The sun., 1919-06-28
MOORE DYE CHARGE
FALSE, SAYS CHOATE
Attack on Chemical Founda-
tion Based on Ignorance
of It's Work.
TRUSTEES GET NO PROFIT
ORGANIZATION Must License
Others to Use It's Manufac-
turing Patents.

Joseph II. Choate, Jr, general coun-
40, for the Chemical Foundation, Inc, |
,h,cb was bitterly attacked on the hoor
:, the House by Representative ].
Hampton Moore of Philadelphia, yes
,srday wrote to Mr.. Moore letter de-
daring that his attack was based on
Inaccuracies and IN ignorance OF the
formation anu work Of the Foundation.
He warmly denies the charge that the
trustees or others connected with the
corporation stand to make money out
~ taking over and licensing for Ameri-
can manufacturers the German dye
secrets gathered during the war by A.
Mitchell Palmer when he was Alien
property Custodian.
He says that the selection OF Francis
p Caravan OF New York as president
Of the Foundation was urged by two
ardent Republican,. Ramsay Hoguet,
Who was patent counsel for the custo-
dian. and Mr.. Choate himself and that
his selection was enthusiastically en-
dorsed by the dyemakers. who are
chiefly concerned in the Foundations
success. Mr.. Choate says In his letter:
In general. your criticisms fall to
take into account the situation which
called the Chemical Foundation into be-
ing. The custodian found himself In
property, of a mass of chemical patents
which stood as an impossible obstacle
In the path of American industry. That
obstacle had to be removed. Unless
Congress (if IL had the power) fol-
lowed the English precedent and an
nulled the patents, which would have
left the Germans free to import or
make the patented dyes here. the OBJ
struction could be done away with
only by a sale to good Americans.
Only Method Available Used.
"The patents could not be sold piece
meal, or they would not be worth de-
tending. They had to be sold to strong
concerns. because no weak. firm could
stand the expense Of defending. Yet II
sold 10 any existing concern, the in
ventions would be lost to all others and
a monopoly would be created.
THE only way in which the patents
could be made available to all, and at
the same time used to fight the German
trust, was the creation of a trustee
corporation.
You state that the Chemical Founda-
ton Is capitalized at 100000 for the
purpose OF engaging In the manufacture
Of dyestuffs in the United States This
is the precise opposite of the truth. The
foundation has no power under its char
ter to do anything OF the kind. 1t can
only license others to manufacture
under its patents. 1t must license by a
non-exclusive license any competent and
truly American manufacturer who may
apply, up to the capacity of the market.
The foundation was carefully orga-
nized in such way that nobody can
possibly make money out Of II. No one
Of the trustees owns. or ever will own. .
share OF stock. The trustees. whom you
present to the public view as dangerous
financial bugaboos. serve permanently
without compensation OF any kind 30
does the president. So at this time do
even the minor executives, who doubtless
will have to be paid salaries when the
Foundation develops SO as to take their
entire time No officer or director owns
stock except the necessary qualifying
shares
You criticise the selection OF the trus-
tees OF the foundation on the ground that
they are not dyemakers. In this, /
think, you forget their function. They
are not directors of the corporation, but
primarily voting trustees of the stock.
II the foundation was to be kept out OF
all danger OF falling into the control of
any group which might use 1t for selfish
interests the voting stock obviously had
t. be trusteed. as otherwise control
might readily have been bought up by
any one. even by single dyemaker. or
by German agents. To insure impartial
iy in the issue of license the trustees
had TO be men wholly ASSOCIATED from
either the dyemaking or dye using in
dustries. Il was evidently desirable that
they be men familiar with German COM
n-rcial crookedness. From these three
points OF view the board could hardly be
improved
You critciSe the connection OF r. p
Garvan with the foundation on the
ground that It must detract from his
service as Alien Property Custodian. and
hereafter as Assistant Attorney-General
when he assumes that Office. Mr.. Gar
van, however. became president OF the
foundation on its organization in Febru-
AIRY, 1919, long before he became Gus
tooian. He did SO most unwillingly. on
persuasion amounting almost to duress
from Ramsay Hoguet (patent counsel
Tor the Custodian. who was one OF the
leading spirits In the creation of the
foundation and who. like you and like
myself, il an ardent Republican,. We
insisted on his taking the place because
we !elt that his knowledge OF German
methods and men and his organizing
eb.lty were Indispensable.
You suggest that the foundation In
tends 10 AK the price OF dyestufrs' and
may contravene the Sherman law There
IL certainly no intention TO nix prices
and no real po yer to do SO. Moreover
u applies to only q fraction of the in.
olstry. the patents covering only about
quarter OF the dyes used before tho
war. and none of those made in the
United States to-day. There can be nc
oortravention OF the Sherman law be
cause the only monopoly involved is thai
granted by the patent laws. and the ben
&c