Had Elmer been in contact with the German spies previously?
Did he not know they were actually spies?
Was Elmer intending on robbing another train?
Did he enlist the help of the spies?
If not, did they enlist his help?
Was the object in Elmer’s mouth a tool of some sort?
Was it a key?
What year is this?
Is the fact that “good guy” is in quotes relevant? Is it sarcastic or subjective? Do some find Steve to be a bad guy?
reply to Knowed_Out:
Had Elmer been in contact with the German spies previously? No
Did he not know they were actually spies?No
Was Elmer intending on robbing another train? No
Did he enlist the help of the spies? No
If not, did they enlist his help? No.
Was the object in Elmer’s mouth a tool of some sort? No
Was it a key? No
reply to Mahaloth:
What year is this? The Year of the Dragon
Is the fact that “good guy” is in quotes relevant? Yes.
Is it sarcastic or subjective? Neither. Steve is considered a “good guy” in that he does good guy things. That is the sense I was trying to convey with the quotes. He is one of the good guys, not that he is a saint.
Do some find Steve to be a bad guy? No. Steve is a hero.
Does this happen during World War I?
World War II?
Some other war?
Peacetime?
Is there any significance to the fact that “german” is not capitalized in the original puzzle?
Does it mean a person from Germany?
Is everybody in this story human?
reply to Fretful_Porpentine:
Does this happen during World War I? No
World War II? No
Some other war? No
Peacetime? Yes
Is there any significance to the fact that “german” is not capitalized in the original puzzle? No. I wrote the puzzle after taking zolpidem sleep aid, so it is a bit fuzzier than I might like. Sorry. I don’t really have the details of the nefarious spy plot, but I speculate the spies were possibly tied to Russia. But there definately were villainous Germans.
Does it mean a person from Germany? Yes.
Is everybody in this story human? Yes
Is this bit actually true, or is it somewhat tongue in cheek, (like at the start of the Fargo film and TV shows?)
Some of the details have been may have been, um, embellished for riddling effect. But the gist of the tale is thus: A team helping hero Steve to catch villainous spies ending up instead disarming and bringing in infamous outlaw Elmer, who was then turned over to the proper authorities who discovered something Elmer had hidden in his mouth that helped explain how he ended up in the middle of the whole spy plot.
Maybe it would be fairer to tell you what the object was. OK. It was a penny. God’s honest truth.
An American penny?
British?
Some other country?
Did this happen during the Cold War?
Post-Cold War?
Post-WWI but pre-WWII?
reply to Fretful_Porpentine:
An American penny? Yes
British? No
Some other country? No
Did this happen during the Cold War? Yes
Post-Cold War? No
Post-WWI but pre-WWII? No
1976-- The Year of the Dragon. Or at least a Year of the Dragon.
Did this happen in the US?
In Germany?
In another part of Europe?
In Asia?
Were the spies from East Germany? West Germany?
Was Elmer German? American? Other? What about Steve?
reply to Fretful_Porpentine:
Did this happen in the US? Yes
In Germany? No
In another part of Europe? No
In Asia? No
Were the spies from East Germany? Probably West Germany? Not sure. Details are sketchy.
Was Elmer German? No American? Yes Other? What about Steve? American.
Do we likely all know this situation already?
reply to Mahaloth:
Do we likely all know this situation already?
Probably not. But you know how those super secret hush-hush CIA folks work. Disaster is always just around the corner and narrowly averted, but the general public remains happily oblivious.
On the other hand, we do love our wild west shoot-em-up outlaws. And I am sure this made the papers at the time. 
Was there something unusual about the penny itself?
Was it (at the time) an old penny or a new penny or is it irrelevant?
Was the penny hollowed out, possibly with something inside?
Was Elmer killed or captured alive?
reply to SurrenderDorothy:
Was there something unusual about the penny itself? Not really, but see the next answer.
Was it (at the time) an old penny or a new penny or is it irrelevant? Old penny. Relevant.
Was the penny hollowed out, possibly with something inside? No
Was Elmer killed or captured alive? Killed, alas. But that’s what comes from being a man of such ill behavior and lawlessness.
Was it a Lincoln penny? If yes, with the pre-1959 “wheat ears” design? Indian-head? Some earlier style, like the flying eagle penny or one of the various large cents?
Would its value been significantly more than one cent?
Had Elmer stolen it? Received it in payment or exchange for something? Did he get it from the Germans?
reply to Fretful_Porpentine:
Was it a Lincoln penny? If yes, with the pre-1959 “wheat ears” design? Indian-head? Some earlier style, like the [flying eagle]
(Flying Eagle cent - Wikipedia) penny or one of the various large cents? Wheat ears Lincoln penny.
Would its value been significantly more than one cent? No
Had Elmer stolen it? Received it in payment or exchange for something? Did he get it from the Germans?
No to all
Is the fact that a penny of that vintage conductive, significant? if so, is the fact that they were frequently used to jump household fuses significant?
Is the Urban Legend that a penny in your mouth would allow you to fraudulently pass a breathalyzer significant? The UL is untrue, but widely believed, and even moreso in the 1970s.
Are Elmer and Steve pseudonyms, or real names?
reply to RivkahChaya:
Is the fact that a penny of that vintage conductive, significant? if so, is the fact that they were frequently used to jump household fuses significant? Not relevant. But I did not know that fact.
Is the Urban Legend that a penny in your mouth would allow you to fraudulently pass a breathalyzer significant? The UL is untrue, but widely believed, and even moreso in the 1970s. No
Are Elmer and Steve pseudonyms, or real names?
Elmer is a real name. Steve… well, it is a real name in context of the puzzle.