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    | Inconsistent hyphenation in the original document has     |
    | been preserved.                                           |
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    | Obvious typographical errors have been corrected. For     |
    | a complete list, please see the end of this document.     |
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   +--------------------------------------------------------------+
   |                                                              |
   |                   The Book and the Author                    |
   |                                                              |
   | John L. Spivak comes closer to the popular conception of the |
   | ace journalist than any other living writer. Combining the   |
   | instinct of a detective with the resourcefulness of a        |
   | reporter, and gifted with a hard-hitting, breezy style, he   |
   | has time and again "scooped the world," "gotten the          |
   | story"--despite powerful opposition and personal danger that |
   | might well have daunted less hardy souls.                    |
   |                                                              |
   | But there is an important difference that sets Spivak apart  |
   | from most other gentlemen of the press. For several years he |
   | has devoted his bright and sharp pen solely to uncovering    |
   | evidence of fascist activities in the United                 |
   | States--evidence that is credited with having set off        |
   | several official investigations exposing un-American,        |
   | foreign-dominated propaganda.                                |
   |                                                              |
   | SECRET ARMIES climaxes Spivak's exposures. His sensational   |
   | inside story of Hitler's far-flung, under-cover poison       |
   | campaign in the Americas would seem scarcely credible, were  |
   | it not so thoroughly documented with original letters and    |
   | records, citing chapter and verse, naming names, dates and   |
   | places. His unanswerable, uncontradicted facts should go far |
   | toward jolting many of us out of our false sense of          |
   | security.                                                    |
   |                                                              |
   +--------------------------------------------------------------+




_Books by John L. Spivak_

    THE DEVIL'S BRIGADE

    GEORGIA NIGGER

    AMERICA FACES THE BARRICADES

    EUROPE UNDER THE TERROR




SECRET ARMIES

_The New Technique of Nazi Warfare_

[Illustration]

JOHN L. SPIVAK



MODERN AGE BOOKS, INC.
432 FOURTH AVENUE NEW YORK




COPYRIGHT 1939 BY JOHN L. SPIVAK
PUBLISHED BY MODERN AGE BOOKS, INC.
432 Fourth Avenue
New York City


   _All rights in this book are reserved, and it may not be
   reproduced in whole or in part without written permission from
   the holder of these rights. For information address the
   publishers._


_First Printing, February 1939_
_Second Printing, March 1939_


_Printed in the United States of America_




_CONTENTS_


CHAPTER                                                      PAGE

     Preface                                                    7

   I Czechoslovakia--Before the Carving                         9

  II England's Cliveden Set                                    17

 III France's Secret Fascist Army                              31

  IV Dynamite Under Mexico                                     43

   V Surrounding the Panama Canal                              56

  VI Secret Agents Arrive in America                           73

 VII Nazi Spies and American "Patriots"                        84

VIII Henry Ford and Secret Nazi Activities                    102

  IX Nazi Agents in American Universities                     118

   X Underground Armies in America                            130

  XI The Dies Committee Suppresses Evidence                   137

 XII Conclusion                                               155




_ILLUSTRATIONS_


                                                             PAGE

Application in the Secret Order of '76 by Sidney Brooks        77

Letter from Harry A. Jung                                      82

Anti-Semitic handbill                                          85

Letter from Peter V. Armstrong                                 89

Letter to Peter V. Armstrong                                   90

Account card of Reverend Gerald B. Winrod                     104

Sample of "Capitol News & Feature Service"                    106

Letter from _Wessington Springs Independent_                  107

Letter from General Rodriguez                                 111

Letter from General Rodriguez                                 113

Letter from Henry Allen                                       115

Anti-Semitic sticker and German titlepage of book by
  Henry Ford                                                  117

Letter from Olov E. Tietzow                                   125

Judgment showing conviction of E.F. Sullivan              138-139

Letter from Carl G. Orgell                                    151

Letter from G. Moshack                                        153

Letter from E.A. Vennekohl                                    154




_Preface_


The material in this small volume just barely scratches the surface of
a problem which is becoming increasingly grave: the activities of Nazi
agents in the United States, Mexico, and Central America. During the
past five years I have observed some of them, watching the original,
crudely organized and directed propaganda machine develop, grow and
leave an influence far wider than most people seem to realize. What at
first appeared to be merely a distasteful attempt by Nazi Government
officials at direct interference in the affairs of the American people
and their Government, has now assumed the more sinister aspect of also
seeking American naval and military secrets.

Further studies in Central America, Mexico and the Panama Canal Zone
disclosed an espionage network directed by the Rome-Berlin-Tokyo axis
and operating against the peace and security of the United States. A
scrutiny of the Nazi Fifth Column[1] in a few European countries,
especially in Czechoslovakia just before that Republic was turned over
to Germany's mercy by the Munich "peace" and in France where Nazi and
Italian agents built an amazing secret underground army, has made the
fascist activities in the Western Hemisphere somewhat clearer to me.

I have included one chapter detailing events which cannot, so far as I
have been able to discover, be traced directly to Nazi espionage; but
it shows the influence of Nazi ideology upon England's now notorious
"Cliveden set," which maneuvered the betrayal of Austria, sacrificed
Czechoslovakia and is working in devious ways to strengthen Hitler in
Europe. The "Cliveden set" has already had so profound an effect upon
the growth and influence of fascism throughout the world, that I
thought it advisable to include it.

The sources for most of the material, by its very nature, naturally
cannot be revealed. Those conversations which I quote directly came
from people who were present when they occurred or, as in the case of
the Cagoulards in France, from official records. In the chapter on
Czechoslovakia I quote a conversation between a Nazi spy and his
chief. The details came to me from a source which in the past I had
found accurate. Subsequently, the spy was arrested by Czech secret
police, and his confession substantiated the conversation as I have
given it.

Much of the material in this volume has been published in various
periodicals from time to time, but so many Americans feel that concern
over Nazi penetration in this country is exaggerated, that I hope even
this brief and incomplete picture will serve to impress the reader, as
it has impressed me, with the gravity of the situation.

                                                 J.L.S.

FOOTNOTES:

[1] When the Spanish Insurgents were investing Madrid early in November,
1936, newspaper correspondents asked Insurgent General Emilio Mola which
of his four columns would take the city. Mola replied enigmatically:
"The Fifth Column." He referred to the fascist sympathizers within
Madrid--those attempting to abet the defeat of the Spanish Government by
means of spying, sabotage and terrorism. The term "Fifth Column" is
today widely used to describe the various fascist and Nazi organizations
operating within the borders of non-fascist nations.




I

_Czechoslovakia--Before The Carving_


It is pretty generally admitted now that the Munich "peace" gave
Germany industrial and military areas essential to further
aggressions. Instead of helping to put a troubled Europe on the road
to lasting peace, Munich strengthened the totalitarian powers,
especially Germany, and a strengthened Germany inevitably means
increased activities of the Nazis' Fifth Column which is, in all
quarters of the globe, actively preparing the ground for Hitler's
greater plans.

If we can divine the future by the past, the Fifth Column, that
shadowy group of secret agents now entrenched in every important
country throughout the world, is an omen of what is to come. Before
Germany marched into Austria, that unhappy country witnessed a large
influx of Fifth Column members. In Czechoslovakia, especially in those
months before the Republic's heart was handed to Hitler on a platter,
there was a tremendous increase in the numbers and activities of
agents sent into the Central European country.

During my stay there in the brief period immediately preceding the
"peace," I learned a little about the operations of the Gestapo's
secret agents in Czechoslovakia. Their numbers are vast and those few
of whom I learned, are infinitesimal to the actual numbers at work
then and now, not only in Czechoslovakia but in other countries. What
I learned of those few, however, shows how the Gestapo, the Nazi
secret service, operates in its ruthless drive.

For years Hitler had laid plans to fight, if he had to, for
Czechoslovakia, whose natural mountain barriers and man-made defensive
line of steel and concrete stood in the way of his announced drive to
the Ukrainian wheat fields. In preparation for the day when he might
have to fight for its control, he sent into the Republic a host of
spies, provocateurs, propagandists and saboteurs to establish
themselves, make contacts, carry on propaganda and build a machine
which would be invaluable in time of war.

In a few instances I learned the details of the Nazis' inexorable
determination and their inhuman indifference to the lives of even
their own agents.


Arno Oertel, _alias_ Harald Half, was a thin, white-faced spy trained
in two Gestapo schools for Fifth Column work. Oertel was given a
German passport by Richter, the Gestapo district chief at
Bischofswerda on what was then the Czechoslovak-German frontier.

"You will proceed to Prague," Richter instructed him, "and lose
yourself in the city. As soon as it is safe, go to Langenau near
Boehmisch-Leipa and report to Frau Anna Suchy.[2] She will give you
further instructions."

Oertel nodded. It was his first important espionage job--assigned to
him after the twenty-five-year-old secret agent had finished his
intensive course in the special Gestapo training school in Zossen
(Brandenburg), one of the many schools established by the Nazi secret
service to train agents for various activities.

After his graduation Oertel had been given minor practical training
in politically disruptive work in anti-fascist organizations across
the Czech border where he had posed as a German emigré. There he had
shown such aptitude that his Gestapo chief at sector headquarters in
Dresden, Herr Geissler, sent him to Czechoslovakia on a special
mission.

Oertel hesitated. "Naturally I'll take all possible precautions
but--accidents may happen."

Richter nodded. "If you are caught and arrested, demand to see the
German Consul immediately," he said. "If you are in a bad predicament,
we'll request your extradition on a criminal charge--burglary with
arms, attempted murder--some non-political crime. We've got a treaty
with Czechoslovakia to extradite Germans accused of criminal acts
but--" The Gestapo chief opened the top drawer of his desk and took a
small capsule from a box. "If you find yourself in an utterly hopeless
situation, swallow this."

He handed the pellet to the nervous young man.

"Cyanide," Richter said. "Tie it up in a knot in your handkerchief. It
will not be taken from you if you are arrested. There is always an
opportunity while being searched to take it."

Oertel tied the pellet in a corner of his handkerchief and placed it
in his breast pocket.

"You are to make two reports," Richter continued. "One for Frau Suchy,
the other for the contact in Prague. She'll get you in touch with
him."

Anna Suchy, when Oertel reported to her, gave him specific orders: "On
August 16 [1937], at five o'clock in the afternoon, you will sit on a
bench near the fountain in Karlsplatz in Prague. A man dressed in a
gray suit, gray hat, with a blue handkerchief showing from the breast
pocket of his coat, will ask you for a light for his cigarette. Give
him the light and accept a cigarette from the gentleman. He will give
you detailed instructions on what to do and how to meet the Prague
contact to whom in turn you will report."

At the appointed hour Oertel sat on a bench staring at the fountain,
watching men and women strolling and chatting cheerfully on the way to
meet friends for late afternoon coffee. Occasionally he looked at the
afternoon papers lying on the bench beside him. He felt that he was
being watched but he saw no one in a gray suit with a blue
handkerchief. He wiped his forehead with his handkerchief, partly
because of the heat, partly because of nervousness. As he held the
handkerchief he could feel the tightly bound capsule.

Precisely at five he noticed a man in a gray suit with a gray hat and
a blue handkerchief in the breast pocket of his coat, strolling toward
him. As the man approached he took out a package of cigarettes,
selected one and searched his pockets for a light. Stopping before
Oertel, he doffed his hat and smilingly asked for a light. Oertel
produced his lighter and the other in turn offered him a cigarette. He
sat down on the bench.

"Report once a week," he said abruptly, puffing at his cigarette and
staring at two children playing in the sunshine which flooded
Karlsplatz. He stretched his feet like a man relaxing after a hard
day's work. "Deliver reports to Frau Suchy personally. One week she
will come to Prague, the next you go to her. Deliver a copy of your
report to the English missionary, Vicar Robert Smith, who lives at 31
Karlsplatz."

Smith, to whom the unidentified man in the gray suit told Oertel to
report, was a minister of the Church of Scotland in Prague, a British
subject with influential connections not only with English-speaking
people but with Czech government officials.[3] Besides his ministerial
work, the Reverend Smith led an amateur orchestra group giving free
concerts for German emigrés. On his clerical recommendation, he got
German "emigré" women into England as house servants for British
government officials and army officers.


The far-flung Gestapo network in Czechoslovakia concentrated much of
its activities along the former German-Czech border. In Prague, even
today when Germany has achieved what she said was all she wanted in
Europe, the network reaches into all branches of the Government, the
military forces and emigré anti-fascist groups. The country, before it
was cut to pieces and even now, is honeycombed with Gestapo agents
sent from Germany with false passports or smuggled across the border.

Often the Gestapo uses Czech citizens whose relatives are in Germany
and upon whom pressure is put. The work of these agents consists not
only of ferreting out military information regarding Czech defense
measures and establishing contacts with Czech citizens for permanent
espionage, but of the equally important assignment of disrupting
anti-fascist groups--of creating opposition within organizations
having large memberships in order to split and disintegrate them.
Agents also make reports on public opinion and attitudes, and record
carefully the names and addresses of those engaged in anti-fascist
work. A similar procedure was followed in Austria before that country
was invaded, and it enabled the Nazis to make wholesale arrests
immediately upon entering the country.

Prague, with a German population of sixty thousand is still the
headquarters for the astonishing espionage and propaganda machine
which the Gestapo built throughout the country. Before Czechoslovakia
was cut up, most of the espionage reports crossed the frontier into
Germany through Tetschen-Bodenbach. The propaganda and espionage
center of the Henlein group was in the headquarters of the _Sudeten
Deutsche Partei_ at 4 Hybernska St. A secondary headquarters, in the
_Deutscher Hilfsverein_ at 7 Nekazanka St., was directed by Emil
Wallner, who was ostensibly representing the Leipzig Fair but was
actually the chief of the Gestapo machine in Prague. His assistant,
Hermann Dorn, living in Hanspaulka-Dejvice, masqueraded as the
representative of the _Muenchner Illustrierte Zeitung_.

Some aspects of the Nazi espionage and propaganda machine in
Czechoslovakia hold especial interest for American immigration
authorities since into the United States, too, comes a steady flow of
the shadowy members of the Nazis' Fifth Column. It is well to know
that the letters and numbers at the top of passports inform German
diplomatic representatives the world over that the bearer usually is a
Gestapo agent. Whenever American immigration authorities find German
passports with letters and numbers at the top, they may be reasonably
sure that the bearer is an agent. These numbers are placed on
passports by Gestapo headquarters in Berlin or Dresden. The agent's
photograph and a sample of his (or her) handwriting is sent via the
diplomatic pouch to the Nazi Embassy, Legation, Consulate or German
Bund in the country or city to which the agent is assigned. When the
agent reports in a foreign city, the resident Gestapo chief, in order
to identify him, checks the passport's top number with the picture and
the handwriting received by diplomatic pouch.


Rudolf Walter Voigt, _alias_ Walter Clas, _alias_ Heinz Leonhard,
_alias_ Herbert Frank--names which he used throughout Europe in his
espionage work will serve as an illustration. Voigt was sent to Prague
on a delicate mission. His job was to discover how Czechs got to Spain
to fight in the International Brigade, a mystery in Berlin since such
Czechs had to cross Italy, Germany or other fascist countries which
cooperate with the Gestapo.

Voigt was given passport No. 1,128,236 made out in the name of Walter
Clas, and bearing at the top of the passport the letters and numbers
1A1444. He was instructed, by Leader Wilhelm May of Dresden, to report
to the Henlein Party headquarters upon his arrival in Prague. Clas,
_alias_ Voigt, arrived October 23, 1937, reported at the Sudeten Party
headquarters and saw a man whom I was unable to identify. He was
instructed to report again four days later, since information about
the agent had not yet arrived.

Voigt was trained in the Gestapo espionage schools in Potsdam and
Calmuth-Remagen. He operates directly under Wilhelm May whose
headquarters are in Dresden. May is in charge of Gestapo work over
Sector No. 2. Preceding the granting to Hitler of the Sudeten areas in
Czechoslovakia, the entire Czech border espionage and terrorist
activity was divided into sectors. At this writing the same sector
divisions still exist, operating now across the new frontiers. Sector
No. 1 embraces Silesia with headquarters at Breslau; No. 2, Saxony,
with headquarters at Dresden; and No. 3, Bavaria, with headquarters at
Munich. After the annexation of Austria, Sector No. 4 was added,
commanded by Gestapo Chief Scheffler whose headquarters are in Berlin
with a branch in Vienna. Sector No. 4 also directs _Standarte II_
which stands ready to provide incidents to justify German invasion
"because the situation has got out of control of the local
authorities."

Another way in which immigration authorities, especially in countries
surrounding Germany, can detect Gestapo agents is by the position of
stamps on the German passport. Stamps are placed, in accordance with
German law, directly under the spot provided for them on the passport
on the front page, upper right hand corner. Whenever the stamps are on
the cover facing the passport title page, it is a sign to Gestapo
representatives and Consulates that the bearer is an agent who crossed
the border hurriedly without time to get the regular numbers and
letters from Gestapo headquarters. The agent is given this means of
temporary identification by the border Gestapo chief.

Also, whenever immigration authorities find a German passport issued
to the bearer for less than five years and then extended to the
regulation five-year period, they may be certain that the bearer is a
new Gestapo agent who is being tested by controlled movements in a
foreign country. For his first Gestapo mission in Holland, for
instance, Voigt was given a passport August 15, 1936, good for only
fourteen days. His chief was not sure whether or not Voigt had agreed
to become an agent just to get a passport and money to escape the
country; so his passport period was limited.

When the fourteen-day period expired, Voigt would have to report to
the Nazi Consulate for a renewal. In this particular instance, the
passport was marked "Non-renewable Except by Special Permission of the
Chief of Dresden Police." When Voigt performed his Holland mission
successfully, he was given the usual five-year passport.


Any German whose passport shows a given limited time, which has been
subsequently extended, gives proof that he has been tested and found
satisfactory by the Gestapo.

FOOTNOTES:

[2] Frau Suchy was one of the most active members of Konrad Henlein's
_Deutscher Volksbund_, a propaganda and espionage organization
masquerading as a "cultural" body in the Sudeten area. She is today a
leading official in the new German Sudetenland.

[3] The Rev. Smith returned to England when he learned that the
Czechoslovakian secret police were watching him. At the present writing
he had not returned to his church in Prague.




II

_England's Cliveden Set_


The work of foreign agents does not necessarily involve the securing
of military and naval secrets. Information of all kinds is important
to an aggressor planning an invasion or estimating a potential enemy's
strength and morale; and often a diplomatic secret is worth far more
than the choicest blueprint of a carefully guarded military device.

There are persons whom money, social position, political promises or
glory cannot interest in following a policy of benefit to a foreign
power. In such instances, however, protection of class interests
sometimes drives them to acts which can scarcely be distinguished from
those of paid foreign agents. This is especially true of those whose
financial interests are on an international scale and who consequently
think internationally.

Such class interests were involved in the betrayal of Austria to the
Nazis only a few months before aggressor nations were invited to cut
themselves a slice of Czechoslovakia; and it will probably never be
known just how much the Nazis' Fifth Column, working in dinner jackets
and evening gowns, influenced the powerful personages involved to
chart a course which sacrificed a nation and a people and which
foretold the Munich "peace" pact.

The story begins when Neville Chamberlain, Prime Minister of England,
accepted an invitation to spend the week-end of March 26-27, 1938, at
Cliveden, Lord and Lady Astor's country estate at Taplow,
Buckinghamshire, in the beautiful Thames Valley. When the Prime
Minister and his wife arrived at the huge Georgian house rising out of
a fairyland of gardens and forests with the placid river for a
background, the other guests who had already arrived and their hosts
were under the horseshoe stone staircase to receive them.

The small but carefully selected group of guests had been invited "to
play charades" over the week-end--a game in which the participants
form opposing sides and act a certain part while the opponents try to
guess what they are portraying. Every man invited held a strategic
position in the British government, and it was during this "charades
party" week-end that they secretly charted a course of British policy
which will affect not only the fate of the British Empire but the
course of world events and the lives of countless millions of people
for years to come.

This course, which indirectly menaces the peace and security of the
United States, deliberately launched England on a series of maneuvers
which made Hitler stronger and will inevitably lead Great Britain on
the road to fascism. The British Parliament and the British people do
not know of these decisions, some of which the Chamberlain government
has already carried out.

And without a knowledge of what happened during the talks in those
historic two days and what preceded them, the world can only puzzle
over an almost incomprehensible British foreign policy.

Present at this week-end gathering, besides the Astors and the Prime
Minister and his wife, were the following:

Sir Thomas Inskip, Minister for Defense.

Sir Alexander Cadogan, who replaced Sir Robert Vansittart as adviser
to the British Cabinet and who acts in a supervisory capacity over
the extraordinarily powerful British Intelligence Service.

Geoffrey Dawson, editor of the London _Times_.

Lord Lothian, Governor of the National Bank of Scotland, a determined
advocate of refusing arms to the Spanish democratic government while
Hitler and Mussolini supplied Franco with them.

Tom Jones, adviser to former Premier Baldwin.

The Right Honorable E.A. Fitzroy, Speaker of the House of Commons.

The Baroness Mary Ravensdale, sister-in-law of Sir Oswald Mosley,
leader of the British fascist movement.

To understand the amazing game played by the Cliveden house guests, in
which nations and peoples have already been shuffled about as pawns,
one must remember that powerful German industrialists and financiers
like the Krupps and the Thyssens supported Hitler primarily in order
to crush the German trade-union and political movements which were in
the late 1920's threatening their wealth and power.

The Astors are part of the same family in the United States. Lady
Nancy Astor, born in Virginia, married into one of the richest
families in England. Her interests and the interests of Viscount
Astor, her husband, stretch into banking, railroads, life insurance
and journalism. Half a dozen members of the family are in Parliament:
Lady Astor, her husband, their son, in the House of Commons; and two
relatives in the House of Lords. The Astor family controls two of the
most powerful and influential newspapers in the world, the London
_Times_ and the London _Observer_. In the past these papers, whose
influence cannot be exaggerated, have been strong enough to make and
break Prime Ministers.

Cliveden House, ruled by the intensely energetic and ambitious
American-born woman, had already left its mark upon current history
following other week-end parties. Lady Astor and her coterie had been
playing a more or less minor role in the affairs of the largest empire
in the world, but decisions recently reached at her week-end parties
have already changed the map of Europe, after almost incredible
intrigues, betrayals and double-crossings, carried through with the
ruthlessness of a conquering Caesar and the boundless ambitions of a
Napoleon.

The week-ends at Cliveden House which culminated in the historic one
of March 26-27, began in the fall of 1937. Lady Astor had been having
teas with Lady Ravensdale and had entertained von Ribbentrop, Nazi
Ambassador to Great Britain, at her town house. Gradually the
Astor-controlled London _Times_ assumed a pro-Nazi bias on its very
influential editorial page. When the _Times_ wants to launch a
campaign, its custom is to run a series of letters in its famous
correspondence columns and then an editorial advocating the policy
decided upon. During October, 1937, the _Times_ sprouted letters
regarding Hitler's claims for the return of the colonies taken from
Germany after the war.

Rather than have Germany attack her, England preferred to see Hitler
turn his eyes to the fertile Ukrainian wheat fields of the Soviet
Union. It meant war, but that war seemed inevitable. If Russia won,
England and her economic royalists would be faced with "the menace of
communism." But if Germany won, she would expand eastward and,
exhausted by the war, would be in no condition to make demands upon
England. The part Great Britain's economic royalists had to play,
then, was to strengthen Germany in her preparations for the coming war
with Russia and at the same time prepare herself to fight if her
calculations went wrong.

Cabinet ministers Lord Hailsham (sugar and insurance interests), Lord
Swinton (railroads, power, with subsidiaries in Germany, Italy, etc.),
Sir Samuel Hoare (real estate, insurance, etc.), were felt out and
thought it was a good idea. Chamberlain himself had a hefty interest
(around twelve thousand shares) in Imperial Chemical Industries,
affiliated with _I.G. Farbenindustrie_, the German dye trust which is
very actively supplying Hitler with war materials. The difficulty was
Anthony Eden, British Foreign Minister, who was opposed to fascist
aggressions because he feared they would eventually threaten the
British Empire. Eden would certainly not approve of strengthening
fascist countries and encouraging them to still greater aggressions.

At one of the carefully selected little parties the Astors invited
Eden. In the small drawing room banked with flowers the idea was
broached about sending an emissary to talk the matter over with
Hitler--some genial, inoffensive person like Lord Halifax (huge land
interests) for instance. Eden understood why the _Times_ had suddenly
raised the issue of the lost German colonies to an extent greater even
than Hitler himself, and Eden emphatically expressed his disapproval.
Such a step, he insisted, would encourage both Germany and Italy to
further aggressions which would ultimately wreck the British Empire.

Nevertheless, the cabinet ministers who had been consulted brought
pressure upon Chamberlain and while the Foreign Secretary was in
Brussels on a state matter, the Prime Minister announced that Halifax
would visit the Führer. Eden was furious and after a stormy session
tendered his resignation. At that period, however, Eden's resignation
might have thrown England into a turmoil--so Chamberlain mollified
him. Public sympathy was with Eden and before he was eased out, the
country had to be prepared for it.

In the quiet and subdued atmosphere of the diplomats' drawing rooms in
London they tell, with many a chuckle, how Lord Halifax, his bowler
firmly on his head, was sent to Berlin and Berchtesgaden in
mid-November, 1937, with instructions not to get into any arguments.
Lord Halifax, in the mellow judgment of his close friends, is one of
the most amiable and charming of the British peers, earnest, well
meaning and--not particularly bright.

In Berlin Halifax met Goering, attired for the occasion in a new and
bewilderingly gaudy uniform. In the course of their conversation
Goering, resting his hands on his enormous paunch, said:

"The world cannot stand still. World conditions cannot be frozen just
as they are forever. The world is subject to change."

"Of course not," Lord Halifax agreed amiably. "It's absurd to think
that anything can be frozen and no changes made."

"Germany cannot stand still," Goering continued. "Germany must expand.
She must have Austria, Czechoslovakia and other countries--she must
have oil--"

Now this was a point for argument but the Messenger Extraordinary had
been instructed not to get into any arguments; so he nodded and in his
best pacifying tone murmured, "Naturally. No one expects Germany to
stand still if she must expand."

After Austria was invaded and Halifax was asked by his close friends
what he had cooked up over there, he told the above story, expressing
the fear that his conversation was probably misunderstood by Goering,
the latter taking his amiability to mean that Great Britain approved
Germany's plans to swallow Austria. The French Intelligence Service,
however, has a different version, most of it collected during
February, 1938, which, in the light of subsequent events, seems far
more accurate.

Lord Halifax, these secret-service reports state, pledged England to a
hands-off policy on Hitler's ambitions in Central Europe if Germany
would not raise the question of the return of the colonies for six
years. Within that period England estimated that Hitler would have
expanded, strengthened his war machine and fought the Soviet Union to
a victorious conclusion.

