liquidating business for the account of the enemy owned interests. It is most gratifying to be able to report that the results of the liquidations of these interests have been unusually satisfactory, the amounts realized being in practically every instance in excess of book value.

The German interests have been somewhat difficult of discovery in this particular trade, as is shown by the tremendous increase in the number of reports filed after the time fixed by the Government for original filing. But it may be confidently asserted that both German influence and capital have been successfully and completely eliminated from the fur trade. And it is not too much to say that with the enforcement of the terms of the trading-with-the-enemy act this absolute abolition of all enemy-owned interests in present existing American fur houses is for all time, and there is no chance that at any time German capital will reappear to any appreciable amount in the American trade. If the great Leipzig fur houses are, after the signing of peace, in a position to branch out in America, it will have to be through entirely new means and by the investment of new capital in this country, in the face of competition that it will be practically impossible to overcome.

A further result of the war and of the enforcement of the tradingwith-the-enemy act, a result of tremendous importance to the American fur trade, is the establishment of great public auction sales, conducted in the spring, winter, and fall at New York City and at St. Louis. Both cities now vie for the title of "the fur market of the world," a title formerly claimed by and accredited to London and Leipzig. Starting late in 1915, the first St. Louis sale amounted to considerably less than $1,000,000, whereas the January sale was said to have been in excess of $9,000,000. The first New York sale in 1916 disposed of merchandise worth about three-quarters of a million dollars, while the sales there in February, 1919, covered merchandise of the value of almost $6,000,000. But New York, besides holding the auction sales and besides being located in the greatest port of the world, is the center in which 85 per cent of the American furs are manufactured and 95 per cent of the American fur catch is dressed and dyed.

For almost a century prior to the war, such auction sales had been held in London, England, but owing to the difficulties of transportation growing out of the war, the sales were begun in this country, and it is confidently expected in both American cities, not only that the American trade will hereafter purchase its American furs in America, but that foreign dealers will ship considerable portions of their seasons' collections to the American fur auction sales to be disposed of to American dealers. The curious phenomenon existing before the

war of American dealers shipping a large portion of the American catch to the London sales, of other American dealers traveling to London in order to purchase the same American catch and bringing it back with them to America, and of other portions of American goods being purchased by Leipzig merchants only to have American dealers travel to Leipzig to repurchase these same American goods, either dressed or dyed, to bring them back to America plus freight and tariff duty, is therefore no longer apparent.

One reason for the general involvement of the American with the Leipzig fur trade was not so much the investment of German capital as such in this country. German interests mostly appeared in the form of debts due Germany from American firms. One of Germany's great policies was the systematic practice of a credit plan more liberal than that offered by any other country of the world. So liberal was it that it was a common practice to send American paper to Germany for discount. American firms could afford to pay almost any profit to the German because of the credit facilities they received and the consequent freedom they enjoyed in the working off of the merchandise purchased. Nothing more insidiously destructive of the independence of the American fur merchant could be conceived.

The result was that the passage of the act found a large number of American fur merchants indebted to Germans in considerable amounts. While the law compelled the payment of these sums to the Alien Property Custodian, it was seen that in many instances payment immediately meant ruin to these Americans who had permitted themselves to be blinded by the glare of Germany's so-called commercial policy and were deceived by the camouflage of the German credit system. It, therefore, became necessary to work out the German interest in such a way as not to affect detrimentally the American business. This has been so successfully accomplished that in every instance the American firm has been actually benefited and, moreover, has through this assistance of the Alien Property Custodian reached, and is now enjoying, a state of business independence never before enjoyed.

In no trade has the result of the war been of greater consequence to the country than in the fur industry.

With the elimination of the foreign market by the war, with the elimination of German capital by the enforcement of the provisions of the trading-with-the-enemy act, these are the net results: 1. American furs dressed, dyed, manufactured, and sold in America.

2. Russian, Chinese, Japanese, and Siberian markets taken from Germany, and direct connection established with the United States.

3. The sale through American auctions of the raw catch, both foreign and domestic, and the consequent creation of the American fur market of the world.

