A most mysterious traffic

"Unterschrift La Plata.,nicht wahr?"

During the Second World War, the Swedish authorities became puzzled by a baffling telegram traffic which took place between a relatively small company La Plata based in Trelleborg in Southern Sweden and various addresses in Argentina. What was particularly curious about the traffic was its triangular nature. A Director Roeber in Berlin would phone up La Plata in Trelleborg and dictate the contents of a telegram to be sent to an address in Argentina. Superficially the subject matter of such telegrams dealt often with private matters which seemed entirely innocent and straightforward. Here are three typical examples:

(1) Barbanicol, Buenos Aires

Herzlichste Glückwünsche Bischofs Roebers Schrőders S

(2) NLT

Pallaco, Buenos Aires

Adresse Nichte charlotte reichel maria viktoriastrasse 8 badenbaden

Laplatako

(3) Isenkinder, Buenos Aires

Arbol tuwhi fiptu olnno hinig

Laplatko

It was judged that all the Argentinian addresses represented the same firm, namely the Staudt concern, a highly important Argentinian enterprise run by Ricardo Staudt. The third telegram requires some additional explanation. During the war , the use of certain public,commercial codes were allowed in telegram traffic. The use of such codes had nothing whatsoever to do with cryptosecurity. Their function was to reduce the number of words in a telegram and thus save money. In telegram 3, the Rudolf Mosse code has been used and the meaning of the text is: “ The widow Arbol has died in Switzerland on the nineteenth of February”.

The conversations between Herr Roeber and the Trelleborg office of La Plata were similarly devoid of any obvious oddities as a conversation on June 25, 1942 illustrates:

[B=Berlin, T= Trelleborg]

B: Hier Roeber, Guten Morgen

T: Guten Tag, Herr Roeber

B: … können Sie mal notieren.

T: Jawohl, Ja.

B: “Herwart Viete Caracas Apartado 704. Seit Dezember ohne direkte Navhricht. Könnt ihr feststellen Befinden und ob Rückkehr zu erwarten.” Bitte zu drahten! Es geht an Iselkinder Santiago.

T: Jawohl, das können wir erledigen.

B: Schön, ist klar.

T: Jawohl.

B: Gut.

T: Unterschrift La Plata Co., nicht wahr?

B: Ja, können Sie ruhig machen.

T; Jawohl.

B: Gut.

T.: Danke sehr.

B: Bitte.

T: Auf Wiederhören.

B: Wiederhören.

The only things that were noteworthy was Roeber’s consistent desire NOT to be identified as the source of the telegrams and his unwillingness to say much about the addresses in South America where they were to be sent.

As for the La Plata company in Trelleborg, there was nothing to show that it had participated in anything suspicious. La Plata was a limited company which was run by a family S. of German origin. It produced products made of bakelite and also was also involved with trade in iron and steel. The founder and head of the family Berthold S. was a gifted engineer who had originally come to Sweden from Hannover but had become a Swedish citizen in 1920. Executive responsibility was eventually assumed by the founder’s children, However the majority of share capital was owned by a Dutch firm Overbeek which formed part of the Staudt group.

One aspect of this triangular traffic involving Germany, Sweden and Argentina was why it was necessary at all. With regard to Sweden, new direct radio telegraph lines had been opened in 1942 with Argentina and Brazil.Previously this had gone indirectly by cable via New York or London where it would have been exposed to Allied interception. This, supposing one was dealing with some kind of German clandestine traffic, made the new direct lines relatively more attractive . But this was hardly the point. Why did not Roeber simply use the direct line which already existed between Berlin and Argentina? Such a line had been operated by Deutsche Reichspost from 1931 from a transmission station at Nauen to the West of Berlin. A parallel reception station for incoming traffic was set up in Beelitz. This traffic continued until January 29, 1944. Although the Argentinians introduced various restrictions during this period, these were relatively mild. It may be noted that the use of the Rudolf Mosse commercial code was expressly permitted on these circuits.

Given this fact, the bother and not inconsiderable costs involved in routing telegrams through Sweden seemed hardly worthwhile.

The matter had first come to the notice of Säkerhetspolisen, the Swedish civilian security service attached to the police. It was now decided that FRA, Sweden’s SIGINT authority should be brought into play since it had the requisite expertise to analyse the traffic and come to some conclusion about it. The primary task of FRA was to monitor the military signal communications of nations of interest to Sweden. However, a memorandum of 28 November 1941 reveals that FRA’s involvement in police cases(possible espionage) had markedly increased. This had led to the formation of a special police group of four staff, two assistants and 4 typists which the author of the memorandum (Carl-Axel Moberg) described as being “completely inadequate”. The man chosen to lead FRA’s analytical work on the La Plata traffic was Kurt Nilsson who had earlier worked on cracking French cryptotraffic with a leading Swedish cryptanalyst, Yves Gyldén.

