ESPIONAGE: The Man with the Satchel

James Street in Newark, N.J. is like many U.S. city streets, almost a community in itself. Its atmosphere is faded elegance: a row of weather-beaten brick fronts with an occasional grubby little tobacco or tailor shop tacked on. In close-knit James Street, people keep tabs on their neighbors.

In September 1942, the dour, thickset man was first seen around Mrs. Marianna Mayer's James Street lodginghouse. His 12-by-16-ft. room on the parlor floor contained a daybed, couch, wardrobe, desk and a three-foot shelf of romantic German novels. Each morning he left the house at 8:30 for his job in Newark's Downtown Club....

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