The Bridgeport times and evening farmer., 1918-02-08
Hun SMUGGLING PLAN
WORKED PERFECTLY
FOR TWO WHOLE YEARS
Stocks of Needed Supplies From United States England
and India Got Past British Blockade

In the first few weeks of the Euro
pean war the German government re-
allied that as the war progressed ana
the British blockade was frightened 1t
was going to need all the wool, cot
ton, jute, resin, and other raw mater
ials it could possibly smuggle past the
allied navies. The result was the Tor
nation of a great secret organization,
principally of banks, to go out INTO
the worlds markets and buy these
materials and then get them into Ger
many. The men charged with get
ting the raw materials were told to
go into all countries, enemy as well as
neutral, and buy everything in sight,
and when necessary to pay with
drafts on banks in enemy lands.
For over two years the plan worked
almost to perfection and Germany
was able to get millions of dollars
worth of sorely needed supplies, es-
pecially cotton, wool, and jute. The
cotton she obtained in the United
States, the wool in this country and
in British South Africa, and the jute
| in India. And all the time that the
big foreign purchasing machine was
functioning there was locked up in
the safe of Hugo Schmidt, the agent
in New York of the Deutsche Bank,
an almost complete history of all the
German transactions in enemy and
neutral countries, and had Bolo Pa
cha remained away from the United
States those documents would prob
ably still be in the possession of
Schmidt, or some other trusted agent
of the German government.
But Bolo Pacha came to New York
in 1916 and entered into negotiations
with Ambassador Won Bernstorff, the
head of the German secret activities
in the United States to get financial
backing for a plot the purpose OF
which was to debauch the French
press in favor of a separate peace Oh
pro-German line.
Bolo, with one Adolph Pavenstedt
acting as the go-between and Huge
Schmidt as the paymaster, obtained
from the German government
through Bernstorff, more than ST..
10000, and then returned to France
On his return he found that the
French authorities had grown suspi.
cious and had requested the Governor
hof New York to investigate his activ.
tiles during the period he was plot
ting with Bernstorff in New York anG
Washington. In the course of this
Investigation Attorney General Lewis
seized all the papers in the possession
of Hugo Schmidt, and it was as a re-
suit of the close examination of those
papers that the story of how Germany
loo
and cotton and other things from the
United States came to light.
Last night a reporter was permit
ted by the Attorney General to looI
over some of these papers, which
Schmidt, who is now informed in
Georgia prison camp, forgot to des
troy, and it was from those document
that the facts on which this story il
based were taken.
These papers show that in 1914, il
the first few weeks of the war, Their
arrived in New York one Eugen
} Schwerdt, who had been an agent il
Belgium for Alfred Everitt, an ex
porter of Cape WOOL with headuuar
tiers offices in East London and Kin,
Williams Town, South Africa TIL
papers indicate that Schwerdt sug
gested to Schmidt that it might b
possible to get some of the wool need
ed in Germany from South Africa
Schmidt then started negotiations TO
the utilization of the wool supply con
trolled by Everitt, and in December
1914, he wrote to the Deutsche Banl
in Berlin regarding the possibility O
getting wool from British sources i,
South Africa.
He began by saying that in tn
event it was found impossible to ge
wool from that part of the Britis
, dominions it would be necessary t
''pay in pounds sterling drawn O
: London"
t This, however, should permit n
difficulties he wrote, "for I wouI
arrange for the final paymen
through the Guaranty Trust Compan
of New York. The greatest Difficult
: ty is the fact that we must arrang
for an American firm to act as tn
shove in between as purchaser. How
ever, that can also be accomplished
\ l am considering for this purpose tn
Botany Worsted Company, (Passaic,
7 and have already spoken with Direc
= tor Stoher of the company. 1 hav
also spoken to the firm of Forstmann
Huffman, (Passaic.) This opportun
{ ity, it seems to me, should interes