New-York tribune., 1918-04-08
Gives Details of Gigantic
Plot to Control Worlds
Supply
$24,OOO,OOO Worth
Reached Germany
Process Can Be Repeated
Now, Says Attorney
General

S'o NeAHdny coHtrol OF tne WOrtu'S
wool for military use now and ior
commercial use after the war, was madc
last night by Alfred l.. Becker, Deputy
Attorney General for the State of Nss,.
York.
THE most disquieting feature Of ail
seems to be that there appears to be
no reason why the same process could
not be operated to-day, provided false
representations to the agencies seek
ing to control wool imports in the in
terest of the United States and its
Allies are condoned and thereby en-
couraged," concluded the report, which
is to be sent to the Department Of
Justice and the War Trade Board.
The report is the result of an inves-
tigaton Of the activities of Hugo
Schmidt, foreign representative of the
Deutsche Bank; Eugen Schwerdt,
millionaire wool importer, now interned
as dangerous enemy alien; Forstmann
& huffman Company, Passaic, N. j.;
the Botany Worsted Mills, Passaic, N.
j.; Charles ]. Webb & Co., Philadel-
phia; P. S. Smith & Son, New York, and
British firms in Calcutta and Cape Col
ony.
Immense Operations in Wool
Schwerdt's operations were made
public at the time Of his arrest in
February, and it was announced then
that So 100000 worth of wool had been
purchased and stored in the United
States for German use after the war.
Details regarding shipments of British
colonial wool through agents in Amer
ica to the German government in viola
tlon OF the agreement between Great
Britain and the United States and of
the license OF the Textile Alliance were
also given.
1t was estimated last night that
through the Deutsche Bank alone S4.-
100000 worth of wool purchased in the
United States and British colonies had
reached Germany, while S2O,0OO,O0O
worth at least was smuggled into Ger
many through neutral countries. 1t
was also stated that German firms have
Deen hoarclng wool in this country dur
ing the last year and thus increasing
the cost of military necessity.
Mr.. Becker's report shows that wool
hrms here, ostensibly American, were
controlled by German interests. He
points out that while they may be tech
nlcally guiltless of an offence against
the United States, except perhaps
breach Of neutrality, "the United
States may properly take their record
INTO consideration in matter of pub
lie policy to what extent such firms
are at war, be trusted"
May they safely be allowed to take
part through advice or participation in
councils OF our government? ?" he asks.
Should they remain in the uncon-
trolied or substantially uncontrolled
direction of the industrial establish
nent5 which they own?"
He recommends that public inves-
tlgatlon be held to determine whether
nf hn
VIOLATIONS of law ,or constituted such
breach of faith or action for German
interests of an underhand character
as might affect the right of the Amer
lean and British firms and individuals
concerned to have their present loyalty
considered above question.
He describes Schmidt's and Schwerdt's
activities as follows:
At the beginning of the war Hugo
Schmidt came to the United States to
act as agent for the Deutsche Bank.
about the same time Eugen ,Schwerdt,
formerly representative in Antwerp
Of British and other firms dealing in
wool, also came to the United States.
Schwerdt claimed Belgian citizenship,
but IN view Of his continued activities
as an agent Of German intcroets and
hostility to- the Allies. this Office rec
commended his internment.
In general the scheme engineered by
Schmidt, Schwcrdt and the German
Embassy, acting through the CONNER
cial attache of the embassy. Privy
Counsellor II. F. Albert, was as fol-
lows:
Various firms OF United States NJ
tlonality were induced to act as the
ostenslble purchasers Of wool and iu,c.
The financial credits were arranged for
Sch ha
est were individuals and syndicates re-
siding in Germany. BY reason of this
method Of concealing the real nature Of
the transactions it became DO sible to
purchase wool for German account in
Cape Colony and Australia and jutc in
India"
Plot to Get Colonial Wool
A description of the plot to get Brit
ish colonial wool and jute for the Ger
man government follows. Mr.. Becker
says it began in December, 1914. It
was Schmidt's idea. and the intention
was to store the wool here if it could
not be got through to Germany. Mr..
Becker says some Of it actually went to
Germany on the steamers Luckenbach
and Caroline.
The firms in Germany that did most
Of the buying were Stoehr and F. f.
kos"ig, and they did business with tho
Botany Worstcd Mills and the Forst.
mann & Huffman Company, according
TO. Mr.. Becker.
The majority Of the stocks Of the
Botany Worsted Mills is owned in
Termany, the report says, in spitc
OF afidavits Of Thomas Prehn, pres-
ident OF the company, to the con-
trary. AT the present time the d.
rectors Of the mills are nominees of
the Alien Property Custodian
The Botany Worsted Mills figured
as ostensible owner Of two large lots
Of wool bought for German account
One lot amounted to 1000 bales Of
South African wool for which the order
was placed in South Africa by Schwerdt
and was financed by the Deutsche
Bank. The actual purchaser Of 4he
wool was Berlin Cubencr Hutfabrik
vors: A. Cohn & Co., a. c., OF Berlin
"Thc Stoehr family are the control
ling factor in the Botany Worsted
Mills" says the report. "Thcy are
thoroughly Gcrman-~-it would be
simple minded To trust them in mat
ters involving the important interests
Of this country"
The Forstrnann Il Huffman Com
pany is much more American than the
Botany Mills, and Julius Forstmann,
the president, was naturalized in 1910
In 1914. however, he accepted an order
from yon Eernstorf for a large quan-
tity Of British colonial wool. Later he
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