Chapter 6

In obtaining that concession he was aided by Giuseppe Sotanis, an Italian gentleman wearing the fascist insignia in the lapel of his coat, whom he met at the Gran Hotel in San José. Sotanis, a former Italian artillery officer, is a nattily dressed, slender man in his early forties who apparently does nothing in San José except study his immaculate finger nails, drink Scotch-and-sodas, collect stamps and vanish every few months only to reappear again, still studying his immaculate finger nails. It was Sotanis who arranged for Nicaragua to get the shipment of arms and munitions which I mentioned earlier.

This uncommunicative Italian stamp collector paved the way for Wakabayashi to meet Raul Gurdian, the Costa Rican Minister of Finance, and Ramon Madrigal, Vice-president of the government-owned National Bank and a prominent Costa Rican merchant. Shortly after Costa Rica gave Wakabayashi permission to experiment with his cotton growing, both the Minister of Finance and the Vice-president of the government bank took trips to Japan.

The ink was scarcely dry on the agreement to permit the Japanese to experiment in cotton growing before a Japanese steamer appeared in Puntarenas with twenty-one young and alert Japanese and a bag of cotton seed. They were "laborers," Wakabayashi explained. The "laborers" were put up in first-class hotels and took life easy while Wakabayashi and one of the laborers started hunting a suitable spot on which to plant their bag of seed. All sorts of land was offered to them, but Wakabayashi wanted no land anywhere near a hill or a mountain. He finally found what he wanted half-way between Puntarenas and San José--long, level, flat acres. He wanted this land at any price, finally paying for it an annual rental equal to the value of the acres.

The twenty-one "laborers" who had been brought from Chimbota, Peru, where there is a colony of twenty thousand Japanese, planted an acre with cotton seed and sat them down to rest, imperturbable, silent, waiting. The plowed land is now as smooth and level as the acres at Corinto in Colombia, south of the Canal.

The harbor at Puntarenas, as I mentioned earlier, would make a splendid base of operations for an enemy fleet. Not far from shore are the flat, level acres of the "experimental station" and the twenty-one Japanese who could quickly turn these smooth acres into an air base. It is north of the Panama Canal and within two hours flying time of it, as Corinto is south of the Canal and within two hours flying time.

The Boyd Bros. steamship agency, to which Tahara and Wakabayashi went immediately upon arrival, is an American concern. The manager, with whom each was closeted, is Hans Hermann Heildelk of Avenida Peru, No. 64, Panama City, and, though efforts have been made to keep it secret, part owner of the agency. Heildelk is also the son-in-law of Ernst F. Neumann, the Nazi Consul to Panama.

On November 15, 1937, Heildelk returned from Japan by way of Germany. Five days later, on November 20, 1937, his father-in-law, who, besides being Nazi Consul, owns in partnership with Fritz Kohpcke, one of the largest hardware stores in Panama, told his clerks that he and his partner would work a little late that night. Neither partner went out to eat and the corrugated sliding door of the store, at Norte No. 54 in the heart of the Panamanian commercial district, was left open about three feet from the ground so that passers-by could not see inside unless they stooped deliberately.

At eight o'clock a car drew up at the corner of the darkened street in front of Neumann & Kohpcke, Ltd. Two unidentified men, Heildelk and Walter Scharpp, former Nazi Consul at Colón who had also just returned from Germany, stepped out, and stooping under the partly open door, entered the store. Once inside Scharpp quietly assumed command. To all practical purposes they were on German territory, for the Nazi consulate office was in the store.

Scharpp announced that the group had been very carefully chosen because of their known loyalty to Nazi Germany and because of their desire to promote friendship for Germany in Latin American countries and to cooperate with the Japanese, who had their own organization functioning efficiently in Central and South America.

"Some of these countries are already friendly," said Scharpp, "and we can work undisturbed provided we do not interfere in the Panama Canal Zone. It is North American territory, and you will have trouble from their officials and intelligence officers as well as political pressure from the States. You understand?"

