AN ARMSDEALER REVEALS

 
This shortened text is based on three articles published in the Swedish monthly magazine OBS in 1946. The author is anonymous but very likely the Lieutenant Colonel J.E Hultcrantz who was one of the three clients my father had during the legal processes that took place in Sweden after the war, regarding unpaid commissions for these contracts. Translation from Swedish: corrections made by Mats Werner from a Google translated text. Full "Allegro"-file in the Swedish Army Library Archive. For the Swedish version including illustrations, please read HERE.
 
An armsdealer reveals.
 

This sensational article, give an insider account of some of the most amazing arms transactions, which occurred between the two world wars - and that, incredible but true, were all completed on Swedish ground. The introductory part is about the narrator's adventures during the Finnish and Baltic freedom wars in 1918-19 and during the Belarusian armies fighting against the Bolsheviks in 1919-20 (These sections will be excluded in this transliteration).
The article will make you acquainted with the arms dealer Joseph Veltjens and follow the way he and his helpers organized the notorious Yorkbrook- and Allegro-affairs.

Well, I've been all around and seen a few things. You think that just because one sits and huddle like a retired old soldier in a country that has had peace for 150 years, one has never smelled gunpowder and never seen the world.

But I will tell you that here you see one, who fought during Mannerheim in Finland in 1918, who took part in the Latvian War of Independence in 1919, who brought one of General Yudenich armored trains to Leningrad and was with Wrangel in the Crimea in 1920.

Yes, then the world became more peaceful, but the old military horse always listen for trumpet signals, and once you have heard the weapon clatter seriously, so it continues to ring in the ears. And even if there is peace, guns will still be in demand, and those interested can still have them around, though perhaps not quite in the same way as in the field. Well, I mean not as hobby. To hang them on the wall in long lines have never been to my taste. Weapons are to be used!

But you might have thought of some time that weapon is a commodity, which is not among the worst. Now do you believe of course that only Sir Basil Zaharoff (Turkish born Greek financier and businessman [1849-1936] who made a bigger fortune on arms and oil trade. Partner of the British arms group Vickers Ltd and in the famous casino in Monte Carlo . Wikipedia), and those kinds of old guys, who have been involved and made big business in weapons, and that there are things that do not exist in our quiet latitudes. But there you are wrong, and I'll tell you that some of the strangest weapons transactions that occurred between the wars, has been completed here in the idyllic Stockholm, believe me or not!

Have you heard of Yemen-licenses and the steamship Yorkbrook, where the ship's documents point out Hodeida in Yemen as destination, while the ship actually ended up in Barcelona with weapons to the Red Government of Spain during the Civil War? Or Allegro, that went from Lübeck with ammunition for the Reds in Spain, but was hijacked by Franco, who thought he made a nice catch until it turned out that almost the entire load consisted of bricks! Or have you heard of weapons magnate Joseph Veltjens and his associates, of whom, by the way, two have taken refuge in Sweden and one of them settled here in Stockholm at one of the city's quietest streets?

No, I believe you haven’t, but here you see one that met them all and went through it all! You believe things like this cannot happen here?  By all means, you do not have to believe it, I will just say that it has.




It starts to smell gunpowder.

And now I come to my first dealings with arms merchants. In 1932, shortly after the Kreuger-crash I was asked to help disentangle blocked currencies in Hungary and Yugoslavia  on STABs (Swedish Match AB) behalf. Thanks to my connections with a small bank in Paris specializing in such transactions, I managed to arrange things and 7,500,000 dinars and 500,000 pengö, that had been untouchable for STAB could now be sold. In conjunction with the release of these currencies I met a European of undetermined origin, a certain Mr Vöhringer and it was through him that I first became interested in the weapons business. After the STAB affair he disappeared from my sight, and for a few years I worked as a traveling agent for Bankhaus F. Sussmann in Berlin without thinking even a minute about Vöhringer or even expect that I would ever see the man again. But a beautiful September-day in 1935 he suddenly appeared and wondered if the Turkish government could build submarines in Sweden. Well, why not, I thought, and arranged a meeting between Vöhringer and the management at Kockums Shipbuilders. After preliminary negotiations, Vöhringer got reinforcement in the form of an authorized Turkish agent, Selim Halim Bey, and eventually the two men along with a Senior Engineer at Kockums all went to Ankara. As the transaction was thwarted as a result of various factors including that the Turks floundered with the money and Vöhringer and the Bey not really played with the cards on the table, no commission came out of it for me.

