The New York herald., 1921-06-12
VAST FORTUNES MADE
Impression Circulated That
They Could Not Be Re-
shipped and Bought.
SPECTATORS ARE LUCKY
Manufacturers Not Competing,
No Duty to Pay, Immense
Gains Reaped.

Special Cable to THE New YosK HERALD.
Copyright, 1921, bv THs NEw York HERALD.
New York Herald Bureau,
Paris, June il.
Investigation of the sale of American
war stocks in France has disclosed a
really amazing situation. as a result
of which a comparatively small group
of Americans have made fortunes
through a widespread misunderstand-
ing regarding the conditions of sale of
these stocks to the French Govern
ment. AS result American manu-
facturers have been kept from COM
peting for them, while American tax
payers have lost the profits which those
persons who understood the situation
have reaped.
While all these stocks have not been
disposed Of by the French Government
most Of them have been sold. Mean
while the impression had been created
that they could not be sold for shipment
to America, but II now appears that this
is not true. THE NEW YORK HERALD
correspondent here was shown a con-
tract in the French Liquidation office
which contained no clause such as many
American business men here, and pre-
sumably many in America also, thought
existed.
Reshipment Not Prohibited.
Certain American firms here were ad-
vised by lawyers that the contract be-
tween the United States and France
prohibited the reshipment of these goods
to America and 1t appears that many
firms in the United States were under
the same impression until they found
that their own goods had been dumped
on them at home, the American Govern
ment meanwhile exacting no duty on
these goods to protect either the Amer
lean manufacturer or taxpayer. whose
money had been spent to buy the goods
for the American Army.
An Investigation here showed that at
least % per cent. OF the American war
stocks purchased by the French Gov
ernment has been bought back by
Americans and reshipped to the United
States duty free. They have been sold
at prices prevailing in America, which
netted the men who purchased them
from the French Government enormous
profits.
To prevent just what has happened
in America from occurring In Great
Britain, the British Government. which
also sold large stocks to the French
Government. put an import tax Of from
10 to 25 per cent. depending on the
character OF the goods, on any Of Its
stocks reshipped across the Channel.
All that the few Americans engaged
In this business had to do here was
to pay the cash for the goods they
bought, certify to the American Consul
here that the goods were Of American
origin and get them at ten cents on
the dollar. Every conceivable kind of
articles. including millions of packages
of tobacco, railroad supplies. &C. has
been reshipped to the United States
by these Americans, who were able.
through the favorable exchange rate, to
outbid all other bidders.
Goods Cost s2,BOO,OOo,OOo.
or course, with no prohibitory clause
In the contract between the United
States and France, such as was gen.
orally believed by some OF the largest
American manufacturers of war stocks
to exist, this business was perfectly
legitimate.
The estimated cost OF these war stocks
in America was s2.500. 900, 900, but they
were sold to the French Government for
5000, ,000. 900. payable In twenty years.
The contract was signed by Liquidation
Parker for the United
The defence put forward In con-
nection with this low price at the time
the sale was made was that the cost OF
the goods to America and
of selling them there was prohibitive.
Immediately after the sale was made a
report appears to have been Industrious
ly circulated In America and France
that these stocks could not be re-
shipped to the United States, and several
one time American officers began get
ting busy negotiating deals. Henry Ford
II Is understood. tried to get back the
automobiles he had sold TO the United
States, but failed to do SO. One Ameri-
can group. however. obtained a conces-
sion from the French Government cover
ing one whole camp and not only bought
up the stocks there but sold them.