This new move of the Germans involves the outlay of hundreds of millions, a gigantic financial operation in the face of war needs and conditions. It is one of the most sensational developments of the present conflict in connection with the United States. Its consummation inevitably would lead this country into serious disagreement, if not conflict, with Great Britain and the Allies.
The latter will demand the fulfillment of their contracts with these concerns. The German move is to prevent this delivery of munitions of war. With the consummation of the purchases, the German owners could refuse to fill these contracts. They will not fear suits for broken contracts.
The whole matter is fraught with such possibilities of danger to this country that Attorney General Gregory and the experts of the Department of Justice have taken up the question with a view to interposing legal obstacles. It may become necessary, it was suggested today, to prevent such a sale on the grounds of public welfare because of strained relations with Germany.
Secretary McAdoo will not disclose who are the agents for the German interests seeking to purchase the munitions plants, or who are the financial backers. The Secret Service men are believed to know these details, having been on the investigation for three weeks. Rich Germans in the United States are believed to be interested.
Charles M. Schwab, head of the Bethlehem Company, came here two weeks ago in response to an urgent summons. He saw Secretary McAdoo, Secretary Daniels, and other officials. At that time it was given out that he was conferring as to details of supplies to be furnished this Government under contracts for new warship construction about to be awarded. It is now understood that Secretary McAdoo sought information as to the negotiations under way at that time for the purchase of the munitions plants in this country by the German interests.
The report of Secretary McAdoo today stirred the Cabinet as deeply almost as the resignation of Secretary of State Bryan. Complete reports were asked and the Secret Service arm of the Government will be required to furnish immediately more complete and detailed information.
Of the efforts to obtain control of the munitions companies, The Providence Journal of June 9, 1915, reported:
Acting under the personal instructions of the German Ambassador, several German bankers of New York have been working together for the last week on preliminary negotiations for the purchase of every large plant they can lay their hands on which is now engaged in turning out munitions of war for the Allies.
Count von Bernstorff, Dr. Dernburg, and two well-known German bankers held a conference at the German Embassy in Washington on Tuesday, June 1. At that conference the Ambassador outlined in detail instructions he had received the day before from Berlin to proceed with this propaganda, and he declared to the three men there present that his Government considered the success of the plan as of vital importance, superseding every other phase of the war situation.
The bankers at once returned to New York, and at a meeting next day with Captain Boy-Ed and several other men at the German Club outlined their plan of campaign.