Late in January 1938, Lord and Lady Astor invited some guests for a
week-end at Cliveden. The Prime Minister of England came and so did
Lord Halifax, Lord Lothian, Tom Jones and J.L. Garvin, editor of the
Astor-controlled London _Observer_. When Chamberlain returned to
London, he asked Eden to open negotiations with Italy to secure a
promise to stop killing British sailors and sinking British merchant
vessels in the Mediterranean. During this time the British Foreign
Office was issuing statements that Mussolini was "cooperating" in the
hunt for the "unidentified" pirates.

British opinion, roused by the sinking of English ships, might hamper
deals with the fascist leaders if such attacks were not ended. In
return for the cessation of the piratical attacks, Chamberlain was
ready to offer recognition of Abyssinia and even loans to Italy to
develop her captured territory. It was paying tribute to a pirate
chieftain, but Chamberlain was ready to do it to quiet opposition at
home to the sinking of British vessels and to give him time in which
to develop his policy.

Eden, who had fought for sanctions against the aggressor when
Abyssinia was invaded, obeyed orders but insisted that Italy must
first get her soldiers out of Spain. He did not want Mussolini to get
a stranglehold upon Gibraltar, one of the strategic life lines of the
British Empire. Mussolini refused and told the British Ambassador in
Rome that he and Great Britain would never to able to get together
because Eden insisted on the withdrawal of Italian troops from Spain,
and that it might help if a different Foreign Secretary were
appointed. Hitler, working closely with Mussolini in the Rome-Berlin
axis, also began to press for a different Foreign Secretary but went
Mussolini one better. Von Ribbentrop informed Chamberlain that Der
Führer was displeased with the English press attacks upon him, Nazis
and Nazi aggressions. Der Führer wanted that stopped.

The Foreign Office of the once proud and still biggest empire in the
world promptly sent notes to the newspapers in Fleet Street
requesting that stories about Nazis and Hitler be toned down "to aid
the government," and most of the once proud and independent British
newspapers established a "voluntary censorship" at what amounted to an
order from Hitler relayed through England's Foreign Office. The
explanation the newspapers gave to their staffs was that the world
situation was too critical to refuse the government's request and,
besides that refusal would probably mean losing routine Foreign Office
and other government department news sources. The more than average
British citizen doesn't know even today how his government and
"independent" press took orders from Hitler.

In the latter part of January, 1938, the French Intelligence Service,
still not knowing of the secret deal Halifax had made, learned that
Hitler intended to invade Austria late in February and that
simultaneously both Italy and Germany, instead of withdrawing troops
as they had said they would, planned to intensify their offensive in
Spain. When the French Intelligence learned of it, M. Delbos, then
French Foreign Minister, and Eden were in Geneva attending a meeting
of the Council of the League. Delbos excitedly informed Eden who,
never dreaming that Great Britain had not only agreed to sacrifice
Austria and betray France but was also double-crossing her own Foreign
Minister, telephoned Chamberlain from Geneva.

The Prime Minister listened attentively, thanked him dryly, hung up,
and promptly telephoned Sir Eric Phipps, British Ambassador to France.
Sir Eric was instructed to get hold of M. Chautemps, the French
Premier at the time, and ask that Chautemps instruct Delbos to stop
frightening the British Foreign Secretary. But all during February the
French Intelligence kept getting more information about the planned
invasion of Austria and the proposed intensified offensive in Spain,
and relayed it to England with insistent suggestions for joint
precautions. Eden in turn relayed it to Chamberlain who always thanked
him.

The date set for the invasion was approaching but Eden was still in
office and Hitler began to fear that perhaps "perfidious Albion" with
all her overtures of friendship might really be double-crossing
Germany. If England could send a special emissary to offer to sell out
Austria and double-cross her ally France, she might be quite capable
of tricking Germany. Simultaneously the Gestapo stumbled upon
information that the British Intelligence had reached into the top
ranks of the German Army and was working with high officers. Hitler,
not knowing how far the British Intelligence had penetrated, shook up
his cabinet, made Ribbentrop Secretary for Foreign Affairs, and
prepared for war in the event that England was leading him into a
trap.

There are records in the British Foreign Office which show that
Hitler, before invading Austria, tested England to be sure he wasn't
being led into a trap. Von Ribbentrop informed Eden and Chamberlain
that Hitler intended to summon Schuschnigg, the Austrian Chancellor,
and demand that Austria rearrange her cabinet, take in Dr.
Seyss-Inquart and release imprisoned Nazis. Hitler knew that
Schuschnigg would immediately rush to England and France for aid. If
they turned Austria down it was safe to proceed with the invasion.

The British Foreign Office records show that Schuschnigg did rush to
England and France for support, that France was ready to give it, but
that England refused, thereby forcing France to keep out of it.

While these frantic maneuvers were going on, the Astor-controlled
_Times_ and _Observer_, the Nazi and the Italian press simultaneously
started a campaign against Eden. The date set for the sacrifice of
Austria was approaching and Eden had to go or it might fail. The
public, however, was with Eden; so another kind of attack was
launched. Stories began to appear about the Foreign Secretary's
health. There were sighs, long faces, sad regrets, but Eden stuck to
his post in the hope that he could do something. On February 19,
Hitler, tired of waiting, bluntly demanded that he be removed, and
with the newspaper campaign in full swing, Chamberlain "in response to
public opinion" removed him the very next day.

The amiable Lord Halifax was appointed Foreign Secretary. Pro-fascists
like A.L. Lennon-Boyd, stanch supporter of Franco and admirer of
Hitler and Mussolini, were given ministerial posts.

The Austrian invasion was delayed for three weeks because of the
difficulty in getting Eden out. When the news flashed to a startled
world that Nazi troops were thundering into a country whose
independence Hitler had promised to respect, M. Corbin, the still
unsuspecting French Ambassador, rushed to the Foreign Office to
arrange for swift joint action. This was at four o'clock in the
afternoon of March 11, 1938. Instead of receiving him immediately,
Lord Halifax kept him waiting until nine o'clock in the evening. By
that time Austria was Nazi territory. There was nothing to do but
protest; so Lord Halifax, with a straight face, joined France in a
"strong protest." It was not until a week after Austria had been
absorbed that the French Intelligence Service learned the details of
the Halifax deal and finally understood why England had side-stepped
the pleas for joint action and why the French Ambassador had been kept
cooling his heels until the occupation of Austria was completed.

From Austria Hitler got more men for his army, large deposits of
magnesite, timber forests and enormous water-power resources for
electricity. From Czechoslovakia, if he could get it, Hitler would
have the Skoda armament works, one of the biggest in the world,
factories in the Sudeten area, be next door to Hungarian wheat and
Rumanian oil, dominate the Balkans, destroy potential Russian air and
troop bases in Central Europe, and place Nazi troops within a few
miles of the Soviet border and the Ukrainian wheat fields he has eyed
so long.

Five days after Austria was invaded, on March 16, at 3:30 in the
afternoon, Lord Halifax personally summoned the Czechoslovakian
Minister. At four o'clock the Minister came out of the conference with
a dazed and bewildered air. Lord Halifax had made some "suggestions."
Revealing complete ignorance of what had happened and was happening in
Czechoslovakian politics, Halifax was nevertheless laying down the
law.

It was obvious that the British Foreign Secretary was getting orders
from someone else, for Halifax suggested that the Central European
Republic try to conciliate Germany (which it had been doing for
months) and that a German be taken into the cabinet (there were
already three in it). On March 22 there was another meeting at which
the Minister learned that Halifax wanted the Czech Government to take
a Nazi into the cabinet--as Austria took Dr. Seyss-Inquart at Hitler's
orders.

This pressure from England for Czechoslovakian Nazis to be given more
power in the government was virtually telling the beleaguered little
democracy to fashion a strong rope and hang itself. Subsequent events
showed that Chamberlain personally supplied the rope.

Then came the historic week-end of March 26-27, 1938.

The walls of the small drawing room at Cliveden House are lined with
shelves filled with books. The laughing and chatting guests had
gathered there after a delightful dinner. For the Prime Minister of
England to go through all sorts of contortions in a game of charades
might prove a trifle undignified; so the hostess suggested that they
play "musical chairs."

Everyone thought it was a splendid idea and men servants in their
impressive blue liveries arranged the chairs in the required order,
carefully spacing the distances between them. One of the laughing and
bejeweled women took her place at the piano. In "musical chairs" there
is one person more than the number of chairs. When the music starts
the players march around the chairs. The moment the music stops
everyone dives for the nearest chair leaving the extra person standing
and subject to the hilarious jibes of the other players and those
rooting from the bleachers. It's one of the ways statesmen relax.

The music started and the dour Prime Minister of the greatest empire
in the world, the Minister in charge of the Empire's defense measures,
the editor of England's most powerful newspaper, the Right Honorable
Speaker of the House of Commons, the sister-in-law of England's
leading fascist and several others started marching while the piano
tinkled its challenging tune. The Prime Minister, perhaps because he
is essentially conservative, marched cautiously and stepped quickly
between the spaces while Lady Astor eyed him shrewdly and the others
suppressed giggles. The Prime Minister tried to maintain at least the
dignity of his banking background but managed "to look only a little
porky" as one expressed it afterward. Suddenly the music stopped.
Everyone lunged for the nearest chair. The Prime Minister managed to
get one and plopped into it heavily.

After half an hour or so some of the strategic rulers of Great Britain
got a little winded and quit. A conversation started on foreign
affairs and most of the wives retired to another room. When the
discussion was ended the little Cliveden house party had come to six
major decisions which will change the face of the world if
successfully carried through.

Those decisions (maneuvers to put some of them into effect have
already begun) are:

1. To inform France that England will go to her aid if she is
attacked, unless the attack results from a treaty obligation with
another power.

2. To introduce peace time conscription in England.

3. To appoint three ministers to coordinate industrial defense
(conscription in peace time); supervise military conscription; and,
coordinate the "political education of the people" (propaganda).

4. To reach an agreement with Italy to preserve the legitimate
interest of both countries in the Mediterranean.

5. To discuss mutual problems with Germany.

6. To express the hope to Germany that her methods of self-assertion
be such as will not hinder mutual discussions by arousing British
public opinion against her.

The two most important decisions in this plan are the one for the
conscription of labor in peace time and the effort to force France to
break the Franco-Soviet pact by choosing between England and Russia.

Consider conscription first and the motives behind it:

When any country whose workers are strongly organized starts veering
towards fascism, it must either win over the trade-unions in one way
or another or destroy them, for rebellious labor can prevent fascism
by means of the general strike. British labor is known to hate fascism
since it has learned that fascism destroys, among other things, the
value of the trade-unions and all that they have gained after many
years of struggle. Any veering by England toward fascism and fascist
alliances spells trouble with the trade-unions; hence, the decision
"to coordinate the political education of the people." This move is
particularly necessary since some trade-union leaders, especially in
the important armament industry, have already stated publicly that
unless the workers were given assurances that the arms labor was
manufacturing would be used in defense of democracy and not to destroy
it, they would not cooperate.

Hence "the education of the people" and the conscription of labor in
peace time which would ultimately lead to government control over the
unions. With some variations it is the same procedure followed by
Hitler in getting control of the once extremely powerful German
trade-unions.

A few days after this historic week-end, the _Times_ came out for
"national organization" and the wisdom of "national registration."
National registration, as the history of fascist countries has shown,
is the first step in the conscription of labor. With this opening gun
having been fired, it is a safe prophecy that if the Chamberlain
government remains in office British labor will witness one of the
most determined attacks ever made upon it in its history. All
indications point to the ground being laid and it may result in
splitting the trade-union movement, for some of the leaders are
willing to go with the government while others have already indicated
that they will refuse unless they know that it's for democracy and not
for fascism.

The second important decision is to exert pressure upon France to
break her pact with the Soviet Union--something Hitler has been
unsuccessfully trying to accomplish for a long time. At the moment it
appears that Great Britain will succeed just as she has already
succeeded in breaking the Czechoslovakian-Soviet pact--another rupture
Hitler was determined upon.

England has a reputation for shrewd diplomacy. In the past she has
used nations and peoples, played one against the other, betrayed,
sacrificed, double-crossed in the march of her empire. Since the
Cliveden week-end, however, with its resultant intrigues, England has,
to all appearances, finally double-crossed herself.

Those who guide her destiny and the destinies of her millions of
subjects have apparently come to the conclusion that democracy, as
England has known it, cannot survive and that it is a choice between
fascism and communism. Under communism, the ruling class to which the
Cliveden week-end guests belong, stand to lose their wealth and power.
It is the fatuous hope of the economic royalists that under fascism
they will still sit on top of the roost, and so the Cliveden
week-enders move toward fascism.

Hitler's Fifth Column finds strange allies.




III

_France's Secret Fascist Army_


Neither Hitler nor Mussolini could have foreseen the development of a
Cliveden set or England's willingness to weaken her own position as
the dominant European power by sacrificing Austria and a good portion
of Czechoslovakia. The totalitarian powers proceeded on the assumption
that when the struggle for control of central Europe, the Balkans and
the Mediterranean came they would have to fight.

The Rome-Berlin axis reasoned logically that if, when the expected war
broke out, France could be disrupted by a widespread internal
rebellion, not only would she be weakened on the battlefield but
fascism might even be victorious in the Republic. In preparation for
this, the axis sent into France secret agents plentifully supplied
with money and arms, and almost succeeded in one of the most amazing
plots in history.


The opening scene of events which led directly to the discovery of how
far the foreign secret agents had progressed took place in the
Restaurant Drouant on the Place Gaillon which is frequented by leaders
of Paris' financial, industrial and cultural life.

Precisely at noon, on September 10, 1937, Jacqueline Blondet, an
eighteen-year-old stenographer with marcelled hair, sparkling eyes,
and heavily rouged lips, passed through the rotating doors of the
famous restaurant and turned right as she had been instructed. She
had never been in so luxurious a place before--dining rooms done in
gray or brown marble with furniture to match. Two steps lead from the
gray to the brown room and Mlle. Blondet, not noticing them in her
excitement, slipped and would have fallen had not the old wine steward
who looks like Charles Dickens, caught and steadied her.

The two men with whom she was lunching were at a table at the far
corner of the deserted room. The one who had invited her, François
Metenier, a well-known French engineer and industrialist, powerfully
built, with sharp eyes, dark hair, and a suave self-assured manner,
rose at her approach, smiling at her embarrassment. The other man,
considerably younger, was M. Locuty, a stocky, bushy haired man with
square jaws and heavy tortoise-shell eyeglasses. He was an engineer at
the huge Michelin Tire Works at Clermont-Ferrand where Metenier was an
important official. The industrialist introduced the girl merely as
"my friend" without mentioning her name.

With the exception of two couples having a late breakfast in the gray
marble room, which they could see from their table, the three were
alone.

"Shall we have a bottle of Bordeaux?" asked Metenier. "I ordered lunch
by 'phone but I thought I would await your presence on the wine."

"Oh, anything you order," said Locuty with an effort at casualness.

"Yes, you order the wine," said the stenographer.

"_Garçon_, a bottle of St. Julien, Château Léoville-Poyferre 1870."

The ghost of Charles Dickens, who had been hovering nearby, bowed and
smiled with appreciation of the guest's knowledge of a rare fine wine
and personally rushed off to the cellars for the Bordeaux.

When the early lunch was over and the brandy had been set before
them, Metenier studied his glass thoughtfully and glanced at the two
portly men who had entered the brown dining room and sat some tables
away. From the snatches of conversation the three gathered that one
was a literary critic and the other a publisher. They were discussing
a thrilling detective story just published which the critic insisted
was too fantastic.

Metenier said to Locuty:

"You will have to make two bombs. I will take you to a very important
man in our organization, a power in France. He will personally give
you the material and show you how to make them. Then I will take you
to the places where you will leave them. I do not want them to see
me."

In low tones, they discussed the bombing of two places. Metenier, a
pillar of the church, highly respected in his community and well-known
throughout France, cautioned them as they left.

Why the vivacious blond stenographer was permitted to sit in on this
conversation, Locuty did not know, unless it was to tempt him, for, as
she bade him good-by, she squeezed his hand significantly and said she
wanted to see him again.

Metenier drove Locuty to an office building where he introduced him to
a man he called "Leon"--actually Alfred Macon, concierge of a building
which Metenier and others used as headquarters for their activities.
Within a few moments the door of an adjacent room opened and Jean
Adolphe Moreau de la Meuse, aristocrat and leading French
industrialist, came in. He had a monocle in his right eye which he
kept adjusting nervously. His face was deeply marked and lined with
heavy bluish pouches under the eyes. With a swift glance he sized up
Locuty as Metenier rose.

"This is the gentleman whom I mentioned," he said.

"He understands his mission?" De la Meuse asked.

"Yes," said Locuty. "You will teach me how to make them?"

De la Meuse nodded. "It will be a time bomb which must be set for ten
o'clock tomorrow night. There will be nobody in the building at that
time, so no one will be hurt."

An hour later Locuty, who had made both bombs and set the timing
devices, wrapped them into two neat packages. Metenier took him to the
General Confederation of French Employers' Building in the Rue de
Presbourg. In accordance with instructions he left one of the packages
with the concierge, after which Metenier took him to the Ironmasters'
Association headquarters on the Rue Boissiere, where Locuty left the
second package.

On the evening of September 11, the General Confederation of French
Employers was scheduled to hold a meeting in their building. This
meeting was postponed; and, as De la Meuse had assured the Michelin
engineer, the concierges and their wives, contrary to custom, were not
in their buildings that evening.

At ten o'clock, both bombs exploded. The plans had gone off as
arranged except for an accident, the investigation of which made
public the whole amazing conspiracy. Two French gendarmes standing
near one of the buildings were killed.

Immediately after the bombs exploded, the Employers' Confederation and
the Ironmasters' Association issued statements charging the Communists
and the Popular Front with being responsible for the outrages and
accusing them of planning a reign of terror to seize control of
France. The accusations left a profound effect upon the French people
despite the Communists' assertions that they never countenance
terrorism. The _Sûreté Nationale_, the French Scotland Yard, opened an
intensive investigation which was spurred on by the deaths of the
unfortunate gendarmes. It was not long before the French people heard
of the almost incredibly fantastic plot to destroy the Popular Front
and establish fascism in France--a plot directed by leading French
industrialists and high army officers cooperating with secret agents
of the German and Italian Governments.

The ramifications of the plot are so packed with dynamite in the
national and international arena that the French government, under
pressure from England as well as from some of its own industrialists,
government officials and army officers, has clamped the lid down on
further disclosures lest continued publicity seriously affect the
delicate balance of international relations.


It was obvious from what the police uncovered that it had taken
several years to organize the gigantic conspiracy. Within the teeming
city of Paris itself, steel and concrete fortresses had been secretly
built. Other cities throughout France were similarly ringed in
strategic places. Every one of these secret fortresses was stocked
with arms and munitions, and throughout the country, once the
confessions began, the police found thousands upon thousands of rifles
and pistols, millions of cartridges, hundreds of machine guns and
sub-machine guns. The fortresses themselves were fitted with secret
radio and telephone stations for communication among themselves. Code
books and evidence of arms-running from Germany and Italy were found.
A vast espionage network and a series of murders were traced to this
secret organization whose official name is the "Secret Committee for
Revolutionary Action." At their meetings they wore hoods to conceal
their identity from one another, like the Black Legion in the United
States, and the press promptly named them the "Cagoulards" ("Hooded
Ones").

Just how many members the Cagoulards actually have is unknown except
to its Supreme Council and probably to the German and Italian
Intelligence Divisions. Lists of names totaling eighteen thousand men
were turned up by the _Sûreté Nationale_, and the hundreds of steel
and concrete fortresses and the arms found in them point to a
membership of at least 100,000. The way the fortresses were built and
their strategic locations (blowing down the walls of the buildings
where the fortresses were hidden would have given them command of
streets, squares and government buildings) indicate supervision by
high military officials.

When contractors buy enormous quantities of cement for dugouts, when
butchers' and bakers' lorries rattle over ancient cobblestones with
enormous loads of arms smuggled across German and Italian borders,
when thousands of people are drilled and trained in pistol, rifle and
machine-gun practice, it is impossible that the competent French
Intelligence Service and the _Sûreté Nationale_ should not get wind of
it.

As far back as September, 1936, the _Sûreté Nationale_ knew that some
leading French industrialists with the cooperation of the German and
Italian Governments were building a military fascist organization
within France. Nevertheless it quietly permitted fortresses to be
built and stocked with munitions. The General Staff of the French
Army, from reports of Intelligence men in Germany and Italy, knew that
those countries were smuggling arms into France, but they permitted it
to go on. The General Staff knew that some eight hundred concrete
fortresses were being built under the supervision of M. Anceaux, a
building contractor of Dieppe, and that skilled members of the Secret
Committee for Revolutionary Action had been recruited for the building
and sworn to secrecy under penalty of death. They knew that these
fortresses were equipped with sending and receiving radios, knew that
some were within the shadow of military centers, knew that the
Cagoulards had a far-flung espionage system. But the French General
Staff made no effort to stop it.

The Popular Front Government was in power at the time, and heads of
the Supreme War Council apparently preferred a fascist France to a
democratic one. In fact, officers and reserve officers of the French
Army cooperated with secret agents of their traditional enemy,
Germany, to build up this formidable secret army.

The investigating authorities, stunned by their discoveries and the
high officials and individuals to whom their investigations led,
either did not dare go further with it, or, if they did, suppressed
the information. Some of it, however, came out.

At the top of the Cagoulards is a Supreme War Council or General Staff
whose members have not been disclosed. Working with them are several
other organizations, all with innocent names, as for example the
"Society of Studies for French Regeneration." The Cagoulards'
activities are divided into broad general lines, each directed by an
individual in complete command and embracing:

Buying war materials within France and smuggling war materials into
the country from Germany, Italy and Insurgent Spain, along with the
simultaneous weaving of an espionage network under Nazi and fascist
direction and leadership.

Building concrete fortresses at strategic centers and storing smuggled
arms in them.

Military training of secretly organized troops.

Getting the money to carry on these extensive activities.

Extreme care was, and still is, taken to conceal the identities of the
ordinary members and especially the leaders. For instance, one of the
leaders known to his subordinates as "Fontaine" is in reality Georges
Cachier, director of a large company in Paris and chief of the
Cagoulards' "Third Bureau," which is in charge of military movements.
Cachier is an Officer of the French Legion of Honor and a reserve
Lieutenant-Colonel in the French Army.

The Cagoulards are still very active. Members are being recruited with
leaders pointing out to the fearful ones that there is nothing to
worry about--almost all of those arrested in the early days of the
investigation are free, out on bail or kept in a "gentleman's
confinement" where they can do virtually as they please. "Our power is
great," new members are told.

As is customary in secret terrorist societies, the members are sworn
to silence with death as the penalty for indiscretion. The penalty
when it is employed is usually administered in American gangster
fashion. Each member is allotted to a "cell," the basic unit of the
military organization, and assigned to a secretly fortified post for
training. One of these posts discovered by the _Sûreté Nationale_ was
in an old boarding house run by two ancient spinsters with equally
ancient guests who spent their time in rockers, knitting and reading
and not dreaming that underneath the porch on which they sat so
tranquilly was a fortress with enough explosives to blow the whole
street to smithereens. Into this particular fortification, the cell
members would steal one by one after the old maids had retired,
entering by a concealed door three feet thick and electrically
operated.

There are two different kinds of cells in the Cagoulards, "heavy" and
"light" ones. They differ in the number of men and the quantity of
armaments assigned to them. The "light" cell has eight men equipped
with army rifles, automatics, hand grenades, and one sub-machine gun;
the "heavy" one has twelve men similarly armed but with a machine gun
instead of a sub-machine gun. Three cells form a unit, three units a
battalion, three battalions a regiment, two regiments a brigade and
two brigades a division of two thousand men. The battalions (one
hundred and fifty men) are subdivided into squads of fifty to sixty
men with ten to twelve cars at their disposal for quick movement
throughout the city. These automobile squads are given intensive
training.

Members are not required to pay dues, for enough money comes in from
industrialists and the German and Italian Governments to eliminate the
need of collecting money from members for operating expenses. Every
effort is made to function without written communications. No
membership cards are issued. Notices of meetings, drill and rifle
practice are issued verbally, and so far as the mass membership is
concerned, nothing in writing is placed in their hands.

A twenty-page handbook with instructions on street fighting was issued
to group commanders and, lest a copy fall into wrong hands and betray
the organization, it was boldly entitled: _Secret Rules of the
Communist Party_. The instructions are specific and are based upon the
insurrectionary tactics issued to the Nazi Storm Troopers. They fall
into six sections: General Remarks; Group Fighting; Section Fighting;
Choice of Terrain; Commissariat; and Policing Groups.

One or two excerpts from these instructions for street fighting
follow:

"The particular force for street fighting is infantry, provided with
automatic weapons and hand grenades. Members of the detachments should
be instructed that automatic weapons must always be used in
preference. Essential arms are: sub-machine guns, rifles including
hunting rifles, hand grenades, revolvers, petards." (Petards are small
bombs used for blowing in doors.)

With regard to "mopping up" in houses, the instructions state:

"If the door is barricaded, it must be opened with tools or
explosives. If it is a heavy door, break it in by driving a lorry at
it. Clean up basements and cellars by throwing bombs down through the
air holes or other openings after your men have got into the house.
Only after these have exploded should the cellar doors be forced.
Then, when ascending the stairs, keep close to the walls while one of
your men keeps firing straight up the shaft. Mop up as you go down
floor by floor. If necessary, pierce holes in the ceilings and mop up
by throwing down hand grenades."

The chief of the Cagoulards' espionage system is Dr. Jean Marie
Martin, a bushy-haired stocky man with dark, somber eyes. Dr. Martin
usually travels with several false passports and with the utmost
secrecy. At the moment he is in Genoa where he went to meet
Commendatore Boccalaro, Mussolini's personal representative in charge
of smuggling arms into foreign countries.

The preparations by the Rome-Berlin axis point to plans for a fight to
a finish between fascist and non-fascist countries. A feeble or
disrupted democracy will obviously strengthen the fascist powers in
any coming struggle with anti-fascist powers. Germany and Italy, faced
on their own borders with a democratic France allied with the Soviet
Union in a military defense pact, would face a powerful enemy in the
event of war. But if France were torn by a bloody civil war, she would
be virtually unable even to defend her borders. Consequently, it is
essential for Germany and Italy to weaken and if possible destroy
France's democracy.

France and Germany have been traditional enemies in their struggle for
land containing raw materials needed by their industries to compete in
the world markets. But the growth of the French labor movement and the
power of the Popular Front which threatened the control and the
profits of French industrialists and financiers, made them find more
in common with fascist and Nazi industrialists than with French
workers who menaced their economic and political control. The result
was that leading French industrialists were willing to cooperate with
Nazi and fascist agents to destroy the Popular Front and establish
fascism in France. About half of the 200,000,000 francs, which it is
estimated the fortresses and arms cost, was contributed by French
industrialists. The other half came from the German and Italian
Governments.

