New-York tribune., 1918-07-30
Heyden Stock Really Held
Abroad, Palmer Is Told
by Director
New York Lawyer
Directed "Transfer"
Second Largest Plant of Its
Kind in u. S. Put in
American Hands

Further disclosures of attempts tc
conceal enemy property under the
cloak of American ownership resulted
in the seizure by the Alien Property
Custodian yesterday of the Heyden
Chemical Works, the second largest
corporation of it's kind in the country
The firm has an Office at 1876 William
Street, with large plant at Garfield
n. j. A. Mitchell Palmer, in taking
over the concern, stated that though
it is nominally capitalized at $780,
600 it did business last year of s4,
100000.
The works were taken over, Mr.
Palmer announced, when it was dis
covered by Francis P. Garvan, Director
of the Bureau of Investigation, that
they were owned by the Chemische
Fabrik Won Heyden, of Radebeul, Ger
many, the largest chemical company ir
the world.
He said that an effort to conceal the
identity of the real proprietors hao
been made by George Simon, represen-
tative of the German firm in this
country, with the aid of T. Elicit
Hodgskin, lawyer of 20 Nassau Street
Stock Is Transferred
Mr.. Garvan declared Simon, with
Hodgskins assistance, sought te
"Americanize" the Heyden firm by an
alleged purchase for $4,000 of the
745 shares of stock owned by the Ger
man company, the possession of which
in 1915 netted the mother concern
$1,026,626. The money to finance this
alleged sale of stock by the German
company was supplied by Richard
Kny, father-in-law Of Simon.
The Heyden Chemical Works has the
exclusive use in this country of many
valuable patents, processes and formu
las for the making of salol, sodium
salicylate, saccharine, formaldehyde
benzoate of soda and numerous by
products of carbolic acid used in the
manufacture of munitions.
Mr.. Garvan said that Mr.. Simon, who
lives in Brooklyn, and is German
subject, came to this country in 1906
as the agent for the German corpora
tion, and organized the Garfield plan
with a capitalization of $4,000. Late
the capital stock was increased tt
$150000, divided into $50 shares, O.
which the parent organization retained
745 shares for its patents. In the con
tract arranged, which recognized thu
property rights of the German com
pany, it was agreed that 8 per cen
be guaranteed on the stock. In 1915
the royalties paid to the Chemisch,
Fabrik totalled S820,603.
Under cross-examination Simon ad
mtted to Mr.. Garvan that the works
were a branch of the German company
and that it was reorganized to hide its
German ownership. In 1916. he said
when the relations between this coun
try and Germany began to look threat
enng, he sought the advice Of
Hodgskin, who had represented various
other German interests, including the
Bauer Chemical Company and the
Jaeger Sanitary Woolen System, botl
of which have been taken over by Mr.
Palmer
Simon, Mr. Garvan revealed, made
a trip to Berlin to arrange for The
transfer of the stock to American
holders, and on his return made prep
arations for the purchase by Hodgskir
Of the 745 shares held by the overseas
company.
On April 20, 1916, declared Mr. Gar
van, HodgSkin made his alleged "pur
chase" of the stock for $149 900, which
was at par value. He borrowel the
money from Richard kny father-in
law of Simon, and as collateral for tht
loan Hodgskin gave Kny a certificate
for the 745 shares. To protect thu
German ownership of the Heyder
works, however, Simon got Hodgskir
to write letter agreeing to sell bacl
the stock of the German interests a
any time within eighteen months fo1
the sum of $4,000 with interest.
On December Is. 1917, Hodgskin ha,
the directors of the work cancel th
contract between the two companies
IN which 1t had been provided that tn,
duration of the contract be unlmite,
unless either party gave six months no
tice of desire to terminate it. Hodgs
KIN was at this time, pointed out Mr.
Garvan, president of the concern, will
salary of $4,000 year.
Old Contract Renewed
On July II the original contract wa
reinstated and Hodgskin turned owe
to Richard Kny all the stock standin,
IN his name in consideration for th
canceling of the loan.
kny claimed that he made the loa,
of Sl49,O0O to Hodgskin in good faitl
TO 'purchase' the company. and boil
assert that the money was transmitte,
to Germany.
MIR. Palmer has appointed the follow
ing directors of the company: Lero
Baldwin. president of the Empire Trus
Company. president; James A. Brane
gan, chemist, of 1927 Chestnut Street
Philadelphia, vice president; F. N. r
Close, Bankers Trust Company. secre
tary and j. Harry Covington, forme
Chief Justice of the Supreme Cour
Of the District of Columbia, and Roya
II. Weller, of this city, will be tn