Weapons wholesalers emerges.

Vöhringer was not of a worrying kind however, and it was not long before he came back. As soon as the Abessinian war broke out, he reached back and wanted my help to organize arms deliveries to the Negus (Negus nege'sti, Amharic for "king of kings", formerly an Abyssinian rule title, corresponding emperor. The title alludes to the imperial dynasty's claim to be descendants of King Solomon and the Queen of Sheba, which is based on information in the Ethiopian national epic, the Kebra Nagast ('King of glory'). With the title of Negus came the titles "God's Chosen One" and "The Lion of Judah ". The last reigning Negus was Haile Selassie, who was overthrown in 1974. Wikipedia). Through an old officer comrade, I had been in communication with one of Germany's largest arms firms J. Veltjens, Waffen und Munition in Berlin, and I decided to mediate a contact between Vöhringer, who for various reasons preferred not to appear personally in Germany, and the Veltjens company. This company was owned and run by Mr Joseph Veltjens German war aviator from the First World War. Veltjens had been one of the Richthofen-squadrons most daring members, he had shot down 39 enemy aircraft and - like his comrade Goering - been awarded Germany's highest military award: Pour le Mérite.

Now, I arranged a meeting in Stockholm between Vöhringer and Veltjens and to this meeting appeared even a Frenchman, a certain Monsieur Fontana, who was the representative of the Negus-authorized representative in London, David Hall. A supply contract absorbing a variety of weapons types and accruing on the total of around 65 million francs was agreed upon. The payment was to be arranged through loans and the pledging of Negus shares in the railway line Djibuti-Addis-Ababa. Not even this deal could be completed. Veltjens could not arrange deliveries quickly enough and meanwhile the Abyssinian defense broke down and Negus was compelled to escape his country. Only later, when it was made clear to me Veltjens relations with Goering, I came to think that the stalling, possibly - though of course far from certain - could have been politically motivated.


Nazi Germany arms the red of Spain.

My debut as weapons agent had therefore not been particularly successful. But I had in any case had a hand in the international arms business world and when the Civil War in Spain broke out in the summer of 1936, big business started to come sailing. The fighting in Spain had not been going on long before a business friend to Vöhringer, a Mr Günther in Paris - with roughly the same obscure background - began to bombard me with requests, if I could arrange deliveries of weapons to the Red Government in Barcelona. Politics is politics and business is business, I thought, and turned to Veltjens. He apparently thought the same as I, he agreed to deliver – the Hitler regime authorized arms dealer he was! Best as negotiations with Günther was going on, suddenly a new customer from Paris appears, a gentleman with the picturesque name Paillard, who - reportedly for the same principal, - immediately wanted to buy 2000 Mauser rifles and 7 million cartridges. I telegraphed to Veltjens and as soon as his prize was approved, he sent me telegraphic authority to do the deal.

Yemen Licences

However, there was a ”small” hitch. The German authorities could not simply turn a blind eye to a German company supplying weapons to the communists in Spain. For an export permit to be granted, an official purchase order on behalf of a formally neutral and unassailable nature must exist. The wily Paillard, however, had foreseen this difficulty and skilfully guarded himself for all eventualities. He brought with him a very general purchase order from - well, guess who of all the world's heads of state if not – The Immam of Yemen. Which purchase order he handed over to me. It was one of the most beautiful documents I had ever seen, stately written in Arabic and French, and it was to play a remarkable role – to say the least – in all the major arms deals, which I would later become involved in. If the mighty autocrat far away in Happy Arabia had ever seen the strange document appears rather questionable to me now. Maybe he was peacefully ignorant of the peculiar transactions that were now being made in his name. How M. Paillard or his clients come into the possession of this very useful document evades my judgment, and I had no reason to do any research. Thus be it anyway. The  beautiful document proved to be an ”open-sesame” for the German authorities - as well as later also for the Finnish. The transaction went smoothly, August 22, 1936 I completed the deal on Veltjens behalf with Paillard and received an advance check for £ 7,137 - the rest was to be paid as soon as the goods were on board the ship in Lübeck. Soon, the entire transaction is completed in port and at a meeting with Veltjens in Berlin, I had the agency for his firm, when it came to weapon-deals on Swedish ground. It was in a time, because when I came back to Stockholm, a telegram from Günther was expecting me telling that big things were in the offing. It was the Yorkbrook-scandal that began to arise over the horizon and it would soon enough be followed by the even worse Allegro-swindle. But that there would be talks about scandal and swindle, I could – at the time – not even imagine.