Germany and Italy sent swarms of secret agents into France to
supervise the building of the underground military machine and to
carry on intensive espionage with the assistance of the French Army
and Government officials who were members of the Hooded Ones. The
espionage service was organized by Baron de Potters, an old
international spy who travels with two or more passports under the
names of Farmer and Meihert. De Potters gets his funds from the Nazis'
strongly guarded "Bureau III B," established in Berne, Switzerland at
21 Gewerbestrasse. "Bureau III B" is the official name of this branch
of the Gestapo. At the head of it is Boris Toedli whose activities
include not only espionage but underground diplomatic intrigue and
propaganda. He works directly under Drs. Rosenberg and Goebbels.
Toedli supplies not only the Baron but other espionage directors with
money and there is plenty of it at his disposal for quick emergency
uses. The money is deposited in the _Société des Banques Suisses_,
account No. 60941.

The head of the Italian espionage system directing the work in France
and cooperating closely with the Nazis is Commendatore Boccalaro, head
of the Italian Government's Arsenal in Genoa. One of his specialties
is the smuggling of arms into foreign countries.

Boccalaro's history shows that the not so fine Italian hand is
interfering in the internal affairs of foreign governments. As far
back as 1928, he secretly supplied carloads of arms from the Genoa
Arsenal to Hungary, and in 1936 he supplied Yugoslavian terrorists
with war materials in efforts to get those countries under Mussolini's
sphere of influence. Boccalaro, too, seems to have had reasons to
suppress information in at least one case where the death penalty was
inflicted upon a member of the Cagoulards.


Among the Hooded Ones who have been found with bullets or knives in
them was an arms runner named Adolphe-Augustin Juif, who tried to
charge the secret organization a little more than he should for
smuggling guns and munitions into France. When the organization
threatened him, he advised it not to resort to threats because he knew
a little too much.

On February 8, 1937, his bullet-riddled body was found in San Remo,
Italy. When Juif's wife, not hearing from him, sought information
about his whereabouts, she wrote to Boccalaro, since she knew he was
working with the Genoa director. The Italian papers had announced the
finding of his body; nevertheless, on March 3, Boccalaro wrote to the
murdered man's widow:

"Your husband, my dear friend, is carrying on a special and delicate
mission (perhaps in Spain or Germany) and has special reasons of a
delicate nature not to inform even his own family where he is at the
present moment."

Among the men whom Juif met before he was murdered was Eugène
Deloncle, director of the Maritime and River Transport Mortgage
Company and one of the most important industrialists in France.
Deloncle, a high official in the Cagoulards, used the name of
"Grosset" in his conspiratorial activities. The other man whom the
murdered Juif met is General Edouard Arthur Du-seigneur, former Air
Force chief and Military Adviser to the French Air Ministry. The
General is one of the military heads of the Cagoulards and frequently
met with Baron de Potters.


The _Sûreté Nationale_, the French Intelligence Service, and the
examining magistrate have documentary evidence that Germany and Italy
were and are deliberately conspiring to throw France, as they did
Spain, into a civil war. Publication of these documents would have
far-reaching effects, internally and externally. Great Britain,
however, planning to establish a four-cornered pact between England,
France, Germany and Italy, brought pressure to bear upon France to
suppress further disclosures about the Cagoulards. To England's
pressure was added that of leading French industrialists, financiers,
government and army officials. Gradually, news about the Cagoulards is
dying out. The real heads of the Hooded Ones either have not been
named or, if arrested in the early days of the investigation, have
been released on bail. And recruiting for the underground army is
still going on.




IV

_Dynamite Under Mexico_


Most people in the UNITED STATES feel secure from European or Asiatic
aggression since wide oceans apparently separate us from the
conquering ambitions of a Führer or a Son of the Sun. However, despite
our desire to be left in peace, the Rome-Berlin axis, which Japan
joined, has cast longing eyes upon the Western Hemisphere. The Monroe
Doctrine is of value only so long as aggressor nations feel we are too
strong for them to violate it; recent history has shown what pieces of
paper are worth.

In the process of trying to get a foothold in the Americas, the Nazis
have sent agents into all of the countries, but because most of the
Central and South American republics are still resentful of past acts
by the "Colossus of the North," they offer the most fertile fields.

The two spots on the Western Hemisphere most vital to the United
States are the Panama Canal Zone and Mexico--the Zone because it is
our trade and naval life line between the oceans and Mexico because
potential enemies could find in it perfect military and naval bases.

Let us see what the totalitarian powers are doing in Mexico:


On June 30, 1937, the S.S. "Panuco" of the New York and Cuba Mail
Steamship Co. steamed into Tampico, Mexico, from New York with a
mysterious cargo consigned to one Armeria Estrada. As soon as she
docked, the cargo was quickly transferred to the Atchison, Topeka and
Santa Fe Railroad freight car No. 45169, which was awaiting it. A
gentleman known around the freight yards as A.M. Cabezut, arranged for
the car to leave immediately for the state of San Luis Potosí in the
heart of Mexico.

There was no record on the bill of lading to show that the shipper was
the Winchester Repeating Arms Company of New Haven, Conn., and that
the cargo, ordered on January 23 and February 23, 1937, by an Italian
named Benito Estrada, was a large quantity of rifles, pistols and one
hundred and forty cases of cartridges for various caliber guns.

When the car arrived in San Luis Potosí, it was met by an elderly,
mustached German named Baron Ernst von Merck, who took the shipment to
General Saturnino Cedillo, former governor of the state[4] and a
well-known advocate of fascism. One week later the elderly German met
a carload shipment of "farm implements." When it was unloaded in San
Luis Potosí, the farm implements turned out to be dynamite.

Von Merck, who has been Cedillo's right-hand man, was during the World
War a German spy stationed in Brussels. A member of Cedillo's staff[5]
he traveled constantly between San Luis Potosí, where the arms were
cached, and the Nazi Legation in Mexico City.

On December 21, 1937, Baron von Merck flew to Guatemala--the same day
that a cargo of arms from Germany was to be landed off the wild jungle
coast of Campeche in Southern Mexico.

Guatemala, just south of Mexico, is the most thoroughly organized
fascist country in Central or South America. Its chief industries,
coffee and bananas, are virtually controlled by Germans, whose
enormous plantations overlap into the state of Chiapas, Mexico. But
President Jorge Ubico, who is not much of an Aryan, prefers
Mussolini's brand of fascism because the Nazi theory of Nordic
supremacy does not strike a sympathetic chord in the President's
heart. As a result, the Italian Minister to Guatemala is Ubico's
adviser on almost all matters of state.

Guiseppe Sotanis, a mysterious Italian officer who sits in the Gran
Hotel in San José, Costa Rica, collecting stamps and studying his
immaculate fingernails, arranges for shipments of Italian arms into
Guatemala. A few months ago Sotanis, the Italian minister to
Guatemala, and Ubico met in Guatemala City. Shortly thereafter the
Italian arms manufacturing company, Bredda, sent Ubico two hundred
eighty portable machine guns, sixty anti-aircraft machine guns and
seventy small caliber cannon.

But President Ubico is not hopelessly addicted to one brand of
fascism. Nazi ships make no attempt to conceal their landing of arms
and munitions at Puerto Barrios. From there they are transported by
car, river and horse into the dense chicle forests in the mountain
regions, then across the Guatemalan border into Chiapas and Campeche.


During March, 1938, mysterious activities took place in the heart of
the chicle forests in Campeche. The region is a dense jungle inhabited
by primitive Indian tribes. There is little reason for anyone to build
an airport in this territory, much of which has not even been
explored. But if the Mexican Government will instruct its air squadron
to go to Campeche and fly forty miles north of the Rio Hondo and a
little west of Quintana Roo border, they will find a completed airport
in the heart of the chicle jungle; and if they will fly a little due
west of the small villages of La Tuxpena and Esperanza in Campeche,
they will find two more secret airports.


The Mexican Government knows that arms are being smuggled in through
its own ports, across the Guatemalan border, and across the wide,
sparsely inhabited two-thousand-mile stretch of American border. Both
American and Mexican border patrols have been increased, but it is
almost impossible to watch the entire region between Southern
California and Brownsville. Few contraband runners are caught,
apparently because neither the American nor Mexican Governments seem
to know the routes followed or who the leading smugglers are.

On February 12, 1938, José Rebey and his brother Pablo, who live in
the Altar district of Sonora and know every foot of the desert, drove
to Tucson, Arizona, where they met two unidentified Americans. On
February 16, 1938, José Rebey and Francisco Cuen, old and close
friends of Gov. Roman Yocupicio, drove a Buick to the sandy, deserted
wastes near Sonoyta, just south of the American border where one of
the two unidentified Americans delivered a carload of cases securely
covered with sheet metal. As soon as the cases were transferred into
Rebey's car, he turned back on Sonora's flat, dusty roads, passing
Caborca, La Cienega, and turning on the sun-dried rutted road to Ures,
which lies parched and dry in the semi-tropical sun.

Ures is the central cache for arms smuggled into Sonora by Yocupicio,
and the Rebey brothers and Cuen are among the chief contraband
runners. The load they carried that day consisted of Thompson guns and
cartridges, and the route followed is the one they generally use. A
secondary route used by one of Cuen's chief aids, a police delegate
from the El Tiro mine, lies over the roads to Ures by way of Altar.

If in time of war it becomes necessary for guard or patrol work to
deflect any troops from the army, or ships from the navy, it is of
advantage to the enemy. If a coming war found the United States lined
up with the democratic as against the fascist powers and serious
uprisings broke out in Mexico, it would require several U.S. regiments
to patrol the border and a number of U.S. ships to watch the thousands
of miles of coast line to prevent arms running to American countries
sympathetic to the Berlin-Rome-Tokyo axis.


The three fascist powers that have cast longing eyes upon Central and
South America have apparently divided their activities in the
Americas, with Japan concentrating on the coast lines and the Panama
Canal, Germany on the large Central and South American countries and
Italy upon the small ones.

In Mexico, Nazi agents work directly with Mexican fascist groups, and
have undertaken to carry the brunt of spreading anti-democratic
propaganda to turn popular sentiment against the "Colossus of the
North," and to develop a receptive attitude toward the totalitarian
form of government.

Italy concentrates on espionage, with particular attention to Mexican
aid to Loyalist Spain. It was the Italian espionage network in Mexico
which learned the course of the ill-fated "Mar Cantabrico" which left
New York and Vera Cruz with a cargo of arms for the Loyalists and was
intercepted and sunk by an Insurgent cruiser.

Though Germany, even more than Italy, is utilizing her propaganda
machine in the Americas' markets, the Japanese are not troubling about
that just yet. Their commercial missions seem to be much less
interested in establishing business connections than in taking
photographs. The chief commercial activity all three countries are
intensely interested in is getting concessions from Mexico for iron,
manganese and oil--materials essential for war. President Lázaro
Cárdenas, however, has stated his dislike of fascism on several
occasions. Since Germany, Japan and Italy must obtain these products
wherever they can get them, it would be to their advantage if a
government more friendly to fascism were in power. But, should that
prove impossible, the existence of a strong, fascist movement would
have, in time of war, tremendous potentialities for sabotage.

Hence, Mexico is today being battered by pro-fascist propaganda
broadcasts from Germany on special short-wave beams, and Nazi and
fascist agents surreptitiously meet with discontented generals to
weave a network throughout the country.

The radio propaganda is devoted chiefly to selling the wonders of
totalitarian government, and to the dissemination of subtle, indirect
comments calculated to turn popular feeling against the United States.
In addition to regular broadcasts, material printed in Spanish and in
German by the _Fichte Bund_ with headquarters in Hamburg, Germany, is
smuggled into Mexico in commercial shipments. A Nazi bund to direct
this propaganda was organized secretly because of the government's
unfriendly attitude toward fascism. The bund operates as the _Deutsche
Volksgemeinschaft_ and its propaganda center functions under the name
of the "United German Charities." This organization, on the top floor
of the building at 80 Uruguay Street, Mexico City, is actually the
"Brown House," in direct contact with Nazi propaganda headquarters in
Hamburg.

Some of the propaganda distributed in Mexico is smuggled off Nazi
ships docking in Los Angeles, and is transported across the American
border by agents working under Hermann Schwinn, director of Nazi
activities for the West Coast of the United States. The propaganda
sent by Schwinn across the American border is chiefly for distribution
around Guaymas, where a special effort is being made to win the
sympathy of the people. Meanwhile Yocupicio caches arms in Ures and
the bland Japanese continue charting the harbors and coast lines.

The Nazis began to build fascism in Mexico right after Hitler got into
power. In 1933 Schwinn called a meeting in Mexicali of several Nazi
agents operating out of Los Angeles, including General Rodriguez, and
several members of a veterans organization. It was at this meeting
that the Mexican Gold shirts were organized. Under the direction of
Rodriguez and his right-hand men (Antonio F. Escobar was one of them),
the fascist organization drilled and paraded, but little official
attention was paid to them. Five years ago few people realized the
intensity and possibilities of Nazi propaganda and organization. The
only ones in Mexico who watched the growth of the fascist military
body were the trade-unionists and the Communists. They remembered what
happened in Italy and Germany when the Black Shirts and the Brown
Shirts were permitted to grow strong.

On November 20, 1935, Rodriguez and his organization staged a military
demonstration in Mexico City, and marched upon the President's palace.
Trade-unionists, liberals and Communists barred their way. When the
pitched battle was over, five Gold Shirts were dead, some sixty
persons wounded, and Rodriguez himself had been stabbed by a woman
worker, on her lips the furious cry, "Down with fascism!"

When the Gold Shirt leader was discharged from the hospital, he found
that his organization had been made illegal, and he himself exiled.
Rodriguez went to El Paso, Texas, and immediately, working through
Escobar, set about establishing the "Confederation of the Middle
Class" to take over now the illegal Gold Shirt work and consolidate
the various Mexican fascist groups. Its headquarters was established
at 40 Passo de la Reforma.

Rodriguez kept in touch with Schwinn through Henry Allen, a native
American of San Diego, who acts as liaison man. It was Allen, on
orders from Schwinn, who last year secretly met in Guaymas Ramon F.
Iturbe, a member of the Mexican Chamber of Deputies. Iturbe is in
constant touch with the fascist groups in Mexico City.

The Gold Shirts smuggled arms into Mexico along the border between
Laredo and Brownsville, and cached them in Monterrey. On January 31,
1938, Gold Shirts attempted to attack Matamoros, near Brownsville. A
Mexican policeman was killed and another wounded in the fighting. Two
days later Gold Shirts surrounded Reynosa, some distance west of
Matamoros, but met peasants armed with rifles, pistols and knives. The
fascists withdrew and Rodriguez vanished, only to appear in San Diego,
California, on February 19, 1938 for a secret meeting with Plutarco
Elias Calles, the former President of Mexico. After a three-hour
conference Rodriguez went to Los Angeles, met Schwinn, and proceeded
to Mission, Texas, where he established new headquarters.

A few days after these conferences, he sent two men into Mexico under
forged passports to discuss closer cooperation among the fascist
leaders. The men sent into Mexico were an American named Mario
Baldwin, one of Rodriguez's chief assistants, and a Mexican named
Sanchez Yanez. They established headquarters at 31 José Joaquin
Herrera, apartment 1-T, and met for their secret conferences in Jesus
de Avila's tailor shop at 22 Isabel la Catolico.


In the latter part of June, 1935, an amiable bar fly arrived in Mexico
City from Berlin as civilian attaché to the German Legation. A
civilian attaché is the lowest grade in the diplomatic ranks and the
salary is just about enough to keep him going. Nevertheless, Dr.
Heinrich Northe, at that time not quite thirty, and not especially
well-to-do, established a somewhat luxurious place at 64 Tokyo St. and
bought a private airplane for "pleasure jaunts" about Mexico. Northe
is seldom at the Nazi Legation. He is more apt to be found in Sonora,
where Yocupicio is storing arms and where the Japanese fishing fleet
is active, or in Acapulco, whose harbor fascinates the Japanese. He
used to make frequent visits to Cedillo just before the General
started his rebellion. On March 4, 1938, Northe took off "for a
vacation" in the Panama Canal Zone. He stopped off in Guatemala on the
way down.

The persistently vacationing commercial attaché, before coming to
Mexico, was part of the Gestapo network in Moscow and Bulgaria.
Immediately after the Nazis got control of Germany, Northe went into
the German "diplomatic service," and was one of the first secret
agents sent to the German Embassy in Moscow. The Russian secret
service apparently watched him a little too closely, for he was
shifted to Sofia, Bulgaria, where he bought a private plane and flew
wherever he wished. In 1935, when the signers of the "anti-Communist
pact" decided to concentrate upon Mexico, Northe was transferred to
Mexico City.

One of Northe's chief aids is a German adventurer who was a spy during
the World War. When the War ended, Hans Heinrich von Holleuffer, of 36
Danubio St., Mexico City, worked hard at earning a dishonest penny in
Republican Germany. When the law got after him, he skipped to Mexico,
where, without even pausing for breath, he went to work on his fellow
countrymen in the New World. Berlin asked for his arrest and
extradition and von Holleuffer fled to Guatemala. That was in 1926. He
came back to Mexico in 1931 under the name of Hans Helbing.

When Hitler got into power von Holleuffer's brother-in-law became a
high official in the Gestapo. Since there was no danger of the Nazis
extraditing him on charges of fraud and forgery, Hans Helbing became
Hans Heinrich von Holleuffer again and, without any visible means of
support, established a swanky residence at the above address, got an
expensive automobile, a chauffeur, and some very good-looking maids.
Since he has not defrauded anyone lately, the German colony in Mexico
still wonders how he does it.

He does it by being in charge of arms smuggling from Germany to
Mexican fascists. During the latter part of December, 1937, he
directed the unloading of one of the heaviest cargoes of arms yet
shipped into Mexico. Northe had informed von Holleuffer that a German
vessel whose name even Northe had not yet been given, would be ready
to land a cargo of guns, munitions and mountain artillery somewhere
along the wild and deserted coast of Campeche where there are miles of
shore with not even an Indian around. Von Holleuffer was instructed to
arrange for unloading the cargo and having it removed into the
interior.

On December 19, 1937, von Holleuffer arranged a meeting in Mexico City
with Julio Rosenberg of 13 San Juan de Letran and Curt Kaiser at 34
Bolivar, the latter's home. He offered them fifty thousand pesos to
take the contraband off the boat and transport it through the chicle
jungles to the destination he would give them.


Shortly after the Japanese-Nazi pact was signed, the Japanese
Government arranged with the somewhat naive Mexican Government for
Japanese fishing experts to conduct "scientific explorations" along
Mexico's Pacific Coast in return for teaching Mexicans how to catch
fish scientifically. The agreement provided that two Japanese, J.
Yamashito and Y. Matsui, be employed by the Mexican Government for the
exploratory work.

Matsui arrived in Mexico in 1936 and immediately became interested in
the fish situation at Acapulco, which from a naval standpoint has the
best harbor on the entire long stretch of Mexico's Pacific coast line.
In February, 1938, he decided that it was important to the west-coast
shrimp-fishing studies for him to do some exploratory work along the
northeast part of the Mexican coast, near the American border, and
there he went.

Immediately after the agreement was signed, three magnificent fishing
boats, the "Minatu Maru," the "Minowa Maru" and the "Saro Maru," which
had been hovering out on the Pacific while the negotiations were going
on, appeared in Guaymas. Their captains reported to the Nippon Suisan
Kaisha, a fishing company with headquarters in Guaymas. Eighty per
cent of this company's stock is owned by the Japanese Government.

Each ship is equipped with large fish bins which can easily be turned
into munition carriers, each has powerful short-wave sending and
receiving sets; and each has extraordinarily long cruising powers
ranging from three to six thousand miles. These boats do not do much
fishing. They confine themselves to "exploring," which includes the
taking of soundings of harbors, especially Magdalena Bay. Apparently
the explorers want to know how deep the fish can swim and whether
there are any rocks or ledges in their way.


That Germany, Japan and Italy are not working toward peaceful ends in
Mexico is slowly dawning upon the Mexican Government. Influential
government and trade-union leaders have repeatedly shown their dislike
of Nazism and fascism and have urged propaganda against them.


On the morning of October 5, 1937, Freiherr Riedt von Collenberg, Nazi
minister to Mexico, telephoned the Japanese and Italian ministers to
suggest a joint meeting to discuss steps to counteract the attacks on
fascism and their countries. The Japanese minister, Sacchiro Koshda,
suave and skilled in such matters, thought it would not be wise to
meet in any of the legations. The Italian minister suggested the
offices of the Italian Union on San Cosne Avenue.

At half past one in the afternoon of October 7, the ministers arrived,
each in a taxi instead of the legation car which carries a conspicuous
diplomatic license plate. At this secret meeting which lasted until
after four, they concluded that it would be unwise for them personally
to take any steps to counteract the anti-fascist activities--that it
would be wiser to work indirectly through fascist organizations like
the Confederation of the Middle Class and its associated bodies. A few
days earlier each minister had received a letter from several
organizations allied with the Confederation of the Middle Class. It
was an offer to help the Berlin-Tokyo-Rome combination. A free
translation of the passage which the ministers discussed (from the
letter received by the Japanese minister which I now have) follows:

"We, exactly like the representatives of the three powers, love our
Fatherland and are disposed to any sacrifice to prevent the
intervention of these elements [Jews and Communists] in our politics,
in which, unfortunately, they have begun to have great influence. And
we will employ, and are employing, all legal methods of struggle to
make an end of them."

The phrase "legal methods" is frequently employed by those who suggest
illegal activity. The German Minister knew that the _Union
Nacionalista Mexicana_, one of the signers of the letter, was run by
Escobar, and that Carmen Calero, 12 Place de la Concepcion, Mexico
City, an elderly woman physician active in many fascist organizations,
was a member of the _Partido Anti-reelectionista Accion_, another of
the signers.

One month later the various fascist groups got enough money to launch
an intensive pro-fascist drive under the usual guise of fighting
Communism. José Luis Noriega, Secretary of the Nationalist Youth of
Mexico, which also signed the letters to the ministers, left for the
United States to organize an anti-Cardenas drive. At the same time,
Carmen Calero left on a mysterious mission to Puebla on November 12,
1937, with a letter from Escobar to J. Trinidad Mata, publisher of the
local paper _Avance_. She carried still another letter addressed to
their "distinguished comrades," without mentioning names, and signed
by both Escobar and Ovidio Pedrero Valenzuela, President of the
_Accion Civica Nacionalista_. The "distinguished comrades" to whom she
presented the letter were the Nazi honorary consul in Puebla, Carl
Petersen, Avenida 2, Oriente 15, and a Japanese agent named L.
Yuzinratsa with whom the consul has been in repeated conferences.

Six weeks after the secret meeting of the Japanese, German and Italian
ministers, and one week after she went to Puebla, Dr. Carmen Calero
got twenty-two kilos of dynamite and stored it in a house at 39 Juan
de la Mateos, in Mexico City. She, her sister, Colonel Valenzuela, and
four others, met at her home and laid plans to assassinate President
Cárdenas by blowing up his train when he left on a proposed trip to
Sonora.

On November 18, 1937, the secret police made a series of simultaneous
raids upon Dr. Calero's and Valenzuela's homes and the house where the
dynamite was cached. They arrested everyone in the houses. But once
the arrests had been made, the Mexican Government found itself in a
quandary. To bring the prisoners to trial would involve foreign
governments and create an international scandal; so Cárdenas
personally ordered the secret police to release them.

The arrests, however, scared the wits out of the ministers, and their
horror was not lessened when they discovered that the letters from the
fascist organizations had vanished from their files. They wouldn't
even answer the telephone when one of the released fascist leaders
called. It was then that the Mexican fascists decided to send a
special messenger to Francisco Franco in Spain (November 30, 1937)
with the request that Franco intercede to get money from Hitler to
help overthrow Cárdenas, since the Nazi minister was too scared to
cooperate. The special messenger was Fernando Ostos Mora. He never got
there.

FOOTNOTES:

[4] In May, 1938, Cedillo launched an abortive rebellion and is now
being hunted by the Mexican government.

[5] After Cedillo's defeat von Merck fled to New York and went to
Germany.




V

_Surrounding the Panama Canal_


There is a little shirt shop in Colon, Panama, on Calle 10a between
Avenida Herrera and Avenida Amador Guerrero, whose red and black
painted shingle announces that Lola Osawa is the proprietor.

Across the street from her shirt shop, where the red light district
begins, is a bar frequented by natives, soldiers and sailors. Tourists
seldom go there, for it is a bit off the beaten track. In front of the
bar is a West Indian boy with a tripod and camera with a telescopic
lens. He never photographs natives, and wandering tourists pass him
by, but he is there every day from eight in the morning until dark.
His job is to photograph everyone who shows an undue interest in the
little shirt shop and particularly anyone who enters or leaves it.
Usually he snaps your picture from across the street, but if he misses
you he darts across and waits to take another shot when you come out.

I saw him take my picture when I entered the store. It was almost high
noon and Lola was not yet up. The business upon which she and her
husband are supposed to depend for a living was in the hands of two
giggling young Panamanian girls who sat idly at two ancient Singer
sewing machines.

"You got shirts?" I asked.

Without troubling to rise and wait on me, they pointed to a glass case
stretched across the room and barring quick entrance to the shop
proper. I examined the assortment in the case, counting a total of
twenty-eight shirts.

"I don't especially like these," I said. "Got any others?"

"No more," one of them giggled.

"Where's Lola?"

"Upstairs," the other said, motioning with her thumb to the ceiling.

"Looks like you're doing a rushing business, eh?" They looked puzzled
and I explained: "Busy, eh?"

"Busy? No. No busy."

There is little work for them and neither Lola nor they care a whoop
whether or not you buy any of the shop's stock of twenty-eight shirts.
Lola herself pays little attention to the business from which she
obviously cannot earn enough to pay the rent, let alone keep herself
and her husband, pay two girls and a lookout.

The little shirt shop is a cubbyhole about nine feet square, its
wooden walls painted a pale, washed-out blue. A deck which cuts the
store's height in half, forms a little balcony which is covered by a
green and yellow print curtain stretched across it. To the right,
casually covered by another print curtain, is a red painted ladder by
which the deck is reached. On the deck, at the extreme left, where it
is not perceptible from the street or the shop, is another tiny ladder
which reaches to the ceiling.

If you stand on the ladder and press against the ceiling directly over
it, a well-oiled trap door will open soundlessly and lead you into
Lola's bedroom above the shop. In front of the window with the blue
curtain is a worn bed, the hard mattress neatly covered with a
counterpane. At the head of the mattress is a mended tear. It is in
this mattress that Lola hides photographs of extraordinary military
and naval importance. I saw four of them.