The analysis carried out involved a number of aspects. Strenuous efforts were made to collect supplementary information both on the firms mentioned in the traffic and the names of the 91 people who eventually figured in it. This search for further information was by no means a simple matter, a fact a generation weened on broadband and fibre might fail to realise. War gave rise to its own obstructions and delays. Enquiries had to be sent to the Swedish Ministry for Foreign Affairs and its network of diplomatic missions. More locally, people would be sent to the great libraries of Sweden to delve into their holdings of books, journals and foreign newspapers in quest of reliable facts. It was in all probability Kurt Nilsson himself who was dispatched to Kungliga Bibliotek in Stockholm to check various obituaries in German newspapers. A problem was the relative scarcity of newspapers partly due to the war itself. Nevertheless it was possible to verify that the majority of names signified real people and that the funerals had really taken place. This factual confirmation tended to refute the the theory that the telegrams were examples of what the Swedes called “pseudograms”. A pseudogram is essentially a superficially innocent text which contains some subtext having a pre-agreed, quite different meaning to what it appears to have. ( By contrast in cryptology, a military code, for example, given by a codebook , has no need to limit itself to innocent words or texts. Its task is to ensure cryptosecurity, not to hide itself. ) Unless the pseudogram used for a series of telegraphic messages is designed very artfully without repetitions, oddities and inconsistencies often come to light. In a document of February 1942, Carl-Axel Moberg even goes as far as to say that “ It is seldom possible to achieve a first-class pseudogram”.

In testing the traffic, more active measures - where nota bene legal hurdles had first to be surmounted-were taken to see what reactions they produced. Words in the text were exchanged for synonyms; sentences were rearranged; numbers in the text were altered; names were exchanged for other names that occurred in the correspondence.One key example of such a transformation was carried out on a message sent on September 7, 1943. Here is the text of the telegram:

euer telegram ersten kurzmeyer gesprochen reist wieder zürich wird von dort uns berichten auch wegen kűnftigen verhalten gegenüber schneider roth punkt kurzmeyer hält für erforderlich dass calus sofort an rot telegrafiert verkauf bestmöglich notfalls zu schweizer francs 70000 durchzuführen da er objekt anderweitig für unverkäuflich hält punkt bitte uns zu drahten auf veranlassung haus seinerzeit erworben wurde punkt abreise barbara noch nicht bestimmt da ausreisevisum noch austeht

The Swedes then made the following alterations. Kurzmeyer was replaced by Schneider and Schneider was replaced by Kurzmeyer; Roth was replaced by Calus; Barbara was replaced by Babel. From other conversations, one already knew that Kurzmeyer, Schneider and Roth were in Europe while Calus was in South America. It was therefore naturally expected that the receiver would react. The strange thing was that there was no reaction whatsoever. The conclusion drawn by Kurt Nilsson was that if the messages were indeed pseudograms, they could only be based on the names which occurred in it and not on the words in general nor on their order. As further evidence, Nilsson noted that it had become clear that the formulation of the telegram was not predetermined before the dictation of the subject matter by director Roeber in Berlin. This was illustrated by the conversation which took place on June 8, 1943 when Roeber had been quite happy to accept the reformulation of the text suggested by the La Plata representative in Trelleborg.

At the end of the war, efforts were made to throw more light on the traffic when the staff at La Plata were interviewed by the police with Kurt Nilsson in attendance. Many of the names occurring in the traffic could at last be cleared up. The mysterious sounding ERWES for example turned out merely to stand for Richard Wilhelm Staudt in person! But the most important questions remained unanswered. Why was the triangular system used in the first place? Why had the German authorities been willing to allow the telephone calls and the traffic? What was ths traffic really about?

At FRA, one of its prominent members, Captain Rossby, speculated that it had been instructions to German submarines. Others suggested that it might be a case of Allied espionage.

My own feeling , if we assume - and I should underline that it remains an assumption-that it was indeed some kind of clandestine traffic, is that its contents were probably concerned with something very different and in many ways much more interesting: namely the movement of funds from Germany to Argentina.

For some reason that is not quite clear to me, it seems that the Swedes failed to grasp or at least to do justice to the true stature of Ricardo Staudt in Argentinian economic life . This was important with an eye to the postwar perspective. Colonel Juan Perón who would emerge as the “Argentinian strong man”was keen to attract German capital and German technical expertise, irrespective of any murky origins, for his postwar programme of Argentinian economic growth. During the war, Staudt had been identified by the Americans in particular as one of the most influential supporters of Nazism.in Argentina. However the sober truth was probably much less clear cut. As von Thermann, the former German ambassador to Argentina, would later testify Staudt had NOT been a member of the Nazi Party and indeed “was absolutely against it.” Staudt was undoubtedly proud of his Germanic ancestry. During the First World War he had been a Reserve Officer in the German army. However, like many rich men he was ultimately concerned less with political ideology than with the success of his own various commercial operations .