Now the real transactions began to emerge. I had, as I told you, just been down at Veltjens in Berlin - it was the end of August 1936 - when there was a telegram from Vöhringers friend Günther in Paris. He told me that two men, named Mirabel and Verne, was to be expected arriving in Stockholm representing a mighty, not further defined principal, with the  mission to negotiate the purchase of new weapons parts.
After a few days indeed the two men arrived and at the same time Veltjens authorized manager appeared, Mr Karl Baumann, who had come from Helsinki, where the company had a large portion of its stock.

Eventually Günther himself arrived, accompanied by another customer, a certain Mr Goldberg, who seemed to represent the same buyer. The weapons, that were negotiated, would be used in the ongoing Spanish Civil War and on the red (communist) side. This was clear from the beginning, but who the actual buyer was, I was quite uncertain about initially.

Gradually, however, I suspect that in fact it was the Soviet-Russian military commission in Paris, which more or less organized the Russian intervention in Spain, that stood behind the French arms buyers. Later these suspicions were confirmed.

On September 20, 1936, we reached an agreement - by the way in the Strand Hotel in Stockholm - and Baumann signed on behalf Veltjens an agreement on the supply of arms and ammunition. Then Baumann disappeared and Veltjens himself, who obviously did not personally wanted openly to act as seller, appeared. During the final part of negotiations on the modalities for the delivery, Veltjens acted in a way that left him with an open back-door to slip through, not to compromise himself. Then, he and the other gentlemen traveled over to Helsinki to inspect the goods and arrange for exports. From Veltjens whole demeanor, I could understand that Soviet interests were directly involved in the ongoing business and eventually I also received documentary evidence to support it. It was the Soviet Union, which through a number of agents and in camouflaged ways negotiated with Nazi Germany on the purchase of weapons to the Spanish Civil War and neither party was a moment in doubt about each other's real identity!

Weak papers.

In Finland however, difficulties of exactly the same kind as before in Germany arose. The goods were there, but the Finnish authorities could not grant export permits in the absense of a fully acceptable official purchase order. Mirabel and Goldberg did not have much to offer in that way. The best they managed to obtain was a purchase order from the Mexican consul general in Paris, and no one can say that that was an exeedingly credible paper. The Finnish official who was concerned with these affairs, was on good terms with Veltjens, and was certainly in every way  trying to help him to finish off the deal. But the Finns thought nevertheless, that the only decent thing to do was to seek seek confirmation of the purchase order from the Mexican government.

The requested confirmation did unfortunately not materialize, however.  The reasons you must try to figure out ourselves! In short: the whole affair seemed to go up in smoke. But when the need is greatest, help is not far away, and in his distress Veltjens had an ingenious inspiration. He had forgotten the Yemen licenses! The old Immam had to get up and jump for a while again. Veltjens had for safety reasons kept the beautiful Arabic handwriting in his pocket and as it had already been used in Germany for the same purpose could not be an obstacle for using it in Finland too.

”The Imam” fixed it all!

Now it all went like clockwork, the licenses were issued, and the purpose-leased English steamer Yorkbrook began embarkation. The official destination was, as it should be, the metropolis of Hodeida in Happy Arabia, the thriving Immamat Yemen's capital. Yorkbrooks first cargo chartered for the account of Goldberg and next trip would be undertaken for Mirabel. For fun, I can show you a list of Goldberg's load, prepared for bills of lading, so that you can get an idea of what stuff it was about and what costs were involved.