The charming little seamstress is one of the most capable of the
Japanese espionage agents operating in the Canal Zone area. Lola Osawa
is not her right name. She is Chiyo Morasawa, who arrived at Balboa
from Yokahama on the Japanese steamship "Anyo Maru" on May 24, 1929,
and promptly disappeared for almost a year. When she appeared again,
she was Lola Osawa, seamstress. She has been an active Japanese agent
for almost ten years, specializing in getting photographs of military
importance. Her husband, who entered Panama without a Panamanian visa
on his passport, is a reserve officer in the Japanese Navy. He lives
with Lola in the room above the shop, never does any work though he
passes as a merchant, and is always wandering around with a camera.
Occasionally he vanishes to Japan. His last trip was in 1935. At that
time he stayed there over a year.


To defend the ten-mile-wide and forty-six-mile-long strip of land,
lakes and canal which the Republic of Panama leased to the United
States "in perpetuity," the army, navy and air corps have woven a
network of secret fortifications, laid mines and placed anti-aircraft
guns. Foreign spies and international adventurers play a sleepless
game to learn these military and naval secrets. The Isthmus is a
center of intrigue, plotting, conniving, conspiracy and espionage,
with the intelligence departments of foreign governments bidding high
for information. For the capture or disablement of the Canal by an
enemy would mean that American ships would have to go around the Horn
to get from one coast to another--a delay which in time of war might
prove to be the difference between victory and defeat.

Because of the efficiency and speed of modern communication and
transportation, any region within five hundred to a thousand miles of
a military objective is considered in the "sensitive zone," especially
if it is of great strategic importance. Hence, espionage activities
embrace Central and South American Republics which may have to be
used by an enemy as a base of operations. Costa Rica, north of the
Canal, and Colombia, south of it, are beehives of secret Japanese,
Nazi and Italian activities. Special efforts are made to buy or lease
land "for colonization," but the land chosen is such that it can be
turned into an air base almost overnight.

For decades Japanese in the Canal Zone area have been photographing
everything in sight, not only around the Canal, but for hundreds of
miles north and south of it; and the Japanese fishing fleet has taken
soundings of the waters and harbors along the coast. Since the
conclusion of the Japanese-Nazi "anti-Communist pact," Nazi agents
have been sent to German colonies in Central and South America to
organize them, carry on propaganda and cooperate secretly with
Japanese agents. Italy, which had been only mildly interested in
Central America, has become extremely active in cultivating the
friendship of Central American Republics since she joined the
Tokyo-Berlin tie-up. Let me illustrate:

The recognized vulnerability of the Canal has caused the United States
to plan another through Nicaragua. The friendship of the Nicaraguan
Government and people, therefore, is of great importance to us from
both a commercial and a military standpoint. It is likewise of
importance to others.

Italy undertook to gain Nicaragua's friendship when she joined the
Japanese-Nazi line-up. First, she offered scholarships, with all
expenses paid, for Nicaraguan students to study fascism in Italy.
Then, on December 14, 1937, about one month after a secret Nazi agent
arrived in Central America with orders to step on the propaganda and
organizational activity, the Italian S.S. "Leme" sailed out of Naples
with a cargo of guns, armored cars, mountain artillery, machine guns
and a considerable amount of munitions.

On January 11, 1938, the Secretary of the Italian Legation in San
José, Costa Rica, flew to Managua, Nicaragua, to witness the delivery
of arms which arrived in Managua on January 12, 1938. Diplomatic
representatives do not usually witness purely business transactions,
but this was a shipment worth $300,000 which the Italian Government
knew Nicaragua could not pay. But, as one of the results, Italy today
has a firm foothold in the country through which the United States
hopes to build another Canal. The international espionage underground
world, which knew that the shipment of arms was coming, has it that
Japan, Germany and Italy split the cost of the arms among themselves
to gain the friendship of the Nicaraguan Government.

A flood of Nazi propaganda sent on short-wave beams is directed at
Central and South America from Germany. In Spanish, German, Portuguese
and English, regular programs are sent across at government expense.
Government subsidized news agencies flood the newspapers with "news
dispatches" which they sell at a nominal price or give away. The
programs and the "news dispatches" explain and glorify the
totalitarian form of government, and since many of the sister
"republics" are dictatorships, they are ideologically sympathetic and
receptive.

The Nazis are strong in Colombia, south of the Canal, with a Bund
training regularly in military maneuvers at Cali. Since the
Japanese-Nazi pact, the Japanese have established a colony of several
hundred at Corinto in the Cauca Valley, thirty miles from Cali.

The Japanese colony was settled on land carefully chosen--long, level,
flat acres which overnight can be turned into an air base for a fleet
landed from an airplane carrier or assembled on the spot. And it is
near Cali that Alejandro Tujun, a Japanese in constant touch with the
Japanese Foreign Office, is at this writing dickering for the purchase
of 400,000 acres of level land for "colonization." On such an acreage
enough military men could be colonized to give the United States a
first-class headache in time of war. It is two hours flying time from
Cali to the Canal.

The entrances on either side of the Panama Canal are secretly mined.
The location of these mines is one of the most carefully guarded
secrets of the American navy and one of the most sought after by
international spies.

The Japanese, who have been fishing along the West Coast and
Panamanian waters for years, are the only fishermen who find it
necessary to use sounding lines to catch fish. Sounding lines are used
to measure the depths of the waters and to locate submerged ledges and
covered rocks in this once mountainous area. Any fleet which plans to
approach the Canal or use harbors even within several hundred miles
north or south of the Canal must have this information to know just
where to go and how near to shore they can approach before sending out
landing parties.

The use of sounding lines by Japanese fishermen and the mysterious
going and comings of their boats became so pronounced that the
Panamanian Government could not ignore them. It issued a decree
prohibiting all aliens from fishing in Panamanian waters.


In April, 1937, the "Taiyo Maru," flying the American flag but manned
by Japanese, hauled up her anchor in the dead of night and with all
lights out chugged from the unrestricted waters into the area where
the mines are generally believed to be laid. The "Taiyo" operated out
of San Diego, California, and once established a world's record of
being one hundred and eleven days at sea without catching a single
fish. The captain, piloting the boat from previous general knowledge
of the waters rather than by chart, unfortunately ran aground. The
fishing vessel was stranded on a submerged ledge and couldn't get off.

In the morning the authorities found her, took off her captain and
crew--all of whom had cameras--and asked why the boat was in
restricted waters.

"I didn't know where I was," said the captain. "We were fishing for
bait."

"But bait is caught in the daytime by all other fishermen," the
officials pointed out.

"We thought we might catch some at night," the captain explained.


Since 1934, when rumors of the Japanese-Nazi pact began to circulate
throughout the world, the Japanese have made several attempts to get a
foothold right at the entrance to the Canal on the Pacific side. They
have moved heaven and earth for permission to establish a
refrigeration plant on Taboga Island, some twelve miles out on the
Pacific Ocean and facing the Canal. Taboga Island would make a perfect
base from which to study the waters and fortifications along the coast
and the islands between the Canal and Taboga.


When this and other efforts failed and there was talk of banning alien
fishing in Panamanian waters, Yoshitaro Amano, who runs a store in
Panama and has far flung interests all along the Pacific coasts of
Central and South America, organized the Amano Fisheries, Ltd. In
July, 1937, he built in Japan the "Amano Maru," as luxurious a fishing
boat as ever sailed the seas. With a purring diesel engine, it has the
longest cruising range of any fishing vessel afloat, a powerful
sending and receiving radio with a permanent operator on board, and an
extremely secret Japanese invention enabling it to detect and locate
mines.

Like all other Japanese in the Canal Zone area, Amano, rated a
millionaire in Chile, goes in for a little photography. In September,
1937, word spread along the international espionage grapevine that
Nicaragua, through which the United States was planning another Canal,
had some sort of peculiar fortifications in the military zone at
Managua.

Shortly thereafter the Japanese millionaire appeared at Managua with
his expensive camera and headed straight for the military zone. Thirty
minutes after he arrived (8:00 A.M. of October 7, 1937), he was in a
Nicaraguan jail charged with suspected espionage and with taking
pictures in prohibited areas.

I mention this incident because the luxurious boat was registered
under the Panamanian flag and immediately began a series of actions so
peculiar that the Republic of Panama canceled the Panamanian registry.
The "Amano" promptly left for Puntarenas, Costa Rica, north of the
Canal, which has a harbor big enough to take care of almost all the
fleets in the world. Many of the Japanese ships went there, sounding
lines and all, when alien fishing was prohibited in Panamanian waters.
Today the "Amano Maru" is a mystery ship haunting Puntarenas and the
waters between Costa Rica and Panama and occasionally vanishing out to
sea with her wireless crackling constantly.


Some seventy fishing vessels operating out of San Diego, California,
fly the American flag. San Diego is of great importance to a potential
enemy because it is a naval as well as an air base. Of these seventy
vessels flying the American flag, ten are either partially or entirely
manned by Japanese.

Let me illustrate how boats fly the American flag:

On March 9, 1937, the S.S. "Columbus" was registered as an American
fishing vessel under certificate of registry No. 235,912, issued at
Los Angeles. The vessel is owned by the Columbus Fishing Company of
Los Angeles. The captain, R.I. Suenaga, is a twenty-six-year-old
Japanese, born in Hawaii and a full-fledged American citizen. The
navigator and one sailor are also Japanese, born in Hawaii but
American citizens. The crew of ten consists entirely of Japanese born
in Japan.

The ten boats which fly the American flag but are manned by Japanese
crews are: "Alert," "Asama," "Columbus," "Flying Cloud," "Magellan,"
"Oipango," "San Lucas," "Santa Margarita," "Taiyo," "Wesgate."

Each boat carries a short-wave radio and has a cruising range of from
three to five thousand miles, which is extraordinary for just little
fishing boats. They operate on the high seas and where they go, only
the master and crew and those who send them know. The only time anyone
gets a record of them is when they come in to refuel or repair.

In the event of war half a dozen of these fishing vessels, stretched
across the Pacific at intervals of five hundred or a thousand miles,
would make an excellent system of communication for messages which
could be relayed from one to another and in a few moments reach their
destination.

In Colón on the Atlantic side and in Panama on the Pacific, East and
West literally meet at the crossroads of the world. The winding
streets are crowded with the brown and black people who comprise
three-fourths of Panama's population. On these teeming, hot, tropical
streets are some three hundred Japanese storekeepers, fishermen,
commission merchants and barbers-few of whom do much business, but all
of whom sit patiently in their doorways, reading the newspapers or
staring at the passer-by.

I counted forty-seven Japanese barbers in Panama and eight in Colón.
In Panama they cluster on Avenida Central and Calle Carlos A. Mendoza.
On both these streets rents are high and, with the exception of
Saturdays when the natives come for haircuts, the amount of business
the barbers do does not warrant the three to five men in each shop.
Yet, though they earn scarcely enough to meet their rent, there is not
a lowly barber among them who does not have a Leica or Contax camera
with which, until the sinking of the "Panay," they wandered around,
photographing the Canal, the islands around the Canal, the coast line,
and the topography of the region.

They live in Panama with a sort of permanence, but nine out of ten do
not have families--even those advanced in years. Periodically some of
them take trips to Japan, though, if you watch their business
carefully, you know they could not possibly have earned enough to pay
for their passage. And those in the outlying districts don't even
pretend to have a business. They just sit and wait, without any
visible means of support. It is not until you study their locations,
as in the Province of Chorrera, that you find they are in spots of
strategic military or naval importance.

Since there were so many barbers in Panama, the need for an occasional
gathering without attracting too much attention became apparent. And
so the little barber, A. Sonada, who shaves and cuts hair at 45 Carlos
A. Mendoza Street, organized a "labor union," the Barbers'
Association. The Association will not accept barbers of other
nationalities but will allow Japanese fishermen to attend meetings.
They meet on the second floor of the building at 58 Carlos A. Mendoza
Street, where many of the fishermen live. At their meetings one guard
stands outside the room and another downstairs at the entrance to the
building.

On hot Sunday afternoons when the Barbers' Association gathers, the
diplomatic representatives of other nations are usually taking a
siesta or are down at the beach, but Tetsuo Umimoto, the Japanese
Consul, climbs the stairs in the stuffy atmosphere and sits in on the
deliberations of the barbers and visiting fishermen. It is the only
barbers' union I ever heard of whose deliberations were considered
important enough for a diplomatic representative to attend. This labor
union has another extraordinary custom. It has a special fund to put
competitors up in business. Whenever a Japanese arrives in Panama, the
Barbers' Association opens a shop for him, buys the chairs-provides
him with everything necessary to compete with them for the scarce
trade in the shaving and shearing industry!

At these meetings the barber Sonada, who is only a hired hand, sits
beside the Japanese Consul at the head of the room. Umimoto remains
standing until Sonada is seated. When another barber, T. Takano, who
runs a little hole-in-the-wall shop and lives at 10 Avenida B, shows
up, both Sonada and the Consul rise, bow very low and remain standing
until he motions them to be seated. Maybe it's just an old Japanese
custom, but the Consul does not extend the same courtesy to the other
barbers.

In attendance at these guarded meetings of the barbers' union and
visiting fishermen, is Katarino Kubayama, a gentle-faced, soft-spoken,
middle-aged businessman with no visible business. He is fifty-five
years old now and lives at Calle Colón, Casa No. 11.


Way back in 1917 Kubayama was a barefoot Japanese fisherman like the
others now on the west coast. One morning two Japanese battleships
appeared and anchored in the harbor. From the reed-and vegetation
covered jungle shore, a sun-dried, brown _panga_ was rowed out by the
barefooted fisherman using the short quick strokes of the native. His
brown, soiled dungarees were rolled up to his calves; his shirt, open
at the throat, was torn and his head was covered by a ragged straw
hat.

The silvery notes of a bugle sounded. The crew of the flagship lined
up at attention. The officers, including the Commander, also waited
stiffly at attention while the fisherman tied his _panga_ to the
ship's ladder. As Kubayama clambered on board, the officers saluted.
With a great show of formality they escorted him to the Commander's
quarters, the junior officer following behind at a respectful
distance. Two hours later Kubayama was escorted to the ladder again,
the trumpet sounded its salute, and the ragged fisherman rowed
away--all conducted with a courtesy extended only to a high ranking
officer of the Japanese navy.

Today Kubayama works closely with the Japanese Consul. Together they
call upon the captains of Japanese ships whenever they come to Panama,
and are closeted with them for hours at a time. Kubayama says he is
trying to sell supplies to the captains.


Japanese in the Canal Zone area change their names periodically or
come with several passports all prepared. There is, for instance,
Shoichi Yokoi, who commutes between Japan and Panama without any
commercial reasons. On June 7, 1934, the Japanese Foreign Office in
Tokyo issued passport No. 255,875 to him under the name of Masakazu
Yokoy with permission to Visit all Central and South American
countries. Though he had permission for all, he applied only for a
Panamanian visa (September 28, 1934), after which he settled down for
a while among the fishermen and barbers. On July 11, 1936, the Foreign
Office in Tokyo handed Yokoy another passport under the name of
Shoichi Yokoi, together with visas which filled the whole passport and
overflowed onto several extra pages. Shoichi or Masakazu is now
traveling with both passports and a suitcase full of film for his
camera.

Several years ago a Japanese named T. Tahara came to Panama as the
traveling representative of a newly organized company, the Official
Japanese Association of Importers and Exporters for Latin America, and
established headquarters in the offices of the Boyd Bros. shipping
agency in Panama.

Nelson Rounsevell, publisher of the _Panama American_, who has fought
Japanese colonization in Canal areas, printed a story that this big
businessman got very little mail, made no efforts to establish
business contacts and, in talking with the few businessmen he met
socially, showed a complete lack of knowledge about business. Tahara
was talked about and orders promptly came through for him to return to
Japan.

This was in 1936. Half a year later, a suave Japanese named Takahiro
Wakabayashi appeared in Panama as the representative of the
Federation of Japanese Importers and Exporters, the same organization
under a slightly changed name. Wakabayashi checked into the cool and
spacious Hotel Tivoli, run by the United States Government on Canal
Zone territory and, protected by the guardian wings of the somewhat
sleepy American Eagle, washed up and made a beeline for the Boyd Bros.
office, where he was closeted with the general manager for over an
hour.

Wakabayashi's business interests ranged from taking pictures of the
Canal in specially chartered planes, to negotiating for manganese
deposits and attempting to establish an "experimental station to grow
cotton in Costa Rica."

The big manganese-and-cotton-photographer man fluttered all over
Central and South America, always with his camera. One week he was in
San José, Costa Rica; the next he made a hurried special flight to
Bogotá, Colombia (November 12, 1937); then back to Panama and Costa
Rica. He finally got permission from Costa Rica to establish his
experimental station.

In obtaining that concession he was aided by Giuseppe Sotanis, an
Italian gentleman wearing the fascist insignia in the lapel of his
coat, whom he met at the Gran Hotel in San José. Sotanis, a former
Italian artillery officer, is a nattily dressed, slender man in his
early forties who apparently does nothing in San José except study his
immaculate finger nails, drink Scotch-and-sodas, collect stamps and
vanish every few months only to reappear again, still studying his
immaculate finger nails. It was Sotanis who arranged for Nicaragua to
get the shipment of arms and munitions which I mentioned earlier.

This uncommunicative Italian stamp collector paved the way for
Wakabayashi to meet Raul Gurdian, the Costa Rican Minister of Finance,
and Ramon Madrigal, Vice-president of the government-owned National
Bank and a prominent Costa Rican merchant. Shortly after Costa Rica
gave Wakabayashi permission to experiment with his cotton growing,
both the Minister of Finance and the Vice-president of the government
bank took trips to Japan.

The ink was scarcely dry on the agreement to permit the Japanese to
experiment in cotton growing before a Japanese steamer appeared in
Puntarenas with twenty-one young and alert Japanese and a bag of
cotton seed. They were "laborers," Wakabayashi explained. The
"laborers" were put up in first-class hotels and took life easy while
Wakabayashi and one of the laborers started hunting a suitable spot on
which to plant their bag of seed. All sorts of land was offered to
them, but Wakabayashi wanted no land anywhere near a hill or a
mountain. He finally found what he wanted half-way between Puntarenas
and San José--long, level, flat acres. He wanted this land at any
price, finally paying for it an annual rental equal to the value of
the acres.

The twenty-one "laborers" who had been brought from Chimbota, Peru,
where there is a colony of twenty thousand Japanese, planted an acre
with cotton seed and sat them down to rest, imperturbable, silent,
waiting. The plowed land is now as smooth and level as the acres at
Corinto in Colombia, south of the Canal.

The harbor at Puntarenas, as I mentioned earlier, would make a
splendid base of operations for an enemy fleet. Not far from shore are
the flat, level acres of the "experimental station" and the twenty-one
Japanese who could quickly turn these smooth acres into an air base.
It is north of the Panama Canal and within two hours flying time of
it, as Corinto is south of the Canal and within two hours flying time.

The Boyd Bros. steamship agency, to which Tahara and Wakabayashi went
immediately upon arrival, is an American concern. The manager, with
whom each was closeted, is Hans Hermann Heildelk of Avenida Peru, No.
64, Panama City, and, though efforts have been made to keep it secret,
part owner of the agency. Heildelk is also the son-in-law of Ernst F.
Neumann, the Nazi Consul to Panama.


On November 15, 1937, Heildelk returned from Japan by way of Germany.
Five days later, on November 20, 1937, his father-in-law, who, besides
being Nazi Consul, owns in partnership with Fritz Kohpcke, one of the
largest hardware stores in Panama, told his clerks that he and his
partner would work a little late that night. Neither partner went out
to eat and the corrugated sliding door of the store, at Norte No. 54
in the heart of the Panamanian commercial district, was left open
about three feet from the ground so that passers-by could not see
inside unless they stooped deliberately.

At eight o'clock a car drew up at the corner of the darkened street in
front of Neumann & Kohpcke, Ltd. Two unidentified men, Heildelk and
Walter Scharpp, former Nazi Consul at Colón who had also just returned
from Germany, stepped out, and stooping under the partly open door,
entered the store. Once inside Scharpp quietly assumed command. To all
practical purposes they were on German territory, for the Nazi
consulate office was in the store.

Scharpp announced that the group had been very carefully chosen
because of their known loyalty to Nazi Germany and because of their
desire to promote friendship for Germany in Latin American countries
and to cooperate with the Japanese, who had their own organization
functioning efficiently in Central and South America.

"Some of these countries are already friendly," said Scharpp, "and we
can work undisturbed provided we do not interfere in the Panama Canal
Zone. It is North American territory, and you will have trouble from
their officials and intelligence officers as well as political
pressure from the States. You understand?"

"Panama is friendly to North America," said Kohpcke.

"Precisely. At the present time it is not wise to do much more than
broadcast, but at a propitious time we shall be able to explain
National Socialism to the Panamanians."

He looked at Kohpcke, whose left eyelid droops more than his right,
giving him the appearance of being perpetually sleepy. Kohpcke looked
at Neumann.

"Tonight we want to organize a Bund in Panama. In a few days I am
going to Costa Rica to organize another and then leave for
Valparaiso."

The others nodded. They had been informed that Scharpp was to have
complete charge of Nazi activities from Valparaiso to Panama. That
night they established _Der Deutsch-Ausländische Nazi Genossenschafts
Bund_, with the understanding that it function secretly. The list of
members was to be controlled by Neumann.

Scharpp explained that secrecy was advisable to avoid antagonizing the
Panamanian Government, "which is friendly to Italy and we can
cooperate with the Italian Legation here."

"The Japanese are more important that the Italians," Kohpcke pointed
out.

"The Japanese will work with us," Heildelk assured him.

"But we can't be seen with them--"

"Fritz [Kohpcke] will call a meeting in Jacobs' house," said Scharpp.

"Jacobs!" exclaimed one of the unidentified men. "You don't mean the
Austrian Consul!"

Scharpp nodded slowly. "He is generally believed to be anti-Nazi. His
partner spent twelve years in Japan and speaks Japanese perfectly. The
Japanese Consul knows and trusts both. We cannot find a better place."

On the night of December 13, 1937, forty carefully selected Germans
who, during the intervening month had become members of the Bund in
Panama, arrived singly and in small groups at the home of August
Jacobs-Kantstein, Panamanian merchant and Austrian Honorary Consul.

Five Japanese, headed by Tetsuo Umimoto, also came. One, K. Ishibashi,
formerly captain of the "Hokkai Maru" and a reserve officer in the
Japanese Navy; K. Ohihara, a Japanese agent staying with the Japanese
Consul but having no visible reason to be in Panama; two captains of
Japanese fishing boats and A. Sonada, the barber who organized the
labor union and in whose presence the Consul does not sit until the
barber is seated.

Throughout the meeting, presided over by the elderly but tall and
soldierly Austrian Consul, the Japanese said little. It was primarily
the first get-together for Nazi-Japanese cooperation in the Canal Zone
area.

"Mr. Umimoto has not said much," remarked Jacobs.

"There is so little to say when there are so many present," said the
little Consul apologetically.

The others understood. The Japanese were too shrewd to discuss
detailed plans with so many present.

A few days later Umimoto called upon Heildelk and was closeted with
him for three hours. Shortly after that Sonada made a hurried trip to
Japan.




VI

_Secret Agents Arrive in America_


Germany's interest in the Panama Canal became acute only after Japan
joined the Rome-Berlin axis "to exchange information about
Communism"--an exchange which appears to be more concerned with
military secrets than with Communism.

The activities of Japanese and Nazi agents in Latin American countries
and especially around the Canal, the organizing of a fascist rebellion
in Mexico to the south of us and intensive propaganda carried on in
Canada to the north, are but part of the broad invasion of the Western
Hemisphere by the Fifth Column--an invasion which began almost
immediately after Hitler got into power. Since the United States is
the most important country in the Americas, it was and is subject to
special concentration by secret Nazi agents.


The first threads spun spread out in many directions, with propaganda
as the base from which to broaden espionage activities. One of the
earliest of the secret agents sent to this country was an American,
Colonel Edwin Emerson, soldier of fortune, mediocre author and fairly
competent war correspondent. Emerson lived at 215 East 15th Street,
New York City and had an office in Room 1923 at 17 Battery Place, the
address of the German Consulate General. Room 1923 was rented by a
representative of the German Consul General. The rent paid was nominal
and in at least one instance, to avoid its being traced, it was paid
in cash by Hitler's diplomatic representative. Prior to the renting of
this room, Emerson had desk space with the German Consulate General
for six weeks.

The May 15, 1933, issue of the _Amerika Deutsche Post_, a Nazi
propaganda organ published in New York, carried an advertisement
stating that the editor of this paper made his headquarters in
Emerson's room. This was the first indication that Emerson had arrived
in this country to handle Nazi propaganda.

For many years Emerson had wandered about the globe covering
assignments for newspapers and magazines and always bragging about his
Americanism and his "patriotism." One of his great boasts was that he
was with Roosevelt's Rough Riders during the Spanish-American war;
what he never told was that Roosevelt brought him back from Cuba in
irons.

From his room paid for by the German Consul General, Emerson launched
the "Friends of Germany."[6] This organization was the chief
disseminator of pro-Hitler and anti-democratic propaganda in the
United States, but the Colonel directed the propaganda somewhat
stupidly. The "Friends of Germany" held meetings with "storm troops"
in full uniform; bitter attacks were made against Jews and Catholics
at large mass meetings. Visiting officers and sailors, from German
ships docked in New York, appeared at these meetings to preach fascism
and Nazism, until a wave of resentment swept the country. One of the
keynotes of these talks was sounded by Edward F. Sullivan of Boston at
a meeting held at Turnhalle, Lexington Avenue and 85th Street, on June
5th, 1934, when he repeatedly referred to Jews as "dirty, stinking
kikes" and announced that he proposed to organize a strong Nazi group
in Boston.

Propaganda Minister Goebbels in Berlin became annoyed at the public
reaction, and the entire Nazi foreign propaganda service was
reorganized. Emerson was ordered back to Germany for explicit
instructions on how to carry on propaganda without antagonizing the
entire country.


In October, 1933, Royal Scott Gulden (who has no connection with the
mustard business, but is a distant relative of the head of it), who
had been cooperating with Emerson, tried to organize an espionage
system to watch Communists. In this effort Gulden enlisted the aid of
Fred R. Marvin, a professional patriot. At three o'clock on the
afternoon of March 10, 1934, a very secret meeting was called by
Gulden at 139 East 57th Street. Present were Gulden, J. Schmidt and
William Dudley Pelley, head of the Silver Shirts.

The meeting decided to adopt anti-semitic propaganda--to play on
latent anti-semitism--as part of the first campaign to attract
followers. The country was in a serious economic crisis with
considerable unrest throughout the land. Both Hitler and Mussolini got
into power in periods of great unrest by promising peace and security
to the bewildered people. Men of means were terrified by fears of
"revolution" and this group, directed by Emerson, began to preach that
the revolution might come any minute and that the Jews were
responsible for Moscow, the Third International, the Mississippi flood
and anything else that troubled the people. When the meeting ended the
"Order of '76"[7] had been born and Royal Scott Gulden appointed
Secretary to direct espionage and propaganda.


