The herald and news. [volume] (Newberry S.C.) 1903-1937, 1917-10-09
BANKER SCHMIDT TELLS
OF GERMAN SLCSH FUND
Revelation May Lead to Investigation
to Reach Persons Now Unknown
Who Are Believed to be In
volved.

New York, Oct. 5Y-oCunt Johann
Heinrich Won Bernstorff, the imperial
German ambassador to the United
States, received some time in 19-"
from the Deutsche bank in Berlin
quarter of million dollars which
may become the object of new N
yestigation either BY the New York
state authorities or by the United
States secret service. This sum IS
separate from the 100000 sent here
by the German foreign office through
the same Berlin bank for Bolo Pasna
the French corruption paymaster.
About the same time Count Won
Bernstorff had $4,000 and then $4,000
paid to one ssMr. Kramer" Of Peter
son, N. j. To these two payments a.
so considerable mystery attaches.
These new traces, leading, it IS be
lieved. to the heart of the ramifica-
tions of German government "slush"
fund in operations in this country
were uncovered voluntarily by Hugo
Schmidt, accredited representative III
America o. the Deutsche bank. The
transcript of his testimony in connec-
ton with the Bolo transactions, IN
which he played a prominent part.
being the man who handled the pay
ments and deposits, was made pubic
tonight
Has First Papers.
Herr Schm DIT, sent here three
years ago to look after the business Of
the Deutsche bank, testified that ne
had taken out his first papers in Feb
rcarv, 1915, because it might be help
ful to him in business wav. He ex-
pIainad he felt failure on his part to
6eclo~e his al1eeianco to the Tnitei
States might imrair his usefulness as
the renresentative Of the Deutsche
bank.
'sI have gotten along always ve"y
nicely with the authorities farn."
reads the transcript of his statements,
s'and I hone it Will also be the case
with you and it will be my best IN
tention to be frank and open, so please
ask any questions Shortly afterward
he made the new revelations:
81 want to be frank and open and
will say that once in 1916 authorized
payment of s25O,oOO by the Corn e.
change bank to the ambassador and
have no knowledge Of what the mouey
was intended for
Then again 1 authorized the pay
ment of $4,000 and $4,000 to a Mr..
Kramer, of Peterson, n. j., on request
of Ambassador Won Bernstorff. l kept
no books and don't know the initials
OF Kramer"
Had Special Powers
Reverting to the Bolo Pasha affair,
Robert C. Morris, counsel to Attorney
General Lewis, who conducted
Schmidt's examination, asked the wit
ness why the s1,7O0,OOO that have
been traced were deposited in more
than one bank.
Herr Schmidt replied that as the
German ambassadors representative
he did not think it proper to deposit
such a large amount in one bank.
The witness said that as alternate
manager in this country of tAe
Deutsche bank he executed orders
from the Berlin headquarters of that
institution and had special powers to
deal with certain banks here. He
named the Guaranty Trust company,
the National Park Bank, Speyer &
Co, the Chase National bank and the
Equitable Trust company.
Two weeks ago, Herr Schmidt tes-
titled, Adolph Pavenstedt, who admit
tedly acted as go between for Count
Won Bernstorff and Bolo Pasha, came
to him, Schmidt, and said:
"You made a payment to me long
time ago and j feel in duty bound to
is, to Bolo Pasha, and this man has
been imprisoned and probably you
will be called too, and so feel in
duty bound to tell you this"
Herr Schmidt appeared suddenly
this afternoon in the room where his
u