It looks like this:

4000 Japanese 6.5 mm rifles + 2010500 cartridges    272 450 SEK.

15,000 grenades                                                          440,000 SEK.

400 Suomi Pistols                                                        156,000 SEK.

860,000 cartridges for these                                        172,000 SEK.

42 pcs Japanese mountain cannons                           546 000 SEK.

25,000 shell cartouches for these                               438 750 SEK.

12 pcs field guns                                                         234.000 SEK.

6,000 grenades + 18.000 shell cartouches for these  468 000 SEK.


It was – as you notice – not exactly ”small potatoes”, and the total went to the neat little amount of 3,624,000 Swedish kronor. (In today's prices: over 110 million discreetly and secretly agreed upon in a room at the Strand Hotel, or perhaps even at the Hotel Esplanade at Strandvägen where Veltjens used to stay during his visits to Stockholm. No wonder that the commission was worth fighting for after the war, throughout the full Swedish judicial system and was to be determined only when all original persons involved were dead and only their lawyers were left fighting! Read more about this on http://matswerner.blogg.se/category/allegroaffaren.html. MW s note).

Yorkbrook made a second trip, now for Mirabel with a load of similar composition valued at approximately 8,000,000 francs. The actual destination was, of course, in both cases, Barcelona. But, as it later proved, it was to a hair that the steamer did not reach there. I did not know it then, but it was eventually made aware that Veltjens in these matters were acting for Goering, who was keen on, among other things, to obtain desirable foreign currency through these weapons deals. To this end, he and his accomplices did not hesitate to do business with the Republican Spanish government or even with Soviet Russia. On the other hand, they were fully prepared for political reasons as well as for pure greed, to collude with Franco. According to what I experienced much later, Veltjens was consequently in telegraphic communication with the Franco government and as soon as one of his weapons loads departed for Spain, he announced this to the Franco authorities and informed them of the destination, route, time and composition of load. The intention was obviously that Franco authorities on the basis of this information would have the ships hijacked in order to lay their hands on the  ships and their cargo and thus be in a position to snatch away the goods under the nose of the buyer with the seller's inclined assistance. My private belief, which I however not managed to get directly confirmed, is that Veltjens also charged Franco for the goods!

Yorkbrook was consequently exposed to an hijacking attempt, but managed to escape and break through to Barcelona. There, waited, however, a new surprise. When the cargo was unloaded, it turned out that it was not in correspondance with the bill of lading, but was incomplete and partially unusable. The bolts were missing on a lot of the guns, the ammunition did not correspond with the caliber of the guns etc. The result was an indignant protest from Barcelona government to the Finnish authorities, inquiring how it was possible that the Finnish customs could condone this fraud. The Finnish authoroties however, raised their eyebrows in surprise and asked in return, what in the world the steamer Yorkbrook was doing in Barcelona and what the Spanish Government had to do with its load. Yorkbrook, as it was emphasized from the Finnish side, was bound for Hodeida in Yemen with a weapons cargo, purchased by the Great and Mighty Immam. Only in the event that the buyer, that is, the Immam, had some complaint against the received goods, would the Finnish Government consider itself to have cause to really take a stand on the issue. The Spaniards were forced to a crestfallen retreat. The bulk of the cargo was, however, certainly in a servicable state and could be used and the duplicity, as conducted from the German side, led, consequently, in fact, to a result which should be felt quite troublesome for the Germans. While the German national government unleashed a fierce propaganda campaign against the "Bolsheviks in Madrid" and supported the Franco by supplying him with weapons and men, perhaps hundreds of soldiers in the famous German "Condor Legion" were killed of fire from guns, sold to the Reds by Goering-Veltjens.

The Allegro-affair

In one case – and the most reknowned – which received wide publicity in the Swedish and international press and was also described in a book – Veltjens managed to fully implement duplicity. Yes, in a way that in the end also Franco was fooled. It was the notorious Allegro-affair, and with it I'll finish this line of ships stories from real life.

