The Penn's Grove record., 1919-08-22

1the American agent of Hoecht) IN
his Consolidated Color and Chemlcai
plant, while the Cassella GO. organ
lied a new subsidiary known as the
Century Color Co to commence man
ufacture under the familiar I. =. =
trademark which it had sold the goooS
of its parent German house.
At the time when l took oHice
therefore, the American dye INDUSTRY
was active and profitable ana IN ID.
most undisturbed possession OF tht
field: but it required only the sllghtes'
investigation to show that the new,
born industriy's hold on life was o.
fine most insecure description. Inc
supplv of crudes had been so expanded
nv the needs of the explosive lndustf!
and the consequent increase In the
number of b~y-products coke plantS
and recovery installations IN gaS
works that our supply OF raw mate
rails was unsurpassed We were
however, producing only a few OF the
essential intermediates We had
lack of such technical knowledge as
was required to produce dyes IN the
laboratory, to say nothing OF Ihe
vastly greater amount OF similar
knowledge required to translate zap
oratory into commercial production
In the Ease of all the faster dyes
Germanv's patents had prevented
every attempt at American prodnc-
ton, and while the trading with the
enemy act authorized issuance OF
licenses under these patents, the terms
were such that nc license could hope
to continue with the Germans after
the war. In the meantime the repre-
sentatives of the great German houses
were holding their organizations TO-
gother and keeping their trade as best
they could by doing out their re-
naming stocks and by selling under
their own names American products,
sometimes mixed with their W Ger
man goods. These representatives
were waiting for the end of hostilities
and were ready at a moments notice
to re-embark in the importing busl-
ness and assist their parent German
house TO destroy the new American in
dustry. 1t was, therefore, n of the
most vital tasks before me to ascer-
tain every trace of German ownership
in the new industry and particularly
in the American representatives of
the German trust. Unless the Ger
mans could be deprived of the benefit
OF these branch houses, their re-en-
trance into the field would be all toe
easy.
This proved to be a hard task.
Every variety of eamoufage had been
resorted TO By the Germans to conceal
their interests. 4 favoFite method in
this, as in other industries, was of
that of a fictitious transfer of
stock. In a few cases such transfers
were carried out after the severance
Of relations and before the declaration
of wal In these cases the character
Of the transaction was fairly obvious
and or course correspondingly SIM
pie. In other cases, howeve1-and
was IL Of two of the three rep<
resentatives of The great German
houses which were ostensibly Ameri-
can owned-the apparent transfer
took place at a period before the war
was thought of, at LEAST by anyone
outside of Germany. In these cases
the transfer vas the result of an at
,acK made by persons ostensibly in
terested in the textile business upon
the representatives of the German
houses under the Sherman law.
Up to about 1910 all the German
houses shipped their goods to their
American representatives on a pure
consignment basis. The compensa-
ton of the American representative
was wholly by way of commission.
The American company in these cases
was a mere selling agency OF branch.
In 1912 a group of Philadelphia law
yers brought about the prosecution of
an office of Bayer & Co. Cnc.) Cor its
predecessor, Farben Fabriken of Ell
berield, another New York corpora
tom for some of the corrupt practices
in the way of bribing buyers, which,
as has been stated, had become uni
versal among the German houses. In
the course of this prosecution the law
yers in question became familiar with
the general history of the German in
dustry and at once realized that it
might be made the subject of an at
tack under the Sherman law, on the
CIlGOIN LldI tdCl VI Vic 1Clilld1l jill
panies vas through it agent, actually
doing business in this country and that
the two great cartels were conspiracies
in restraint of trade. Acting on this
theory, suits we're commenced fol-
triple damages against most of the
American representatives. The in
stitution of these suits, which were
subsequently settled, resulted, in a
least two cases, in a transfer for the
Germans of their stock in the Ameri
can company to the officers of thu
company. In the case of Badisch'
Co., the stock of which was alread.
in the names of the American repre-
sentatives, it was only necessary II
change the basis of the business from
cons; gnment to sale. This was don,
in all the cases, SO that the German
house might appear not to be doinI
business in this country through it
representative, but to be merely sell
ing to an apparently Independent
American corporation. There was o
the surface no apparent reason VIII
these transfers should not have bee
genuine. Each German house reall
controlled the situation with referenc
to it's agent because it could Instant
ruin it's agents business by Withdraw
ing supplies. Accordingly, for a cor
Siderable period these houseS eScaDe