It's a lovely bike, but I'm a little disappointed that it doesn't have the Herse cranks, cantilevers, or stem but uses off the shelf parts instead. The hand-painted lettering is to die for, though...

As prettyshady noted, the wire is for the headlight. Herse was clever about this and routed the wire through the front rack to the lamp, with brushes inside the head tube to conduct across the rotating parts.