New-York tribune., 1918-12-21

latest year book was issued, Felix and
Paul Warburg.
DR.. Fritz Warburg, Of that fnmIv he
said had been stationed in Stockholm
by the German government, where he
performed about the same functions
that DR.. Albert did here, and was men
toned in the Sisson documents as con-
cerned in the disbursing of money for
the Bolshevik movement.
The evidence indicated, he said, that
when the war began the German gov
crnment expected these two firms to
handle the finances in America, but
though the firm tried to convince the
French that its members had sub
scribed to the Anglo-French loan and
the Germans that they had not, and
otherwise "playcd both ends against
the middle" it soon became evident
that they were not controlled by Ger
many, and the accounts were shifted
away from them. This he attributed
largely to the influence OF Otto H.
Kahn. This, he said, was q grievous
disappointment to the Germans.
Drastic Terms Asked
The fact that Paul M. Warburg had
been a member of the Federal Reserve
Board was mentioned by Senator Mel
it clear that he had 10 charges to
make against Mr.. Warburg, Senator
King remarked:
There is not man in the country
who has been more loyal than MIR.
Warburg, and no man that has con-
tributed more to make the Federal
Reserve law success; and | think
the country suffered materially when
he resigned"
ot K,,11 ~
imposed on the Germans were shown
by letter from Hugo Smith to
the Deutsche Bank, of February 16,
1916, which said:
"At the outbreak of the war, when
cable communication with Germany
was for some time completely inter
rupted, the Hamburg American Line.
which then needed money to charter
and equip ships for the ministry of
war, approached Kuhn, Loeb & Co.,
for many years local bankers, in
order to obtain large advance,
about S1,000,000. Kuhn, Loeb & Co.
are said to have acted very arbitra-
rily on that occasion.
''At first they were not willing to
entertain the proposition, then they
said they could do nothing in the
matter alone. but would try to organ
ize syndicate for that purpose.
After a few days they informed the
Hamburg American Line, which was
very anxious to procure the money
during all that time, that they, to-
gether with some other friends, were
ready to grant loan of 100000
marks, but that amount was on the
very next day reduced to 900,0 900
marks, because one of the associates
had withdrawn in the meantime.
"Kuhn, Loeb & Co. further de-
manded, on the other hand, the
mortgaging of all the, as is we'll
known, extraordinarily valuable OBJ
iects (ships) and, indeed, with
clause. according to which they
would have had the right to sell the
mortgaged objects at public auction
or out of hand in case Judgment
was obtained by any one against the
Hamburg American Line.
"However much the Hamburg
American Line was in need of money
it could not bring itself to accept
these ruinous terms, and in the mean
time cable communication was re-
stored to some extent, so that 1t sue
ceeded in obtaining financial assist
ance from it's German firm. This is
by no means gossip, but facts which
Mr.. Buenz recently related to me-"
Captain Boy-Ed had similar ex-
periences with Kuhn, Loeb & Co.
The Ministry of War had caused
large amounts to be transferred to
its local account through Speyer
Co.; nevertheless payment here was
deferred for about ten days, although
the Reichsbank had in its favor
balance which was by far greater
than the sum asked for"
Mr.. Becker then tool; UP Albert's sys
TEN for covering his trail by means O.
cashiers checks. which, of course car
ried, when used, no indication of the
original payers of the money. This, h,
pointed out, had eventually resulted il
the uncovering of many plots, for
while ordinary checks could have beer
destroyed by the drawer, the cashier
checks and the letters ordering then
were preserved by the banks and wer
eventually seized by the Federal inves
tigators.
He then took up the work of Hugo
Schmidt, of which he has made a par