davidaulloa/AmericanStories huggingface dataset:
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1919-05-04
Our Enemies Euen
In Days Before War

But long before there was any
war the German chemical invaders
were our enemies. On dyes and coal
tar drugs the Germans had q prac-
tical monopoly held by driving
every American effort along these
lines out Of business. On heavy
chemicals the situation was not quite
80 bad, though serious enough.
This situation was used to derive
enormous profits, the dyes In par
ticular often being sold here at
four or five times their cost. The
Bayer Company, for instance, after
paying enormous prices to the Ger
man cartels for it's goods, in 1914
made $2,702, 1891 profit on sales Of
$s,4sb,820, while the Synthetic
Patents Company, owned by it and
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1919-05-04
Germans Get Inside
american Development

The Germans did not long keep
out of the American development,
and there are now prominent in it
several men who have been Ger
man agents. The Alien Property
Custodian has seized and sold most
of the big German companies here.
but their brains remain, and in
some cases the evasion has been
such that he could not get the
concern.
Several small companies are also
imperfectly cleaned out, and there
are few the stock of which Is ap-
parently in the hands of neutrals,
but which are decidedly under sus-
picion. Altogether the chemical
trade was in a far from satisfactory
condition. Mr.. Palmer in his re-
port could say Of it nothing better
than this:
"This, it is to be hoped, NAV
interpose some difficulties in the
way of any attempt on the part
OF the latter to reestablish them
selves in this country"
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1919-05-04
Cern,any's Chemicals
Her Greatest ASSET

Germany's estimate Of the value
to her, for after-war uses of the
chemical industry to force Allied
business to meet her demands, il
voiced by Herzog:
"Those of raw products which
are obtained by the use of chemi-
calls, however, will be Of especial
Importance. Thanks to the mar
vellous development Of Ger
man science, they assure
monopoly TO German industry
d monopoly the use of which is
Of great Importance. The ex-
perlenceg of the war thus far
have given in this very connec-
ton an incontrovertible proof of
the absolute dependence Of the
foreign countries upon Germany.
With few exceptions
me dependency Of foreign coun-
tfies III not easy to prove. In
onese exceptions are included GER
fain dyestuffs and chemical pro-
ductg. Products Of
German origin are considered for
purposes OF protecting the cx-
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1919-05-04
Industry Busy in
War Plots Here

In spite Of the facts that have
become known as to the war activi-
ties of the German chemical inter
ests, few people have yet realized
how tremendously useful they were
to the Kaiser in his war against
America on American soil. DR..
Hugo Schweitzer and his propa-
ganda plots are known, as are DR..
Scheele's bomb manufactures. At
least two of the chemical compan-
les, the Bayer and the Geisenheimer,
were suspected of transmitting code
messages under the guise Of bust
ness. Officers Of the latter con-
Germ were deep In the councils Of
Boyd, Won Papen, Albert, ct al.
Even more important were the
chemical pots engineered with the
idea Of preventing the manufac-
ture in this country of munitions.
One aimed at the manufacture of
toluol and benzol-products essen
tial to many industries-so that
there would be no impetus for the
establishment Of an American plant
which could provide them for ex-
plosives, for which they are indis-
pensible. A plant for this purpose
was built, financed by the Deutsche
Bank, through Hugo Schmidt, and
did supply America-under con-
tracts preventing the use Of the
products for explosives. Thus the
war found America dependent on a
German plant for her powder!
Another anti-explosive scheme
was the so-called "Chemical Ex-
change Associated, of which
Thomas A. Edison was the target.
Early in the war there was great
shortage of phenol (carbolic acid)
and Mr.. Edison, who needed much
in his business, invented q new pro-
cess for it's production and started
manufacture on a scale that left
him a big surplus, which easily
could have gone into the making
Of valuable explosives. The Ger
man ring got contract for all this
phenol, and to prevent it's reaching
the powder factories had it con-
verted into other non-explosive
products. This prolonged the car
bolic acid famine, to the great dis
tress Of the country. incidentally
the plot paid a profit of $4,000.
There were many others. These
show the German kultur.
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1919-05-04
First american, Dyes
Like q Brides Biscuits

