The delayed departure was more than likely caused by the attentions of the Ochrana, who were taking a close interest in Reilly and the war materials he was trading in. Before going aboard the SS Czar, he was searched on the orders of Col. Globachev, head of the St Petersburg Ochrana. Nothing incriminating was found on him or in his trunks and he was allowed to proceed on his way.28 One such deal that attracted Globachev’s interest concerned a consignment of nickel ore ordered through Reilly by the Russian government. The consignment was duly shipped to Russia via Sweden in a deal Reilly brokered through the Swedish Russo-Asiatic Company. All had proceeded smoothly until a routine check indicated that the weight of the ore unloaded in Petrograd was somewhat less than the amount loaded in New York.29 This immediately lead to rumours that the missing ore had been appropriated in Sweden and sold on to Germany. A more likely scenario, however, was that the Russian government had been short-changed in New York by a sleight of hand on the paperwork. It would not have been the first time that a Reilly consignment was loaded underweight but the customer invoiced for the full cargo.
Reilly’s postponed departure lead to a rumour reaching the Russian General Staff that the Ochrana had detained him. Maj.-Gen. Leontyev of the Quartermaster-General’s Office immediately sent a cable on 24 June30 to the staff of the commander-in-chief of the 6th Army, instructing that urgent enquiries be made to establish what had happened to Reilly. In a reply from Maj.-Gen. Bazhenov, Leontyev was assured that Reilly had not been detained and that he had been allowed to depart unhindered.31
Arriving in New York on 10 July,32 Reilly returned to his desk at 120 Broadway. It did not take him long to work out that the main problem being encountered by American companies was not in securing munitions contracts per se, but in ensuring that the order, once manufactured, was actually accepted on delivery. Russian inspectors, whose job it was to ensure that shells, for example, were up to standard, were exceptionally careful about passing them. In the first six months of the war it was found, to the great cost of those at the battlefront, that some shell deliveries were not compatible with Russian guns and could not be fired. The result of this was a more vigorous system of quality control. This inspection system applied to all munitions including rifles, which had to be specially converted to take Russian cartridges. This presented an opportunity for Reilly, who had a close relationship with those issuing the surety bonds necessary before the Russian government would accept the consignment. On 19 April 1915, for example, Reilly signed a deal whereby he would, ‘assist in the performance of the said contract and in particular in reaching an understanding with the Russian Government as to the assurances required… that the contract will be performed’.33 In other words, Remington Union would pay Reilly a large sum of money to ensure that their rifles successfully passed through the quality control process and were accepted by the Russian government. Over three years later, Samuel Prior, who had signed the agreement with Reilly on behalf of the Remington Union Company, quite accurately described the deal as a ‘hold-up’34 on Reilly’s part, for unless he was given a commission on the deal, the implication was that he would use his influence to frustrate their ability to get the rifles accepted.
In late 1915 the Russian government sent an official purchasing supply committee to New York headed by Gen. A.V. Sapozhnikov, another old Reilly acquaintance from St Petersburg. Whilst the committee was an understandable attempt to rationalise Russia’s munitions purchases in America, it was dogged with scandal almost from the day its members arrived. Although, as usual, Reilly had a personal motive for writing to Lt-Gen. Eduard Germonius on 21 December 1915, he was essentially correct in drawing attention to the disorganised and over-optimistic state of affairs concerning Russian munitions purchases in America. In his report he stated that:
In the last eight months the chief Artillery Administration in Petrograd and the Russian Artillery Commission in America have been holding talks with dozens of factories and endless different suppliers, banks, ‘groups’ or just ‘representatives’ about ordering from them 1,000,000 to 2,000,000 rifles and corresponding quantity of cartridges. The offers exceeded the demand many times over and if they were all added up it would appear that in these eight months Russia has been offered rifles and cartridges in quantities that may be expressed only in ‘astronomical’ figures. Understandably, there is nothing surprising about the fact that so many offers have been forthcoming: the example of Allison, who secured a contract for shells worth $86,000,000 is still fresh in everybody’s memory. What one cannot understand is that all these offers have been examined in detail, thorough talks have taken place, a huge amount of time and money has been spent on correspondence and telegrams, inspectors have been ordered to look round factories, legal consultants have been given the job of drawing up contracts, in many cases draft, preliminary or even final agreements have been signed (and then torn up) – but these orders for rifles and cartridges have still not been placed.
The reason for this is that the Chief Artillery Administration does not know enough about the real state of the rifle and cartridge trade in America. Petrograd, as optimistic as the entrepreneurs themselves, is not giving up and continues to hunt for the grain of corn in all the paper-litter put out by Jones, Hough, Zeretelli, Morny, Wilsey, Bradley, Garland, Empire Rifle Company, American Arms Company, Atlantic Rifle Company et al., and is evidently ignoring the actual state of affairs.35
Reilly went on to draw attention to the fact that the allied countries had placed orders in America for approximately 7.5 million rifles, 3,500 million cartridges and about 1.5 million gun barrels. His conclusion was that in their haste to take advantage of these large Russian contracts, many American firms had seriously overreached themselves and were highly unlikely to be able to deliver on schedule.
This eventually turned out to be the case, although the situation was not helped by the over-enthusiastic quality-control system. Before too long the system began to have serious repercussions on Russia’s ability to fight the war. The problem now was not the quality of the munitions they were receiving, but the fact that the inspection system was slowing the delivery process down to such an extent that the Russian Army at the battlefront was virtually out of shells to fire at the enemy. When Gen. Germonius became head of the Russian Purchasing Commission in America, this issue was one that was very much to the fore.
Again, Reilly saw a golden opportunity to exploit this opportunity. According to Vladimir Krymov he visited the plants that were contracted to manufacture shells and were experiencing difficulties in getting them passed, and proposed that in exchange for a commission he could ensure that the inspectors would pass the finished munitions.36 It is not surprising that the companies were initially sceptical to say the least, as he was not the first person who had approached them with this proposal. He told the companies, however, that he and Gen. Germonius were related and that through the general he could not only ensure the successful acceptance of their current orders but could also secure new orders for them. As proof he persuaded the managing directors of two companies to have lunch at the Coq d’Or, a country restaurant outside New York, and told them they would see him, his wife and Gen. Germonius having lunch together. The directors knew that Germonius never went anywhere, let alone had lunch with middlemen or suppliers. Nadine persuaded Germonius to have lunch with them at the Coq d’Or, and Reilly was thus able to show off the unsuspecting general to the directors. On 7 January 1916, an agreement was signed between Reilly and Samuel M. Vauclain, John T. Sykes and Andrew Fletcher on behalf of the Eddystone Ammunition Corporation. The agreement gave Reilly 25 cents commission on every round of three-inch shrapnel shell that was accepted.37