"Panama is friendly to North America," said Kohpcke.

"Precisely. At the present time it is not wise to do much more than broadcast, but at a propitious time we shall be able to explain National Socialism to the Panamanians."

He looked at Kohpcke, whose left eyelid droops more than his right, giving him the appearance of being perpetually sleepy. Kohpcke looked at Neumann.

"Tonight we want to organize a Bund in Panama. In a few days I am going to Costa Rica to organize another and then leave for Valparaiso."

The others nodded. They had been informed that Scharpp was to have complete charge of Nazi activities from Valparaiso to Panama. That night they established _Der Deutsch-Ausländische Nazi Genossenschafts Bund_, with the understanding that it function secretly. The list of members was to be controlled by Neumann.

Scharpp explained that secrecy was advisable to avoid antagonizing the Panamanian Government, "which is friendly to Italy and we can cooperate with the Italian Legation here."

"The Japanese are more important that the Italians," Kohpcke pointed out.

"The Japanese will work with us," Heildelk assured him.

"But we can't be seen with them--"

"Fritz [Kohpcke] will call a meeting in Jacobs' house," said Scharpp.

"Jacobs!" exclaimed one of the unidentified men. "You don't mean the Austrian Consul!"

Scharpp nodded slowly. "He is generally believed to be anti-Nazi. His partner spent twelve years in Japan and speaks Japanese perfectly. The Japanese Consul knows and trusts both. We cannot find a better place."

On the night of December 13, 1937, forty carefully selected Germans who, during the intervening month had become members of the Bund in Panama, arrived singly and in small groups at the home of August Jacobs-Kantstein, Panamanian merchant and Austrian Honorary Consul.

Five Japanese, headed by Tetsuo Umimoto, also came. One, K. Ishibashi, formerly captain of the "Hokkai Maru" and a reserve officer in the Japanese Navy; K. Ohihara, a Japanese agent staying with the Japanese Consul but having no visible reason to be in Panama; two captains of Japanese fishing boats and A. Sonada, the barber who organized the labor union and in whose presence the Consul does not sit until the barber is seated.

Throughout the meeting, presided over by the elderly but tall and soldierly Austrian Consul, the Japanese said little. It was primarily the first get-together for Nazi-Japanese cooperation in the Canal Zone area.

"Mr. Umimoto has not said much," remarked Jacobs.

"There is so little to say when there are so many present," said the little Consul apologetically.

The others understood. The Japanese were too shrewd to discuss detailed plans with so many present.

A few days later Umimoto called upon Heildelk and was closeted with him for three hours. Shortly after that Sonada made a hurried trip to Japan.

VI

_Secret Agents Arrive in America_

Germany's interest in the Panama Canal became acute only after Japan joined the Rome-Berlin axis "to exchange information about Communism"--an exchange which appears to be more concerned with military secrets than with Communism.

The activities of Japanese and Nazi agents in Latin American countries and especially around the Canal, the organizing of a fascist rebellion in Mexico to the south of us and intensive propaganda carried on in Canada to the north, are but part of the broad invasion of the Western Hemisphere by the Fifth Column--an invasion which began almost immediately after Hitler got into power. Since the United States is the most important country in the Americas, it was and is subject to special concentration by secret Nazi agents.

The first threads spun spread out in many directions, with propaganda as the base from which to broaden espionage activities. One of the earliest of the secret agents sent to this country was an American, Colonel Edwin Emerson, soldier of fortune, mediocre author and fairly competent war correspondent. Emerson lived at 215 East 15th Street, New York City and had an office in Room 1923 at 17 Battery Place, the address of the German Consulate General. Room 1923 was rented by a representative of the German Consul General. The rent paid was nominal and in at least one instance, to avoid its being traced, it was paid in cash by Hitler's diplomatic representative. Prior to the renting of this room, Emerson had desk space with the German Consulate General for six weeks.

The May 15, 1933, issue of the _Amerika Deutsche Post_, a Nazi propaganda organ published in New York, carried an advertisement stating that the editor of this paper made his headquarters in Emerson's room. This was the first indication that Emerson had arrived in this country to handle Nazi propaganda.