From the very beginning Emerson tried to get people into places which
would provide access to important information. On February 22, 1934, a
merger of the Republican Senatorial and Congressional Campaign
Committees to conduct the Party's Congressional campaign independent
of the Republican National Committee was announced in a joint
statement by Senator Daniel O. Hastings of Delaware and
Representative Chester C. Bolton of Ohio, chairmen, respectively, of
the two committees.

Several weeks before this announcement, the two committees had
employed Sidney Brooks, for years head of the research bureau of the
International Telephone and Telegraph Company. Brooks, because of his
position, was close in the confidences of Republican Senators and
Congressmen. He heard state secrets and had his fingers on the
political pulse of the country.

Shortly after he took charge of the joint committee for the Senators
and Congressmen, Brooks made a hurried visit to New York. On March 4,
1934, he drove to the Hotel Edison and went directly to Room 830 where
a man registered as "William D. Goodales--Los Angeles," was awaiting
him. Mr. "Goodales" was William Dudley Pelley, head of the Silver
Shirts, who had come to New York to confer with Brooks and Gulden.
After this conference the two went to Gulden's office where they had a
confidential talk that lasted over an hour during which an agreement
was made to merge the Order of '76 with the Silver Shirts so as to
carry on their propaganda more effectively.

Brooks himself, on his mysterious visits to New York, went to 17
Battery Place, which houses the German Consulate General. At that
address he visited one John E. Kelly. In a letter to Kelly dated as
far back as December 27, 1933, he wrote: "I will be in New York Friday
to Monday and can be reached in the usual manner--Gramercy 5-9193
(care Emerson)."

Sidney Brooks also was a member of the secret Order of '76. Before
anyone could join he had to give, in his own handwriting and sealed
with his own fingerprints, certain details of his life. Brooks'
application for membership in this espionage group organized with the
help of a Nazi sent to this country, revealed that he was the son of
the Nazi agent, Colonel Edwin Emerson, and that he was using his
mother's maiden name so that connection could not be traced too
easily.

   [Illustration: Application by Sidney Brooks for membership in the
   secret Order of '76, showing him to be a son of the Nazi agent,
   Colonel Edwin Emerson.]

One of the other early propagandists who is still active as a
"patriot" was Edward H. Hunter, Executive Secretary of the Industrial
Defense Association, Inc., 7 Water Street, Boston. Early in 1934,
while the negotiations for the merging of the espionage order and the
Silver Shirts were going on, this rooter for American liberty heard
Germany was spending money in this country and on March 3, he wrote to
the "Friends of Germany":

"Under separate cover we are sending you twenty-five copies of our
_Swan Song of Hate_ as requested and you may have as many as you wish.

"Several times I have conferred with Dr. Tippelskirch and at one time
suggested that if he could secure the financial backing from Germany,
I could start a real campaign along lines that would be very
effective.

"All that is necessary to return America to Americans is to organize
the many thousands of persons who are victims of Judaism and I am
ready to do that at any time."

Dr. Tippelskirch, with whom Hunter discussed getting money from
Germany for anti-semitic work, was the German Consul in Boston.


The activities of the early agents ranged from propaganda to smuggling
and espionage, though at the beginning the espionage was on a minor
scale. It took several years of organizing pro-German groups in this
country before they could pick the most reliable for the more
dangerous spy work. Much of the propaganda was sent in openly through
the mails, but some of it was of so vicious and anti-democratic
character that the Propaganda Ministry in Germany decided it was wiser
to smuggle it in from Nazi ships.


One of the chief smugglers was Guenther Orgell,[8] at that time head
of the "Friends of Germany," through whom the propaganda was
distributed to various branches of the organization throughout the
country. In those days Orgell lived at 606 West 115th Street, New York
City,[9] and was ostensibly employed as an electrical engineer by the
Raymond Roth Co., 25 West 45th Street. Let me illustrate how he
worked:

At twenty minutes to ten on the evening of March 16, 1934, the North
German Lloyd "Europa" was preparing to sail at midnight. The gaily
illuminated boat was filled with men and women, many in evening dress,
seeing friends off to Europe. German stewards, all of them members of
the ship's Nazi _Gruppe_, stood about smiling, bowing, but watching
every passenger and visitor carefully.

People wandered all over the boat. Many visited the library on the
main promenade deck, which has a German post office. There was a great
deal of laughter and chatter. Orgell, dressed in an ordinary business
suit and carrying a folded newspaper in his hands, wandered in.
Catching the post office steward's eye, he casually took four letters
from his coat pocket and handed them to the steward who as casually
slipped them into his pocket. There were no stamps on the letters,
which, incidentally, constituted a federal offense.

Still so casual in manner that the average observer would not even
have noticed the transfer of the letters, Orgell wandered over to a
desk in the library and rapidly wrote another letter--so important,
apparently, that he dared not carry it with him for fear of a mishap.
The letter was sealed and handed to the steward.

The library had a great many visitors. No one seemed to be paying any
attention to this visitor or passenger talking to the steward. With a
quick glance around him, Orgell took in everyone in the library and
seemed satisfied. He caught the steward's eye again and nodded. The
steward opened a closet in the library, the second one left of the
main aisle on the port side toward the stern of the boat. A thin
package was taken from its hiding place and quickly slipped to Orgell
who covered it with his newspaper and promptly left the ship.

This was the manner in which Nazi secret instructions and spy reports
were sent and received--a procedure that kept up until the arrest of
the Nazi spies who were tried late in 1938.


When Orgell needed trusted men to deliver messages to and from the
boats as well as to smuggle off material, he usually called upon the
American branch of the _Stahlhelm_, or Steel Helmets, which used to
drill secretly in anticipation of _Der Tag_ in this country. Only when
he felt that he was not being watched, or only in the event of the
most important messages, did he go aboard the ships personally.
Orgell's liaison man in the smuggling activities was Frank
Mutschinski, a painting contractor who used to live at 116 Garland
Court, Garritsen Beach, N.Y.

Mutschinski came to the United States from Germany on the S.S. "George
Washington," June 16, 1920. He was commander of one of the American
branches of the _Stahlhelm_ which had offices at 174 East 85th Street,
New York. While he was in command, he received his orders direct from
Franz Seldte, subsequently Minister of Labor under Hitler. Seldte at
that time was in Magdeburg, Germany. Branches of the _Stahlhelm_ were
established by him and Orgell in Rochester, Chicago, Philadelphia,
Newark, Detroit, Los Angeles and Toronto (the first step in the Fifth
Column's invasion of Canada).

To help Orgell in his smuggling activities, Mutschinski supplied him
with a chief assistant, Carl Brunkhorst. It was Brunkhorst's job to
deliver the secret letters. Nazi uniforms for American Storm Troopers
were smuggled into this country off German ships by Paul Bante who
lived at 186 East 93rd Street, New York City. Bante, at the time he
was engaged in the smuggling activities, was a member of the 244th
Coast Guard as well as the New York National Guard.


In the early days of organizing the Nazi web over the United States,
the German agents received cooperation from racketeering "patriots"
who saw possibilities of scaring the wits out of the American people
by announcing that the "revolution" was just around the corner. The
country was in an economic crisis, the American people were bewildered
and didn't know which way to turn, there was considerable unrest in
the land, and the Nazi agents and their American counterparts
visualized in Hitler's cry that "Communism and the Jews" were
responsible, grand pickings from the scared suckers.

Since Communism, especially in those restless days in the depths of
the depression, was the bugaboo of the rich, it was inevitable that
some unscrupulous but shrewd observers of the American scene would
take advantage of this fear and capitalize on it. One of the chief
racketeers, a man who subsequently worked very closely with secret
Nazi agents in this country, was Harry A. Jung, Honorary General
Manager of the American Vigilant Intelligence Federation, Post Office
Box 144, Chicago. This organization was originally founded to spy on
Communists and Socialists. For a while Jung collected from terrified
employers by promising to inform them about the threat of
revolution--what time it would occur and who would lead it. In return
he collected plenty.

In time employers got fed up when the rowboat loaded with
bomb-throwing Bolsheviks failed to arrive from Moscow. Pickings became
slim. Jung was badly in need of a new terror-inspiring "issue" with
which to collect from the suckers. He found it at the time Emerson was
sent here from Germany. Gulden, Pelley and their associates were
launching an anti-semitic campaign as the first step to attract people
to the "Friends of Germany." Jung likewise discovered the "menace of
the Jew" and peddled it for all it was worth.

   [Illustration: Showing the type of literature peddled by
   patrioteer Harry A. Jung.]

There was an air of secrecy about the whole outfit. Even the location
of the office in the Chicago Tribune Tower was kept from the
membership; all they were given was the post office box number. As
soon as he collected enough material from the _Daily Worker_ and other
Communist publications, he sent agents to call on the gullible
businessmen with horrendous stories of the Muscovites now on the high
seas on their way to capture the American Government. The salesmen
collected and in turn got forty per cent of the pickings.

When Jung heard that William Dudley Pelley was making money on the
Jew-and-Catholic scare and that others like Edward H. Hunter of the
Industrial Defense Association were talking with the German Consul
General about getting money from Germany for propaganda, he got busy
peddling "The Protocols of the Elders of Zion," long discredited as
forgeries. Armed with these, Jung's high pressure salesmen scoured the
country, collecting shekels from Christian businessmen and getting
their forty per cent commissions.

It was not long before Jung, Pelley and others were working in full
swing with secret Nazi agents sent into this country for propaganda
and espionage purposes.

FOOTNOTES:

[6] Subsequently changed to "Friends of the New Germany" and then to the
current "German-American Bund."

[7] Still functioning on a minor scale. The Fifth Column has since these
early beginnings established much more efficient groups.

[8] Following passage of the new 1938 law requiring all foreign agents
to register, Orgell registered with the State Department as a German
agent.

[9] He now lives at Great Kills, Staten Island, N.Y.




VII

_Nazi Spies and American "Patriots"_


Once the spadework was done by the early Nazi agents sent into the
United States, the web rapidly embraced native fascists, racketeering
"patriots" and deluded Americans who swallowed their propaganda. When
Japan joined the Rome-Berlin axis, espionage directed against American
naval and military forces became one of the major interests of the
foreign agents, especially on the West Coast.

Some five years ago, after the McCormick Congressional Committee
investigation into Nazi activities turned up a number of
propagandists, there was a lull in their activity until the
nation-wide denunciations died out. In the meantime Goebbels again
ordered the reorganization of the entire propaganda machine in this
country.

It was during this period that the approaching Presidential elections
presented an immediate task for the Nazis to work on. The Roosevelt
Administration was considered by the Nazis both here and in Germany as
none too friendly to Hitler, and before the election got well under
way the Nazis here, upon instructions from their local leaders who act
only upon instructions from the German Propaganda Bureau, became
active in the anti-Roosevelt campaign. Both Nazi agents and
"patriotic" American groups working with Nazi agents (without much
money after the Congressional Committee's exposés) suddenly found
themselves possessed of more than enough capital with which to
operate. Some of the money came from the Nazis and some from
anti-Roosevelt forces.

One of the most vicious of the anti-Roosevelt propaganda mediums was
established by Nazi agents in a carefully hidden printing plant.

   [Illustration: Anti-Semitic anti-Roosevelt handbill issued by the
   American White Guard in California.]

No one who got off on the sixth floor at 325 W. Ohio St., Chicago, and
entered the John Baumgarth's Specialty Company, would have suspected
anything out of the ordinary about the place. It looked just like
hundreds of other business firms where pale girls and anemic-looking
men made calendars.

People came up on the ancient elevator, attended to their affairs at
the desks in front of the door, and left. Very few of them ever went
behind the enormous piles of cardboard and paper which almost
obstructed the passage to the right of the desks. But if you turned
into this passage and then turned to the left, you came upon a wooden
partition. Unless you were watching for it you would think it a wall.

There was no indication of what was behind the partition. There was
only a shiny Yale lock in a door carefully hidden from the eyes of
casual visitors. If you knew nothing about it and tried to open the
door, you would find it locked. If you knocked or banged on it, there
would be no answering sign from the other side, and the young man
operating the cutting machine alongside the partition would merely
stare at you blankly.

But if you knocked three times quickly, paused for a split second and
then knocked once more, the door would be opened immediately. Without
the proper signal all the knocking in the world would not help, for
this was the entrance to the carefully guarded publication rooms of
the _American Gentile_ and the headquarters for Nazi anti-democratic
activities in the Middle West. But even more guarded than the location
of the printing plant were the goings and comings of the paper's
editor, Captain Victor DeKayville and his financial backer, Charles
O'Brien.

This brings me to two of the leading Nazi agents in the United States,
one of whom originally started the newspaper. Certainly none of the
American suckers who gave them money to spread pro-Nazi propaganda
knew that both were masquerading under false names and that one of
them is an ex-convict.


Those social leaders in Chicago and San Francisco, whose doors were
always open to the handsome, dashing Prince Peter Kushubue with his
sad eyes and his talk of how the Bolsheviki had confiscated his vast
estates and family jewels in Old Russia, may be interested to learn
that his Highness, the Prince, is really--well, let me give a brief
sketch of his activities before he became a Nazi agent:

In 1922, a Russian emigré, born in Petrograd and christened Peter
Afanassieff or Aphanassieff, came to the United States seeking his
fortune, preferably in the form of a wealthy heiress. As an ordinary
run-of-the-mill Afanassieff, he was just an unemployed White Russian
looking for a job and it didn't take him long to discover that in this
democratic country heiresses and their doting papas go nuts over
titles. So overnight Peter Afanassieff blossomed out into Prince Peter
Kushubue; and as a Prince whose wealth had been confiscated by the
Bolsheviki, the doors of San Francisco society opened to him.

Afanassieff just barely missed marrying a wealthy heiress on the West
Coast, and in his despondence he tried his hand at a little forgery.
But he picked the wrong outfit to practice penmanship on. He forged a
United States Treasury check and when the federal men got after him he
fled to Chicago. He was picked up and on November 29, 1929, he found
himself before a U.S. Commissioner who ordered his return to San
Francisco. On December 19 of the same year he pleaded guilty before
Federal Judge F.J. Kerrigan and was given a year and a half. At the
trial he admitted to being just an ordinary Afanassieff and served his
sentence under that name.

When he came out he alternated between being Prince Kushubue and an
ordinary Afanassieff and then, because the 1930 crash had kicked the
bottom out of the market for foreign titles, he picked himself a good
solid American name: Armstrong. He said it was his mother's maiden
name. For convenience we'll call him Armstrong from now on.

When he arrived in Chicago in 1933, he met some White Russians who
were working with Harry A. Jung on an altogether new translation of
the "Protocols." Jung planned to publish and distribute the forgeries
in order to scare the wits out of his Christian suckers, but changed
his mind when he discovered he could buy them cheaper and resell at a
higher price. Jung, in turn, introduced Armstrong to Nazi agents.

Jung and the ex-convict hit it up. Before long Armstrong became Jung's
secret agent No. 31 (Jung is No. 1 and always signs his letters to
agents with that number. His agents, too, sign only their numbers.
They are not supposed even to write the number but every once in a
while an agent slips up and scribbles a postscript in his own
handwriting. A reproduction of one of No. 31's reports to the No. 1
Guy appears on the opposite page.)

It was not long after Jung introduced Armstrong to Nazi agents that
the White Russian decided that he could work the racket himself. He
began to meet secretly with Nazi agents without telling Jung about it.
Their favorite meeting place was at Von Thenen's Tavern, 2357 Roscoe
St., Chicago. Present at these meetings, usually called by Fritz
Gissibl, head of the "Friends of the New Germany,"[10] were Armstrong,
Captain Victor DeKayville, J.K. Leibl (who organized an underground
Nazi clique in South Bend, Ind.), Oscar Pfaus, Nick Mueller, Toni
Mueller, Jose Martini, Franz Schaeffer and Gregor Buss. When Gissibl
couldn't attend, his right-hand man Leibl acted for him.

In March, 1936, Armstrong and the others decided to establish a
"National Alliance" to aid in Nazi work. They decided to use the
utmost secrecy lest what they were doing and who were behind it, leak
out. They met only in private homes and so careful were they that the
host of one meeting would not be told where the next meeting was to be
held. Only a picked handful of the most trusted Nazi agents were
invited.

The first meeting was held at Bockhold's home, 1235 Wave-land Ave.,
Chicago; the second at the home of Mrs. Emma Schmid, 4710 Winthrop
Ave., Chicago. To the second meeting they invited C.O. Anderson of 601
Diversey Parkway, Chicago. He was listed by the Nazis and the White
Russians as a good sucker because he had contributed money to Jung.

   [Illustration: Letter written by secret agent No. 31 (Peter
   Afanassieff, _alias_ Prince Kushubue, _alias_ Peter V. Armstrong)
   to No. 1 (Harry A. Jung).]

   [Illustration: Letter showing contact between Peter V. Armstrong
   (the White Russian ex-convict Peter Afanassieff) and German
   publishers of anti-Semitic literature.]

The White Russians and the Nazi agents then decided to start a
publishing business as the first step to attract followers. They
issued a paper called the _Gentile Front_. They were extremely
careful to keep the editorial and publication addresses secret. All
mail was sent only to Post Office Box No. 526 in the old Chicago Post
Office. The company was named the Patriotic Publishing Co. and with
the utmost secrecy editorial offices were established at 5 S. Wabash
in Chicago and the paper printed in the basement at 4233 N. Kildare
where the Merrimac Press functioned.

Subsequently, to throw anyone who might be watching them off the
trail, they changed the name of the publishing company to the Right
Cause Publishing Co. and issued an avalanche of Nazi propaganda. It
was through this secretly organized and secretly functioning
propaganda center that Harry A. Jung, ultra-"patriot," distributed
printed attacks on Roosevelt just before the Presidential election.


The _American Gentile_, backed by Nazi money, published the most
insane rantings imaginable. But when one is inclined to dismiss them
as insanity, one remembers that it was the same sort of stuff Hitler
used in winning millions of bewildered Germans to his banner. The
pre-election issue (October, 1936) of the _Gentile_ will serve as an
illustration of what they published and distributed through the United
States mails:

Former Congressman Louis T. McFadden[11] died on October 1 from a
stroke. He was sixty years old. The _American Gentile_, however,
implied that he had been murdered by Jews; Senator Bronson Cutting
(killed in an airplane crash) also was murdered by Jews. Huey Long was
murdered by Jews. Walter A. Liggett, the newspaper editor, was
murdered by Jews, and it was an international ring of Jewish bankers
who hired Booth to murder Abraham Lincoln.

Of course it was crazy, but the coal digger in Kentucky or the
bedeviled farmer in the Middle West who couldn't pay his taxes or the
unemployed worker in an industrial center who couldn't find a job did
not know history any too well nor understand the workings of the
economic system; and when they were told by newspapers brought to them
by the United States Government mails that their economic difficulties
were due to a Jewish-Communist plot, that Roosevelt was a Jew and was
controlled by Jews and Communists, some of them were prone to believe
it. With this irresponsible propaganda anti-semitism grew. Men and
women were attracted to the Nazi web without dreaming of the forces
disseminating the propaganda of the motives behind them.


The most capable of those drawn into the Nazi propaganda machine were
chosen for more serious work. Some were used for propaganda; others
were given definite espionage assignments. The espionage and
propaganda divisions of the Nazi machine in this country are separate
bodies. They overlap only in serving as a recruiting ground.

The smuggling of anti-democratic propaganda off Nazi ships entering
American ports was exposed by the McCormick Congressional Committee,
but it stopped only for a brief period. The Nazi ships which bring in
propaganda also bring secret instructions to agents here and take back
their reports. To eliminate tell-tale evidence, Dr. George Gyssling,
Nazi Consul in Los Angeles, has paid out cash to leaders of the German
propaganda machine on the West Coast. Affidavits to this effect are in
my possession.

The headquarters for the West Coast propaganda machine which dabbles a
little in espionage, is the _Deutsches Haus_, 634 W. 15th Street, Los
Angeles. The building is supposed to be merely a meeting place for
German-Americans and sympathizers of the Hitler regime. Actually its
functions are far more sinister.

The _Deutsches Haus_, before it was turned into a center of Nazi
activity, had been a typical Los Angeles home. When the Nazis took it
over, they ripped out several of the front rooms and turned it into a
barn-like affair with a skylight overhead and a raised platform from
which speakers sing the praises of Hitler and fascism. In the rear
part of the hall is a combined bar and restaurant where the
German-Americans drink their beer and whiskies and plot the smuggling
of propaganda from Nazi ships and the carrying on of espionage against
American military and naval forces.

I use the word "plot" for precisely what it means. From this house,
naturalized American citizens and native Americans direct espionage
and propaganda activities paid for by a foreign government and
designed against the peace and security of the United States.

The leader of this group, Hermann Schwinn, was appointed by Minister
of Propaganda Goebbels in Germany and is the recipient of personal
letters of praise from Adolf Hitler for his work. Schwinn is a
naturalized citizen,[12] a comparatively young man in his early
thirties, ruddy-faced and with a thin, quivering mustache on his upper
lip. This little Führer's office is just off the meeting hall and
adjoins the small bookstore where the purchaser can get pamphlets,
books, and newspapers attacking democracy.

When I called upon Schwinn at the Nazi headquarters and introduced
myself, he smiled amiably and granted my request for an interview. The
German-American Bund, he explained immediately (the reorganized
Friends of the New Germany), is now a patriotic organization,
consisting only of American citizens.

The German-American Bund, Schwinn continued as we seated ourselves in
his office, was now a "patriotic organization striving to create among
Americans a better understanding of Nazi Germany, to combat anti-Nazi
propaganda and the boycott against Germany, and to fight Communism."
He took about ten minutes to explain their peaceful objectives and
their great love for the United States.

"Everything is America for the Americans and to fight all alien
theories and interests?" I asked, summing up his explanation.

"That's right," he beamed.

"Does any propaganda come from Germany to help save America for the
Americans?"

"No, sir!" he said. "We have nothing to do with Germany; we are
Americans first. Mr. Dickstein[13] says that there is propaganda
coming, but he was never able to prove any of his statements."

"Then how does propaganda like _World Service_ from Erfurt, Germany,
get into this country?"

"Oh, I get it," he said casually. "Anyone can subscribe to it for a
dollar and a half a year. We get two or three copies around here--by
subscription, of course."

"There must be a lot of subscribers in the United States for I've seen
a great many copies. I thought that perhaps it comes in batches from
Germany for distribution here so members of the Nazi groups in the
United States could use it to help save America for the Americans."

"No," he smiled. "It's all a subscription matter."

"I see. Do you know Captain George Trauernicht?"

Schwinn shot a startled glance at me and nodded slowly. "Yes," he
said, "he's Captain of the Hapag Line ship 'Oakland.'"

"Do you ever visit him?"

"Yes; he was here last week."

"Doesn't he bring batches of _World Service_ and other propaganda for
you every time he comes into port?"

"No," Schwinn said sharply. "The visits I pay him are purely social.
Just to drink a glass of good German beer."

"Do you usually pay social visits carrying a brief case?"

"Now, wait a minute," he protested. "Don't write down the answer until
I think."

I stopped typing on his office machine which he had permitted me to
use to take verbatim notes of the interview and waited while he
thought. After a lengthy silence I added:

"You had a brief case on Thursday when you visited him."

He continued thinking for a little longer and then said that he
thought he had had a brief case on that trip.

"But why do you ask me that?" he demanded. "There was nothing in that
brief case."

"Sure there was. The brief case always contains reports you send back
to Germany and instructions from Germany are brought to you by Captain
Trauernicht as well as other captains of German ships docking here and
in San Diego."

"I have never taken off propaganda nor given nor received reports,"
Schwinn insisted. "Somebody told you something and you've got it all
wrong."

"Suppose I mention a few instances. At four o'clock on Monday
afternoon, March 9, 1936, your beer-drinking friend, Captain
Trauernicht, waited for you at the gangplank of his boat--for your
'social' visit. What he wanted was the package of sealed reports from
Nazi agents throughout the United States which you were bringing in
your brief case. In due time you arrived and gave him the reports.
Then you started on a drinking spree--"

"I don't know what you're talking about," Schwinn interrupted.

"Maybe I can refresh your memory. That was the evening the Captain
took a lady from Beverly Hills, to the first mate's cabin--remember?
You know, the lady who lives on North Crescent Drive--shall I mention
her name?"

Schwinn's face turned an apoplectic red and he became quiet.

"On Monday, February 10, 1936," I continued. "Reinhold Kusche, leader
of the O.D. unit in your organization and a 'patriotic' naturalized
American citizen, was on board the steamer 'Elbe' docked in Los
Angeles harbor. He telephoned to one of your Nazi agents, Albert
Voigt, that the Captain was sailing at five o'clock for Antwerp and
was furious because the agents' reports had not yet been delivered to
him. Kusche told Voigt to bring the reports in a hurry--which Voigt
promptly did.

"On Tuesday evening, May 12, 1936, the Captain of the Nazi ship
'Schwaben', which had just arrived from Antwerp, Belgium, came to your
office and handed you a sealed package of orders and propaganda. He
laid it on your desk in this room. The package contained copies of
_World Service_--which is obtainable, you remember, only by
subscription at a dollar and a half a year."

"It is not true--" Schwinn interrupted excitedly.

"I have a copy from the batch he brought to you. But let's continue.
On Monday, June 8, 1936, you yourself went to the Nazi ship 'Weser'
and gave the captain secret reports to take back to Germany and left
with secret orders he had brought over--orders sealed in brown, manila
paper[14]--and a large package of _Fichte-Bund_ propaganda. I have a
copy from that batch, too."

Schwinn stared at me and then smiled. "You can't prove anything," he
said with assurance.

"I have affidavits about all these items and more--affidavits from men
on board the Nazi ships."

"It's impossible!" he exclaimed. "No German on the ship would dare to
sign an affidavit!"

"But I have them," I repeated.

"You intend to publish them?" he asked, a cunning look appearing in
his eyes.

His eagerness to discover who had given me affidavits was funny and I
laughed. "I'll publish the information contained in them," I
explained. "The names of the signers will be given only to an American
governmental or judicial body which may look into your 'patriotic'
activities. But let's get on. Do you know the Nazi Consul in Los
Angeles--Dr. George Gyssling?"

He sat silently for a moment as if hesitating whether to speak.

"Don't be afraid to talk," I said. "The Consul isn't. You know, of
course, that he does not like you?"

