New-York tribune., 1918-02-26
Arrest of Rich Importer
Here Reveals Gigantic
Scheme
American Firms
Used as Dummies
Product Stored for Use
During or After
the War

man government, TO buy up the worlds
output of wool for military use now
and commercial use after the war. was
disclosed yesterday with the arrest in
this city of Eugene Schwerdt, a mill
ionaire wool importer, as a dangerous
alien enemy.
Commercial firms in the United
States and American business men, it
is alleged, were employed by the plot
terS as dummy" purchasers in South
America and South Africa of the wool
1esuned Tor German clients of the
Deutsche Rank, one of the larges,
hnanclal institutions in Germany.
the wool, $3,000,00O worth of which
mad already been purchased and stored
IN the United States alone, was to be
Smuggled through to Germany for
clothing the Kaiser's hordes. now said
20 pc clad III uniforms of cotton, paper
ana lutc. In case thus plan fell
through, the supply was to be held in
storage here until peace was declared
then shipped to Germany. to combat
the commercial war after the war
threatened by the Allies.
Cargocs Reached GERMANY
Large shipments Of wool were. in
deed. made to Germany under the plan.
tar'y IN 1915. according to documents
N the hands OF the Federal authori-
ties, two careoes OF the material, one
oy the steamer j. l.. Luckenbach,
reached Germany and were used for
military purposes.
During the first two years of the
war, it is further shown. Germans
were able to purchase wool in the Brit
ish colonies, apparently with the great
est ease. documentary evidence is on
hand to the effect that large guam
llty OF the wool was stored in London
Itself, before transshipment. and was
paid tor with money drawn on London
banks.
The boldness of the plan appears to
have been more successful in Great
Britain than here. Of the vast ouan-
titles Of wool stored here very little
could be run past the British blockade
and 1t remained in storage When the
price or the commodity rose steeply it
was sold by its German purchasers. and
inc money sent to Germany for aid in
prosecution OF the war
he papers show that Schwerdt went
so TAR as to arrange for the charter
of North German LLOYD steamer to
carry the wool to Germany certain
length of time after the close of the
war and that the length of the conflict
was the only bar TO the success of this
scheme.
These revelations, together with
others equally startling, bringing in
prominently the names of Hugo
Schmidt. American representative Of
ne Deutsche Bank, now interned and
Dr Heinrich Albert, former Privy
counsellor and German financial agent
yr.ap
Deputy Attorney General Alfred l.,
Becker. of New York, in a report to
Onlted states Attorney General Greg
ory.
Arrested in Wall Street Office
1t was upon the information con-
tanned in this report. after an investi-
CATION of SchWerdt's affairs, that the
latter was arrested.
When he was taken in charge bv
deputy marshals yesterday at his luyu.
rous Office at 10 Wall Street Schwerdt
V,ehemently protested his innocence,
declarlng ne was Belgian. had son
IN the ar service Of that country and
was strongly proAlly in thought and
action.
"What does this mean ?" he shouted
"Where is the Constitution of the
United States Am to have no trial ~
he importer was bundled. uncere-
n'onlously into an automobile. papers
and documents seized in the raid ON
'iS Office tlled another motor. and the
two cars sped to the Federal Buildjnp
mere Schwerdt telephoned to his wife.
SAID to be an American, and met ber
when she appeared. After examina+ion ion
~ Assistant United States Attorney
Stephenson Schwerdt was taken to the
Tombs ~ we
Although Schwerdt, according to the
Attorney Generals report. resided for
thlrty years in Belgium. whore he wa
m the wool business in 1914, shortly
after the outbreak Of the war. he came
20 inns country I'm the guise of a Bel
gan ana Immediately, correspondence
selzed shows, communicated with the
herman spy masters here TO nut on
iooU the plan for the Wholesale round
up 81 wool IN the interests Of Germany.
Son Aiding Fathers Scheme
The son. Schwerdt, pointed to as in
me belgian aviation, is shown by the
report to be now in this country, I'ot-
ters which he wrote to his father Wills
IN south America prove conclusivelv
that the younger man, trading on his
,ormer military serv e for the Allies.
mad aided his father in the purchase Of
vast quantities of wool, with the assist
&nce OF Schmidt, Albert and the other
agents OF the Kaiser here
IN l9o1, Schwcrdt claims 10 have ac-
Qulred civil lights in Belgium bv rna.
son of service in the Belgian militia
Tie married an American citiznn in
Chicago IN 1895, and his three sons
Eugene f., born in 1897; Rudolnh r
and Max W., are asserted by him 10
be Belgians. '''''' ~
At the outbreak of the war his eldest
son, Eugene f, then seventeen years
old, volunteered IN the Belgian army
Soon afterward, according to Schwerdt
he obtained his honorable discharge
from the army through powerful inhu-
ences which reached King Albert. and
came here with his father in October
1914.
The elder Schwerdt established him
self in business here as wool broker.
and within q month, according to Mr.,
Becker. had established communica. ~ 'a
tons with firms in Germany. On No
vember 16 he appears to have ad-
dressed a circular letter to various
firms IN Germany, proposing the I'M
portation of Australian wool into Ger
many by way of North America
Dealt With Hugo Schmidt
"Schwerdt Immediately formed
friendly relations with Hugo Schmidt
the representative Of the Deutsche
Bank reads the report from the Attor-
ney Generals Office "The Deutsche
Bank papers show that there were nu-
merous purchases OF wool on behalf of
German clients Of the Deutschc Bank.
In order to conceal the fact that
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