Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1923-07-27
The Dive Patents Case
(BoSton Herald)

The Dye Patents Case
BoSton Herald) . .. -.
The court sits at Wilmington, Del
aware. The judge is Hugh NJ Nor
ris. an appointee of Woodrow Will
sons and descendant of Robert
Morris, the financier of the revolu-
ton. The plaintiff is the United
States government. The defendant is
the Chemical Foundation, Inc. The
property involved consists of $500
German dye and chemical patents
which were sold early in 1919 by
Frank l.. Polk, then acting secretary
of state. to the Foundation, organ
lied under the laws of Delaware. for
$250,000. Tho disposition of these
patents thus at private sale was
made under the trading with. the
enemy act; the negotiations were be-
gun by y. Mitchell Palmer the first
alien property custodian; his sue
cessor, Francis II. Caravan, continued
the negotiations and consummated
the sale; the present custodian,
Thomas w. Miller, severely criticises
this policy of his predecessors.
If the government wins the case
these patents may go back in the
mans. If the sale should be can
disuosition of Congress. Germany
would like to get back these patents
DR.. Karl Holdermann is now in this
country for the purpose. it has been
said at Wilmington, of recovering
500 patents belonging formerly to
his country. The defence has
charged that an "invisible plaintiff"
is intensely interested in this case.
namely. "the great German chemical
trust, the Unforeseen Gemeinschaft,
otherwise known as the Il. G."
The suit began on June 4. The
government seeks to void the trans
That when President Wilson left
rurriedly for Paris in December
1918, he practically but illegally
designated Mr.. Polk as racting
President" but that Mr. Polk was
not sworn into any such Office. that
he did not sign the essential doCu
ments in any such capacity, but
simply as an individual. and that
the sale therefore is void. Also that
the sale price was so low as 10
amount merely to a gift to certain
favored individuals. Moreover, that
the chemical industry of the country
deceived and dupcd Palmer. Polk and
Garvap and thus brought about this
sale. Again, that the Foundation Is
substituting an American dye and
chemical monopoly for the German
one. Finally. that certain officials of
the cuStodianS office were also Off
GERS of the Foundation and therefore
were buyers and sellers at the same
time and in the same transaction.
The government has said at Will
mington that there was fraud in
law" alho"Ch hoping that there was
no fraud in fact"
And the defence repncs: That
Mr.. Polk did not exceed his authority.
That the purchase price was reason
able, for q fourth of the patents had
expired, that many of them could
not be dcciphcrcd, and that still
others We're of no practical use. Also
that there is no American monopoly
in existence or contemplated. buc
that, in the words OF Mi. Palmer .
testimony, "the sale was made to a
corporation which was formed by all
the dye and chemical manufacturers
of the United States, not for profit
but for research and educational
work, and which was to license these
patents on reasonable terms to all
applicants" Again, that the trans
action was carried through under
the powers entrusted to the Prcsi-
don't by the trading with the enemy
ate. And that the United States
officials knew we'll not only all the
surface facts about the German dye
industry in this country, but man:
other alleged facts about the use
of important business information
obtained by German dye agents here
and forwarded to Berlin.
The most important witnesses
thus far have been Palmer. Polk.
Caravan, and Herman Al Metz. The
first three have explained why the
sale was private instead OF by public
auction. The latter method would
have made an American monopoly
actually possible. An individual
buyer could have done as he pleased
with his purchase; he could have
refused to make use of it, or
highest bidder could have returned
the patents to Germany. We might
have been left just where we were
before the war. AS a matter of fact
Germany held thousands of patents
in this country, not for the purpose
of working them. but to prevent
American competition: the products
made possible by these patents were
manufactured in Germany and sent
over here. The defence has had
much to say to the effect that if the
American industry now in process
of creation can have only few more
years for development it will be able
to stand on it's own feet and not even
German monopoly would be able
to overthrow it.
Palmer was on the stand about
three days. His recital is said to
have been dramatic" He categori-
cally denied that he or any of the
others were duped into selling this
property for a pittance. His story
reminds the reader of conditions in
wartime that now seem misty even
though they are only five years in