Chapter 10

The propaganda machine is already functioning as the German-American _Volksbund_. The second step, as was demonstrated in France with the Cagoulards and in Spain with Franco's Fifth Column, is to organize secret armies capable of starting sporadic outbreaks tantamount to civil war--a procedure which would naturally deflect the country's energies in war time.

This second step was taken after careful study, and Henry D. Allen was chosen as the liaison man between those maneuvering the plot.

The private letters exchanged between Allen and his fellow conspirators are now in my possession. Some of the letters exchanged were signed with the writers' real names and some with code names. Allen's code name, for instance, is "Rosenthal."

On April 13, 1938, he wrote to a "G.D." (of whom more shortly) as follows:

Have just sent Delgado into Sonora incognito. This move has resulted from a four-party conference held in Yuma a few days ago. This party was composed of Urbalejo, chief of the Yaqui nation, Joe Mattus, his trusted lieutenant, Delgado and myself. Yocupicio has completely come over to our side, which you can perceive from the outcome of the little tryout in Aqua Prieta a few weeks ago. Delgado has arrived safely at Bocatete, and will get the boys in that part of the country pretty active.... Inasmuch as I am his legal and properly accredited representative in the United States, you may rest assured that there will be no doubt as to the objectives of this movement south of the Rio Grande.

I have received three letters from General Iturbe in which he tells me that they are taking the Spanish copies of the Protocols which K. sent me, and making 5,000 copies of same. In each letter he begs me to set a time and date for meeting him at Guadalajara for the purpose of effecting the necessary plans for active campaigning with Delgado. I will arrange all of this as soon as you consider it expedient....

ROSENTHAL.

Two days later (April 15, 1938) he wrote from Fresno, Calif. under his own name to F.W. Clark, 919-½ S. Yakima Ave., Tacoma, Wash. The letter reads in part:

Relative to the Gold Shirts of Mexico, please be advised that we found it necessary to reorganize this group in August, 1937. The activist elements have proceeded and are now carrying on under the name of the Mexican Nationalist Movement of which Pablo L. Delgado is the nominal head. I am the legal and personal representative of Delgado in the movement in the United States.

So much for his current activities to establish fascism to the south of us.

Most Americans who fall for Nazi propaganda do not suspect that they are being played for suckers by shrewd manipulators pulling the strings in Berlin, and probably not one of the many reputable and sincerely patriotic Americans who fell for Allen's "patriotic" appeals suspects his activities against the country he so zealously wants to "save."

Some shrewd observer once remarked that "patriotism is the last refuge of a scoundrel." Whenever I come across an "ultra-patriot" with foam dripping from his mouth while he beats his chest with loud cries about his own honesty and the crookedness of those running the country, I suspect a phony. As a rule, I look for the criminal record of a man who's yelling "Chase out the crooks" and "Let's have honest government," and all too often I find one. Henry D. Allen, _alias_ H.O. Moffet, _alias_ Howard Leighton Allen, _alias_ Rosenthal, etc., ex-inmate of San Quentin and Folsom prisons, is no exception; his criminal record extends over a period of twenty-nine years.

Let me give the record before I start quoting from his letters, chiefly for the benefit of those sincere and loyal Americans who thought his Swastika-inspired activities represented honest convictions.

May 17, 1910: Arrested in Los Angeles charged with uttering fictitious checks. In simple language this means just a little bit of forgery. Los Angeles Police Department file, No. 7613.

June 10, 1910: Sentenced to three years imprisonment; sentence suspended upon tearful assurances of good behavior.

May 12, 1912: Picked up in Philadelphia charged with being a fugitive; brought back to Los Angeles.

July 1, 1912: Committed to San Quentin. Guest No. 25835.

April 21, 1915: Committed to Folsom from Santa Barbara on a forgery charge. Guest No. 9542.

Feb. 1, 1919: Arrested in Los Angeles County charged with suspicion of a felony. Los Angeles County No. 14554.

June 31, 1924: Arrested in San Francisco, charged with uttering fictitious checks. No. 35570.