Since the Yorkbrook business was completed, I did not see much of Veltjens, and when we met, he was very secretive and mysterious and seemed quite nervous. I had a feeling that he had a big deal in preparation, but as I did not know anything I just let it all out of my mind. Then one day in early February 1937, I was approached by Karl Baumann, who wanted my help with the transfer of 1.100.000 SEK to Berlin and with the deposit of 48,000 SEK in a Swedish bank, which would be held awaiting Veltjens orders to be paid out to the crew of the Swedish steamer Allegro. This was the first time I heard about the Allegro transaction. The details were as follows. Through the mediation of a Swedish former colonel in the Persian service, Nystroem, who for some time had been dealing in arms in Copenhagen, Veltjens had sold to the Barcelona government's representative in Paris's Ozores: 13,334 boxes of ammunition. Still, it was the good old Yemen license that did service! The deal was formally in Baumann's name - Veltjens would still not openly figure in connexion with these deals - and the purchase price 1,940,000 SEK. (57,201,582 SEK in today's money) was paid in the Stockholm-branch of The bank of Gothenburg. The ammunition was this time completely from the firm's German stores and loaded in Lübeck on the Swedish steamer Allegro, which Baumann had chartered for the purpose. The captain - his name was incidentally Andersson - was like the rest of the crew, Swedish. And to avoid suspicions the steamer was suppossed to sail under the Swedish flag, which of course was in breach of international rules. When the loading was finished in Lübeck called the Allegro sailed to the Polish port at the city of Gdynia where the buyer's agent, who for obvious reasons could not reveal himself in Germany, would inspect the cargo. From hard expericence the buyer had this time arranged for a comparatively accurate control. However – as it would eventually prove – not careful enough. Since verification was carried out with satisfactory results, the money was paid, as mentioned above, in Sweden, and the steamer could continue its journey. If you should believe the shipping documents, this was obviously yet another pilgrimage to Hodeida in Yemen, the city, which suddenly started to exert a magical attraction for sailors from the Nordic countries.

Even this time Veltjens had, true to his lofty political morality, informed Franco. He felt indeed that he could charge the Barcelona government for the goods, but considered simultaneously that he owed his national-socialistic convictions and his weapon brotherhood with the Franco-regime, that he had to prevent the goods from reaching its proper destination - and this so much preferable as he thereby was able to collect the purchase price from both sides. This time the cooperation really worked. Francos posted hijackers managed to capture the Allegro, and the precious catch was towed in triumph into the Malaga harbour. But imagine the Franco-officials surprise and bitterness, when the shipment was unloaded and found to consist of 1,000 boxes of ammunition, which carefully covered 12,334 boxes of exactly the same appearance, but not quite with the same content. They were namely filled with - bricks! Franco had to gnash his teeth and admit to be cheated.

Well, that was the last I had to do with Veltjens, for when it finally got clear to me what sort of business he really ran, I thought it was best not to team up with him anymore. With the Allegro-deal he made in all cases, a neat little profit and managed, as I afterwards heard, through a huge donation to the Winter Aid (Winterhilfswerk des Deutschen Volkes, a charitable organization in Nazi Germany. The slogan was "No one should have to starve or freeze" and acted to collect food, money and clothes to the poor Germans. This is part of the National Socialist idea of national community and individual sacrifice for the collective bästa.Wikipedia) buy his way back into the party's leading circles again, from which he had been expelled by Hitler due to undisciplinary behavior. At the outbreak of the war he was promoted from lieutenant in the Air Force reserve, to colonel and towards the end of the war he got a death worthy of an adventurer and condottiere (condottiere = mercenary). He flew himself to death somewhere in the Alps.

Yes, all that, is now far away in time and have faded into fantastic memories of something that they think they have read in a book. Most of those memories are perhaps not so pleasant, but in one and the other one cannot help but smile covertly.

And I could never see the name of Yemen on a map or in a newspaper without wondering how the old Immam was and regret that I have not had a chance to make his acquaintance. We probably would have been able to have a few things to talk about.



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