At the start the American indus
try was practically without re-
sources. Something of the situation
they had to meet is shown by few
figures. There were more than ten
thousand dyes patented in Germany,
of which some 900 had an ex-
tensive sale In America. There
were more than 5000 patents in
America on German dye manufac-
ture. Of course all these patents
very shortly were put at the dis
posal of the American manufac-
turers, but producing the dyes was
a very different matter.
Some Of the American makers
did, and there were many justifi-
able complaints of the dyes pro.
duced-of which the German prop
agandists took full advantage.
But to-day the American indus.
try is nearly out of the woods. Il
is actually making some dyes bet
ter and cheaper than Germany ever
did. IL has produced practically all
the staple colors. And within two
or three weeks the great du Point
laboratories will begin turning out
vat" dyes, the last and most com
plicated of the lot. Also, America
now has small army of splendid
chemists at work inventing new
dyes Of her own. This process.
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1919-05-04

Of those Of the KuttroR contract
In addition are the following, sum.
married because Of the great length
of the original contract:
The name of Farbwerke is not
to appear on the books Of these
corporations nor be known to any
but the parties to the agreement,
and the transfer of shares to be
made by Endorsement and delivery
Of the certificates thereof. On
demand, however, the Farbwerke
will at any time be entered on
the books Of the respective cor
porations.
Should Metz die or withdraw
from active management of said
three corporations all of his
shares in all three companies
must be rendered to Farbwerke
at prices fixed in agreement, who
will have the right to preemption.
The option is to purchase shares
of all three corporations and not
of one or two such corporations.
Metz agrees to continue in
active control and management
of these three companies unless
Farbwerke should acquire control
of all stock of such corporations,
and in turn Farbwerke agrees
to give the exclusive sale of
their products to H. A. Metz
& Co. at their lowest market
price. This agreement for five
years and to go on unless a writ
ten notice Of the intention to let
the same expire is given by
either party year in advance.
Metz agrees not to enter into
a competing business nor permit
the use of his name in such bust
ness as long as either he or Farb-
werke remains stockholders in the
three corporations or he is mana
ger and so long as Farbwerke
faithfully observes his agreement.
In turn Metz promises not to sell
any of his stock without giving
an option on it at prices given in
Paragraph Is to Farbwerke, and
for three years thereafter not to
go into a competing business nor
lend his name to one.
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1919-05-04
Var Also Centre
OF Spy System

In another sense the chemical
trade served the war god, as well
as the commercial needs. It was
the centre of German espionage,
managed for twenty years by Hugo
Schweitzer, a consulting chemist"
of the Bayer Company, but with
power which in many things ex-
ceeded that Of an ambassador. He
handled funds running into the
millions which never showed on the
books. He paid the chemical and
dye men throughout the country
salaries three and four times their
business income. He managed the
German propaganda.
The work done by A. Mitchell
Palmer and Francis p Garvan, his
successor as Alien Property Custo-
dian, and by the War Trade Board,
has smashed that beautifully built
chemical machine. Thanks to Mr..
Carvan and the men who worked
with him, it has been thoroughly
exposed. The story Of their in
vestigation and success is one Of
the most dramatic chapters Of the
secret history of the war, but it
may not yet be told.
The facts they have revealed
have amazed even those most
familiar with the situation, for they
show an enemy whether in peace
or war; that was firmly established
in position Of great strategic
power, holding up American bust
ness for an enormous profit, crush
ing competition by every available
method, centre Of espionage and
propaganda and Of crime when need
arose, lodging our taxes, evading
our law and hiding under American
name and citizenship through all
manner of deceit and camoufage.
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1919-05-04