A deep red flush suffused his face. "It's mutual!" he said. "I know he
talks--"

Throughout the interview Schwinn tried almost pathetically, despite
his obvious dislike of Gyssling, to cover up the Consul's interference
in American affairs. When I told Schwinn I had affidavits showing that
Rafael Demmler, President of the Steuben Society of Los Angeles, got
two hundred dollars in April, 1936, from the Nazi Consul to help
maintain the _Deutsches Haus_ as a center of Nazi propaganda, he shook
his head bewilderedly; and when I pointed out that he himself got one
hundred and forty-five dollars in cash from the Nazi Consul on
Tuesday, April 28, 1936, to cover expenses incurred by Schwinn in the
effort to bring the German-American groups together for the better
dissemination of Nazi propaganda, his face turned alternately white
and red and finally he exploded:

"Did Gyssling tell you that?"

"I'm not saying who told it to me. But let's get on with some of your
other 'patriotic' activities. On Thursday, June 18, 1936, you visited
Captain Trauernicht in company with Count von Bülow--"

For the first time since the interview began Schwinn sat upright in
his chair as if I had struck him. All the other subjects had left him
slightly disturbed but still with an obvious sense that he was not on
particularly dangerous ground. But at the mention of Von Bülow's name
a look of actual fear spread over his face.

"On that day," I continued, "you and the Count went directly to the
Captain's cabin where you handed over your reports--"

"What are you getting at?" Schwinn demanded sharply.

"I'm getting at the Count. What do you know about him?"

"Nothing. I know nothing about him. I've met him, that's all."

"Have you ever visited his home at Point Loma,[15] San Diego?"

Schwinn stared at me without answering.

"Have you ever been there?" I repeated.

"Yes," he said slowly.

"Did you ever observe how, through his study windows, you could see
almost everything going on at the American naval base--"

"I have nothing to say," Schwinn interrupted excitedly.

Among the men sent here directly by Rudolf Hess, Hitler's right-hand
man, is a former German-American businessman named Meyerhofer. This
Nazi came here with special instructions from Hess, a personal friend
of his, to reorganize the Nazi machine in the United States. He
arrived early in 1935 posing as a businessman. After consultations
with Nazi leaders in New York, including the Nazi Consul General, he
went to Detroit to confer with Fritz Kuhn,[16] national head of the
German-American Bund. From Detroit he went to Chicago where he held
more conferences with Nazi agents and then went directly to Los
Angeles for conferences with Schwinn, Von Bülow and other secret
agents operating in the United States. Meyerhofer's mission was not
only to reorganize the propaganda machine but to try to place it on a
self-supporting basis so that in the event of war when funds from
Germany would be cut off, an efficient Nazi machine could continue
functioning.

It was with this knowledge in mind that I asked Schwinn what he knew
about Meyerhofer. At the mention of his name the Nazi leader for the
West Coast again showed a flash of fear. He hesitated a little longer
than usual and then said in a low voice, "He is a member of our
organization. He came from Germany about thirty or forty years ago."
Suddenly he added, "He's an American citizen."

"I know he's an American citizen. But are you sure he didn't come from
Germany--on his latest trip--in January of last year?"

Schwinn smiled a little wryly. "He might have," he said in the same
low tone.

"He's a personal friend of Rudolf Hess--"

"Listen!" Schwinn exclaimed. "You're on the wrong track!"

"Maybe; but what's his business here?"

"He's a businessman!"

"What's his business?"

Schwinn shrugged his shoulders. "I don't know," he said and then with
growing excitement, "I tell you you're on the wrong track!"

"Then what are you so excited about?"

"Because you're on the wrong track--"

"Okay. I'm on the wrong track and you know nothing about Nazi spies.
Do you know of the visits paid by the Japanese Consul in Los Angeles
to Nazi ships when they come into port and of his conferences with
Nazi captains--"

"The Japanese! We have nothing to do with the Japanese. We are a
patriotic group--"

"Yes, I know. What do you know about Schneeberger?"

Schwinn answered with an "M-m-m-m." His jaw bones showed against the
ruddy flesh of his cheeks. He stared up at the ceiling. "He was a
Tyrolian peasant boy," he said without looking at me. "A boy
traveling around the world; you know, just chiseling his way around--"

"Just a bum, eh?"

"That's it," he agreed quickly. "Just a bum."

"What would your connections be with bums? Do you usually associate
with Tyrolian bums who are chiseling their way around the world?"

"Oh, he just came here like so many other people. He wanted money; so
I gave him a little help and he went to San Francisco and Oakland. He
vanished. I haven't any idea where he might be now. Maybe he's in
Chicago now."

"He couldn't possibly be in Japan now, could he?"

"He spoke of going to Japan," Schwinn admitted.

"You saw him off on a Japanese training ship which the Japanese
Government sent here from the Canal Zone, didn't you?"

"I don't know," he said defiantly. "I know nothing about him."

"The treaty between Japan and Germany providing for exchange of
information about Communists was signed November 25, 1936. But in
September, 1936, Schneeberger told you he was leaving on a Japanese
training ship for Japan. No training ship was expected on the West
Coast at that time by the United States port authorities, and yet a
Japanese training ship appeared--ordered here from the Canal Zone. It
was on this ship that Schneeberger left. Apparently, then, the Nazis
and the Japanese had already been working together--and you were
cooperating because you took Schneeberger around. You took him to
Count von Bülow's home at Point Loma, overlooking the American naval
base. You know that Schneeberger was not broke because he was spending
money freely--"

"He was broke," Schwinn interrupted weakly.

"If he was so broke, how do you account for his carrying around an
expensive camera and always having plenty of film with which to
photograph American naval and military spots?"

"I don't know. Maybe he carried the camera around to hock in case he
went broke."

The absurdity of the excuse was so patent that I laughed. Schwinn
smiled a little.

"All right. What do you know about a man named Maeder?"

Again that long, drawn-out "M-m-m-m." A long pause and Schwinn said,
"Maeder is an American citizen, I believe."

"Yes; you are, too. But what's his business in this country?"

"I don't know," Schwinn said helplessly. "I really don't know."

"You know nothing about his activities or observations of American
naval and military bases? Do you usually take in members without
knowing anything about them?"

"Sometimes we do and sometimes we do not--"

"But orders were sent from Germany to make this an American
organization--"

Schwinn nodded without admitting it verbally.

"And since you throw out all Germans who are not American citizens,
you check with the Consul General in New York as to whether they are
fit--"

"We have nothing to do with the Consul General--"

"What happened to Willi Sachse who used to be a member here?"

"He is supposed to have gone back to Germany."

"Have you heard from him from Germany?"

"No; I haven't heard since he left."

"You received a letter recently from him from San Francisco where he
is watching foreign vessels--"

"Oh," said Schwinn, raising his hands in a helpless gesture, "I know
you have spies in my organization."

We talked a little longer--of visits he made to Nazi agents in the
Middle West and in New York, of secret conferences with propagandists
and spies. But he refused to do any more than shrug his shoulders at
all new questions.

"I have said too much already," he said.

FOOTNOTES:

[10] Gissibl left for Stuttgart, Germany, and leadership was taken over
by his brother, Peter.

[11] Before McFadden died, I published evidence that while he was a
member of Congress he worked with Nazi agents in this country.

[12] As this book went to press, the U.S. Government had just begun
action to revoke Schwinn's citizenship, claiming that he had obtained it
by making false statements.

[13] Congressman Samuel Dickstein. The McCormick Congressional Committee
was frequently referred to as the "Dickstein Committee" because
Dickstein had introduced the resolution for the investigation.

[14] During the trial of the four Nazi spies in New York the Federal
prosecutor brought out that they also carried orders sealed in brown,
manila paper.

[15] Von Bülow has since sold his home and moved into the El Cortez
Hotel in San Diego.

[16] At that time working for Henry Ford.




VIII

_Henry Ford and Secret Nazi Activities_


One of the Chief Nazi propagandists in the United States recently ran
in the United States Senate primaries in Kansas and was almost
nominated. He is Gerald B. Winrod, who poses as a Protestant minister
but has no affiliations with any reputable church.

Winrod, even before he tried to get into the Senate, was one of the
most brazen of the Nazis' Fifth Column operating in this country. He
has held secret consultations with officials in the German Embassy in
Washington and carries on his propaganda under Fritz Kuhn's direction.

Shortly after Winrod returned from a mysterious trip to Germany and
held an equally mysterious long consultation at the Nazi Embassy in
this country (1935), he organized the _Capitol News and Feature
Service_, with offices at 209 Kellogg Building, Washington. The "news
service" supplied smaller papers throughout the land with "impartial
comments" on the national scene. The _Service_ was edited by Dan
Gilbert, a San Diego newspaperman, and the material was sent free of
charge (as is the material sent to the Latin American countries from
Germany and Italy). It was of course, deliberately calculated to
spread pro-Hitler sentiment and propaganda.

Few who read Winrod's publications realize the extent of his
activities. On March 1, 1937, Senator Joseph T. Robinson addressed the
United States Senate on what appeared to him to be "unfair propaganda"
carried on by Winrod against President Roosevelt's proposed
reorganization of the judiciary system. The Senator stated that he
could not understand why the issues should be deliberately falsified
by a gentleman of the cloth--that it reminded him of the old Ku Klux
Klan tactics.

The Senator did not know that Winrod's propaganda against Roosevelt
was only part of a propaganda campaign cunningly and brazenly
organized by Nazis in this country in an effort to defeat a man who,
they felt, was not friendly to them. In this campaign, Nazi agents
worked openly and secretly with a few unscrupulous members of the
Republican Party in an effort to defeat Roosevelt.

Several years ago Winrod was a poverty-stricken man living at 145 N.
Green Street, Wichita, Kansas. He called himself a minister but all
church bodies have repudiated him. Without a church, he did a little
evangelistic preaching and lived off collections made from his
audience. It was a precarious livelihood and often the "Reverend" did
not have enough money to buy even ordinary necessities.

Records in several Wichita department stores tell the story of the
evangelist's poverty before an angel came to visit him. All the
storekeepers with whom Winrod dealt requested that their names be
withheld, but signified their willingness to present their records to
any governmental body which might be interested in the sudden wealth
he acquired after he became an intense Hitler propagandist. In the
days of his poverty Winrod, the records show, could afford to buy only
the cheapest furniture, the cheapest clothes, and pay for them on the
installment plan in weekly payments ranging from fifty cents to two or
three dollars a week.

I am reproducing with this chapter several of the installment cards.
The reader will notice that as late as 1934 Winrod was paying at the
rate of one dollar a week. It was in this period that Nazi agents in
the United States were carrying on their intensive campaign, and it
was also in this period that Winrod began to harangue his audiences
about the "menace of the Jews and the Catholics."

   [Illustration: Account cards for the Reverend Gerald B. Winrod in
   a Wichita department store, showing his straitened financial
   circumstances during the early thirties.]

Then one day, the Reverend Gerald B. Winrod suddenly found himself
possessed of enough money to go to Germany. When he came back in
February, 1935, he had new suit cases, new clothes and a fat check
book. The records in the Wichita department stores where he had been
getting credit for clothes and furniture show that after his return
from Germany he paid all his debts in lump sums--by check. Then he
became a publisher.

In his newspaper, _The Revealer_, he published a report on his trip to
Europe, but did not mention where he got the money for the jaunt. The
report (February 15, 1935) told of his discovery that the German
people loved Hitler and that only "Jewish influence in high circles of
certain governments is making it impossible for Germany to carry on
normal trade and financial relations with other countries."

In this period of his new-found prosperity he established contacts
with Nazi agents and pro-fascists like Harry A. Jung of the American
Vigilant Intelligence Federation, Colonel Edwin Emerson, James True
and a host of other patrioteers.

Before the Presidential election he made another trip to Germany. When
he returned, he enlarged his distribution apparatus and was apparently
important enough for high Nazi officials visiting the United States to
meet with him. One of these was Hans von Reitenkranz, who came quietly
to the United States as Hitler's personal representative to arrange
for oil purchases--oil which Germany needed badly for her factories
and especially for her growing war machine.

Von Reitenkranz is a friend of Professor Kurt Sepmeier of the
University of Wichita. He introduced Winrod to the Professor. They
became friendly. When I was in Wichita making inquiries about the
Reverend Winrod, I constantly came across the Professor's trail. Both
he and Winrod had been meeting regularly but with an effort at
secrecy.

In January, 1937, after several meetings with Professor Sepmeier,
Winrod went to Washington. I also went to Washington and found that
the Reverend was calling at the German Embassy. On one of his visits
he remained inside for an hour and eighteen minutes. Whom he saw or
what he discussed I do not know; but immediately after this long
visit, the _News and Feature Service_ was organized with money enough
to send its items out free of charge to the papers that would accept
them.

Gilbert, who headed the _Service_, was for many years the personal
representative of William Dudley Pelley, leader of the Silver Shirts.
The Nazis had been trying to get the Silver Shirts to cooperate with
them in a fascist "united front" and the appointment of Gilbert was
the first indication that a friendly cooperation had been established.

   [Illustration: Sample of the "Capital News and Feature Service,"
   in the establishment and distribution of which the Reverend
   Gerald B. Winrod had a hand.]

Winrod had been in constant communication with Pelley, and Pelley had
conferred several times with Schwinn. The Nazis were eager to get a
native American body into the organization so they would have an
American "front."

Gilbert opened offices in Washington and, fearful lest their
location become known, rented Post Office Box No. 771, Ben Franklin
Station, for use as a mailing address. After the first issue had been
sent out, Winrod and his agents canvassed prominent industrialists for
donations to support the "news service" on the grounds that it was
furthering religious activities and fighting Communism. The money
collected was actually used to carry on anti-democratic propaganda. A
number of industrialists contributed. I have a list of them, but since
there is no conclusive evidence that they knew the money was being
spent by Nazi agents, I shall not publish the names. I mention it
merely as an illustration of how wealthy men are victimized by
racketeers with pleas of "patriotism" and "public service." Harry A.
Jung did the same thing by getting money from rich Jews "to fight
Communism" and from rich gentiles "to fight the menace of the Jew."

   [Illustration: Letter from a small-town newspaper showing the
   kind of confusion caused by the "Capitol News and Feature
   Service."]

With the first issue of the _Capitol News and Feature Service_, the
following announcement was mailed to the editors of rural weeklies:

"Good Morning, Mr. Editor! _Capitol News and Feature Service_ herewith
delivers three priceless articles, fresh from the Nation's capitol.
Use them without cost. You will hear from us each week. Watch for
these interesting articles."

An examination of the "priceless articles" showed that they were
designed primarily to attack American democracy.

Since his return from Germany and his conferences at the Nazi Embassy,
Winrod has made frequent trips into Mexico where he has met with
Mexican fascists--especially with leaders of the Mexican Gold Shirts
which were organized by Hermann Schwinn. Again we discover the tie-up
between fascist organizations in the United States and those to the
south of us.


When the Nazis reorganized their propaganda machine several years ago
and established smuggling headquarters on the West Coast, propaganda
taken off Nazi ships docking in San Diego and Los Angeles included
material printed in Spanish for the special use of General Nicholás
Rodriguez, head of the Gold Shirts.

The Spanish as well as the English material was taken to the
_Deutsches Haus_ in Los Angeles and turned over to Schwinn, who
forwarded the batches to Rodriguez. The contact man between Schwinn
and the head of the fascist movement in Mexico is a native American
named Henry Douglas Allen of San Diego. Allen, under the pretext of
being a mining engineer and interested in prospecting in Mexico, went
repeatedly into the neighboring country with the smuggled propaganda
and delivered it to Rodriguez' agents.

Since native Americans, especially if they say they wish to prospect,
can travel across the international boundary into Mexico as often as
they please without arousing suspicion, Allen was chosen as the
liaison man between Nazi agents in the United States and Rodriguez. As
I said earlier, the Nazis tried from the beginning to get an American
"front" and to draw as many Americans into it as possible--obviously
strategic preparation for future work more serious than mere
propaganda. Hence Allen was instructed to become active in the Silver
Shirt movement. He organized Down Town Post No. 47-10 and established
Silver Shirt recruiting headquarters in Room 693 at 730 South Grand
Ave., Los Angeles.

In August, 1936, when a lot of Nazi and anti-Roosevelt money was being
shelled out in efforts to defeat Roosevelt, Allen became extremely
active. While Pelley was out of town, he was instructed to work with
Kenneth Alexander, Pelley's right-hand man. Alexander was formerly a
still-photographer at United Artists Studios. The two opened offices
in the Broadway Arcade Building and on October 1, 1935, moved to the
Lankersheim Building at Third Street near Spring, Los Angeles.

Rodriguez, after he was given assurances of Nazi aid, worked not only
with Nazi agents in this country but also with Julio Brunet, manager
of the Ford factory in Mexico City.

The earliest documentary record I have of their tie-up is a letter
Rodriguez wrote to Ford's manager on September 27, 1934, on Gold Shirt
stationery. The letter merely asks Brunet to give jobs to two "worthy
young men" and is written in a manner that shows Rodriguez and Brunet
are rather close.

By February 7, 1935, Rodriguez and the Ford executive in Mexico had
become sufficiently intimate for the fascist leader to express his
appreciation of Brunet's placing Gold Shirts in the plant. His letter
addressed to the manager of the Ford Company follows:

    We have been informed by our delegate, Senora N.M. Colunga, that
    she was very well treated by you and that in addition you
    informed her that our request for work for some of our comrades
    who needed it has also been heard. Not doubting but that this
    will be fulfilled, A.R.M. [the Gold Shirts] sends you the most
    expressive thanks for having seen in you the recognition of one
    of the greatest obligations of humanity to Mexicanism.

On November 19, 1935, shortly before the Gold Shirts felt they were
powerful enough to attempt the overthrow of the Mexican Government and
the establishment of a fascist dictatorship, Rodriguez wrote to the
manager of the Ford plant, asking for the two ambulances which had
been promised the fascists by the Ford manager. Rodriguez had
organized his attempted Putsch carefully, with a women's ambulance
corps to care for the wounded in the expected fighting. The letter,
again translated almost literally, follows:


    Sr. Manager of the Ford Company           Nov. 19, 1935.
    City
    Highly Esteemed Señor:

    This will be delivered to you personally by Sr. General Juan
    Alvarez C., who comes with the object of ascertaining if that
    company would be able to supply two ambulances which they had
    already offered, for the transportation of the Women's Sanitary
    Brigade on the 20th day of this month at 8 A.M.

    Thanking you in advance for the references, I am happy to repeat
    that I am at your command. Affectionately and attentively, S.S.

                                       NICHOLÁS RODRIGUEZ C.
                                          Supreme Commander.

   [Illustration: Letter from General Nicholás Rodriguez, Mexican
   fascist leader, to the Ford manager in Mexico City, soliciting
   employment for two protégés.]

In the street fighting that followed the attempted fascist Putsch a
number were killed and wounded. It was after this fight that Rodriguez
was exiled.

I am reproducing some of these letters from carbon copies, initialed
by Rodriguez, which were in his files. Why he initials carbon copies
I don't know, but I have a stack of his correspondence with Nazi
agents and almost all of his carbons are initialed.

On October 4, 1936, Allen wrote to the exiled fascist leader.
Ostensibly the letter invited him to address the Silver Shirts.
Actually it was for a special conference about "matters of vital
importance to us both." This letter was written when Schwinn was
holding conferences with Pelley to merge forces in a fascist united
front, and when Schneeberger was preparing to leave for Japan on a
training ship ordered up from the Canal Zone by the Japanese to take
him on board. The letter follows:

    Dear General Rodriguez:

    Upon receipt of this letter will you kindly communicate with me
    and advise me whether it would be possible for you to come to
    Los Angeles in the near future to make an address to our
    organization here. We shall be glad to defray all expenses which
    will include airplane both ways if you desire it. We shall also
    offer you bodyguard for your protection if you deem it
    necessary. Your fight is our fight and it is our desire to have
    you come to Los Angeles especially to confer with us relative to
    matters of vital importance to us both. I would suggest that if
    you can arrange to come, you telegraph me (charges collect) upon
    receipt of this letter so that I may make arrangements without
    delay.

                                          Fraternally yours,
                                                HENRY ALLEN.

When I went to Mexico to look into Nazi activities, I gave a copy of
this letter to the Minister of the Interior. At that time Allen was
again in Mexico under the pretense of looking into his mining
interests, but a check showed that he had actually gone there to
confer secretly with a Mexican army man, General Iturbe. At my request
the Mexican Government looked into Allen's movements and learned that
he had entered Guaymas, center of Japanese activities, with Kenneth
Alexander, Pelley's chief aid.

The connection between Ford's Mexican manager and General Rodriguez
might be considered an unfortunate incident for which Ford could not
be held responsible. This would be a reasonable assumption if the
Nazi-Rodriguez-Ford tie-up in Mexico were an isolated case. The facts,
however, show it is not.

   [Illustration: Letter from General Rodriguez to the Ford manager
   in Mexico City. The translation is given on page 110.]


The national leader of the Nazi propaganda machine in this country has
been on the Ford pay roll. Kuhn was supposed to work for Ford as a
chemist, but while on Ford's pay roll he traveled around the United
States conferring with other secret Nazi agents and actively directing
Nazi work in this country.

Ford has a highly developed and exceedingly efficient espionage system
of his own which, among other things, watches what his employees
do--even to their home life. Kuhn's activities were known to Harry
Bennett, head of the Ford secret service or "Personnel Department," as
it is called, and Bennett reports to Ford. Furthermore, Kuhn's Nazi
connections had been publicized in both the American and the Nazi
press and were no secret. Jews and Christians alike protested to Ford
about his employee's anti-democratic work while on the motor magnate's
pay roll, but Kuhn was left undisturbed to travel around organizing
Nazi groups. In 1938 Ford was given the highest medal of honor which
Hitler can give to a foreigner. No statement was ever made as to just
what Henry Ford had done for the Nazi Führer to merit the honor.

Simultaneously with Kuhn's intensified work, Ford's confidential
secretary, William J. Cameron, became active again. Cameron was editor
of Ford's _Dearborn Independent_ when that newspaper published the
"Protocols of the Elders of Zion" after they had been proved to be
forgeries. When a nation-wide protest arose from Jews and Christians
who were shocked at seeing one of the richest and most powerful men in
the country use his wealth to disseminate race hatred, and when the
protest grew into a boycott of his cars, Ford apologized and
discontinued the newspaper. But instead of easing his editor out or
giving him some other job, he made him his confidential secretary.

   [Illustration: Letter from Henry Allen to General Rodriguez,
   showing the tie-up between American and Mexican fascist
   organizations.]

When Kuhn went to work for Ford, the national headquarters of the Nazi
propaganda machine was moved to Detroit, and the anti-democratic
activities increased in intensity. Employing Nazi anti-semitism as the
bait to attract dissatisfied and bewildered elements in the
population, a new organization made its appearance: The Anglo-Saxon
Federation, headed by Ford's private secretary. Headquarters were
established in the McCormick Building in Chicago, Room 834, at 332 S.
Michigan Ave. and in the Fox Building in Detroit.

In July, 1936, Cameron, obviously because Ford was violently
anti-Roosevelt, stepped out as head of the organization and became its
Director of Publications. When Winrod was raising money from American
industrialists to support the _Capitol News and Feature Service_,
Cameron was among the contributors.

The Anglo-Saxon Federation began to distribute the "Protocols" again.
I bought a copy in the Detroit offices of the organization, stamped
with the name of the organization. The introduction quotes Ford as
approving of them. It states:

    Mr. Henry Ford, in an interview published in the _New York
    World_. February 17, 1921, put the case for Nilus[17] tersely
    and convincingly thus:

    "The only statement I care to make about the 'Protocols' is that
    they fit in with what is going on. They are sixteen years old,
    and they have fitted the world situation up to this time. They
    fit it now."

When Ford was on the witness stand in a libel suit some fifteen years
ago and admitted his ignorance of matters with which even grammar
school children are familiar, the country laughed. His ignorance,
however, is his own affair, but when he takes no step to curb his
personal representative from working with secret foreign agents to
undermine a friendly government, it becomes a matter, it appears to
me, of importance to the people of this country and the Government of
the United States.

   [Illustration: LEFT: American-made anti-Semitic sticker of a type
   appearing with increasing frequency in recent times. RIGHT:
   Title-page of the German edition of "The International Jew," by
   Henry Ford, of which 100,000 copies have been distributed.]

FOOTNOTES:

[17] The man who forged the "Protocols" originally and who subsequently
confessed to having done so.




IX

_Nazi Agents in American Universities_


The universities are too important a training ground for Nazi agents
to ignore. A few professors in some of our universities have joined
the growing list of anti-democratic propagandists. Some of them are
German subjects and do not disguise their pro-Nazi bias; others carry
on their propaganda as a "scholarly analysis" of the Hitler
regime--with a fervor, however, that smacks of the paid propagandist.

German exchange students, too, studying at some of our universities,
are active in various efforts to draw native Americans within the
sphere of Nazi influence. Some of these students came here ostensibly
to study for degrees, but devote most of their time to spreading Nazi
ideology and meeting with secret Nazi agents and military spies. Such
was Prince von Lippe of the University of Southern California.

Von Lippe is not an American citizen as so many of the agents are.
With no visible means of support, he received expenses from a total
stranger--oddly enough, Count von Bülow whose home overlooked the
naval base in San Diego and who was constantly in conferences with
Nazi agents. It was to Count von Bülow, you recall, that Hermann
Schwinn brought Schneeberger as soon as he arrived on his way to
Japan, and von Bülow took him around while Schneeberger photographed
areas in the military and naval zone. A number of very secret
conferences were held while Schneeberger was on the West Coast, in the
home of Dr. K. Burchardi, a Los Angeles physician who visits Nazi
ships with Schwinn and von Bülow (on one occasion Schneeberger
summoned Burchardi to come with him to a Nazi ship which had just
docked in Los Angeles--and the physician dropped his work and went).

German exchange students, when they enter this country, are under
instructions to report to the German-American Bund. On July 4, 1936,
three exchange students--a young lady and two young men--entered Los
Angeles while on a motor tour of the country. They were students at
Georgia Tech. In Los Angeles they went directly to the _Deutsches
Haus_ and presented a letter of introduction to Hermann Schwinn who
assigned them quarters at the home of Max Edgan, one of Schwinn's
lieutenants. The students then made a detailed report to Schwinn on
the political work they were carrying out at Georgia Tech.

But the professors are the chief hope of Nazi agents attempting to
spread the idea of totalitarian government and a bit of race hatred as
the bait to attract some elements in the population. Some of the
professors and some of their activities follow briefly:


Professor Frederick E. Auhagen, formerly of the German Department,
Seth Low Junior College, Columbia University.

Dr. Auhagen came to this country in 1923 and worked as a mining
engineer in Pennsylvania. From 1925 to 1927 he was with the Foreign
Department of the Equitable Trust Co.; then became connected with
Columbia University in 1927. He is not an American citizen and
constantly refers to Germany as "my native country."

