Chapter Eleven.
Steinhauer’s Work.
The trials of Schulz, Graves, and others who have made appearances in the British criminal courts recently—or comparatively so—showed us the spy at work in extricating information; they demonstrated one phase, and a dangerous phase at that, of the business. No recent trial, however, has proved of such importance in connection with a study of the system as that of Ernst, which, quite apart from the doings of the accused man, shows the work of Steinhauer, the Potsdam director of the fixed agent, or “post office,” as the fixed spy is designated in the slang of espionage. Since the case of Ernst is still sub judice at the time of writing, only the bare official report can be given, at least as regards the conduct of the accused; but even with this limitation there is more to be learned from the case of Ernst and his alleged doings than from any other recent case, for the allegations of the prosecution involve evidence as to the headquarter office at Potsdam managed by Steinhauer, who supervises the working of the fixed agent as well as that of travelling spies and secret-service headquarter methods—evidence which is sufficiently plain and complete to substantiate all the statements made as regards the foreign work of the German secret service in the course of this book.
Karl Gustav Ernst, hairdresser, of Caledonian Road, Islington, was first charged on August 4, 1914, with contravening the Official Secrets Act with a view to his being dealt with under the Aliens Restriction Act. He denied knowledge of the charge against him, which he described as “ridiculous,” and, after remand, was ordered deportation. Conveyed to Brixton prison, to await a suitable opportunity for his being sent to Germany, he appealed to the Home Office for release. His appeal included claims to the effect that he was absolutely innocent of any crime, that he had nothing whatever to do with the Official Secrets Act, and that, since the police had produced no documents in court, they had evidently discovered nothing of an incriminating nature at his place in Caledonian Road, where he had carried on business as a hairdresser for sixteen years, with a Pentonville official among his customers. Inquiries proved the truth of a claim that he made to the effect that he was a British subject, which rendered it impossible to detain him under the Aliens Restriction Act. He was consequently released, and rearrested outside the prison gates as a spy on the country in which he had voluntarily become a citizen by means of naturalisation. The charge against him now is that is he traitor as well as spy.
His position with regard to the original charge and sentence of deportation is worthy of note. For sixteen years he had been in business in Caledonian Road; that is to say, he had resided in his place for such a length of time that there were no grounds for suspicion against him on the part of the inhabitants of the district. He was a part of the life of the place, almost an old inhabitant, when his doings rendered him worthy of the notice of the police. This is characteristic of the fixed agent in French centres, as already stated here.
On September 28, 1914, the present case was opened against Ernst by Mr Bodkin, who appeared for the Director of Public Prosecutions at Bow Street Police-Court. The charge was to the effect that Ernst had “obtained and communicated, and attempted to obtain and communicate to one Steinhauer, certain information calculated to be useful to an enemy.”
Mr Bodkin stated that the prisoner first came under the suspicion of the authorities in October of 1911, and it was evident that from then until January of 1914 he had been a spy in the pay of the German secret service. The man who was practically Ernst’s master was one Steinhauer, a member and organiser of the German secret service, whose name had figured in practically every espionage case investigated in this country for the past three or four years.
Acting under Steinhauer’s orders, the prisoner was alleged to have been deputed to accomplish certain duties which fell under two heads. In the first place, it was alleged that he was to receive from Steinhauer, who was located in Germany, letters enclosed in envelopes which gave them the appearance of ordinary business communications, and to post them in England to various members of the organisation. In the second place, it was alleged that he was to make inquiries on his own account with regard to persons and places which, in the opinion of Steinhauer, would be useful to the German secret service. His salary consisted of out-of-pocket expenses and a retaining fee of one pound a month, which, when Ernst pointed out the risk attaching to what he was doing, and the importance of his work, was increased to one pound ten shillings a month. Mr Bodkin stated that “the system was perfectly well-known from the commencement in 1911, and the hairdresser’s shop in Caledonian Road was accordingly kept under observation.”