started, but absolutely forbidden by
the home companies. Herzog, it
will be remembered, emphasizes in
his book the principle that under
no circumstances shall valuable
trade secrets concerning the indus
tries which Germany intends to use
to bludgeon the world be permitted
to leave Germany.
With what supplies were on hand
the German concerns mixed cheaper
or more available substitutes to
string them out. Those that could
be obtained they bought at almost
any price and sent them out as their
own undertrademarks and labels
that closely initiated the German
and with legends that emphasized
the German origin of the goods.
They sought longtime contracts as
the price of parting with what they
had Of the more precious materials
Finally they organized an American
edition of the great German dye
cartel, the Republic Trading Corpo-
ration, which included all the princi-
pal agents and which was intended
to guard their mutual interests, fight
American competition and, as is
stated in a letter from the Bayer
company to DR.. Christian Hess, one
of the German owners:
1T was interesting to note in
our last conversation with Mr..
Metz that he was specially
anxious that the organization
should aim later at placing in the
pillory all dealers who would not
publicly agree to run the business
according to the fixed principles
Of sale laid down by US. You
will understand what l mean, and
l think Mr.. Kuttroff also will
enlist under the flag later"
This precious corporation lam
guished for lack Of having any dyes
to sell, though it got little when
che Deutschland came over, and was
doing little when it came under the
control of the Alien Property Gus
todian, through his seizure Of most
of the member companies.
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1919-05-04

condemned. The most used scheme
was the corruption of the boss dy-
ers, mostly Germans, who by manip-
ulation could make the best dyes re-
suit poorly, end would get good ef-
fects only from the product of the
man who paid them. There are
charges that in some cases these
boss dyers took pains to do poor
work on goods that were to meet
German competition in the market.
Dumping was the accepted way Of
killing American competition, wher-
ever it showed it's head, and it was
almost completely successful This
was done mostly in branches other
than dyes, because the dye industry
never needed the German killers
expert attention. When the Benzol
Products Company was organized in
1910 the Germans cut the price on
aniline oil, which it manufactured.
from II Il cents, normal, under
~. When there was competition
in salicylic acid they sold it here,
after paying duty of cents a
pound, for 25 cents, the home
price at that time being 26A to
3Oh cents. In 1910 they sold
oxalic acid at 6 cents. An Ameri-
can factory opened and the price
was cut to At cents. In 1907 the
American factory shut down and the
price went to cents; it reopened
after some months and At cents
again became the figure. In 1908
the American failed and the price
went to Z II and stayed there.
Of course there was tax lodging.
In the Bayer Company, for instance,
Mr.. Palmer reports the organiza-
ton Of a subsidiary company "to
conceal the profits for the purposes
of taxation,' and he adds "the in
vestigation also covered number Of
less legitimate evasions of the tax
laws and resulted in the recovery of
large sum by the Treasury; and
at least part of the concealed
ownerships of the German agen-
cies, which helped make it hard for
the Alien Property Custodian to
seize them after we entered the
war, were unearthed at this time.
Elaborate arrangements also were
taken to avoid the law against sell
ing pools, and these seem to have
worked.
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1919-05-04
By Stanley Frost
Copyright, 1919, Menu York Tribune ync.)

port trade primarily if they are
absolutely Indispensable"
That is the theory-here is the
plan to put 1t into practice, as ex-
pressed by the "Farber-Zeitung, /"
the dye trade paper of Germany:
EThe German coal tar dye
stuff industry ought, after the
conclusion Of peace, to be per-
mitted to sell dyestuffs only in
Germany, Austria, Turkey and
Bulgaria until the German tex
tile factories are again fully
occupied and all warehouses and
stores and all concerns are again
fully supplied with good white,
dyed and printed goods. ONLY
then would 1t be permissible to
furnish German coal tar dyestuffs
to neutral or hostile foreign coun-
tries. If foreign
countries begin again too soon to
receive good German coal tar
dyestuffs they might easily ruin
the business Of the German ex-
port trade in finished products.
1t would be permis-
sible to furnish dyestuffs to
America only if the American
government should consent to
bury for long time the unjusti-
fable so-called antitrust uues-
ton in connection with the ami
line dye interests"
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1919-05-04
Many Schemes
10 AuOid Seizure

