In the years leading up to World War II, German shopkeeper Johannes Frerck ran a delicatessen in Sydney's inner-city Darlinghurst.

He sold sausages, sauerkraut and pickled herring, and was described in a 1935 newspaper article as "a pleasant, thick-set, friendly man" who had "a cheery word with every customer".

Frerck was also a staunch supporter of Adolf Hitler and a leader of the small but vocal Sydney branch of the Nazi Party.

Its members, including Frerck's wife Else, celebrated the Fuhrer's birthday, distributed Nazi propaganda and flew the swastika on Germany's national day.

Though he denied accusations he was a Nazi spy, Frerck spent five months in his homeland in 1936 as a guest of the German government.

Else Frerck joined the Nazi Party in 1935. ( Supplied: National Archives of Australia )

"Later on, when the newspapers were trying to make the case for him being too dangerous to stay in Australia, this is something that they listed as proof of his Nazi affiliation," said Emily Catt, curator at the National Archives of Australia.

The Frercks' Nazi membership cards, brooches and badges are featured in the NAA's exhibition Spy: Espionage in Australia.

Ms Catt said the badges were collected and worn out of a sense of pride.

"But for the [Australian] government it was ... an indication of the fact these people were a threat," she said.

In the months before the outbreak of war, Frerck's delicatessen was targeted by hundreds of protesters calling for his business to be boycotted.

The Kings Cross branch of the Communist Party claimed he was undermining Australian security and demanded his deportation.

In one incident, Frerck's shop window was smashed; in another, two women demonstrators were arrested and fined for offensive behaviour.

Ms Catt said the protests reflected the public's concern about what was happening in Europe.

"Having someone here who was a Nazi agent ... [created] a lot of uproar among the community."

Little black book of fellow internees

During the war, Johannes and Else Frerck and their young daughter Elsbeth were interned in detention camps in Victoria with hundreds of other German-Australians, most of whom had no Nazi sympathies.

Else Frerck's brooches were used as proof of her Nazi sympathies. ( Supplied: National Archives of Australia )

During an inquiry after the war it was revealed that Frerck had kept a little black book in which he made notes about the religion and characteristics of fellow internees.

"He said it was so that if he met them in the real world he would know what he was up against and he wouldn't be caught unaware," Ms Catt said.

"The government's fear at the time was that these records were spying for Germany.

"If they won the war he would have a record of what people believed and their true behaviours."

The Frerck family was deported to Germany in 1947. Their fate remains unknown.

Spy: Espionage in Australia is showing at the Museum of the Riverina, Wagga Wagga, until August 12. The exhibition will open in Canberra in 2019.