The New York herald., 1922-07-03
GERMAN TRICK SEEN
IN Dye SEIZURE
Garvan Says Berlin In
trigle Caused 1nvestiga-
tion of Foundation.
HARDING rs DUPED'
Former Owners of Patents
Resort to Any Means to
Get Them Back.
VITAL TO U. s. HEALTH
Action Strikes at Sick, Says
Former Alien Property
Custodian.
VITAL TO U. s. HEALTH

Francis P. Garvan, former Alien
Property Custodian and present head
of the Chemical Foundation. stated
yesterday that the action began by
the President and the Attorney Cen
eral to compel the Foundation to re-
turn about 500 patents affecting the
organic chemical industry was the out
come of German intrigue.
"The Germans. thoroughly aware Of
the peace and war Importance of these
patents. have never relaxed their ef-
forts to get them back into German
hands" Mr.. Garvan said at his home
in Wheatley Hills. Long Island "Un-
discouraged and always persistent,
they have worked in devious ways and
they have powerful friends at court.
I know what I am talking about.
They know that the upbuildIpg of
German industry to the point already
visioned by the Industrious and ambi-
tious German mind is, II not impossi-
BILE, rendered extremely difficult by
American possession of ths patents of
the basic industry, for that is precisely
what the organic chemical industry is.
They know that unless they can
strangle American competition now the
American organic chemical industry
soon will be too solidly established to
be affected by German competition
under any reasonable form of protec-
ton.
Hope to Gain Patents.
They know that IL the American
organic chemical industry can be
Foundation IL can be attacked piece
meal and destroyed, the patents, of
course. reverting to their former Ger
man owners, spies and enemy aliens.
That Is why they have been so bitter
against the Foundation and it's officers
this realization that the Foundation
must be credited with organizing the
| American organic chemical industry.
encouraging its development and ex-
pansion and teaching 1t to walk alone.
Inspired by German influences there
has been investigation after investiga-
| ton of the Chemical Foundation and
| thousands of pages of testimony as to
| its organization, methods and purposes
exist in the records of Congress. All
of it's documents and records have been
examined and all of it's officers have
been questioned under oath. Every one
of these Investigations disclosed the
honorable and patriotic character of the
Foundation. These records should be
easily accessible to the President and
to his Attorney General.
ANY investigation must come to the
acceptance of these facts: When the
Alien Property Custodian's office inves-
tigated the dye industry in the spring of
1918 and came to understand it's basic
Importance to national welfare, the scope
and aim of the German dye monopoly
maintained by the Unforeseen Gemein-
schaft, the great German dye trust
which is even now intriguing to recover
the lost patents, became clear as spring
water. 1t was discovered that the mo-
nopoly maintained a strangle hold in
America by means of these very patents
in chemical and related manufactures.
Would XIII Rivals.
THE patents represented a master
stroke by the German trust to kill Amer
lean enterprise. They covered all the
latest and most desirable dyes, as well
as products and processes in drugs that
American physicians and surgeons sim
ply cannot do without. They were held
over the heads of American industry
and maintained solely as an obstacle to
American progress.
mot one of them had ever been used
by an American manufacturer because
no manufacturer had been mad enough
to ask from the Unforeseen Gemeinschaft
the right to compete with IL. The Ger
mans held those patents idle over here
for the twin purpose of preventing Amer
lean manufacturers and of barring i'm
ports from possible competitors.
ITO Joseph III. Choate. Jr.. and my
self, with others in the Alien Property
Custodians office. these patents were the
key to the situation. Ii seemed to us
that somebody should do something
about It, outside of the Alien Property
Custodian's office nobody seemed to
know much about the organic chemical
industry. Before us was an opportunity
and problem. TO serve the country
without the slightest personal or finan-
clal interest in the industry and with
every possible safeguard and prohibi-
tion against personal or financial inter-
est or profit in the future.
THE first thing to do was to get pos
session of the patents. and this was
done by amendment to the Trading with
the Enemy act. Then we found that no
department of government had the
power to take over the patents and ad-
minister them.
Problems Considered.
I'VE first considered the idea of SELL
ing them. but II was pointed out that
this would be sure to create a number
of powerful. greedy little monopolies
Moreover. the patents, because OF their
very nature, with individual patents on
processes which had to be combined 20
produce single dye or drug, had to
be sold in groups II at all. We saw
that 1t would be possible for purchasers
of the patents to sit back and enjoy a
monopoly in this field and do nothing
whatever but collact royalties from
american manufacturers and importers.
Or they could wait for German COM
petition after the war and force pay
ment from the Germans themselves.
After thinking over the puzzle for
months IL occurred to me that the fair
est method would be to form a quasi
trustee corporation. which could be
owned and operated by the Industries
affected by the patents. There was a
conference OF representative men in the
organic chemical industry and IL was
agreed that we should go to the Pres-
dent to request authorization OF their
sale to the Chemical Foundation. Prcsi-
dent Wilson issued the necessary execu-
tive order, and the price was fixed az
s250.000. This was merely a rough es-