The Penn's Grove record., 1919-08-29
DYE WORKERS DOINGS
Mechanicals Still In Lead. Chemical Stages Surprise Of
Season. Americans Must Meet Competition
HOW GERMANY KILLED AMERI.
CAN DYE INDUSTRY
A. Mitchell Palmer
Alien PropertY Custodian

After the wal began the industry
became a center not only of espion-
age, but of propaganda and direct gov
ermental activity. The number OF
striking instances of this development
is SO great that only a few can be de-
tailed, but these appear sufficiently
striking. Among the early examples
~unearthed by the Bureau of ~Investiga-
ton was that of the by-product coke
plant established by the Lehigh Coke
60. The latter was a corporation or
gained by a syndicate represented by
the Deutsche Bank. At the time the
war broke out it had been in opera
ton for a number of years and was
promising considerable success. 1t
had not, however, gone extensively in
to the manufacture of coal tar and its
derivatives. In 1915, however, it es-
purpose. Every ounce of toluol and
benzol which was produced was sold
under contracts binding the purchaser
not to use II permit the use of the
product for the manufacture of explo-
sives or for the benefit of the allies.
An examination of the correspondence
between Hugo Smith, the agent of the
Deutsche Bank in this country, and the
bank, shows that the entire undertake
ing represented by this by-product
plant was a direct effort by the Ger
man Government to prevent the MAX
ing Of these valuable materials for ex-
plosive manufacture in the United
States, or rather, to prevent their use
for the benefit of Germany's enemies.
The undertaking was decided on be-
cause the Deutsche Bank had ascer-
tanned that the Bethlehem Steel Co.,
which had a contract with the Lehigh
Coke Co. for the latter's coke and gas,
had practically determined to build
such a plant for its own purposes, but
that this decision might be changed if
forestalled by the erection of a plant
by the Lehigh Coke Co. This actually
occurred, with the result that large
supplies of these invaluable coal-tar
products were kept out of the NUM-
ton industry, while the demand for
Observation-Disclosures was pre-
vented from having its natural effect
in bringing into existence American
plants which would have been free to
supply the allies. This condition con-
tinued until just before we entered the
war, when the Deutsche Bank, doubt
less better informed than most as to
the probabilities, sold out the Lehigh
Coke Co. to a nominee of the H. Kop-
pers Co., which in turn Immediately
resold to the Bethlehem Steel Co.
A still more striking instance, I'M
covered by the Bureau of investiga-
ton under the direction of Mr.. Gar
van, with important aid from the De-
partment of Justice and the Secret Ser
vice, was that of the organization
known as "The Chemical Exchange
Association" The purpose, and for a
time the effect, of this enterprise was
to corner the supply in the United
States of phenol, an essential of the
explosive industry, and to prevent its
use for the manufacture of high ex-
plosives (picric acid and tr~initrotoluol,
or T. N. To-. This undertaking was
apparently initiated by DR.. Albert, the
financial adviser of the German Gov
eminent in this country, in direct col
l%aboration with Won Bernstein. DR..
Albert carried out the scheme through
DR.. Hugo Schweitzer, the chemist and
leading spirit of Bayer & Co. (Inc.),
the American agent of Bayer, of
Leverkusen. The outbreak of the war
had instantly stopped the importation
of phenol, which was not manufacture
ed to any extent in this country. Mr..
Thomas A. Edison, who required large
supplies of phenol for the manufac-
ture of his Photographic records,
which were made of a synthetic resin
of which phenol and formaldehyde
were the chief ingredients, immedi-
ately set to work to solve the difficult
ties involved in the manufacture of
this substance. By the most strenu-
GUS work the problem was solved in
his laboratories in a few weeks, and
he commenced the manufacture of
very considerable quantities, produc-
ing a large surplus beyond his own
requirements. This surplus would
normally have supplied means for the
manufacture of fairly large quantities
of the most valuable explosives. To
prevent this, DIR. Schweitzer, on June
%, 1915, entered into a contract with
the American Oil & supply Co., which
Tile Selling dScHCy VI Tile CuiSOu
works, for practically the entire sr--
plus of phenol available for use. As
security for the faithful performance
of this contract, DR.. Schweitzer put
up 100000 in cash, which was fur
nished to him by DIR. Albert, and also
a $25, 900 surety company bond. A
week later DIR Schweitzer made q con-
tract with the Heyden Chemical
Works "a mere branch of the German
house of Chemische Fabrik Won Hey
den, of Radebuel), of which George
Simon, a German subject, was tie
manager, by which the entire supply
of phenol thus purchased was to be
taken by the Heyden company and
converted into salicylic acid and other
harmless medicinal and 1avoring pro-
ducts. The arrangement was that the
Heyden works yer to return to
Sweitzer / pound of salicylic acid for
each pound of phenol and keep the
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