The observation included the opening of letters addressed to the accused, which were traced and the tracings filed before delivery of the originals to Ernst. There were included among these letters a large number of communications from Germany, chiefly from Potsdam, and Ernst himself sent many communications to Potsdam and Berlin. His letters were posted in different districts of London, while the letters coming from Germany to him were written on English note-paper and enclosed in English envelopes, which the prisoner had forwarded to Steinhauer for use—in one instance the paper and envelopes had been sent as “samples,” the package being so weighty that Steinhauer had to pay excess postage at the other end. By opening both outgoing and incoming correspondence the authorities were placed in possession of a mass of valuable information as regards not only Ernst, but also other members of the system in England.
For the purpose of the correspondence with Ernst, Steinhauer was alleged to have adopted the alias of “Mrs Reimers,” and Ernst himself, the prosecution stated, changed his name from time to time, having letters addressed to his shop as to “J. Walters, care of K.G. Ernst,” and sometimes to “W. Weller.” These two names were the prisoner’s own suggestion to Steinhauer. The latter sent letters not only to Ernst himself, but also missives to be forwarded to various places, including Chatham, Sheerness, and Portland Harbour. These letters were opened by the authorities under powers which they possessed for dealing with such cases, and tracings were taken before the letters were delivered.
Ernst was requested by Steinhauer to find out all that he could about certain persons named, on the ground that they were connected or believed to be connected with the Intelligence Department of the War Office. One of the firms upon which he was called to make inquiries and report had an office in the City opposite to the office occupied by the late Captain Stewart, who figured in the German courts in an espionage case, and subsequently was imprisoned in a German fortress. In one of the envelopes sent to Ernst by Steinhauer were two letters, one of which was addressed to a British sailor, and the other to a German located at Portland Harbour. Further, the prosecution alleged, Ernst was in constant communication with persons named Kruger and Krumer, in connection with espionage work, while one of his letters referred to a magazine article which described the defences of the East Coast. Another letter contained reference to the espionage case against Parrott, which took place in the autumn of 1912. After January of 1914, Steinhauer requested Ernst to make inquiries about a person living in Somerset, and to this Ernst replied that he could not spare the time to do so, though he had previously gone up to Sheffield on business of a similar nature.
Here, with the taking of some formal evidence, the first hearing of the case closed, and at this point Mr S.Y. Tilly, who had been retained for the defence of the prisoner, said that if he had been in possession of the information outlined by Mr Bodkin it would have made a difference in his procedure in the case. He had been assured by the prisoner and the prisoner’s friends that Ernst was a perfectly straightforward British subject: but, in the circumstances revealed by Mr Bodkin’s statement, he felt compelled to withdraw from the case. The act was sufficiently unusual to excite comment on the part of the court authorities; but Mr Tilly withdrew.
The second hearing took place on October 5, 1914, when the first witness called, a clerk in the secretary’s office at the General Post Office, deposed to having opened and copied the letters which bore as postmark either “Potsdam” or “Berlin.” These letters were written in German, and many of the envelopes contained letters which were to be reposted by Ernst to other addresses. Some of the letters to Ernst were signed “St.,” and one of them, bearing the postmark “Berlin 6-1-12” contained an envelope addressed to “Mrs Seymour, 87, Alexandra Road, Sheerness.” Mr Bodkin explained that this was the pseudonym and address of the man Parrott, who figured in an espionage case in the autumn of 1912.
Another letter to Ernst, the witness further deposed, was dated “Potsdam, January 25, 1912,” and signed “St.” It contained a request that envelopes, bearing the printed name of the makers, should be sent to the writer. Then, on February 12, the same correspondent addressed Ernst: “Please post the enclosed letters at once, and send me, if you please, fifty envelopes as sample which you sent. Then write me a letter, if you please, a letter in good English, in which a customer asks for letters to be forwarded to him on the Continent addressed to ‘Poste Restante, etc.’”