Oct. 5, 1925: Los Angeles Police Department issued notice that Allen was wanted for uttering fictitious checks. Bulletin No. 233.

Allen is apparently a prolific writer--of bad checks and of long reports about his activities to his superiors.

Two of Allen's close friends are also native Americans: C.F. Ingalls of 2702 Bush St., San Francisco and George Deatherage (the G.D. mentioned earlier). Deatherage now lives and operates out of St. Albans, W. Va. He organized the American Nationalist Confederation which used to have its headquarters in Palo Alto, Calif. Both these gentlemen also work with Schwinn.

On January 7, 1938, Deatherage received from San Francisco a letter signed "C.F.I."--in a plain envelope without a return address. The letter is very long and detailed. I quote in part:

We must get busy organizing grid-lattice-work or skeleton for a military staff throughout the nation, and in this we need representatives of fascist groups, and we need Americans with whom these others may be incorporated.... All must believe in being ruthless in an emergency....

The political and the military organizations must not be unified. They have different aims. With one hand we offer the public a potential program. Whether they accept it or not and whether they wish to return to the ideals embodied in a representative form of a constitutional federal republic or not, is of secondary importance. Of first importance is the need of the emergency military organization to function simultaneously should our enemies revolt if we should win politically or should we revolt if our enemies win politically.

On January 19, 1938, Deatherage received a letter signed with the code name "Laura and Clayton." "Laura" is Hermann Schwinn. This letter, too, is long and goes into details on how best to organize the secret military group and have it ready for instant action. The letter states at one point:

After we do all this, now then we shall have the national military framework all steamed up and oiled and coupled to the multiplicity of working parts ready to appear on all fronts....

After "C.F.I." and "Laura and Clayton" had decided on the details of the secret military body in which they needed the aid of "Nazi and fascist" forces, they needed money and arms.

Early in January, Allen received from "Mrs. Fry and C. Chapman" four hundred and fifty dollars for a trip to Washington, D.C. "Mrs. Fry and C. Chapman" live in Santa Monica, but use Glendale, Calif, for a post office address. This money was spent between January 13 and February 10, 1938, according to the expense account Allen turned in to the Fry-Chapman combination.

Three days after Allen got the money (January 16, 1938), he received from Schwinn a letter of introduction to Fritz Kuhn, addressed to the _Amerikadeutscher Volksbund_, 178 E. 85th Street, New York City. The letter was written in German. Following is the translation:

My Bund Leader:

The bearer of this letter is my old friend and comrade-in-arms, Henry Allen, who is coming East on an important matter.

Mr. Allen knows the situation in Los Angeles and California very well and can give you important information. We can give Allen absolute confidence.

Hail and Victory, HERMANN SCHWINN.

The "important matter" on which Allen was going East and which he wanted to discuss with the national Nazi leader in this country, was to contact the Italian Embassy, the Hungarian Legation, James True of the James True Associates (distributors of "Industrial Control Reports" from its headquarters in Washington, D.C.), George Deatherage in St. Albans, W. Va., and several others.

Allen reported regularly to Chapman, signing his letters with the code name "Rosenthal." I quote in part from one letter written from Washington on January 24, 1938:

Upon calling at the Rumanian Embassy I found the Ambassador with all his attachés are of the Carol-Tartarescu regime, and they are sailing on Wednesday, January 26. The new Ambassador will arrive with his staff on Saturday, I am told. The letter which you gave me I mailed to Budapest myself, not daring to entrust it to the present staff at the Embassy. At the Italian Embassy I found the Ambassador away, but I had a very delightful and satisfactory conference with Signor G. Cosmelli, who is the Italian counselor....

Shortly after the conference at the Italian Embassy, True and Allen conferred. Subsequently, True wrote to Allen and added a postscript in long hand: "But be very careful about controlling the information and destroy this letter."

Allen did not destroy it immediately. The letter, dated February 23, 1938, reads in part:

The bunch of money promised off and on for three years may come through within the next week or two. We have had so many disappointments that I hardly dare hope but there seems a fair chance of results. If it comes through we will have you back here in a hurry. You, George, and I will get together and prepare for real action.