For many years Emerson had wandered about the globe covering assignments for newspapers and magazines and always bragging about his Americanism and his "patriotism." One of his great boasts was that he was with Roosevelt's Rough Riders during the Spanish-American war; what he never told was that Roosevelt brought him back from Cuba in irons.

From his room paid for by the German Consul General, Emerson launched the "Friends of Germany."[6] This organization was the chief disseminator of pro-Hitler and anti-democratic propaganda in the United States, but the Colonel directed the propaganda somewhat stupidly. The "Friends of Germany" held meetings with "storm troops" in full uniform; bitter attacks were made against Jews and Catholics at large mass meetings. Visiting officers and sailors, from German ships docked in New York, appeared at these meetings to preach fascism and Nazism, until a wave of resentment swept the country. One of the keynotes of these talks was sounded by Edward F. Sullivan of Boston at a meeting held at Turnhalle, Lexington Avenue and 85th Street, on June 5th, 1934, when he repeatedly referred to Jews as "dirty, stinking kikes" and announced that he proposed to organize a strong Nazi group in Boston.

Propaganda Minister Goebbels in Berlin became annoyed at the public reaction, and the entire Nazi foreign propaganda service was reorganized. Emerson was ordered back to Germany for explicit instructions on how to carry on propaganda without antagonizing the entire country.

In October, 1933, Royal Scott Gulden (who has no connection with the mustard business, but is a distant relative of the head of it), who had been cooperating with Emerson, tried to organize an espionage system to watch Communists. In this effort Gulden enlisted the aid of Fred R. Marvin, a professional patriot. At three o'clock on the afternoon of March 10, 1934, a very secret meeting was called by Gulden at 139 East 57th Street. Present were Gulden, J. Schmidt and William Dudley Pelley, head of the Silver Shirts.

The meeting decided to adopt anti-semitic propaganda--to play on latent anti-semitism--as part of the first campaign to attract followers. The country was in a serious economic crisis with considerable unrest throughout the land. Both Hitler and Mussolini got into power in periods of great unrest by promising peace and security to the bewildered people. Men of means were terrified by fears of "revolution" and this group, directed by Emerson, began to preach that the revolution might come any minute and that the Jews were responsible for Moscow, the Third International, the Mississippi flood and anything else that troubled the people. When the meeting ended the "Order of '76"[7] had been born and Royal Scott Gulden appointed Secretary to direct espionage and propaganda.

From the very beginning Emerson tried to get people into places which would provide access to important information. On February 22, 1934, a merger of the Republican Senatorial and Congressional Campaign Committees to conduct the Party's Congressional campaign independent of the Republican National Committee was announced in a joint statement by Senator Daniel O. Hastings of Delaware and Representative Chester C. Bolton of Ohio, chairmen, respectively, of the two committees.

Several weeks before this announcement, the two committees had employed Sidney Brooks, for years head of the research bureau of the International Telephone and Telegraph Company. Brooks, because of his position, was close in the confidences of Republican Senators and Congressmen. He heard state secrets and had his fingers on the political pulse of the country.

Shortly after he took charge of the joint committee for the Senators and Congressmen, Brooks made a hurried visit to New York. On March 4, 1934, he drove to the Hotel Edison and went directly to Room 830 where a man registered as "William D. Goodales--Los Angeles," was awaiting him. Mr. "Goodales" was William Dudley Pelley, head of the Silver Shirts, who had come to New York to confer with Brooks and Gulden. After this conference the two went to Gulden's office where they had a confidential talk that lasted over an hour during which an agreement was made to merge the Order of '76 with the Silver Shirts so as to carry on their propaganda more effectively.

Brooks himself, on his mysterious visits to New York, went to 17 Battery Place, which houses the German Consulate General. At that address he visited one John E. Kelly. In a letter to Kelly dated as far back as December 27, 1933, he wrote: "I will be in New York Friday to Monday and can be reached in the usual manner--Gramercy 5-9193 (care Emerson)."