There were enclosed with this missive two letters, addressed respectively to “F. Ireland, Mess 2, H.M.S. Foxhound, care of G.P.O.,” and “A Schutte, 5, Castletown, Portland Harbour.” Another letter produced, bearing date of January 23, 1912, signed “St.,” and dated from Potsdam, contained the following:
“According to information from newspapers, a fireman has been arrested on the English cruiser Foxhound. If that is Kr’s nephew, then it is certain he was dragged into it through the carelessness and stupidity of Kr. Perhaps you can get into communication with K., but by all means be cautious. If my suspicions are correct, then Kr. will be watched. Above all—caution. Should you have an opportunity to speak to him then ask him at the same time respecting a certain Schmidt he once recommended to me. He (Kruger) must be cautious, and especially show no address. That is to say, only go there when you know there is no danger to you. I mean, he must not start speaking German to you in the presence of others. Please let me hear something soon.”
Mr Bodkin explained that Ireland of the Foxhound was a nephew of a man named Kruger, who took the name of Ireland when he joined the Navy.
Another letter addressed to the prisoner from Potsdam, and dated February 11, 1912, contained the following:
“Many thanks for your valuable letter. In future it will be done so. Do you also desire that the letters I send you be sent ‘care of’? Please reply to me as to this. Please deliver at once enclosed letter addressed to Kronan. Expenses please charge. Best greetings.—St.”
A letter sent to the prisoner for reposting was addressed to “H. Graves, Esq, B.M., B.Sc., 23, Craiglea Drive, Morningside, Edinburgh,” and in this were three five-pound Bank of England notes. On March 7, 1912, Steinhauer signed his name in full, and enclosed 100 marks, requesting Ernst to obtain for him a copy of a London daily paper, which contained a detailed article on espionage, published a little time before the close of the Stewart espionage case. Copies of the letters sent through Ernst to “Mrs Parrott, Alexandra Road, Sheerness,” and to “H. Graves,” at Edinburgh and later at Glasgow, were put in as evidence, but these were not read in court. One of Graves’s letters was enclosed in an envelope which bore the name of a well-known firm of chemical and drug manufacturers, as detailed in the evidence at the trial of Graves. Mr Bodkin, commenting on this, said that the envelope was probably stolen.
On March 23 “St.” (Steinhauer) wrote from Potsdam to Ernst: “K. has excited himself for nothing. The youth is free. I will tell you the story orally next time.” Mr Bodkin remarked, by way of explanation, that the youth Ireland had been discharged.
Another letter addressed to Mr Graves, at the Central Hotel, Glasgow, dated April 9, 1912, and forwarded through Ernst, contained bank-notes for 15 pounds—this was very nearly the last letter ever sent to Graves, judging from the time of his arrest and trial. On March 2 a letter from Potsdam contained a request for the prisoner to inquire whether a certain person living near Hyde Park was a busy man, and whether he was connected with the English Government. Then, in July of 1912, “St.” must have grown suspicious of the correspondence having been examined, for he wrote: “There is another point that I wish to impress on you, and that is, always to post registered letters in different post offices or districts. But you do that probably on your own accord.” Yet again, in a letter dated September 1, from Potsdam, Steinhauer emphasised the need for caution. “You can imagine,” he wrote, “for yourself that we need in all directions only good, sure, and trustworthy people. We must be safe from surprises on the part of the women. Will you take another name instead of Walters?”
Evidence of another travelling spy was afforded by letters addressed to “F. Gould, Queen Charlotte Hotel, Rochester,” and to “Charles Graham, care of Mr Gould,” at the same address. The one directly addressed contained two five-pound notes, and the “care of” letter contained three of these.
So far, the evidence had concerned letters addressed to Ernst, and then the witness went on to tell of the letters sent by Ernst to Steinhauer. Witness had from time to time opened these letters, acting under his official instructions, and had found they were posted in London to Mrs or Miss Reimers, care of Steinhauer, at a Potsdam address. They were all in handwriting which he recognised as that of the prisoner, when given the opportunity of comparing the writing, and were variously signed “G.E.,” “W. Weller,” and “J. Walters.” Certain extracts from these letters were read in court by Mr Bodkin, and the following passages may be quoted:
“Dear Mr Steinhauer,—Allow me to make a few suggestions which came into my head while reading the case of Grosse. You will be able to see that your agent Grosse had not the slightest consideration for your other agents. No more could be expected from a man who has already done ten years’ penal servitude. Therefore, I beg that when you give any one my address, you give a different name, such as W. Weller.