If your friends want some pea shooters, I have connections now for any quantity and at the right price. They are United States standard surplus. Let me know as soon as you can.

To these events must be added the peculiar and unexplained actions of the Dies Congressional Committee appointed to "investigate subversive activities." The Committee employed a Nazi propagandist as one of its chief investigators and refused to question three suspected Nazi spies working in the Brooklyn Navy Yard. Congressman Martin Dies of Texas, chairman of the Committee, gave two of the _National Republic's_ high-pressure men letters of introduction when they started out on a little milking party in the name of patriotism. He received the cooperation of Harry A. Jung, and he refused to examine the files of James A. True when the above letter was brought to his Committee's attention.

But these actions merit more detailed consideration.

XI

_The Dies Committee Suppresses Evidence_

Three Suspected Nazi Spies were quietly taken out of the Brooklyn Navy Yard to the Dies Congressional Committee headquarters in New York in Room 1604, United States Court House Building. The three men were each questioned for about five minutes by Congressman J. Parnell Thomas[20] of New Jersey and Joe Starnes of Alabama. The men were asked if they had heard of any un-American goings-on in the Navy Yard. Each of the three subpoenaed men said he had not, and the Congressmen sent them back to work in the Navy Yard after warning them not to say a word to anyone about having been called before the Committee.

When I learned of the Congressional Committee's refusal to question men they had subpoenaed, I wondered at the unusual procedure--especially since it promptly put Nazi propagandists (such as Edwin P. Banta, a speaker for the German-American Bund) on the stand as authorities on "un-American" activities in the United States. A little inquiry turned up some interesting facts.

One of the Committee's chief investigators, Edward Francis Sullivan of Boston, had worked closely with Nazi agents as far back as 1934. Sullivan's whole record was extremely unsavory. He had been a labor spy, had been active in promoting anti-democratic sentiments in cooperation with secret agents of the German Government and in addition was a convicted thief. (Shortly after Slap-Happy Eddie, as he was known around Boston because of his convictions on drunkenness, lined up with the Nazis, he got six months for a little stealing.) Before going on with the Congressional Committee's strange attitude toward suspected spies and known propagandists in constant communication with Germany, it might be well to review a meeting which the Congressional Committee's investigator addressed in the Nazi stronghold in Yorkville.

On the night of Tuesday, June 5, 1934, at eight o'clock, some 2,500 Nazis and their friends attended a mass meeting of the Friends of the New Germany at Turnhall, Lexington Ave. and 85th Street, New York City. Sixty Nazi Storm Troopers--attired in uniforms with black breeches and Sam Brown belts, smuggled off Nazi ships--were the guard of honor. Storm Troop officers had white and red arm bands with the swastika superimposed on them. Every twenty minutes the Troopers, clicking their heels in the best Nazi fashion, changed guard in front of the speakers' stand. The Hitler Youth organization was present. Men and women Nazis sold the official Nazi publication, _Jung Sturm_, and everybody awaited the coming of one of the chief speakers of the evening who was to bring them a message from the Boston Nazis.

W.L. McLaughlin, then editor of the _Deutsche Zeitung_, spoke in English. He was followed by H. Hempel, an officer of the Nazi steamship "Stuttgart," who vigorously exhorted his audience to fight for Hitlerism and was rewarded by shouts of "Heil Hitler!" McLaughlin then introduced Edward Francis Sullivan of Boston as a "fighting Irishman." The gentleman whom the Congressional Committee chose as one of its investigators into subversive activities, gave the crowd the Hitler salute and launched into an attack upon the "dirty, lousy, stinking Jews." In the course of his talk he announced proudly that he had organized the group of Nazis in Boston who had attacked and beaten liberals and Communists at a meeting protesting the docking of the Nazi cruiser "Karlsruhe," in an American port.

The audience cheered. Sullivan, again giving the Nazi salute, shouted: "Throw the goddam lousy Jews--all of them--into the Atlantic Ocean. We'll get rid of the stinking kikes! Heil Hitler!"