Sidney Brooks also was a member of the secret Order of '76. Before anyone could join he had to give, in his own handwriting and sealed with his own fingerprints, certain details of his life. Brooks' application for membership in this espionage group organized with the help of a Nazi sent to this country, revealed that he was the son of the Nazi agent, Colonel Edwin Emerson, and that he was using his mother's maiden name so that connection could not be traced too easily.

One of the other early propagandists who is still active as a "patriot" was Edward H. Hunter, Executive Secretary of the Industrial Defense Association, Inc., 7 Water Street, Boston. Early in 1934, while the negotiations for the merging of the espionage order and the Silver Shirts were going on, this rooter for American liberty heard Germany was spending money in this country and on March 3, he wrote to the "Friends of Germany":

"Under separate cover we are sending you twenty-five copies of our _Swan Song of Hate_ as requested and you may have as many as you wish.

"Several times I have conferred with Dr. Tippelskirch and at one time suggested that if he could secure the financial backing from Germany, I could start a real campaign along lines that would be very effective.

"All that is necessary to return America to Americans is to organize the many thousands of persons who are victims of Judaism and I am ready to do that at any time."

Dr. Tippelskirch, with whom Hunter discussed getting money from Germany for anti-semitic work, was the German Consul in Boston.

The activities of the early agents ranged from propaganda to smuggling and espionage, though at the beginning the espionage was on a minor scale. It took several years of organizing pro-German groups in this country before they could pick the most reliable for the more dangerous spy work. Much of the propaganda was sent in openly through the mails, but some of it was of so vicious and anti-democratic character that the Propaganda Ministry in Germany decided it was wiser to smuggle it in from Nazi ships.

One of the chief smugglers was Guenther Orgell,[8] at that time head of the "Friends of Germany," through whom the propaganda was distributed to various branches of the organization throughout the country. In those days Orgell lived at 606 West 115th Street, New York City,[9] and was ostensibly employed as an electrical engineer by the Raymond Roth Co., 25 West 45th Street. Let me illustrate how he worked:

At twenty minutes to ten on the evening of March 16, 1934, the North German Lloyd "Europa" was preparing to sail at midnight. The gaily illuminated boat was filled with men and women, many in evening dress, seeing friends off to Europe. German stewards, all of them members of the ship's Nazi _Gruppe_, stood about smiling, bowing, but watching every passenger and visitor carefully.

People wandered all over the boat. Many visited the library on the main promenade deck, which has a German post office. There was a great deal of laughter and chatter. Orgell, dressed in an ordinary business suit and carrying a folded newspaper in his hands, wandered in. Catching the post office steward's eye, he casually took four letters from his coat pocket and handed them to the steward who as casually slipped them into his pocket. There were no stamps on the letters, which, incidentally, constituted a federal offense.

Still so casual in manner that the average observer would not even have noticed the transfer of the letters, Orgell wandered over to a desk in the library and rapidly wrote another letter--so important, apparently, that he dared not carry it with him for fear of a mishap. The letter was sealed and handed to the steward.

The library had a great many visitors. No one seemed to be paying any attention to this visitor or passenger talking to the steward. With a quick glance around him, Orgell took in everyone in the library and seemed satisfied. He caught the steward's eye again and nodded. The steward opened a closet in the library, the second one left of the main aisle on the port side toward the stern of the boat. A thin package was taken from its hiding place and quickly slipped to Orgell who covered it with his newspaper and promptly left the ship.

This was the manner in which Nazi secret instructions and spy reports were sent and received--a procedure that kept up until the arrest of the Nazi spies who were tried late in 1938.

When Orgell needed trusted men to deliver messages to and from the boats as well as to smuggle off material, he usually called upon the American branch of the _Stahlhelm_, or Steel Helmets, which used to drill secretly in anticipation of _Der Tag_ in this country. Only when he felt that he was not being watched, or only in the event of the most important messages, did he go aboard the ships personally. Orgell's liaison man in the smuggling activities was Frank Mutschinski, a painting contractor who used to live at 116 Garland Court, Garritsen Beach, N.Y.

