The leak in the National City Bank—The Minnehaha—Von Rintelen's training—His return to America—His aims—His funds—Smuggling oil—The Krag-Joergensen rifles—Von Rintelen's flight and capture.
There was a suggestion in the newspapers of dates immediately following Paul Koenig's arrest that the authorities had been lax in allowing the Germans to have later access to the safe in his private office in the Hamburg-American building. As a matter of fact the contents of the safe were well known to the authorities—how, it is not necessary to say. The multitudinous notes and reference data kept by the industrious "P. K." uncovered a plentiful German source of information of munitions.
They knew the factories in which war materials were being turned out. They knew the numbers of the freight cars into which the materials were loaded for shipment to the waterfronts. They knew the ships into which those cargoes were consigned. How they knew was revealed by Koenig's secretary, Metzler, after he had been arrested in the second Welland episode.
Franz von Rintelen
Down in Wall Street, in the foreign department of the National City Bank, there was a young German named Frederick Schleindl. He had been in the United States for several years, and had been employed by various bankers, one of whom recommended him to the National City Bank shortly after the outbreak of war. In the foreign department he had access to cables from the Allies concerning the purchase of munitions. It was customary to pay manufacturers for their completed orders when the bank received a bill of lading showing their shipment by railroad or their delivery at points of departure. Close familiarity with such bills of lading and cablegrams gave Schleindl an up-to-the-minute survey of the production of supplies.
In late 1914 Schleindl registered with the German consul in New York, setting down his name and address as liable to call for special service. In May, 1915, he was directed by the consul to meet a certain person at the Hotel Manhattan; the unknown proved to be Koenig, who had been informed of Schleindl's occupation by the alert German consul. Playing on the youth's patriotism and greed, Koenig agreed to pay him $25 a week for confidential information from the bank. From that time forward Schleindl reported regularly to Koenig. Nearly every evening a meeting occurred in the office in the Hamburg-American building, and Koenig and Metzler would spend many hours a night in copying the letters, cables and shipping documents. In the morning they would return the originals to Schleindl on his way to work—he made it his custom to arrive early at the bank—and the papers would be restored to their proper files when the business day began.
On December 17, 1915, Schleindl was arrested. In his pocket were two documents, enough to convict him of having stolen information: one a duplicate of a cablegram from the Banque Belge pour Etrangers to the National City Bank relating to a shipment of 2,000,000 rifles which was then being handled by the Hudson Trust Company; the other a cablegram from the Russian Government authorizing the City Bank to place some millions of dollars to the credit of Colonel Golejewski, the Russian naval attaché and purchasing agent. From a German standpoint, of course, both were highly significant. Schleindl's arrest caused considerable uneasiness in Wall Street, and other banking houses who had been dealing in munitions "looked unto themselves" lest there be similar cracks through which information might sift to Berlin. There had been many such. Koenig was tried on the charge of having bought stolen information, and convicted, but sentence was suspended, although the United States already looked back on two years of waterfront conspiracies to destroy Allied shipping.
The City Bank episode gave a clue to the source of those conspiracies, by the white light which it cast upon an explosion in hold number 2 of the steamship Minnehaha on July 4, 1915. Thousands of magnetos were stored there destined for automobiles at the front. The only person besides the officers of the bank and of the magneto factory who could have known of the ship in which they were transported was the man who wrote the letter to the bank enclosing the bill of lading for the shipment. Naturally the officers were not suspected of circulating the news; the leak therefore must have occurred in handling the letter. That theory was a strong scent, made no less pungent by the activities in America of one Franz von Rintelen.