The Penn's Grove record., 1919-09-12
How Germany Killed American Dye
Industry
Continued from page /

fatnef imam part WIN Lne DeSC COW
in the barn. we ought to take every
risk of the political situation and trust
to fighting our rights in free Amer
ica." Notwithstanding this discourage
ing statement, Messrs. Roessler &
Hasslacher did send wei a confidential
man as was suggested. This emissary,
Mr.. Oscar R. Seitz, a New York law-
yer of Swiss descent with some Ger
man connections reached Frankfort on
February 1st. He brought no letters
of introduction, power of attorney or
means of identification. The Scheide-
Anstalt people did not know for GER
tain that a confidential man was COM
ing, or that if so, it vas to be Mr..
Seitz; yet he offered no argument,
other than those which had already
been stated in the letters from Nh.
Hasslacher to his German intimates,
the Scheide-Anstalt people agreed to
sell to the American representatives
the following stock: $500 shares of
Roessler & Hasslacher, at 200; 140
shares Niagara Chemical Electric Co.,
at 400; 80 shares Perth Amboy Chem
ical Works, at 200. No counter offer
was apparently made, and there seems
to be no hesitation about the price,
nor vas there any suggestion of the
purchase of the balance of the Ger
man holdings. A wireless was then,
on February 6, 1917, sent to the New
York office, and, upon this wireless,
the stocks were transferred on the
books of the companies and the nee
essary $3.50, 600 was RENTED to the
German house. The stocks thus sold
carried with them control of all three
of the companies. The price paid
represented a book value approximate
ly twice as great, and the average an
nual dividends for the preceding five
years on the three blocks of stock com
bined figured out at over 80 per cent
on the purchase price. As regards
the Niagara stock, the book value was
nearly four times the purchase price,
while the average dividends for five
years figure out an annual return OF
225 per cent on the purchase price.
These facts, and a host of additional
circumstances likewise pointing inev-
itably to the conclusion that this sale
was not genuine, were brought out in a
prolonged proceeding conducted by my
representative before the attorney gen
eral of the State of New York, who
had the power to subpoena witnesses.
In the meantime the AT per cent of the
stock of the Roessler & Hasslacher
Chemical Co., which was admittedly
still German owned, had already been
taken over. | thereupon determined,
by virtue of the authority conferred
upon me by the trading-with-the-ene-
my act and by the presidential procla-
nations Hereunder, that the stock os-
tensibly transferred in February, 1917,
was in fact still German owned; and
accordingly l then issued demands
for it. This proceeding will result in
the Americanization of the most I'M
portant German-owned chemical COM
pany outside the dye industry.
Next to Roessler & Hasslacher in
Importance among companies of the
same class is the Heyden Chemical
Works; this was the subsidiary of the
Chemische Fabrik Won Heyden, of Ra-
debuell, Germany, and manufactures
.salicylic acid and it's derivitives, for
maldehyde, saccharin, the medicines
usually known by their proprietary
names aspirin and urotropin, benzoate
of soda and, and many other valuable
products. Of late years it has be-
come enormously successful. Prior to
the year 1917 all the stock was owned
by the German company, and IN add
tion the American concern was tied by
a contract with its parent house under
which all the earnings of the Amerl-
can concern over s per cent went to
the German house in payment for pro-
cesses and information. When my IN
vestigation commenced, all of the stock
except three shares stood IN the name
of T. Elicit Hodgskin, a New YORK
LAWYER. who had for some time repre-
scented the firm. After considerable
examination it was ascertalned that
this stock, which had been transferred
lust before our entrance into the war,
had been paid at par with a sum OF
S149, 900, borrowed by Mr.: Hodgskln
for the purpose from Richard Kny,
fa~ther-in-law of George Simon, a Ger
man subject and the manager OF the
under an agreement contain
ed in a letter from Mr.. Hodgskln to
the effect that he would thereafter
r~etransfer it at cost. Richard kny, IL
will be remembered, was h partner
of Schweitzer in the Chemical EX-
change Association, and he was also
the ostensible owner OF the kny-
Scheerer Chemical Co., which also
turned out to be a purely German
owned concern and has been taken
over as such. Thorough investigation
resulted in the practical admission that
this transfer was mere c~amoufiage,
and accordingly the stock has been de-
manded and taken over. Mr.. Hodg-
skin is now under Indictment for his
participation in similar proceedings IN
respect to another company. This
stock and other rights of the German
house in the American company have
been sold at public auction TO tne
Monsanto Chemical Works for $685.
900 plus taxes and profits of 1917 and
1918. but the sale has not yet been con-
frmed by the sales committee.
An almost exactly similar situation
was disclosed by the investigation OF
Bauer Chemical Co., a much smaller
concern manufacturing ~pharmaceuti-
Gals, especially the widely advertised
"Sanatogen" and "Formamint':, In
this company also the stock, which was