4. The realization of the fur merchant of the actual motive of Germany.

5. The complete elimination of German influence in the American fur trade.

It is inconceivable that the American fur merchant will ever permit any future participation by Germany or the Germans in this industry which the war has brought into its own.

CHAPTER VII.

ENEMY INTERESTS IN AMERICAN MANUFACTURING CONCERNS.

The German agents looked upon the American manufacturing field as a particularly fertile one, and their investments were large and varied. It afforded them excellent means for sowing the seeds of German propaganda and at the same time gave them practically unlimited opportunities for collecting information, both commercial and military, for the use of the German Government and its agents.

In many of the large German owned companies taken over by the Alien Property Custodian, after investigation, it was found that espionage was one of the chief functions. Every scrap of information of commercial or military value to Germany was carefully gathered by the representatives of these concerns in this country and quickly forwarded to the home office in Germany. The German agents were particularly keen on gathering information that would be helpful to Germany's commercial warfare.

Once in Germany, this information was carefully card-indexed for the use of German manufacturers. Bulletins of commercial information were also prepared and placed at the disposal of the German manufacturer. In Germany, the collection of all commercial information is under a bureau which is controlled and financed by the great German banks, such as the Dresdner, Disconto, and Reichs Bank.

One of the most striking examples of the German propaganda and spy system in this country was furnished by the Orenstein-Arthur Koppel Co., of Koppel, Pa.

Orenstein-Arthur Koppel Co.-This concern was a branch of a German company with agencies in every country in the world. It manufactures light inside railway equipment and was a bidder for this class of work in every big industrial plant in this country. This company was thus enabled to obtain much confidential information regarding these plants which was quickly forwarded to Germany in the form of blue prints, there to be held for whatever use the German strategists could make of it. This was the first German-owned plant

sold by the Alien Property Custodian and is now in the hands of 100 per cent Americans.

The Orenstein-Arthur Koppel Co. owned the Koppel Land Co., the Beaver Connecting Railroad Co., the Koppel Water Co., and the Koppel Sales Co., of Koppel, Pa., the Pennsylvania Car & Manufacturing Co., of Pittsburgh, and the Universal Railway Products Co., of New York.

The Orenstein-Arthur Koppel Co. furnished an excellent example of the German prewar methods in obtaining a foothold in an essential American industry-an industry through which valuable military information was obtained and sent to Germany. About 10 years ago the Orenstein & Koppel-Arthur Koppel Aktiengesellschaft, a German corporation with its principal office in Berlin, organized a branch in this country under the laws of Pennsylvania. It was called the Orenstein-Arthur Koppel Co. The company itself was established at Koppel, which is about 35 miles from Pittsburgh. As the business of the company grew, the subsidiary companies were organized and branch offices were established in New York, Chicago, Pittsburgh, and San Francisco.

The parent concern in Germany had many branches and plants in South American countries, Cuba and Mexico, German-Africa, England, and Russia, and the establishment of a branch plant in this country completed the chain that would give the Germans practically world control of this particular industry.

The Orenstein-Arthur Koppel Co. installed light railway equipment in practically all American munition plants, steel plants, and kindred concerns. It had contracts with the Westinghouse Co., with the United States Steel Corporation, with the Du Pont Works, and with nearly half of the big industrial plants operating in this country. Under these conditions it can readily be seen how easy it was for this German-owned concern to supply information of great military importance to the German Government regarding the big industrial and munition plants in this country. The American business was conducted by a committee composed of Arthur Riche, Karl Hansen, and Eric Joseph, all of them German subjects, now interned.

When in 1916 the relations between the United States and Germany became strained and the war clouds began to gather, the managers of the German-owned concerns in this country became panicstricken. The cables and the wireless stations were crowded with messages to and from the German owners and their managers in this country, scheming and plotting to arrange their affairs in such a manner as to keep the concerns from being taken over by the Alien Property Custodian. Every conceivable sort of camouflage was used; the flimsiest pretexts were used to transfer overnight corporations