When the United States entered
the war and it became evident that
German property was to be seized
Teutonic evasion reached it's highest
point. Every conceivable scheme
was resorted to in the efforts to
conceal the actual German owner
ship, and some Of these schemes
were so smooth that the courts still
are untangling the messes, with a
fair chance that the government
may get lien on the companies, but
will not get control of them. Less
than half of the German owned COM
panles found themselves in a posi-
ton where they thought it safer to
make reports to the Alien Property
Custodian. The schemes of evasion
were all different and each was
pretty puzzle in itself.
One of the first unravelled, and
the simplest, was that of the Baver
Company. This company, which
was exceedingly profitable, report
ed that its stock was held BY one
of its officers, on behalf Of Germans
who held for the parent company.
1t also reported the stock, similarly
held, of the Synthetic Patents Com
pany, which owned the patents and
other rights under which Baver
operated, was used as a mixer to
conceal profits.
The readiness with which such an
important concern surrendered
aroused suspicion, and after a pro-
longed investigation the joker was
unearthed. This was the Williams &
Crowell Company, a concern in Con-
necticut, to which had quietly been
transferred much of the most valu-
able rights of the Bayer. 1t finally
was possible to prove that, though
the stock Of this concern was held
by American citizens, the money to
pay for 1t came from Germans.
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1919-05-04

not till the contract printed above
was unearthed that it was plain
they had no real control. In
fact, the New York concern asked
permission of the Badische for
every raise of salary to an en-
ploye, and paid it sums running
into hundreds Of thousands for
which no reason appeared.
A trick that failed was that of
the Bauer Chemical Company,
much smaller concern, which owned
the rights to Formaint and Sanato-
gen. This concern, by the way,
raised a pretty problem for the
Alien Property Custodian when he
seized it. 1t became his duty to
protect the interests Of the prop
erty, and one of the interests lay
in the sale of Sanatogen. Mr.. Gar
van, who was in charge, remem-
bered The Tribune's exposure of
the fake involved in this scheme of
selling few cents worth of stuff
chiefly cheese-for dollar, and re-
fused to continue the advertising.
The stock Of this concern ap-
peared to have passed into the
hands of T. Elicit Hodgkin, its
lawyer, who now is under indict-
ment on another matter, also con-
nected with German interests in
this country. Hodgkin bought 744
of the $50 shares in May, 1915,
borrowing the money for the deal
from Richard Kny, father-in-law
of George Simon. president of
the corporation, who held the stock
himself, in escrow for the debt,
leaving Mr.. Hodgkin's ownership
rather thin. Mr.. Kny appears in
another place on the records of the
Alien Property Office, in connec-
ton with the Kny-Scheerer Corpo-
ration, which held the monopoly of
German surgical instruments in
this country.
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1919-05-04
Wanted Ownership
'To End Of the War;

In addition, there was taken from
a man who reached Montreal from
Germany an authorization sent in
response to a letter in which Hodg-
kin said:
"Get authority to Hohmeyer La
German subject in control Of the
company for the owners] to de-
liver to me or to you all the stock
certificates Of the company, for
us, or. me or you, to own abso-
lutely until we sell them, or other
wise until the end of the war. The
company and name are so well
known that / would like it to be
American in name and in fact,
so that in case [ am ever called
upon to show my hand I can
safely do SO. | am sure
you will understand what I am
after"
The Alien Property Custodian has
since sold out this concern.
Although the American chemical
industry took a fair start about
1880, the Germans promptly crushed
it, and when war broke there were
but five plants dealing with dyes in
this country, three Of them German
owned, and the other two practi-
cally merely assembling German
products. With the war there came
an immediate tremendous expan-
sion and many companies were
formed. At first the Germans paid
little attention to this, a letter from
the Cassella Company Of New York
stating: "There is no grave danger
to be feared for German industry"
and expressed his belief that the
textile industry would prevent the
dye makers from getting enough
protection to let them continue
after the war.
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1919-05-04
Big Propaganda
against americans