“I have immediately posted both letters. (To Schutte and Ireland.) Herewith enclosed two sample letters. I should also like to mention that the papers are making a gigantic row respecting the Stewart affair. To-day several papers had the interview and confession which he has made. W. Weller.”
The “sample” letters referred to may be judged from the following, read in court from one of them:
“Dear Sir,—My business has caused me to go to Switzerland for a short time, and, as I shall not be back in London for about two months, I should like you to send on my letters, marked Poste Restante. Any expenses you might incur I will make up on my return to London.”
Another letter was as follows:
“Dear Mr Steinhauer,—I should be very pleased if you would address letters to J. Walters, care of Ernst. In future I shall sign my letters J. Walters, so that no mistake can be made... With regard to your other order, I beg you to excuse me, as I don’t at all wish to meet Kruger. I have seen him once, and he does not please me. I myself got a letter for somebody, care of the Foxhound. I did not post the letter in my vicinity, but in the West End. The newspapers have the sailor’s photograph, and he is said to be named Ireland, and to have been born in Germany. I shall have nothing to do with it.”
Another letter was mentioned in which the accused was alleged to have referred to what he described as “a fine article” in a monthly magazine with regard to the East Coast defences, and he also enclosed a cutting from a newspaper which detailed the arrest of Doctor Graves of Edinburgh. Ernst’s comments on this, as read in court, were: “It shows how dangerous it is to have letters addressed Poste Restante. I only say of myself that for one pound a month I will not live in fear, as I have indeed a good business which maintains me. In April I shall end my second year in your service, and I should like to ask that my salary be increased. A confidential post such as mine is worth 30 shillings a month.”
Further letters produced referred to the Parrott case, and one of these contained a cutting from a paper giving a report of the evidence against Parrott in the police-court. When asked if he wished to question the witness, Ernst replied that he was unable to employ a solicitor, and had determined to reserve his defence until he appeared on trial. With that the hearing of the case was adjourned for a week.
The detailed evidence, summarised above, is extremely interesting and enlightening, in that it outlines, with a few gaps, the working of the fixed post system, and further discloses that, in addition to the headquarter stations established at Brussels, Lausanne, Berne, and other places outside Germany, a headquarter station exists by means of which the fixed agents are enabled to communicate direct with Berlin. Moreover, this case demonstrates very forcibly the measures taken for counter-espionage, and shows that Germany needs another Stieber if the secret service of the present day is to be made as efficient as in the time of the first Franco-German War. Since the alleged treachery of Ernst was in the knowledge of the police from the beginning of the time stated as his period of work, and since the alleged effect of his establishment as a fixed agent was to produce more arrests by the English and Scottish police than useful news for Germany, one is at liberty to entertain very grave doubts of the efficiency of a system which includes such establishments as this. The capture of letters, and their opening and tracing, is worthy of note, especially when it is remembered that not only were the post office authorities able to capture incoming letters—a comparatively simple matter, once their suspicions were aroused—but also were able to trace and find the letters that Ernst was alleged to have posted to Potsdam—not so simple a matter, when it is remembered that he is alleged to have posted his missives from all over London. The chief feature of the case, as reported, is the credit it reflects on the British system of counter-espionage, and the way in which German efforts are neutralised.
The length of time the prisoner had resided in England was in accordance with the system pursued at Berlin, of planting men for use when they had passed out from chance of suspicion by reason of their having become to all intents citizens of the country on which espionage is required. The fact of naturalisation is proved to have no significance—nor, since a German retains his nationality if he wishes it, in spite of having been naturalised in any other country, should naturalisation be held as a bar to suspicion. The position held by the defendant, in which he was able to carry on an independent business of his own, is quite in accordance with secret-service methods—these are the men Berlin wants for its fixed posts. The only discrepancy with known methods lies in the rate of pay known to be allowed to fixed agents in French centres, but this may be accounted for by the fact that Ernst is alleged to have completed only a short period (two years or so) in the employment of the Berlin secret service.
Such evidence as the prosecution gave, as shown in the foregoing report, is worthy of very careful attention with regard to the working of the espionage system. For such a post as that which Ernst is alleged to have filled is but a link in a chain, and the chain is a long one.