After indictments had been returned against some of the Hamburg-American officials for conspiring to defraud the United States of legal clearance papers, Koenig, assisted by a private detective in the pay of Captain Boy-Ed, developed a scheme to get affidavits from tugboat captains to the effect that they had supplied English war vessels patrolling off Sandy Hook with provisions.
The plan was to turn sentiment against the British by proving that the British were doing the same thing that had been charged to the Germans. Accordingly, Koenig called a number of tugboat captains to a room in the Great Eastern Hotel, New York, and offered them a contract to haul provisions to the English cruisers. He told them that the captains were extremely suspicious of boats approaching the war vessels, and the affidavits were necessary to allay their fears that the tugboats might have a few Germans with bombs on board. So, in return for sworn statements from them to the effect that they already had been carrying supplies out to other English cruisers, he, Koenig, was to give them a monthly contract to do the work. Many of the tugboat captains signed the affidavits; but the scheme was exposed before the Germans really made any use of the documents. So carefully did Koenig work that he made the stenographers who took the statements transcribe the notes in his presence, give him the shorthand notes and he immediately destroyed them.
SPIES IN BANKS
Through the arrest of Koenig and the facts obtained thereby, one of the mysteries concerning the Germans’ method of getting information about the shipment of munitions of war to the Allies was cleared. They knew the number of the freight car rushing to the Atlantic seaboard and its exact contents. They knew the ship’s hold into which that product was to be placed; but how they got this data was a mystery until Koenig was caught. Then Metzler, Koenig’s secretary, made a confession that cleared the mystery. Agent Adams got the confession.
Besides having spies in some of the factories throughout the country, the Germans had one great fountain of information in the foreign department of the National City Bank, an institution that has carried hundreds of millions of dollars in financing the purchase of supplies for the Entente Powers. That source was Frederick Schleindl, a German who has since been convicted of selling stolen information and sentenced to three years in a New York State prison.
Schleindl, only twenty-three years old, came to this country from Germany several years ago, obtained work with a private banking firm, and after the war started was shifted to the National City Bank. He had influence to get the position, and, incidentally, it may be said, that for years prior to the war German agents, trained financiers, have been stationed in New York, making friends and learning conditions, so that at the critical time they could, by underground means, succeed in getting positions for such men as Schleindl who would betray their trust.
SECRET INFORMATION ON BANKS
When the war started Schleindl registered with the German Consul, giving his address and his place of business. One day word reached him that a German wished to see him, and going to the Hotel Manhattan he was approached by a man who introduced himself as Koenig. The latter sounded him thoroughly as to his sentiments on the war, and then outlined the scheme by which Schleindl was to help Germany and make $25 a week. Schleindl was to keep his eyes open for all letters and cable messages bearing on the deposits of the Allies with the bank, the payments of orders and other facts bearing on the war.
The bank clerk succumbed, either through patriotism or love of money. And Koenig had placed his finger on exactly the right spot; so accurate was he that there seems no doubt that he received guidance from a master spy higher up, who knew banking operations thoroughly, and where to go for information. It quickly developed that Schleindl could obtain information of two very important kinds.
First, he received in his department cable messages bearing on war orders and deposits by the Allies. The day he was arrested he had in his pocket certain messages and letters addressed to the National City Bank. One had come from the Banque Belge pour Etrangers in regard to a shipment of two million rifles that was being handled through the Hudson Trust Company. Another message that he picked up and handed over to Koenig had come from the Russian Government, directing the bank to place at the disposal of Colonel Golejewski, a Russian naval attaché, a large amount of money for the purchase of war materials.