The firm had been established in June 1887 in Buenos Aires and shortly afterwards in July of the same year, a German company bearing the name of Staudt with rather grand offices in Berlin was set up. The aim of the company was to specialise in trade between Germany and South America. To begin with, the main trade consisted in the export of wool and hides from Argentina where Staudt had large farm holdings. Later the export expanded to include various foodstuffs. On the import side, Staudt developed its role as one of the chief Argentinian importers of German machinery. This led the firm to deal in addition in the iron and steel trade. It should be noted that the Staudt concern was not solely concerned with Germany as a partner. It traded with several countries including Britain and established branches in several other South American states such as Chile. The company history Staudt &Co 1887-1937 which is the source of my own knowledge, notes that the activity of the Hamburg Staudt office because of the difficulties of sea traffic during the First World War had been partially transferred at the beginning of 1915 to Sweden where the company A/B La Plata had been set up in Stockholm to continue trade with neutral Sweden. Later it would be moved to Trelleborg.

Because of his significant role in Argentinian- German trade, Ricardo Staudt was plausibly in a position to profit from any injection of German flight capital into Argentina. This way of looking at things is rendered still more plausible when we consider one of the chief figures on the board of Roeber’s company in Berlin: Carl von Schröder. In a postwar OSS report, von Schröder is described as co-owner of the import/export company Staudt and Co. “ an enterprise dealing mostly through the Deutsche Bank.” Schröder was said to a member of the Advisory Board of the Berlin-Brandenburg branch of this bank. In September 1944, he was made head of "the department “Foreign Trade” [Aussenhandel] of the Economic Group Wholesale and Foreign Trade which dealt with all foreign trade questions formerly handled by Reichsgruppe Handel. He was also appointed by Funk to be permanent member and Deputy Chairman of the Arbeitskreis für Aussenwirtschaftsfragen composed of leading personalities from the National Groups for Industry and Commerce. He was also a member of the Werberat der Deutschen Wirtschaft, an organisation established to promote trade relations with foreign countries through exhibition and propaganda activities.

There is another fact worth bearing in mind: Carl von Schröder’s brother was Kurt von Schröder, a member of the SS, the owner of the Cologne bank Stein and above all the trusted financial adviser of the NDSAP , particularly as regards its less advertised pursuits.

We know independently there were quite a few influential people in Germany who at the end of the war despaired of the outcome and sought to place their wealth in safe keeping before the final disaster. Was Carl von Schrőder part of such a group? Was he making use of La Plata AB as a veiled channel to accomplish the task in hand? What seems probable is that if he did have the desire to use La Plata in Sweden as a way of diverting German official interest from more closely monitoring the telephone and telegram traffic involved, he undoubtedly had the power and persuasion to do so.

In 1946, the Staudt concern in Argentina which was anxious to clean up its reputation with a view to improve its postwar standing with the United States produced a defence testament, El “Caso Staudt” authored by Dr. Silvestre H. Blousson. This testament quoted on page 40, the statement of a former Staudt employee, Senor Tjebbes regarding La Plata. Although the testament was keen to dismiss the reliability of Tjebbes’ statement by pointing out for example that Tjebbes had located the firm wrongly in Gothenburg instead of Trelleborg, the statement nevertheless contained an interesting twist to it. Tjebbes claimed that the Swedish company had been used for taxation matters which the participants in the German company wished to avoid divulging to the German authorities and preferred to keep to themselves.

An even more interesting piece of evidence in judging the real complexity of Staudt’s activities came to light through my own research. In a file in the National Archives at Kew , which I noted at the time quite clearly as FO 115/ 1266, I discovered documentd with a somewhat agitated discussion about the Staudt concern. It appeared the the authorities in Chile were incensed by the fact that the British in their fight against blacklisted German controlled firms, had failed to take similar action against Staudt, the Argentinian concern. To complicate matters still more, the Chilean protest had also gained US support. Recollect that in US eyes, Staudt was identified as a leading Nazi menace.

This led to a telegram Nr 2681 dated December 4, 1944 to Lord Halifax using OTP and carrying the security classification TOP SECRET/ GUARD. The word GUARD signified that it was not to be shown to the Americans. The body of the text then continued:

Interested Department authorize you to inform State Department that

(1) S has been of assistance to them

(2) They plan using him to watch movement of Axis funds in the Argentine both now and after the war

(3) If he is listed, these plans will be ruined.

It is likely that the ‘interested department’ was either the Ministry of Economic Warfare or the Secret Intelligence Service or perhaps both.

It greatly interests me to know if any of the files fairly recently released by the Argentinian government dealing with Nazi infiltration in the country just at the end of the war contains new material concerning Staudt and I would be most grateful if anyone having knowledge of these files can supply an answer.

As for the man himself, I have been told that Ricardo Staudt died not long after the war as the victim of hit and run accident but this story should perhaps be double-checked.

.