The three suspected Nazi spies were subpoenaed on August 23, 1938. They were:

Walter Dieckhoff, Badge No. 38117, living at 2654 E. 19th Street, Sheepshead Bay.

Hugo Woulters, Badge No. 38166, living at 221 East 16th Street, Brooklyn.

Alfred Boldt, Badge No. 38069, living at 64-29 70th Street, Middle Village, L.I.

Boldt had worked in the Navy Yard since 1931. Dieckhoff and Woulters went to work there within one day of each other in June, 1936.

The three men were kept in the Committee's room from one o'clock on the day they were subpoenaed until five in the afternoon. When it became apparent that the Congressmen would not show up until the next day, the men were dismissed and told to come back the following morning.

Not a word was said to them as to why they had been subpoenaed. Nevertheless Dieckhoff, who was with the German Air Corps during the World War, instead of going to his home in Sheepshead Bay, drove to the home of Albert Nordenholz at 1572 Castleton Ave., Port Richmond, S.I., where he kept two trunks. Nordenholz, a German-American naturalized citizen for many years, is highly respected by the people in his neighborhood. When Dieckhoff first came to the United States, the Nordenholzes accepted him with open arms. He was the son of an old friend back in Bremerhafen, Germany. Dieckhoff asked permission to keep two trunks in the Nordenholz garret; he stored them there when he went to work in the Brooklyn Navy Yard.

During the two years he worked in the Yard, he would drop around every two weeks or so and go up to the garret to his trunks. Just what he did on those visits, Nordenholz does not know.

On the night Dieckhoff was subpoenaed he suddenly appeared to claim the trunks. He told Nordenholz that he planned to return to Germany. Just what the trunks contained and what he did with them I do not know. They have vanished.

I called upon Dieckhoff in the two-story house in Sheepshead Bay where he lived. He had no intimate friends, didn't smoke, drink or run around. The life of the German war veteran seemed to be confined to working in the Navy Yard, returning home unobtrusively to work on ships' models and making his occasional visits to Nordenholz's garret.

So far as I could learn, Dieckhoff became a marine engineer, working for the North German Lloyd after the World War. In 1923 he entered the United States illegally and remained for two years. Eventually he returned to Germany, but came back to the United States, this time legally, applied for citizenship papers and became a naturalized citizen five years later.

Before he went to work on American war vessels, he worked in various parts of the country--in automobile shops, in the General Electric Co. in Schenectady and as an engineer on Sheepshead Bay boats. Even after Hitler came into power, he worked on Sheepshead Bay boats. After the Berlin-Tokyo axis was formed (1935), Germany became particularly interested in American naval affairs, for the axis, among other things, exchanged military secrets. Shortly before the agreement was made, Dieckhoff suddenly went to work for the Staten Island Shipbuilding Co., Staten Island, which was building four United States destroyers, numbers 364, 365, 384 and 385. He worked on these destroyers during the day. Until late at night he pursued his hobby of building ships' models, which he never made an attempt to sell.

Dieckhoff weighed his words carefully during our talk.

"Why did you apply for a transfer from Staten Island to the Brooklyn Navy Yard?" I asked.

"I don't know," he said. "I guess there was more money in it."

"How much were you getting when you were working on the destroyers?"

"It was some time ago," he said slowly. "I do not remember very good."

"How much are you getting now at the Navy Yard?"

"Forty dollars and twenty-nine cents a week."

"You went to Germany last year for a couple of months and before that you went to Germany for six months. Were you able to save enough for these trips on your wages?"

"I do not spend very much," he said. "I live here all alone."

"How much do you save a week?"

"Oh, I don't know. Ten dollars a week."

"That would make five hundred dollars a year--if you worked steadily, which you didn't. You traveled third class. A round trip would be about two hundred dollars. That would leave you three hundred to spend provided you did not buy clothes, etc., for these trips. How did you manage to live in Germany for six months on three hundred dollars? Did you work there?"

He hesitated and said, "No, I did not work there. I traveled around. I was not in one place."

"How did you do it on three hundred dollars for six months?"

"My brother gave me money."

"What's your brother's business?"

