we guarantee you a regular advance, I must—
“1. Have a new statement of the condition of your paper.
“2. Practice a control over the financial management.
“In addition to this, we must have an understanding regarding the course in politics which you will pursue, which we have not asked heretofore. Perhaps you will be so kind as to talk the matter over, on the basis of this letter, with ——.”
Plans for the purchase of an English daily in New York which would support the German cause were worked over at length by Dr. Albert and his assistants. Proof also that Dr. Albert and his associates contemplated the creation of news bureaus in New York and Berlin which would furnish and disseminate throughout the United States news favourable to the German Government is given in the memorandum prepared apparently by an expert newspaper man, outlining the plan and cost of organization and giving certain suggestions.
Dr. Albert gave consideration to the suggestion of paying the expenses of American newspaper men who would go to Germany and send back articles favourable to the German cause. He did so under orders from von Bethmann-Hollweg, the German Imperial Chancellor, who caused one of his aids to write to the German Ambassador a letter suggesting that certain journalists be invited to visit Germany.
EFFORTS TO OUTWIT THE BRITISH BLOCKADE
Varied and important as were these various duties, already mentioned, still the paramount task to which Dr. Albert devoted himself was a scheme to outwit England’s blockade of Germany. This tall, silent man, working in his little office, was concerned with the purchase of millions and millions of dollars’ worth of supplies—cargo after cargo—for shipment to Germany, direct or through neutral countries. In this campaign he used every means of deceiving the enemy that were in his power.
Let it be said that this is meant as no reflection on Dr. Albert. In war one nation may establish a blockade and the other nation will attempt to run it. International lawyers agree that one nation has a right to establish such a blockade. If the shipowner obtains ingress to the port he makes big profits by the sale of his goods, but if he is caught by the other belligerent he loses his ship and cargo. It is a gamble.
It has already been established as a part of international law, through decisions of Lord Stowell in England more than a century ago and of the United States Supreme Court during the Civil War, that if it can be shown that shipments of supplies to a neutral country are really designed for transhipment to a belligerent, then the enemy has a right to seize and confiscate those goods.
After the Orders in Council were issued by England, Dr. Albert sought first to make the embargo unpopular in America. Letters and other documents in his dossier show that plans were submitted to him for stirring up sentiment in this country against what was denounced by pro-Germans as arbitrary seizures on the part of Great Britain. For instance, Edward D. Adams of 71, Broadway, New York, who for many years was a representative in that city of the Deutsche Bank, sent a letter to Dr. Albert in which he makes the following suggestion:
“The South politically is of very great importance to the Democratic Party and to the re-election of its representatives at our next Presidential election. The Cabinet and Congress have represented in them Southern men to a considerable number who are keenly alive to the importance of keeping the Democratic Administration in close touch with the Southern voters, and it takes such action from time to time as will secure their sympathy and support.”
Likewise plans were worked out for the arousing of the meat packers in Chicago to protest to Washington over the seizure of meat ships bound for Germany by way of neutral ports.
German representatives studying public sentiment in this country also suggested to Dr. Albert that indignation against Great Britain could be aroused by making it appear as if the British blockade was hurting America in preventing the receipt here of various non-contraband articles from Germany. One associate wrote to Dr. Albert:
“From a German standpoint, the pressure on the American Government can be strengthened by the interruption of deliveries from Germany even if the British Government should permit exception. Those shipments especially should be interrupted which the American industries so badly require; withholding of goods is the surest means of occasioning the placing before the Administration in Washington of American interests. Those protests have the most weight which come from American industries which employ many workmen.”
In the early months of the war Dr. Albert was a buyer of enormous supplies of cotton, wheat, copper, lubricating oil and other articles needed by Germany for the prosecution of the war. He signed contracts for meat and other supplies amounting to millions of dollars and he made payment the moment the ships were loaded here so that the American seller got his money regardless of what happened to the cargo while on the high seas. Of course, after the German Government seized all food supplies, the British Government took the attitude that all food supplies bound for Germany were intended for the Government and were therefore contraband. In the next place all purchases of food or other material by Dr. Albert as the official representative of the German Government made them Government supplies and therefore contraband of war. The moment the British Government discovered that these articles were purchased by Albert, no matter whether they were bound for neutral countries, or not, England argued she was justified in seizing the ships and confiscating them. But as a fact, England paid the American shippers in most instances.
All the facts in the vast scheme mapped out by Dr. Albert for outwitting John Bull’s blockade, have been developed by the Attorney-General of England and set forth in the prize courts there. It has been shown that Albert backed the purchase of cotton by the shipload, that he acquired vessels under neutral flags for carrying these cargoes to neutral countries. He spent millions of dollars in the purchase of meat. For instance, Dr. C. T. Dumba, Austro-Hungarian Ambassador, writing to Baron Burian from New York, tells of an interview in Chicago with a beef packer.
“No fewer than thirty-one ships, with meat and bacon shipments from his firm to Sweden, with a value of $19,000,000, have been detained,” he says, “in British ports for months under suspicion of being ultimately intended for Germany. The negotiations have been long drawn out, because Mr. Meagher and his companion will not accept a lame compromise, but insist on full compensation or release of the consignments in which the bacon may still remain sound.”
A TWO-FACED PROPAGANDIST
Dr. Albert issued a statement which purports to be a complete reply to the charges in regard to a secret German propaganda in the United States. He said that the purchase of ammunition plants in this country was justifiable, argued for an embargo on arms and ammunition, charged Great Britain with piracy on the high seas, denied that the German Government financed press agents, and asserted that the German Government had not started any under-cover newspaper campaign in this country. He said it was inevitable that all sorts of wild and irresponsible offers, proposals and suggestions should be addressed from every conceivable quarter to one holding the official position in which he was placed as an accredited agent of one of the great nations engaged in this unfortunate world-wide war. He referred to the strike letters as junk, and said that he should not be held responsible for every crank that wrote him a letter.
That statement was for the American public. Dr. Albert’s real sentiments are shown vividly in a letter which he wrote to Captain von Papen from San Francisco after the announcement of the President’s decision to send the military attaché out of the country. Here is part of it:
“Well, then! How I wish I were in New York and could discuss the situation with you and B. E.! Many thanks for the telegram. The ‘Patron’ also telegraphed that I was to continue the journey. So we shall not see each other for the present. Shall we at all before you leave? It would be my most anxious wish; but my hope is small. For this time, I suppose, matters will move more quickly than in Dumba’s case. I wonder whether our Government will respond in a suitable manner! In my opinion, it need no longer take public opinion so much into consideration, in spite of its being artificially and intentionally agitated by the Press and the legal proceedings, so that a somewhat ‘stiffer’ attitude would be desirable, naturally quiet and dignified!
“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 receive then in Germany the long-intended report of the expenses paid through my account on your behalf. I would be very thankful to you if you would then support the question of a monetary advance which you know of, although I know that I was mistaken in my opinion, that I acted as your representative and according to your wishes.”
When all the work of Dr. Albert is summed up and taken into consideration with his propaganda in association with Captain von Papen and Captain Boy-Ed, the impression remains that he, a guest of the United States, was immersed in plans that were aimed at the honour and integrity of this republic.