Mutschinski came to the United States from Germany on the S.S. "George Washington," June 16, 1920. He was commander of one of the American branches of the _Stahlhelm_ which had offices at 174 East 85th Street, New York. While he was in command, he received his orders direct from Franz Seldte, subsequently Minister of Labor under Hitler. Seldte at that time was in Magdeburg, Germany. Branches of the _Stahlhelm_ were established by him and Orgell in Rochester, Chicago, Philadelphia, Newark, Detroit, Los Angeles and Toronto (the first step in the Fifth Column's invasion of Canada).

To help Orgell in his smuggling activities, Mutschinski supplied him with a chief assistant, Carl Brunkhorst. It was Brunkhorst's job to deliver the secret letters. Nazi uniforms for American Storm Troopers were smuggled into this country off German ships by Paul Bante who lived at 186 East 93rd Street, New York City. Bante, at the time he was engaged in the smuggling activities, was a member of the 244th Coast Guard as well as the New York National Guard.

In the early days of organizing the Nazi web over the United States, the German agents received cooperation from racketeering "patriots" who saw possibilities of scaring the wits out of the American people by announcing that the "revolution" was just around the corner. The country was in an economic crisis, the American people were bewildered and didn't know which way to turn, there was considerable unrest in the land, and the Nazi agents and their American counterparts visualized in Hitler's cry that "Communism and the Jews" were responsible, grand pickings from the scared suckers.

Since Communism, especially in those restless days in the depths of the depression, was the bugaboo of the rich, it was inevitable that some unscrupulous but shrewd observers of the American scene would take advantage of this fear and capitalize on it. One of the chief racketeers, a man who subsequently worked very closely with secret Nazi agents in this country, was Harry A. Jung, Honorary General Manager of the American Vigilant Intelligence Federation, Post Office Box 144, Chicago. This organization was originally founded to spy on Communists and Socialists. For a while Jung collected from terrified employers by promising to inform them about the threat of revolution--what time it would occur and who would lead it. In return he collected plenty.

In time employers got fed up when the rowboat loaded with bomb-throwing Bolsheviks failed to arrive from Moscow. Pickings became slim. Jung was badly in need of a new terror-inspiring "issue" with which to collect from the suckers. He found it at the time Emerson was sent here from Germany. Gulden, Pelley and their associates were launching an anti-semitic campaign as the first step to attract people to the "Friends of Germany." Jung likewise discovered the "menace of the Jew" and peddled it for all it was worth.

There was an air of secrecy about the whole outfit. Even the location of the office in the Chicago Tribune Tower was kept from the membership; all they were given was the post office box number. As soon as he collected enough material from the _Daily Worker_ and other Communist publications, he sent agents to call on the gullible businessmen with horrendous stories of the Muscovites now on the high seas on their way to capture the American Government. The salesmen collected and in turn got forty per cent of the pickings.

When Jung heard that William Dudley Pelley was making money on the Jew-and-Catholic scare and that others like Edward H. Hunter of the Industrial Defense Association were talking with the German Consul General about getting money from Germany for propaganda, he got busy peddling "The Protocols of the Elders of Zion," long discredited as forgeries. Armed with these, Jung's high pressure salesmen scoured the country, collecting shekels from Christian businessmen and getting their forty per cent commissions.

It was not long before Jung, Pelley and others were working in full swing with secret Nazi agents sent into this country for propaganda and espionage purposes.

FOOTNOTES:

[6] Subsequently changed to "Friends of the New Germany" and then to the current "German-American Bund."

[7] Still functioning on a minor scale. The Fifth Column has since these early beginnings established much more efficient groups.

[8] Following passage of the new 1938 law requiring all foreign agents to register, Orgell registered with the State Department as a German agent.

[9] He now lives at Great Kills, Staten Island, N.Y.

VII

_Nazi Spies and American "Patriots"_