The guilt-stained check-book of the military attaché contained these entries:
March 29, 1915. Paul Koenig (Secret Service Bill) $509.11
April 18, Paul Koenig (Secret Service Bill) $90.94
May 11, Paul Koenig (Secret Service) $66.71
July 16, Paul Koenig (Compensation for F. J. Busse) $150.00
August 4, Paul Koenig (5 bills secret service) $118.92
Those entries represent only the payments made Koenig by check for special work done for von Papen. Koenig received his wages from the Line. When he performed work for any one else he rendered a special bill. This necessitated his itemizing his expenditures, and this Germanly thorough and thoroughly German system of petty accounting enabled our secret service later to trace his activities with considerable success. Koenig and von Papen used to haggle over his bills—on one occasion the attaché felt he was being overcharged, and accordingly deducted a half-dollar from the total.
"P. K." also had an incriminating book—a carefully prepared notebook of his spies and of persons in New York, Boston and other cities who were useful in furnishing him information. In another book he kept a complete record of the purpose and cost of assignments on which he sent his men. He listed in its pages the names of several hundred persons—army reservists, German-Americans and Americans, clerks, scientists and city and Federal employees—showing that his district was large and that his range for getting information and for supervising other pro-German propaganda was broad. For his own direct staff he worked out a system of numbers and initials to be used in communication. The numbers he changed at regular intervals and a system of progression was devised by which each agent would know when his number changed. He provided them with suitable aliases. These men had alternative codes for writing letters and for telephone communication to be changed automatically by certain fixed dates.
Always alert for spies upon himself, Koenig suspected that his telephone wire was tapped and that his orders were being overheard. So he instructed his men in various code words. If he told an agent to meet him "at 5 o'clock at South Ferry" he meant: "Meet me at 7 o'clock at Forty-second Street and Broadway." His suspicions were well-grounded, for his wire was tapped, and Koenig led the men who were spying on him an unhappy dance.
For example: he would receive a call on the telephone and would direct his agent, at the other end of the wire, to meet him in fifteen minutes at Pabst's, Harlem. It is practically impossible to make the journey from Koenig's office in the Hamburg-American Building to 125th Street in a quarter of an hour. After a time his watchers learned that "Pabst's, Harlem" meant Borough Hall, Brooklyn.
He never went out in the daytime without one or two of his agents trailing him to see whether he was being shadowed. He used to turn a corner suddenly and stand still so that an American detective following came unexpectedly face to face with him and betrayed his identity. Koenig would laugh heartily and pass on. Thus he came to know many agents of the Department of Justice and many New York detectives. When he started out at night he usually had three of his own men follow him and by a prearranged system of signals inform him if any strangers were following him.
The task of keeping watch of Koenig's movements required astute guessing and tireless work on the part of the New York police. So elusive did he become that it was necessary for Captain Tunney to evolve a new system of shadowing him in order to keep him in sight without betraying that he was under surveillance. One detective, accordingly, would be stationed several blocks away and would start out ahead of Koenig. The "front shadow" was signaled by his confederates in the rear whenever Koenig turned a corner, so that the man in front might dart down a cross-street and manœuvre to keep ahead of him. If Koenig boarded a street car the man ahead would hail the car several blocks beyond, thus avoiding suspicion. In more than one instance detectives in the rear, guessing that he was about to take a car, would board it several blocks before it got abreast of Koenig. His alertness kept Detectives Barnitz, Coy, Terra, and Corell on edge for months.
It was impossible to overhear direct conversation between Koenig and any man to whom he was giving instructions. Some of his workers he never permitted to meet him at all, but when he kept a rendezvous it was in the open, in the parks in broad daylight, or in a moving-picture theatre, or in the Pennsylvania Station, or the Grand Central Terminal. There he could make sure that nobody was eavesdropping. If he met an agent in the open for the first time he gave him some such command at this:
"Be at Third Avenue and Fifty-ninth Street at 2:30 to-morrow afternoon beside a public telephone booth there. When the telephone rings answer it."