This professor is one of the leading academic apologists for Herr
Hitler in the United States. Besides carrying on his pro-Nazi
propaganda in the classroom, he does a great deal of lecturing,
sometimes appearing before the Foreign Policy Association. On one
occasion, in an address before the Men's Club of the Baptist Church at
Rockville, Long Island, he stated that Seth Low Junior College was
opened "in order to keep Hebrew faces off the campus at Columbia
University."

Auhagen never tried to hide his sympathies with Nazism. Preceding a
debate on February 1, 1936, before the City Club of Cleveland, he gave
press interviews as a Nazi, and in the debate upheld Hitler as the
savior of Germany and world civilization. With a fervor far removed
from professorial calm, he explained that American newspaper
dispatches about the treatment of Jews and Catholics in Germany were
exaggerated.

"As to criticism of Germany's treatment of Catholics," he said again
in Denver, Colorado on July 26, 1935, "that is not true!"


Professor Frederick K. Krueger, of Wittenberg college, with whom
Auhagen is rather closely identified in arranging and giving talks
about Nazis and totalitarian government, at every opportunity issues
press interviews along the same line. In them he explains that the
anti-Nazi sentiment in the United States press does not represent the
editors, but is dictated by Jews who "control the press, the motion
pictures and other organs of public opinion."


Because of the high scientific standing of Professor Vladimir
Karapetoff of the Cornell engineering faculty, he is listened to with
more attention and respect than are the more blatant propagandists for
the adoption of fascist tactics and principles. Shortly after Hitler
took power, the Professor started to do his share on the campus. At
first he did it subtly, but when this made little headway he began to
talk of the "growing domination of Jews in American life, politically
as well as economically" and emphasized that the large number of Jews
in the Law School and on the campus generally was becoming a problem.

"It's the smooth-faced Jew whom we must fear," he kept repeating, "and
not the long-bearded Jewish rabbi."

Not content with expressing personal opinions, he took to organizing
groups, addressing them on the subject of the Jew; and on one occasion
he called a special meeting of the Officer's Club with the proviso
that Jews be excluded.


Paul F. Douglas,[18] teacher of German, Economics and Political
Science at Green Mountain College, wrote a book, _God Among the
Germans_, which purports to be an introduction to the mind and method
of Nazism.

I have information coming from a reputable source that Dr. Douglas was
paid by the Nazi Government to write the book. This source is
unwilling to let his name be used, but is ready to testify and lay his
information before any governmental body which will investigate the
devious methods of Nazi agents in this country.


There are at various universities throughout the country other
professors and instructors quite active in spreading pro-Hitler
propaganda. Some of them meet with Nazi agents closely allied to the
espionage machine. I offer only these few as illustrations of Nazi
efforts to get footholds in the American universities.


Along with efforts to carry on their work in the universities, Nazi
agents tried to get a foothold in the political life of the country by
finding a few Republicans who were willing to use anti-democratic
propaganda in their efforts to defeat Roosevelt during the
Presidential campaign. At no time in American history did secret
agents of a foreign power so brazenly attempt to interfere in the
internal affairs of the American people. Nor at any time in American
history did agents of a foreign government find such willing
cooperation from unscrupulous American politicians.

Among those who worked with Hitler agents was Newton Jenkins, director
of the Coughlin-Lemke Third Party.[19] The Detroit Priest and the
Congressman were fully aware, preceding and during the campaign, that
Jenkins supported Hitler and was a Jew-baiter of the first order. They
were aware of this while they were appealing for Jewish votes. The
Radio Priest and the Congressman kept in constant touch with their
campaign manager and knew what sort of government Jenkins wanted.

Jenkins' association with Nazis dates to the days preceding the
launching of the Presidential campaign. At that time he participated
in a secret conference held in Chicago with the object of uniting the
scattered fascist forces in the United States to form a powerful
fascist united front. Among those who attended were Walter Kappe,
Fritz Gissibl and Zahn--three active Hitler agents assigned to the
Mid-West area; William Dudley Pelley, leader of the Silver Shirts;
Harry A. Jung, the ultra-"patriot"; George W. Christians of
Chattanooga, Tenn., head of the American fascists; and several others.
The conference ended with an agreement to support a Third-Party
movement directed by Jenkins.

Throughout the campaign Jenkins stressed an exaggerated nationalism,
advocated "party patrols" similar to Hitler's storm troops and adopted
the Nazi Jew-baiting tactics. His first public appearance with the
Nazis was on October 30, 1935, at a meeting held in Lincoln Turner
Hall, 1005 Diversey Building, Chicago. Uniformed storm troopers with
the swastika on their arm bands patrolled the room. In the course of
his talk he said:

    The trouble with this country now is due to the money powers and
    Jewish politicians who control our Government. The Federal
    Treasury is being controlled by a Jew, Morgenthau, and a Jew,
    Eugene Meyer. The State, County and our own Municipal Government
    is being controlled by Jewish politicians. Our own Mayor signs
    what the Jews want him to sign. Nearly in every department of
    our country and local government you will find a Jew at the head
    of it. Not only under a Democratic administration but also under
    a Republican administration we will find the same conditions....
    The American people must free itself from the money plunderers
    who have thrown this country into the World War and also a
    possibility of dragging them into the present war for private
    gain and shake off their shoulders the Jewish politicians. The
    Third Party promises to do both.


This is precisely the sort of stuff paid Nazi agents in the propaganda
division are ordered to disseminate, and this is the man Father
Coughlin and Congressman Lemke picked to direct their campaign.


It was a Nazi agent, Ernst Goerner of Milwaukee, who spread the story,
aided by anti-Roosevelt forces, that Frances Perkins, Secretary of
Labor, was a Jewess. The story received such wide publicity that she
had to issue a public statement giving her birth and marriage records.

Goerner is one of the important Nazi agents in the Mid-West. He's a
bit eccentric and the Nazis sometimes have difficulty keeping him in
line, but when Schwinn made a trip East shortly before the election
campaign, he stopped off specially to see Goerner who thereupon sent a
flood of propaganda throughout the country about Secretary Perkins'
ancestry as well as charges that Roosevelt and almost all Government
officials were Jews.


It was after Schwinn's trip to the East that other disseminators of
anti-democratic propaganda, like Robert Edward Edmondson and James
True, came to life in a big way. One of the penniless men who suddenly
blossomed into the money after Schwinn's trip East was Olov E.
Tietzow, who used Post Office Box No. 491 in Chicago lest the fact
that he lived at 715 Aldine Ave. be discovered.

Up until a few months before the campaign Tietzow was an unemployed
electrical engineer who had difficulty paying the three-dollar weekly
rent for his hall bed-room at the Aldine Ave. address. After Schwinn's
visit and meeting with him, Tietzow began to commute by air between
Chicago and Buffalo where he opened a branch office.

Tietzow was tested out a little at first. He was put to work in the
offices of the Friends of the New Germany on Western Ave. and Roscoe
St., Chicago. In his spare time he worked out of 1454 Foster Ave.,
Chicago. A quotation or two from some of his letters will give an
indication of his activities. On February 21, 1936, he wrote to
William Stern, Fargo, N.D., a member of the Republican National
Committee. He said in part:

    Information about the so-called fascist movement here in the
    U.S.A. will be furnished by me if you so desire, together with
    other data you might be interested in. An opportunity to discuss
    our national problems and to lay before patriotic persons of
    means and influence and before national organizations my plans
    for a nationwide movement would be welcome....

This letter to a high Republican Party official was written after
Tietzow had outlined the contents to Toni Mueller, Nazi agent in
Chicago reporting directly to Fritz Kuhn.

Since most of the patrioteers were opposed to the New Deal and since
some of them were already working with Nazi agents in this country, it
was not long before they were going full blast in their "Save America"
racket. The people of the United States, though they don't talk much
about it, are thoroughly patriotic in the fullest sense of the word.
To accuse anyone of not being a patriot is almost worse than telling a
man that he is a son of not quite a lady. The racketeers in patriotism
long ago discovered that people would contribute to a "patriotic
cause" if only to escape the reputation of being unpatriotic; and the
racketeers have made a nice living out of it. For some of the
patrioteers it has become a thriving business, with everybody
involved--except the suckers--getting his cut. Some of the big
"patriotic" organizations are really influential, and the small ones
are hopefully struggling along in the expectation of bigger and better
and more patriotic days when the pickings will be more than
attractive.

   [Illustration: Letter by Olov E. Tietzow, showing typical methods
   of American fascists.]

Every time I start looking into organizations with high-sounding and
impressive names, I am profoundly impressed with the accuracy of
Barnum's noted observation. Raise the cry of "patriotism" and
perfectly good Americans forget to try to find out just what the
"patriotic" activities are, and shell out without a murmur.
Industrialists particularly like the "Americanism" of the patriotic
groups because almost all of them incorporate an anti-labor policy.
The propaganda, of course, is rarely conducted as an open fight
against labor, but is put across as a fight to save America from the
Communists.

Some of the racketeering patriotic organizations with a more or less
devout following include the National Republican Publishing Company,
Washington, D.C., the American Vigilant Intelligence Federation,
Chicago, Ill., the Paul Reveres, Chicago, Ill., the Industrial Defense
Association, Boston, Mass., the American Nationalists, Inc., New York,
N.Y. and the American Nationalist Party, Los Angeles, Calif. There are
a number of others, but these are some of the most blatant.


The National Republican Company, 511 11th Street, N.W., Washington,
D.C., is one of the most influential. It publishes the _National
Republic_, a journal accepted by men high in public office and by
leading industrialists as earnestly trying to inculcate "Americanism"
into Americans.

The _National Republic_ has an amazing list of endorsers--governors,
mayors, senators, congressmen and nationally-known industrialists. The
magazine is virtually the entire organization and is dedicated "to
defending American ideals and institutions." It is headed by Walter S.
Steele, who was tied up with Harry A. Jung of the American Vigilant
Intelligence Federation before he went into business for himself.
While Steele was working with the ace of racketeers in patriotism,
the president-editor of the _National Republic_ also eked out a few
pennies by distributing the "Protocols of the Elders of Zion." Today,
however, he confines himself chiefly to fighting Communism, spreading
race hatred only when it is paid for in advertisements. Books
distributed by Nazi propagandists in furthering their anti-democratic
campaign--such books as _T.N.T._ by Colonel Edwin Hadley and _The
Conflict of the Ages_ find space in the _National Republic's_ pages.
Colonel Hadley headed the Paul Reveres which tried to organize fascist
groups on American university campuses, and _The Conflict of the Ages_
devotes a full chapter to the Nazi "proofs" of the authenticity of the
"Protocols."

I mention these to show the type of stuff Steele is willing to
disseminate--if he is paid for it. And by permitting the use of their
names, the sponsors, consciously or unconsciously, aid him in his
anti-American activities.

The detailed aims of the _National Republic_ are to provide a "weekly
service to twenty-three hundred editors, to defend American
institutions against subversive radicalism; a national information
service on subversive organizations and activities; an Americanization
bureau serving schools, colleges and patriotic groups; conducted for
the public good from Washington, D.C., by nationally known leaders."

The procedure of conducting the organization "for the public good"
includes high-pressuring the shekels from the suckers. Steele, a
former newspaperman, learned from his association with that other
arch-patriot, Jung. So when Steele established his own racket, he
found one of his early aids in former Senator Robinson of Indiana.
Robinson was closely tied up with the Ku Klux Klan. Through Robinson
and through other politicians reached with the cry "Save America," he
got a long list of prominent sponsors and gradually increased it until
now it reads like a _Who's Who_ of reactionary industrialists and
innocent politicians. With letters of introduction from Senator
Robinson, Steele's high pressure gang set out to collect in the name
of patriotism.

The procedure was simple. Salesmen presented their letters of
introduction to the mayor of a city. The mayor was impressed with the
high "patriotic" motives and especially with the imposing list of
names sponsoring the efforts. The mayor introduced the high-pressure
fellows to other people--and the milking began.

Let me illustrate a little more specifically:

On March 4, 1936, Steele sent two of his ablest dollar-pullers,
Messrs. Fahr and Hamilton, into the Oklahoma oil fields where the
industrialists would like to see a minimum of 200 per cent Americanism
instilled in the public mind. Messrs. Fahr and Hamilton had letters of
introduction to Mayor T.A. Penny of Tulsa, Okla. When the salesmen
approached the Mayor, they had not only the long and imposing list of
names on the letterhead but additional letters of introduction from
ex-Governor Curley of Mass., ex-Senator Robinson of Indiana and
Congressman Martin Dies of Texas. The drummers wanted the Mayor to
introduce them to the Chairman of the Tulsa Board of Education who
could help them get funds in Tulsa and elsewhere. The funds were to be
used to place the "patriotic" magazine in the public school system in
order "to preserve this country against subversive activities,
particularly Communism."

It was a neat circulation-getting stunt, performed without Fahr and
Hamilton telling what percentage of the take they got.

The Mayor gave the letters of introduction. With these letters and the
excellent contacts thus established, they started down the sucker list
from W.G. Skelly, head of the Skelly Oil Co., Tulsa to Waite Phillips
of the Phillips Petroleum Co.

Like his former colleague Harry A. Jung, Steele works on the big
industrialists by whispering confidentially that he has sources of
information about which he can't talk much but which make it possible
for him to keep the industrialists informed about "subversive
radicals." For a reasonable price and perhaps a contribution to a
worthy cause, Steele would supply the industrialist with "confidential
information for members only" which would keep him up to date about
the radicals threatening America. The "confidential information" must
not be shown to anybody else. Extreme caution is necessary lest the
radicals find out about the "information service." With all this
hocum, secrecy and whispering, the industrialist becomes a member at
so much per not realizing that the information thus peddled can be got
for three cents a day--five cents on Sundays--by buying the _Daily
Worker_. It's just one of the little patriotic rackets the boys have
cooked up.

Working closely with Steele is James A. True of the James True
Associates, another precious racketeer who stepped from patrioteering
into efforts to organize in conjunction with Nazi agents a secret
armed force in the United States. With True in this effort to
establish a Cagoulard organization in this country, were some of the
most active Nazi agents and patrioteers.

FOOTNOTES:

[18] Not to be confused with Prof. Paul H. Douglas of the University of
Chicago, a highly reputable scholar and a stanch defender of democracy.

[19] Father Coughlin was finally reprimanded by the Vatican for his
unpriestly attacks upon the President.




X

_Underground Armies in America_


Early in 1938 native Americans, working with Nazi agents, completed
plans to organize a secret army along the general lines of the
Cagoulards in France. The decision was made after the liaison man
between Nazi agents here and plotters for the secret army met with
Fritz Kuhn and Signor Giuseppe Cosmelli, Counselor to the Italian
Embassy in Washington.

The liaison man is Henry D. Allen, who moved from San Diego to 2860
Nina St., Pasadena, Calif. Allen, the reader may recollect, helped
Schwinn organize the Mexican Gold Shirts which unsuccessfully
attempted to seize the Mexican Government. Allen is still active in a
plot to overthrow the Cárdenas Government, working at the moment with
Gen. Ramon F. Iturbe, a member of the Mexican Chamber of Deputies,
with Gen. Yocupicio who is smuggling arms as part of a plan to rebel,
and with Pablo L. Delgado who took over the fascist Gold Shirt work
under a different name after Rodriguez was exiled when his attempt to
march on the Government failed.

To understand the feverish activities of foreign agents and native
Americans working with foreign agents, one must remember that when the
World War broke out in 1914, Germany was caught with only small
espionage and sabotage organizations in the United States. It cost the
German War Office large sums of money to build them under difficult
and dangerous conditions. The Nazis do not intend to be caught the
same way in the event a war finds the United States on the enemy side
or, if neutral, supplying arms and materials to the enemy.

The first step to prevent such a development is to build an enormous
propaganda machine and to draw into it as many native Americans as
possible. Because of the future potentialities of natives as spies and
_saboteurs_, the Nazi leaders take extraordinary precautions to
safeguard their identities. Should the United States become involved
in a war with fascist powers, especially Germany, the German members
of the Bund can be watched and, if necessary, interned; but native
Americans not known as Bund members can move about freely, hence the
care to prevent their identities from becoming known. Schwinn, for
instance, keeps a regular list of the German-American Bund members at
the _Deutsches Haus_ in Los Angeles. The native American members,
however, are not listed. The names are kept in code and only Schwinn
knows the code numbers.

Military considerations thus lead the Nazi General Staff to maintain
this propaganda in the United States, despite the knowledge Nazi
leaders in Germany have that its activities and distasteful propaganda
here are seriously hampering German-American commercial relations.

The propaganda machine is already functioning as the German-American
_Volksbund_. The second step, as was demonstrated in France with the
Cagoulards and in Spain with Franco's Fifth Column, is to organize
secret armies capable of starting sporadic outbreaks tantamount to
civil war--a procedure which would naturally deflect the country's
energies in war time.

This second step was taken after careful study, and Henry D. Allen was
chosen as the liaison man between those maneuvering the plot.

The private letters exchanged between Allen and his fellow
conspirators are now in my possession. Some of the letters exchanged
were signed with the writers' real names and some with code names.
Allen's code name, for instance, is "Rosenthal."

On April 13, 1938, he wrote to a "G.D." (of whom more shortly) as
follows:

    Have just sent Delgado into Sonora incognito. This move has
    resulted from a four-party conference held in Yuma a few days
    ago. This party was composed of Urbalejo, chief of the Yaqui
    nation, Joe Mattus, his trusted lieutenant, Delgado and myself.
    Yocupicio has completely come over to our side, which you can
    perceive from the outcome of the little tryout in Aqua Prieta a
    few weeks ago. Delgado has arrived safely at Bocatete, and will
    get the boys in that part of the country pretty active....
    Inasmuch as I am his legal and properly accredited
    representative in the United States, you may rest assured that
    there will be no doubt as to the objectives of this movement
    south of the Rio Grande.

    I have received three letters from General Iturbe in which he
    tells me that they are taking the Spanish copies of the
    Protocols which K. sent me, and making 5,000 copies of same. In
    each letter he begs me to set a time and date for meeting him at
    Guadalajara for the purpose of effecting the necessary plans for
    active campaigning with Delgado. I will arrange all of this as
    soon as you consider it expedient....

                                                  ROSENTHAL.

Two days later (April 15, 1938) he wrote from Fresno, Calif. under his
own name to F.W. Clark, 919-½ S. Yakima Ave., Tacoma, Wash. The letter
reads in part:

    Relative to the Gold Shirts of Mexico, please be advised that we
    found it necessary to reorganize this group in August, 1937. The
    activist elements have proceeded and are now carrying on under
    the name of the Mexican Nationalist Movement of which Pablo L.
    Delgado is the nominal head. I am the legal and personal
    representative of Delgado in the movement in the United States.

So much for his current activities to establish fascism to the south
of us.

Most Americans who fall for Nazi propaganda do not suspect that they
are being played for suckers by shrewd manipulators pulling the
strings in Berlin, and probably not one of the many reputable and
sincerely patriotic Americans who fell for Allen's "patriotic"
appeals suspects his activities against the country he so zealously
wants to "save."

Some shrewd observer once remarked that "patriotism is the last refuge
of a scoundrel." Whenever I come across an "ultra-patriot" with foam
dripping from his mouth while he beats his chest with loud cries about
his own honesty and the crookedness of those running the country, I
suspect a phony. As a rule, I look for the criminal record of a man
who's yelling "Chase out the crooks" and "Let's have honest
government," and all too often I find one. Henry D. Allen, _alias_
H.O. Moffet, _alias_ Howard Leighton Allen, _alias_ Rosenthal, etc.,
ex-inmate of San Quentin and Folsom prisons, is no exception; his
criminal record extends over a period of twenty-nine years.

Let me give the record before I start quoting from his letters,
chiefly for the benefit of those sincere and loyal Americans who
thought his Swastika-inspired activities represented honest
convictions.

May 17, 1910: Arrested in Los Angeles charged with uttering fictitious
checks. In simple language this means just a little bit of forgery.
Los Angeles Police Department file, No. 7613.

June 10, 1910: Sentenced to three years imprisonment; sentence
suspended upon tearful assurances of good behavior.

May 12, 1912: Picked up in Philadelphia charged with being a fugitive;
brought back to Los Angeles.

July 1, 1912: Committed to San Quentin. Guest No. 25835.

April 21, 1915: Committed to Folsom from Santa Barbara on a forgery
charge. Guest No. 9542.

Feb. 1, 1919: Arrested in Los Angeles County charged with suspicion of
a felony. Los Angeles County No. 14554.

June 31, 1924: Arrested in San Francisco, charged with uttering
fictitious checks. No. 35570.

Oct. 5, 1925: Los Angeles Police Department issued notice that Allen
was wanted for uttering fictitious checks. Bulletin No. 233.

Allen is apparently a prolific writer--of bad checks and of long
reports about his activities to his superiors.

Two of Allen's close friends are also native Americans: C.F. Ingalls
of 2702 Bush St., San Francisco and George Deatherage (the G.D.
mentioned earlier). Deatherage now lives and operates out of St.
Albans, W. Va. He organized the American Nationalist Confederation
which used to have its headquarters in Palo Alto, Calif. Both these
gentlemen also work with Schwinn.

On January 7, 1938, Deatherage received from San Francisco a letter
signed "C.F.I."--in a plain envelope without a return address. The
letter is very long and detailed. I quote in part:

    We must get busy organizing grid-lattice-work or skeleton for a
    military staff throughout the nation, and in this we need
    representatives of fascist groups, and we need Americans with
    whom these others may be incorporated.... All must believe in
    being ruthless in an emergency....

    The political and the military organizations must not be
    unified. They have different aims. With one hand we offer the
    public a potential program. Whether they accept it or not and
    whether they wish to return to the ideals embodied in a
    representative form of a constitutional federal republic or not,
    is of secondary importance. Of first importance is the need of
    the emergency military organization to function simultaneously
    should our enemies revolt if we should win politically or should
    we revolt if our enemies win politically.

On January 19, 1938, Deatherage received a letter signed with the code
name "Laura and Clayton." "Laura" is Hermann Schwinn. This letter,
too, is long and goes into details on how best to organize the secret
military group and have it ready for instant action. The letter states
at one point:

    After we do all this, now then we shall have the national
    military framework all steamed up and oiled and coupled to the
    multiplicity of working parts ready to appear on all fronts....

After "C.F.I." and "Laura and Clayton" had decided on the details of
the secret military body in which they needed the aid of "Nazi and
fascist" forces, they needed money and arms.

Early in January, Allen received from "Mrs. Fry and C. Chapman" four
hundred and fifty dollars for a trip to Washington, D.C. "Mrs. Fry and
C. Chapman" live in Santa Monica, but use Glendale, Calif, for a post
office address. This money was spent between January 13 and February
10, 1938, according to the expense account Allen turned in to the
Fry-Chapman combination.

Three days after Allen got the money (January 16, 1938), he received
from Schwinn a letter of introduction to Fritz Kuhn, addressed to the
_Amerikadeutscher Volksbund_, 178 E. 85th Street, New York City. The
letter was written in German. Following is the translation:

    My Bund Leader:

    The bearer of this letter is my old friend and comrade-in-arms,
    Henry Allen, who is coming East on an important matter.

    Mr. Allen knows the situation in Los Angeles and California very
    well and can give you important information. We can give Allen
    absolute confidence.

                                           Hail and Victory,
                                            HERMANN SCHWINN.

The "important matter" on which Allen was going East and which he
wanted to discuss with the national Nazi leader in this country, was
to contact the Italian Embassy, the Hungarian Legation, James True of
the James True Associates (distributors of "Industrial Control
Reports" from its headquarters in Washington, D.C.), George Deatherage
in St. Albans, W. Va., and several others.

Allen reported regularly to Chapman, signing his letters with the code
name "Rosenthal." I quote in part from one letter written from
Washington on January 24, 1938:

    Upon calling at the Rumanian Embassy I found the Ambassador with
    all his attachés are of the Carol-Tartarescu regime, and they
    are sailing on Wednesday, January 26. The new Ambassador will
    arrive with his staff on Saturday, I am told. The letter which
    you gave me I mailed to Budapest myself, not daring to entrust
    it to the present staff at the Embassy. At the Italian Embassy I
    found the Ambassador away, but I had a very delightful and
    satisfactory conference with Signor G. Cosmelli, who is the
    Italian counselor....

Shortly after the conference at the Italian Embassy, True and Allen
conferred. Subsequently, True wrote to Allen and added a postscript in
long hand: "But be very careful about controlling the information and
destroy this letter."

Allen did not destroy it immediately. The letter, dated February 23,
1938, reads in part:

    The bunch of money promised off and on for three years may come
    through within the next week or two. We have had so many
    disappointments that I hardly dare hope but there seems a fair
    chance of results. If it comes through we will have you back
    here in a hurry. You, George, and I will get together and
    prepare for real action.

    If your friends want some pea shooters, I have connections now
    for any quantity and at the right price. They are United States
    standard surplus. Let me know as soon as you can.

To these events must be added the peculiar and unexplained actions of
the Dies Congressional Committee appointed to "investigate subversive
activities." The Committee employed a Nazi propagandist as one of its
chief investigators and refused to question three suspected Nazi spies
working in the Brooklyn Navy Yard. Congressman Martin Dies of Texas,
chairman of the Committee, gave two of the _National Republic's_
high-pressure men letters of introduction when they started out on a
little milking party in the name of patriotism. He received the
cooperation of Harry A. Jung, and he refused to examine the files of
James A. True when the above letter was brought to his Committee's
attention.

But these actions merit more detailed consideration.




XI

_The Dies Committee Suppresses Evidence_


Three Suspected Nazi Spies were quietly taken out of the Brooklyn Navy
Yard to the Dies Congressional Committee headquarters in New York in
Room 1604, United States Court House Building. The three men were each
questioned for about five minutes by Congressman J. Parnell Thomas[20]
of New Jersey and Joe Starnes of Alabama. The men were asked if they
had heard of any un-American goings-on in the Navy Yard. Each of the
three subpoenaed men said he had not, and the Congressmen sent them
back to work in the Navy Yard after warning them not to say a word to
anyone about having been called before the Committee.

When I learned of the Congressional Committee's refusal to question men
they had subpoenaed, I wondered at the unusual procedure--especially
since it promptly put Nazi propagandists (such as Edwin P. Banta, a
speaker for the German-American Bund) on the stand as authorities on
"un-American" activities in the United States. A little inquiry turned
up some interesting facts.


One of the Committee's chief investigators, Edward Francis Sullivan of
Boston, had worked closely with Nazi agents as far back as 1934.
Sullivan's whole record was extremely unsavory. He had been a labor
spy, had been active in promoting anti-democratic sentiments in
cooperation with secret agents of the German Government and in
addition was a convicted thief. (Shortly after Slap-Happy Eddie, as he
was known around Boston because of his convictions on drunkenness,
lined up with the Nazis, he got six months for a little stealing.)
Before going on with the Congressional Committee's strange attitude
toward suspected spies and known propagandists in constant
communication with Germany, it might be well to review a meeting which
the Congressional Committee's investigator addressed in the Nazi
stronghold in Yorkville.

