Espionage came to Santa Cruz County, California in 1917 when America entered World War I. District Attorney George W. Smith responded with innovative measures, capturing one of the most notorious German spymasters in America- along with 150 sticks of dynamite. The spy drama began when Chief of Police Frank Hannah told Smith of a network of German “listening posts” in Santa Cruz delivering daily reports on the evening train.  In cooperation with the FBI, Smith organized a county secret service in March 1917 called “The American Protective League.”  Smith feared its tactics, and in November requested a private San Francisco detective agency send an undercover agent who spoke German and knew Wobblie politics.  “Agent 18” came, a German who barely spoke English; he was so convincing, even Smith and Hannah were almost afraid to trust him.

Smith was in Watsonville when he received a frantic phone call from his wife that a “crazy German” was at the house, demanding to talk to Smith.  Smith said he’d been there in the morning, but she said it was urgent.  Smith immediatley drove back to Santa Cruz, where he found Agent 18, who said excitedly “I haff foundt der big vun at Beck’s!” Agent 18 said the German was living in the abandoned Market Street brewery as a guest of Carl Beck.  He was Franz Schulenberg, an on-and-off local resident for 14 years who worked as a cabinet maker, movie extra and, at that time, a miner.  Schulenberg carried a precious gems book, and made horseback trips into the mountains.  Yet when Agent 18 questioned him, Schulenberg’s responces showed he knew nothing of mining.  Smith decided to keep him under surveillance.

German loyalties were often detected at the Capitol Saloon after Allied defeats by noting who drank in a salubrious manner.  But Schulenberg frequented the Saddle Rock Restaurant in the St. George Hotel, so Smith tipped off the proprietor of the restaurant and hotel, fellow Croatian patriot George Carstulovich-Krstulovich, born on the Island of Brac.  Plying Schulenberg with Rhein wine and Wagnerian music, Carstulovich recalled his own service in the Austrian navy, parading in 1898 at the emperor’s 50th anniversary ceremony in Vienna.

Believing Castulovich German, Schulenberg confessed he was there that day as a German officer in the Brandenberg Guards. Agent 18 tracked Schulenberg to a meeting of the “Turn Verein” (German culture club), in the back of Front Street’s Arion Music Hall, north of today’s Silver Bullet bar.  Finally convinced Schulenberg was a German spy, Smith contacted authorities, who arrived December 5.  Fearing they’d compromise the case if he were an American Citizen, they received Carl Beck’s permission to search Schulenberg’s room while he was out.  They found an arsenal of weapons, U.S. Army uniforms, German guns and binoculars- and under a pile of clothes, in a box lebeled “green pumic,” were 150 sticks of dynamite.

A consul letter stated Schulenberg was a German-born representative of the Imperial German government, to be shown in all due privilege.  Even more incriminating was a letter addressed to a Hindu terrorist leader Ram Chandra proving how dangerous he was. But Schulenberg had already fled Santa Cruz, so Smith telephoned the San Jose sheriff.  Schulenberg was captured and held under presidential warrant in San Francisco.  His car contained bridge plans, loaded guns, 46 pounds of dynamite, three timers and three detonators.  And letter revealed his handler to be a mysterious woman known only as Madam “H.”  She’d been seen several times in Santa Cruz, and had even danced with Smith at a Fourth of July picnic.

George J. Krstulovich, the smiling and genial proprietor of the Saddle Rock Cafe and owner of the St George Hotel, at 73 pacific avenue, Santa Cruz, California was born March 12, 1877, on the Island of Brac. Dalmatia, Croatia a son of Antone and Margarete Carstulovich. Three sons of the family came to this country, including John, who emigrated to America before George was born, and they did not meet until 1905. The other brother to choose the United States as his home was Pete. George Carstulovich attended both the grammar and the high schools in Dalmatia, and then entered the University of Agriculture, where he pursued practical courses for five years. At the age of twenty-eight years he crossed the ocean to the United States, having already served the time required of him by his government in the army, and here he joined his brothers in the cafe business. Later one of the trio returned to the old country and sold one-half of his interest to George, and in 1911 John died. George Carstulovich then continued to conduct the cafe for the estate but in 1914 came into possession of the whole property. The Saddle Rock Cafe is the second oldest restaurant in Santa Cruz, having been opened 1890 by George Dabelich and in its management are now employed eight people. Mr. Carstulovich is fond of outdoor life and given to hunting. Fraternally he is a member of the Foresters and the Eagles.


Adam S Eterovich