The Penn's Grove record., 1919-08-29

: heavy chemicals in the country. The
= price paid was $5,310,000, plus back
: axes and obligations of many hun
> bred thousands more. Both purchas-
- NO companies appear, on careful in
, Festigation, to be thoroughly Ameri-
!, can.
Two other of the American branches
of the six great German dye compa-
MES were also taken over at the out
set. These were the Berlin Aniline
Works and Kalle & Co. These COM
panies were, however, little more than
shells, each consisting almost solely of
a selling organization without plant or
other valuable fixed capital. In the
case Of the Berlin Aniline Works, there
was an attempt to duplicate on a small
scale the Williams & Crowell episode,
but the resources available were insult
fcient. Neither of these companies
accordingly had anything of great val
ne to sell, and it has therefore been
deemed the wiser course to liquidate
them. The patents of the German
concerns were in each case held In its
own name and not transferred to the
American branch.
Having taken over these three of
the six American representatives of
the German giants, my activities IN
this direction seemed to have been
brought to a halt. The other three
did not report any German ownership
and on a preliminary investigation
seemed to be American owned. A
very careful examination of all avail
able materials, however, sufflced to
raise sufficient doubt in each case to
force the company in question to offer
to submit its entire books and records
to our inspection, and to provide an
audit at its own expense. An *
tremely thorough investigation was
thus made possible, and / n each case
it has resulted in a demonstration
that the stock of the branch was actu-
ally, in part at least, German owned.
In its relation to the American in
dustry, the most important of these
companies was the Cassella Color Co.
This concern, the agent of Leopold
Cassella & Co. G. m. b. H., was man
aged by w. j. Matheson and Robert w.
Shaw. Both of these gentlemen are
Americans by birth and tradition, but
both of them had been for many years
wholly or chiefly engaged in the bust
ness of marketing the products of the
Cassella works. The stock stood on
the books of the company in their
name, and appeared to have been pur-
chased for cash at par in 1913. The
transoendent Importance of this COM
pany was due to two facts: First, that
it had apparently been absorbed by
the National Aniline & Chemical Co.,
Inc, which up to the present has been
by far the largest American manu-
~facture of dyes; and, secondly, that
the leadership of the new al~l-inclusive
German cartel, including all the great
companies, is vested in Mr.. Carl Won
Weinberg, who was for many years
president of Leopold Cassella & Co.
and closely associated with Messrs
Mathesop and Shaw. The Importance
of these facts was emphasized when
the former Cassella organization be-
came the selling department of the
National Aniline & Chemical Co., and
when Mr.. Matheson assumed it's pres
;dency. A storm of rumor immediate
ly arose, and it was suggested to me
from every side that the National
company was at least in part German
owned. The facts, however, were
found to be as follows: Prior to 1913
he majority of the stock of the Cas-
sella Co., of New York, was owned
by the German house. In that year
t the antitrust suits above referred to
, convinced all parties interested that it
was unsafe to allow the New York
5 owned by a member of the German
1 tTu1cf Aoo0y1,oo IL tIA r,oy1o in in n
: stock was transferred to Messrs Math-
eson and Shaw and paid for in cash.
: An option was, however, reserved.
l This was reduced to writing so far as it
7 conferred upon the German house the
l right to take the stock at the book
r value on the death of either Matheson
1 or Shaw. 1t was, however, orally
agreed that the stock might be taken
: on the same basis at any time. In
r the meantime the contract between
: the German and American companies
was SO framed that the profits of the
n company continued to be divided as
before, 81 per cent going to the Ger
. man house and 43 to the American
!, house. The sale, therefore, made sub
: stantially no difference in the relative
rights of the parties. Messrs. Math-
eson and Shaw gained nothing which
they did not already have in the way
OF theoretical control of the American
house. The German company retained
complete practical control of the
American house because it could
d at any moment, by withdraw
Y ing supplies, render the American
business worthless. The American
:, patents owned by the German house
had been assigned to the American
company. In most cases, however, re-
e assignments had been executed, but
not recorded, so that the real, though
not the OStapcih1a ourparchip of the