"Oh, just general business in Bremerhafen. He's got a big business there."

"Perhaps I can get a report from the American Consul--"

"Oh," he interrupted. "His business isn't that big."

"Have you a bank account?"

He hesitated again and then said, "No, I do not make enough money for a bank account."

"Where do you keep your money for trips to Germany? In cash?"

"Yes, in cash."

"Where? Here? In this room?"

"No. Not in this room. I have it locked up."

"Where?"

"Oh, different places," he said vaguely.

"Where are those places?"

"I have my money with a friend."

"Who?"

"Nordenholz, Albert Nordenholz."

"You work in Brooklyn, live in Sheepshead Bay and save ten dollars a week in Port Richmond with a friend? Isn't that a long distance to go to save money?"

He shrugged his shoulders without answering.

"What's Nordenholz's business?"

"I think he's retired. I think he used to be a butcher."

"You don't know very much about a man's business and you travel all this distance to give him money to save for you when there are banks all around? Why do you do that?"

"Oh, I don't know. It seems to me that it is better that way."

Later when I asked Nordenholz, he denied that Dieckhoff had ever given him any money to hold.

Dieckhoff had worked on turbines, gear reductions and other complicated mechanical parts on the cruiser "Brooklyn." The moment I asked him if he handled blueprints he answered in the affirmative, but quickly added that the blueprints were returned every night and locked up by the officers. A capable machinist could, he admitted, after careful study remember the blueprints well enough to make a duplicate copy.

"When you went to Germany after working on the destroyers did anyone ever question you about them over there?"

"No," he said quickly. "Nobody."

"My information is that you did talk about structural matters."

He looked startled. "Well," he said, "my brother knew I worked in the Brooklyn Navy Yard. We talked about it, naturally."

"My information is that you talked about it with other people, too."

He stared out of the window with a worried air. Finally he said, "Well, my brother has a friend and I talked with him about it."

"A minute ago you said you had not talked about it with anyone."

"I had forgotten."

"This is the brother who gave you money to travel around in Germany?"

He didn't answer.

"I didn't hear you," I said.

"Yes," Dieckhoff said finally, "he gave me the money."

I called upon the second of the three suspected spies subpoenaed by the Dies Committee. Alfred Boldt had done very responsible work on the U.S. cruiser "Honolulu." Though he had not been in Germany for ten years, he suddenly got enough money last year to go there and to send his son to school at a Nazi academy. Boldt, too, has no bank account. He needed a minimum of seven hundred dollars for his wife and himself to cross third class, but the Dies Committee was not interested in where the money for the trip had come from.

Boldt left for Germany on August 4, 1936, and returned September 12. On the evening I dropped in to see him, he was tensely nervous. He had heard that someone had been around to talk with Dieckhoff.

"I understand your only son, Helmuth, is going to school in Langin, Germany?" I asked.

"Yes," he said, "I sent him there two years ago."

"No schools in the United States for a fifteen-year-old boy?"

"I wanted him to learn German."

"What do you pay for his schooling over there?"

He hesitated. His wife, who was sitting with us and occasionally advising him in German, suddenly interrupted in German, "Don't tell him. That's German business."

I assume they did not know that I understood, for Boldt passed off her comment as if he had not heard it and said casually, "Oh, twenty-five dollars a month."

"You earn forty dollars a week at the Navy Yard, pay for your son's schooling in Germany, clothes, etc., and you and your wife took more than a month's trip to Germany last year. How do you do it on forty a week?"

His wife giggled a little in the adjoining room. Boldt shrugged his shoulder without answering.

"The cheapest the two of you could do it, third class, would be about seven hundred dollars. Where do you have your bank account?"

"No. No bank account," his wife interrupted sharply.

"All the money is kept here, right here in this house," he laughed.

"You saved all that money in cash?"

"Yes; in cash, right here."

"No banks?"

"We like it better like that--in cash."

Boldt, like Dieckhoff, had been a marine engineer on the North German Lloyd. He went to work in the Brooklyn Navy Yard in 1931. When the cruiser "Honolulu" made its trial run in the spring of 1938, Boldt was on board.