   [Illustration: Reproduction of a document showing that Edward
   Francis Sullivan, at one time chief investigator for the Dies
   Committee, was convicted of larceny and sentenced to prison.]

On the night of Tuesday, June 5, 1934, at eight o'clock, some 2,500
Nazis and their friends attended a mass meeting of the Friends of the
New Germany at Turnhall, Lexington Ave. and 85th Street, New York
City. Sixty Nazi Storm Troopers--attired in uniforms with black
breeches and Sam Brown belts, smuggled off Nazi ships--were the guard
of honor. Storm Troop officers had white and red arm bands with the
swastika superimposed on them. Every twenty minutes the Troopers,
clicking their heels in the best Nazi fashion, changed guard in front
of the speakers' stand. The Hitler Youth organization was present. Men
and women Nazis sold the official Nazi publication, _Jung Sturm_, and
everybody awaited the coming of one of the chief speakers of the
evening who was to bring them a message from the Boston Nazis.

W.L. McLaughlin, then editor of the _Deutsche Zeitung_, spoke in
English. He was followed by H. Hempel, an officer of the Nazi
steamship "Stuttgart," who vigorously exhorted his audience to fight
for Hitlerism and was rewarded by shouts of "Heil Hitler!" McLaughlin
then introduced Edward Francis Sullivan of Boston as a "fighting
Irishman." The gentleman whom the Congressional Committee chose as one
of its investigators into subversive activities, gave the crowd the
Hitler salute and launched into an attack upon the "dirty, lousy,
stinking Jews." In the course of his talk he announced proudly that he
had organized the group of Nazis in Boston who had attacked and
beaten liberals and Communists at a meeting protesting the docking of
the Nazi cruiser "Karlsruhe," in an American port.

The audience cheered. Sullivan, again giving the Nazi salute, shouted:
"Throw the goddam lousy Jews--all of them--into the Atlantic Ocean.
We'll get rid of the stinking kikes! Heil Hitler!"


The three suspected Nazi spies were subpoenaed on August 23, 1938.
They were:

Walter Dieckhoff, Badge No. 38117, living at 2654 E. 19th Street,
Sheepshead Bay.

Hugo Woulters, Badge No. 38166, living at 221 East 16th Street,
Brooklyn.

Alfred Boldt, Badge No. 38069, living at 64-29 70th Street, Middle
Village, L.I.

Boldt had worked in the Navy Yard since 1931. Dieckhoff and Woulters
went to work there within one day of each other in June, 1936.

The three men were kept in the Committee's room from one o'clock on
the day they were subpoenaed until five in the afternoon. When it
became apparent that the Congressmen would not show up until the next
day, the men were dismissed and told to come back the following
morning.

Not a word was said to them as to why they had been subpoenaed.
Nevertheless Dieckhoff, who was with the German Air Corps during the
World War, instead of going to his home in Sheepshead Bay, drove to
the home of Albert Nordenholz at 1572 Castleton Ave., Port Richmond,
S.I., where he kept two trunks. Nordenholz, a German-American
naturalized citizen for many years, is highly respected by the people
in his neighborhood. When Dieckhoff first came to the United States,
the Nordenholzes accepted him with open arms. He was the son of an old
friend back in Bremerhafen, Germany. Dieckhoff asked permission to
keep two trunks in the Nordenholz garret; he stored them there when
he went to work in the Brooklyn Navy Yard.

During the two years he worked in the Yard, he would drop around every
two weeks or so and go up to the garret to his trunks. Just what he
did on those visits, Nordenholz does not know.

On the night Dieckhoff was subpoenaed he suddenly appeared to claim
the trunks. He told Nordenholz that he planned to return to Germany.
Just what the trunks contained and what he did with them I do not
know. They have vanished.


I called upon Dieckhoff in the two-story house in Sheepshead Bay where
he lived. He had no intimate friends, didn't smoke, drink or run
around. The life of the German war veteran seemed to be confined to
working in the Navy Yard, returning home unobtrusively to work on
ships' models and making his occasional visits to Nordenholz's garret.

So far as I could learn, Dieckhoff became a marine engineer, working
for the North German Lloyd after the World War. In 1923 he entered the
United States illegally and remained for two years. Eventually he
returned to Germany, but came back to the United States, this time
legally, applied for citizenship papers and became a naturalized
citizen five years later.

Before he went to work on American war vessels, he worked in various
parts of the country--in automobile shops, in the General Electric Co.
in Schenectady and as an engineer on Sheepshead Bay boats. Even after
Hitler came into power, he worked on Sheepshead Bay boats. After the
Berlin-Tokyo axis was formed (1935), Germany became particularly
interested in American naval affairs, for the axis, among other
things, exchanged military secrets. Shortly before the agreement was
made, Dieckhoff suddenly went to work for the Staten Island
Shipbuilding Co., Staten Island, which was building four United States
destroyers, numbers 364, 365, 384 and 385. He worked on these
destroyers during the day. Until late at night he pursued his hobby of
building ships' models, which he never made an attempt to sell.

Dieckhoff weighed his words carefully during our talk.

"Why did you apply for a transfer from Staten Island to the Brooklyn
Navy Yard?" I asked.

"I don't know," he said. "I guess there was more money in it."

"How much were you getting when you were working on the destroyers?"

"It was some time ago," he said slowly. "I do not remember very good."

"How much are you getting now at the Navy Yard?"

"Forty dollars and twenty-nine cents a week."

"You went to Germany last year for a couple of months and before that
you went to Germany for six months. Were you able to save enough for
these trips on your wages?"

"I do not spend very much," he said. "I live here all alone."

"How much do you save a week?"

"Oh, I don't know. Ten dollars a week."

"That would make five hundred dollars a year--if you worked steadily,
which you didn't. You traveled third class. A round trip would be
about two hundred dollars. That would leave you three hundred to spend
provided you did not buy clothes, etc., for these trips. How did you
manage to live in Germany for six months on three hundred dollars? Did
you work there?"

He hesitated and said, "No, I did not work there. I traveled around. I
was not in one place."

"How did you do it on three hundred dollars for six months?"

"My brother gave me money."

"What's your brother's business?"

"Oh, just general business in Bremerhafen. He's got a big business
there."

"Perhaps I can get a report from the American Consul--"

"Oh," he interrupted. "His business isn't that big."

"Have you a bank account?"

He hesitated again and then said, "No, I do not make enough money for
a bank account."

"Where do you keep your money for trips to Germany? In cash?"

"Yes, in cash."

"Where? Here? In this room?"

"No. Not in this room. I have it locked up."

"Where?"

"Oh, different places," he said vaguely.

"Where are those places?"

"I have my money with a friend."

"Who?"

"Nordenholz, Albert Nordenholz."

"You work in Brooklyn, live in Sheepshead Bay and save ten dollars a
week in Port Richmond with a friend? Isn't that a long distance to go
to save money?"

He shrugged his shoulders without answering.

"What's Nordenholz's business?"

"I think he's retired. I think he used to be a butcher."

"You don't know very much about a man's business and you travel all
this distance to give him money to save for you when there are banks
all around? Why do you do that?"

"Oh, I don't know. It seems to me that it is better that way."

Later when I asked Nordenholz, he denied that Dieckhoff had ever given
him any money to hold.

Dieckhoff had worked on turbines, gear reductions and other
complicated mechanical parts on the cruiser "Brooklyn." The moment I
asked him if he handled blueprints he answered in the affirmative, but
quickly added that the blueprints were returned every night and locked
up by the officers. A capable machinist could, he admitted, after
careful study remember the blueprints well enough to make a duplicate
copy.

"When you went to Germany after working on the destroyers did anyone
ever question you about them over there?"

"No," he said quickly. "Nobody."

"My information is that you did talk about structural matters."

He looked startled. "Well," he said, "my brother knew I worked in the
Brooklyn Navy Yard. We talked about it, naturally."

"My information is that you talked about it with other people, too."

He stared out of the window with a worried air. Finally he said,
"Well, my brother has a friend and I talked with him about it."

"A minute ago you said you had not talked about it with anyone."

"I had forgotten."

"This is the brother who gave you money to travel around in Germany?"

He didn't answer.

"I didn't hear you," I said.

"Yes," Dieckhoff said finally, "he gave me the money."


I called upon the second of the three suspected spies subpoenaed by
the Dies Committee. Alfred Boldt had done very responsible work on the
U.S. cruiser "Honolulu." Though he had not been in Germany for ten
years, he suddenly got enough money last year to go there and to send
his son to school at a Nazi academy. Boldt, too, has no bank account.
He needed a minimum of seven hundred dollars for his wife and himself
to cross third class, but the Dies Committee was not interested in
where the money for the trip had come from.

Boldt left for Germany on August 4, 1936, and returned September 12.
On the evening I dropped in to see him, he was tensely nervous. He had
heard that someone had been around to talk with Dieckhoff.

"I understand your only son, Helmuth, is going to school in Langin,
Germany?" I asked.

"Yes," he said, "I sent him there two years ago."

"No schools in the United States for a fifteen-year-old boy?"

"I wanted him to learn German."

"What do you pay for his schooling over there?"

He hesitated. His wife, who was sitting with us and occasionally
advising him in German, suddenly interrupted in German, "Don't tell
him. That's German business."

I assume they did not know that I understood, for Boldt passed off her
comment as if he had not heard it and said casually, "Oh, twenty-five
dollars a month."

"You earn forty dollars a week at the Navy Yard, pay for your son's
schooling in Germany, clothes, etc., and you and your wife took more
than a month's trip to Germany last year. How do you do it on forty a
week?"

His wife giggled a little in the adjoining room. Boldt shrugged his
shoulder without answering.

"The cheapest the two of you could do it, third class, would be about
seven hundred dollars. Where do you have your bank account?"

"No. No bank account," his wife interrupted sharply.

"All the money is kept here, right here in this house," he laughed.

"You saved all that money in cash?"

"Yes; in cash, right here."

"No banks?"

"We like it better like that--in cash."

Boldt, like Dieckhoff, had been a marine engineer on the North German
Lloyd. He went to work in the Brooklyn Navy Yard in 1931. When the
cruiser "Honolulu" made its trial run in the spring of 1938, Boldt was
on board.

Like Dieckhoff and Boldt, Harry Woulters, _alias_ Hugo Woulters, the
third of the three subpoenaed men, is a naturalized citizen of German
extraction. He went to work in the Navy Yard within one day of
Dieckhoff. Before that, both had worked on the same four American
destroyers at the Staten Island Shipbuilding Company.

The house where Woulters lives has a great many Jews in it, judging
from the names on the letterboxes, and since Hugo sounded too German,
he listed his first name as "Harry."

"You and Dieckhoff worked on the same destroyers on Staten Island and
you say you never met him there?" I asked.

"No, I never met him until the second day after I went to work in the
Navy Yard."

"How many people work on a destroyer--a thousand?"

"Oh, no. Not that many."

"About one hundred?"

"About that," he said uncertainly.

"And you worked with Dieckhoff for six months on the same warships and
never met him?"

"Yes," he insisted.

"How come that if you never met him both of you applied for jobs at
the Brooklyn Navy Yard at about the same time?"

He shrugged his shoulders. "I don't know. It's funny. Sounds funny,
anyway."

"When you worked on the cruiser 'Honolulu' you handled blueprints?"

"Yes, of course, but they were never left in my possession overnight,"
he added quickly. I couldn't help but think that Dieckhoff, too, had
been very quick in protesting that the blueprints had never been left
in his possession overnight. They seemed worried about that even
though I had not said anything about it.

"Were they _ever_ left in your possession overnight?"

"No. They guarded the blueprints--"

"My information is that they were left in your possession."

"Wells, sometimes--blueprints--you know, when you work from blueprints
sometimes, yes, sometimes blueprints were left in my possession
overnight. I was working on reduction gears on the cruiser 'Brooklyn'
and I kept the blueprints overnight."

"How often?"

"I can't remember how often. Sometimes the blueprints were kept
overnight in my tool box."

"You also worked on turbines and other complicated and confidential
structural problems on the warship?"

"Yes."

"And you kept those blueprints overnight, too?"

"Sometimes--not often. Sometimes I left them in my tool box
overnight."

Woulters, during the latter period of construction on the "Brooklyn"
and the "Honolulu" had got two jobs which most workers do not like. He
had the four to midnight and the midnight to eight A.M. watches.
Normally Woulters likes to stay at home with his wife.

"While you had these watch duties you had pretty much the run of the
ship?"

He hesitated and weighed his words carefully before answering. Finally
he nodded and added hastily, "But no one can get on board."

"I didn't ask that. Did you have the run of the ship while everybody
else was asleep when you were on watch?"

"Yes," he said in a low voice.

"How did you happen to work in the Brooklyn Navy Yard?"

"Oh, I don't know. I like to work for the Government."

"Have you a bank account?"

"Yes."

"What bank?"

"Oh, I don't know, it's some place on Church Avenue."

"You have about 2,400 dollars in the bank, a nice apartment, and you
and your wife went on a trip to Germany last year. Did you save all
that money in so short a time on wages of forty dollars a week?"

He shrugged his shoulders.

"Your bank account does not show withdrawals sufficient to cover the
trip to Germany--"

"Say," he interrupted excitedly as soon as he saw where the question
was leading, "when I was called before the Dies Committee, the
Congressman there shook hands with me and asked me if I knew anything
about un-American activities in the Navy Yard. I told him I didn't and
he told me to go back to work and not to say anything about having
been called before them. Now I do not understand why you ask me all
these questions. The Congressman told me not to talk and I am saying
nothing more. Nothing."


The Dies Congressional Committee was not interested in these three men
whom they had subpoenaed and then, oddly enough, refused to question.
Besides this very strange procedure by a Committee empowered by the
Congress to investigate subversive activities, the Dies Committee
withheld for months documentary evidence of Nazi activities in this
country directed from Germany. The Committee obtained letters to
Guenther Orgell and Peter Gissibl, but quietly placed them in their
files without telling anyone about the existence of these documents.
They did not subpoena or question the men involved.

The letters the Committee treated so cavalierly are from E.A.
Vennekohl in charge of the foreign division of the _Volksbund für das
Deutschtum im Ausland_ with headquarters in Berlin, letters from the
foreign division headquarters in Stuttgart, and from Orgell to
Gissibl.

Gissibl was in constant touch with Nazi propaganda headquarters in
Germany, receiving instructions and reporting not only on general
activities, but especially upon the opening by the Nazis here of
schools for children in which Nazi propaganda would be disseminated.

The letters, freely translated, follow. The first is dated October 29,
1937, and was sent by Orgell from his home at Great Kills, S.I.:

    Dear Mr. Gissibl:

    Many thanks for your prompt reply. My complaint that one cannot
    get an answer from Chicago refers to the time prior to May,
    1937.

    I assume from your writing that it is not opportune any more to
    deliver further books to the _Arbeitsgemeinschaft_, etc.

    The material which Mr. Balderman received came from the
    V.D.A.[21] It has been sent to our Central Book distributing
    place (Mirbt). If he wishes he can get more any time; that is,
    if you recommend it.

    The thirty books for your Theodore Koerner School, which arrived
    this summer (via the German Consulate General in Chicago), also
    came from the V.D.A. If you need more first readers or study
    books, please write directly to me. Your request then goes
    immediately--without the official way via the Consulate and
    Foreign Office--to our Central Book distributing place. Please
    say how many you need and what else beside the first readers and
    primers[22] you need. I will take care that it will be promptly
    attended to. Fritz Kuhn, of course, has to be informed of your
    request and has to give his okay....

                                      With German greetings,
                                             CARL G. ORGELL.

Five days earlier Orgell had written to Gissibl: "You may perhaps
remember that I am in charge of the work for the _Volkbund für das
Deutschtum im Ausland_[23] for the U.S.A."

   [Illustration: A letter the Dies Committee shelved--Carl G.
   Orgell identifying himself to Peter Gissibl as a representative
   of the People's Bund for Germans Living Abroad.]

On March 18, 1938, Gissibl, who had been taking instructions from
Orgell, received the following letter from Stuttgart:

    Dear Peter:

    From your office manager. Comrade Möller, I received a letter
    dated February 15. He informed me among other things that an
    exchange of youth is out of the question for this year. I regret
    this very much. I would like to see, in the interests of our
    common efforts, if we would have had youth all ready this year,
    especially also from your district. Perhaps it is still
    possible with your support. The time, of course, which is still
    at our disposal, is very limited. This I can see clearly.

    I will write to you again in greater detail soon. In the
    meantime you can perhaps send me more detailed information about
    the development of your school during the past weeks; I
    recommend again the fulfillment of your justified wishes
    wholeheartedly. Let us hope that the result might be achieved
    very soon towards which we in common strive.

    Hearty greetings from house to house.

                                       In loyal comradeship,
                                         Yours,
                                           G. MOSHACK.

On May 20, 1938, E.A. Vennekohl, of the People's Bund for Germans
Living Abroad, wrote to Gissibl as follows:

    Dear Comrade Gissibl:

    We wrote you yesterday that the 3,000 badges for the singing
    festival would be sent to you via Orgell; for various reasons we
    have now divided the badges in ten single packages of which two
    each went to the following addresses: Friedrich Schlenz, Karl
    Moeller, Karl Kraenzle, Orgell and two to you.

    Please inform your co-workers respectively and take care that in
    case duties have to be paid they should be laid out; please see
    to it that Orgell refunds the money to you later; this was the
    simplest and the only way by which the badges could be sent in
    order to arrive on time.

                         With the German people's greetings,
                                             E.A. VENNEKOHL.

These documents in the hands of the Dies Committee show definite
tie-ups between German propaganda divisions and agents in the United
States (some of them came through the Nazi diplomatic corps), yet
these documents were put aside. The letters from True, Allen, and
others quoted in the previous chapter were also placed before the
Congressional Committee. It refused to call the men involved.

   [Illustration: Another letter connecting Gissibl with a German
   propaganda agency. This letter, translated in the text, was
   hardly noticed by the Dies Committee.]

   [Illustration: Further evidence of Gissibl's tie-up with the
   People's Bund for Germans Living Abroad. This letter, a
   translation of which appears in the text, was also long withheld
   by the Dies Committee.]

FOOTNOTES:

[20] Formerly known as J. Parnell Feeney. He changed his name because he
thought he could get along better in the business world with a name like
Thomas than with a name as potently Irish as Feeney.

[21] Nazi propaganda center for foreign countries with headquarters in
Germany.

[22] The notorious Nazi Primer teaching children songs of hate against
Jews and Catholics.

[23] People's Bund for Germans Living Abroad.




_Conclusion_


The activities of the few agents and propagandists described in the
foregoing chapters do not, as I said in the preface, even scratch the
surface of what seem to be widespread efforts to interfere in the
internal affairs of the American people and their Government; but a
few basic conclusions can reasonably be drawn from what little is
known of the Fifth Column's operations.

Berlin-directed agents in foreign countries sometimes combine
propaganda and espionage, frequently using the propaganda
organizations as the bases for espionage. In the United States, so far
as I have been able to ascertain, agents of the Rome-Berlin-Tokyo axis
are just beginning to cooperate. In the Central and South American
countries, however, the axis has apparently agreed to a division of
labor, each of the fascist powers assuming a specific field of
activity.

Germany, Italy and Japan have already shown the extent to which they
will go in their drive for raw materials vital to their industries and
war machines. In Spain, the German and Italian Fifth Column organized
and fomented a bloody civil war in order to establish a wide fascist
area to the south of France, for Germany and Italy, of course,
consider France a potential enemy in the next war. In France itself,
German and Italian agents, aided by their Governments, built an
amazing network of steel and concrete fortifications manned by at
least 100,000 heavily armed men--all this before France awoke to the
treason within her own borders.

The strategy pursued by the Fifth Column in different countries falls
into like patterns. In Austria, before it was swallowed, Nazi agents
first established propaganda organizations as the bases from which to
work. When, after the abortive attempt to seize the Austrian
Government, the Nazis were made illegal, they went underground but
continued to get aid from Germany. Eventually Berlin ordered
_Standarte II_ organized as a specific body prepared to provoke
disturbances. When the Austrian police quelled them, the provocations
enabled Germany to protest that German citizens were being attacked
and mistreated. The activities of _Standarte II_, directed by the
Gestapo, continued with increasing intensity until the unfortunate
country was absorbed.

In Czechoslovakia the same strategy was followed: first the
establishment of propaganda centers to which Nazis and Nazi
sympathizers could gravitate--under the cloak of bodies seeking to
improve relations between the Sudeten Germans and the Czech
Government; then the utilization of propaganda headquarters and
branches as centers for espionage. Shortly before the Munich Pact,
_Standarte II_ again came into being, creating disorders which, when
Czech police tried to suppress them, enabled Germany to raise the cry
that Czech subjects of German blood were being cruelly mistreated.

Invariably the aggressor nation raises a moral issue to cover up
proposed acts of aggression. Italy wanted to "civilize the Ethiopians"
by dropping bombs on defenseless women and children. Germany and Italy
openly sent aid to Franco "to keep Spain from being Bolshevized." And
so on. The broad "moral issue" on the international field to cover up
aggressions by the Rome-Berlin-Tokyo axis is "Communism." The axis,
announced as having been formed "to exchange information about
Communism," is really a military alliance now generally recognized.
With the same issue, the axis is now boring into the Western
Hemisphere. Actually the reasons seem to be military and not
missionary.

Germany, especially, has sent and is sending agents not only to carry
on espionage but to organize groups for political pressure upon the
American republics. I very much doubt, from all I have been able to
learn, if the motive is primarily to win the Americas over to the joys
of totalitarian government or to the theory of Aryan supremacy. The
money and the effort seem to be expended for more practical reasons.
The Bunds can exert not only political pressure, but can develop
natives with fascist leanings into the spies and _saboteurs_ so badly
needed in war time; for this reason it is worth the enormous effort
and money it is costing the aggressor nations.

When the long expected war breaks, neither Europe nor the Far East
will be in a condition to supply war materials and foodstuffs to the
warring countries. The chief sources of raw materials will be the
Western Hemisphere. A strong foothold in the Americas means a
tremendous advantage in the coming struggle, since materials are as
important to an army as is man power. And, should the fascist powers
be unable to get these raw materials for themselves, secret agents can
at least sabotage shipments to enemy countries--as did German agents
in the United States during the first years of the World War, while we
were still neutral.

Mexico, because of its enormous oil supplies, plays an important part
in fascist military strategy. Consequently, we find intensive efforts
by the axis, and especially Germany, to overthrow the Cárdenas
Government because it is avowedly anti-fascist. A fascist government,
helped into power by the Rome-Berlin-Tokyo axis, could be depended
upon to supply much needed oil in war time.

The United States, as one of the world's greatest sources of raw
materials and foodstuffs, is an even more important factor. Germany
has not forgotten that its armies had the Allies on their knees when
American supplies and American man power turned their imminent victory
into defeat; should America be on the side of the democracies as
against the fascist powers, sabotaging shipments of supplies and men
will be as important as crushing an enemy line.

The tactics utilized in the Western Hemisphere by the Fifth Column are
similar to those used in Europe. Propaganda machines, masquerading as
organizations designed to promote better relationships between a
fascist and an American nation, are set up. Fascist movements are
organized, usually from across national boundaries. In Mexico, Nazi
agents operating out of the United States organized the Gold Shirts;
subsequently, as in Austria, a Putsch was attempted (in 1935 and again
in 1938). The storing of arms in Sonora by General Yocupicio, who is
working with Nazi agents, promises another rebellion when the time
seems ripe.

In Central America, the axis is presenting small republics with gifts
of arms in efforts to win their friendship. Agents sent from Germany
are establishing Nazi centers and the home Government is supplying
them with propaganda. In Panama the situation is somewhat more sharp.
There Japan has always had an intense interest in the Canal. In the
axis, Germany has become a co-worker since she has large colonies in
Brazil and Colombia, next door to the Panama Canal. These colonies are
now being organized at a feverish pace while the countries themselves
are deluged with propaganda over special short-wave beams. In Brazil,
a Nazi-directed abortive Putsch took place in 1938.

These activities point to an objective which certainly is not
calculated to be in the interest of the United States and our Monroe
Doctrine. From all indications the efforts appear directed toward
ringing the United States with fascist countries, or at least
countries with fascist bodies capable of giving the United States a
headache should she ever be involved in a war with one or all of the
axis powers.

In the United States itself we find that the strategy is the same as
that followed in Austria, Czechoslovakia and in countries of the
Western World. The German-American Bund functions "to promote better
relations between the United States and Germany," but the efforts
consist of persistent anti-American and anti-democratic propaganda
and, within the past year or two, of serving as a base for military
and naval spies.

With Germany directing the strategy, her agents in all countries raise
the issue of the "menace of the Jew and the Catholic," with especial
emphasis upon the Jew; the Catholics are still too strong for the
Nazis to come to grips with at this time.

The Federal Government, of course, has ample legal machinery for
prosecuting spies, but espionage is only part of the broad Nazi
campaign against this democratic Government. So far as the Western
World is concerned, the Federal Government has already taken steps to
try to counteract the short-wave broadcasts by German and Italian
government-controlled stations. Counter broadcasts are being employed
as a defensive measure, and though of value, will probably not
completely counteract fascist "news" agencies supplying propaganda in
the guise of news, free of charge, to the Central and South American
newspapers as well as printed propaganda sent from Germany and
distributed by the bunds. Outside of military action, economic
pressure seems to be the only language the fascist governments
understand, and a little of that pressure by the American Government
would probably make them understand our resentment at their invasion
far more than broadcasts and general talk about a family of nations in
the Western Hemisphere.

Our laws and courts provide a machinery which can be used to prevent
any infringement upon the democratically constituted rights of the
people. It is of vital importance, however, that preparations for
fascist lawlessness be vigilantly uprooted. The Italian and German
people made just this fatal mistake of tolerating the activities of
Mussolini's and Hitler's gangs until they grew strong enough to seize
power and crush every sign of democracy.

There is no reason why a great people, attacked by a pernicious
ideology, cannot counteract such propaganda with greater and more
intelligent propaganda to educate our people to the advantages of
democracy--to what fascism really means to everyone, including the big
industrialists and financiers, some of whom have been flirting with
fascism. The Government, however, can and should be instructed by the
representatives of the people, to take proper steps to stop the
infiltration of Nazi agents and propagandists into this country.

There are various other and perhaps more practical and useful steps
which can be taken, but those can be worked out once the people awake
to the danger of permitting fascist propaganda to go on, and sentiment
becomes strong enough to put an end to foreign-directed activities
here.


--THE END--


               _This book has been produced wholly
               under union conditions. The paper was
               made, the type set, the plates
               electrotyped, and the printing and
               binding done in union shops affiliated
               with the American Federation of Labor.
               All employees of Modern Age Books,
               Inc., are members of the Book and
               Magazine Guild, Local No. 18 of the
               United Office and Professional Workers
               of America, affiliated with the
               Congress of Industrial Organizations._

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