Backing all this was an elaborate
propaganda. 1t has not been deter
mined how far this was under CEN
trail German control, but it carries
all the earmarks that distinguish
the propaganda we have learned to
know. 1t became very complicated
at times, and some of it was so con-
vincing that the myth Of invincibil-
ity, as Mr.. Palmer calls it, still lin
gers in many minds.
The Germans, from their high
places as the chemical experts for
the world, announced that American
coal would not produce a tar suit
able for dyes. They declared that
Americans had neither the brains,
the training nor the skill to produce
them, and we Americans meekly
swallowed the insult. They laid it
down as an axiom that no one could
compete with them in the niceties of
chemical research-and we took
that, too. Finally, they pointed out
that the German industry had such
a start that we never could overtake
it; and, but for the war, there may
have been some truth in that.
But to-day we have found that we
have the brains, the skill, the pa
thence, the inventiveness and very
disable coal, and with little more
time we shall have overtaken the
German industry, and, many be-
lieve, have put 1t far in the rear.
The invention Of coal tar dyes is
not German, anyway.
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1919-05-04
agrees Not to Sell
Competing Products
A later agreement provides

A later agreement provides:
H. A. Metz & Co. or the
Hoechst Color Co. is not to buy
or sell products competing with
out reporting such to f'arbwerke
for approval or disapprova. Of
such products the American COM
pany is to send report every
three months and samples if de-
sired and statement of stock-in
trade on hand when desired, and
also a weekly report, when re-
quested, as to goods and wares
delivered with the prices. When
name is changed goods are to be
marked Hoechst Color Co.
An agreement on July p, 1912,
includes the following:
The dividends of H. A. Metz & Co.
shall be paid to the holders Of record
of it's stock, but in division between
Metz and Farbwerke the entire sum
of dividends to stockholders out Of
the profits of the general business
shall be regarded as one amount
and the entire sum paid out of the
profits of the pharmaceutical bust
ness as another amount and these
amounts to be used as bases for cal
culating the above SO per cert or rs
per cent, as the case may be. Metz
not to have a separate claim to divi-
dends for his ten shares. All profits
and dividends not paid to Metz as
aforesaid to be the property of the
German corporation, subject to the
bonuses payable as aforesaid to en-
ployes, if the German corporation
elects to undertake such distribu-
ton.
AS long as Paragraph II remains
in force Metz agrees not to pur-
chase or sell competing products
without referring such transactions
to Farbwerke for approval or dis
approval, also to send report every
three months to Farbwerke and
samples If desired, and render to
them when requested a statement
of the stock in trade on hand and
statements Of all goods and wares
delivered
So strong was the German con-
troll Metz, who is an American,
had been trying for years to free
himself from this control, Mr.. Gar
van declares, but without success.
For the rest, the German trade
methods were in most cases all that
is despicable and much that is il
legal.
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1919-05-04
Patent Trust PIar,
CiUes Protection

The whole situation, however,
has been changed as the result of
scheme recently put into effect by
Francis P. Caravan, the new Alien
Property Custodian, and devised by
him when chief of the Bureau of
Investigation.
This scheme hangs on patents.
1t was discovered that the Germans
had registered in this country some
5000 patents. There was practi-
cally no manufacture here under
them, and it soon became evident
that their chief purpose was to pre-
vent the importation of dyes made
under them, such importation being
an infringement of the patent. Mr..
Garvan saw no reason why this
should not work both 'ways-why
the patents seized and sold to
American owners should not be
used as bar to the import of Ger
man dyes.
He therefore organized the Chem
zeal Foundation, Inc, which is to
hold in trust all such patents and
others that may be developed, and
to which practically all of the Ger
man patents have already been
turned over. The Foundation will
conduct experiments as well as pro-
tect the patents, and all its patents
will be open to the use of any Amer
lean manufacturer, but not to others.
and will bar importation of ANYTHING
infringing.
This scheme, be believes, will.
when supplemented with a plan for
licensing the importation of Ger
man dyes in such quantities as NAV
be necessary, and no more, at rea-
sonable prices, offer almost com
plete protection to the American
industry till the period when the
patents now held are superseded
by new ones. BY that time. he
hopes, the American industry will
be able to take care Of itself.