an excerpt from:
Treason's Peace
Howard Watson Armbruster�1947
A Crossroads Press Book
Beechurst Press
New York
438 pps. -- First/Only Edition -- Out-of Print
-----
CHAPTER XIX
Behind America's Iron Curtain
"CONFIDENTIALLY, it stinks," said Senator LaFollette. It was April 24, 1942,
more than four months after Pearl Harbor. The Wisconsin Senator was
expressing his opinion before the Senate Patents Committee of the failure of
the justice Department to punish the affiliates of I.G. Farben who conspired
to obstruct production of defense materials, and its neglect to require full
disclosures of the know-how of the patented processes thus obstructed.
Thurman Arnold, Assistant Attorney General, had been making a half-hearted
defense of the consent decrees in the Standard and Alcoa-Dow cases, as having
been the best which the department could obtain under the circumstances.
However, it was apparent from Mr. Arnold's testimony on this occasion, and
previously before the Truman Committee, that he did not wish to make public
exactly what circumstances, or whose intercession had caused the justice
Department to give in to the offenders after ample evidence had been
uncovered for criminal prosecution for conspiracy and interference with the
war effort. Mr. Arnold admitted that he had been faced with a "take it or
leave it" attitude in dealing with the Farben affiliates and that when he
"took it" he agreed to fines, which he considered inadequate punishment, and
to terms in civil consent decrees which he conceded did not properly supply
the know-how on the patents which had served as pass keys in the illegal
tie-ups with Farben.
While Mr. Arnold was before the Patents Committee he had ample opportunity to
reveal to the Senate and the public the reasons, and the influence which
caused him to consent to what amounted substantially to immunity for those
who had conspired with Farben to obstruct our preparations for war. Mr.
Arnold, however, chose not to volunteer such information, and the Senators
who were questioning him chose not to press the questions that would have
compelled him to do so. Senator LaFollette contented himself with his jibe at
the odor of the situation, and Senator Bone with comments that anyone who had
withheld technical knowledge and vital necessities from his country at such a
time "was not decent" and "has no business in this country."
Mr. Arnold, in testifying later before the Bone Committee and elsewhere made
no secret of the fact that he was not in accord with the postponement of the
other prosecutions which he had instituted against Farben affiliates in
plastics and other munitions industries. Nevertheless he had meekly consented
to them on the ground that it would interfere with the pursuance of the war
to prosecute those accused of conspiring to obstruct our preparations for the
war.
It was not mere rumor in Washington that Thurman Arnold resigned as
anti-trust chief in March 1943 because of dissatisfaction (honest rage might
better describe it) with what seems to have been pseudo-legal sabotage of his
efforts to eradicate Farben's industrial sabotage of this nation.
Be that as it may, when the appointment was tendered him, the chunky frame of
the Assistant Attorney General bounced ungracefully down the steps of the
Justice building, and found dignified repose a few blocks away in the U. S.
Court of Appeals of the District of Columbia�where, as Mr. justice Axnold, he
could at least write his own decisions. No obstructions were placed upon Mr.
Arnold's departure. The Senate held no hearing on the confirmation of his
appointment. "My friends didn't require a hearing," he told me at the time,
"and my enemies were only too anxious to get me out of the justice
Department."
Mr. Arnold is honored for the things that he started out to do, rather than
criticized for the things he did not do; and his admirers regret that he did
not state in public the conclusions which he expressed so fluently in private
about why his efforts had failed so dismally to put the fear of God into
Farben, and its American accomplices behind bars.
As the reader may by now have concluded, always it has been
largely this official policy of "hush hush" that has made Farbeds
subversive activities possible. After the war began and revelations
of those activities began to come out, it then helped provide immunity for
the individuals involved.
On Feb. 11, 1942, when these very facts were tumbling out, when public
indignation was mounting and Washington was seething with rumor about efforts
being made to protect certain individuals who were involved with Farben, the
following letter was received by the Speaker of the House of Representatives:
Office of the Attorney General Washington, D. C.
Honorable Sam Rayburn,
The Speaker,
House of Representatives, Washington, D. C.
My dear Mr. Speaker:
I desire to call your attention to the advisability of a law to protect the
contents of secret or confidential Government records and documents from
unlawful disclosure.
Under existing law, it is an offense unlawfully to conceal, remove or destroy
any record, paper, or document deposited with any public officer of the
United States (U. S. Code, Title 18, Sec. 254). It is likewise an offense for
any person who has custody of any record or document to conceal, remove or
destroy it (U. S. Code, Title 18, Sec. 235). There is no prohibition,
however, against furnishing copies of or divulging the contents of secret or
confidential files or documents. It would be advisable in the best interest
of the public business, and particularly in the interest of national defense
and internal security, to make it a criminal offense to disclose confidential
Government information without authority to do so.
Accordingly, I recommend that enactment of legislation to make it a criminal
offense for anyone without authority to divulge the contents of secret or
confidential Government documents.
A proposed bill to effectuate this purpose is enclosed herewith.
I have been informed by the Director of the Bureau of the Budget that there
is no objection to the presentation of this proposed legislation to the
Congress.
Sincerely yours,
Francis Biddle,
Attorney General
Provisions in the proposed bill which Mr. Biddle's letter transmitted caused
the Chairman of the Senate judiciary Committee to state that, "It is more or
less a censorship bill We will have hearings."
Attorney General Biddle appeared before a sub-committee of the Senate
Committee on February 24, and denied that the bill would be a curb on the'
freedom of the press, but he conceded that its censorship powers might be
utilized by officials who desired to escape criticism for their acts.
Kenneth G. Crawford, then Washington bureau chief of the newspaper PM and
chairman of the censorship committee of the Washington Newspaper Guild,
testified that the bill, if enacted, would empower a bureaucrat to stamp as
"confidential" documents relating to a scandal in his department and thus
prevent all publicity.
On February 28, 1942, I addressed to the Chairman of both the Senate and
House judiciary Committees a protest on the bill's provisions and requested
that I be permitted to testify against it. My letter said in part:
There is something very fishy about the way this so-called official war
secrets bill has been trotted out just at this time, when it is no secret in
Washington that those influences which were spending time and money without
limit to retard our entrance into combat war prior to Dec. 9, have since then
merely gone underground with their treasonable efforts to hamstring our war
effort and to protect their spokesmen from punishment.
I suggest that your committee should plumb to its muddy depths the origin of
this bill. When you find out who actually conceived the infant, and uncover
who induced its adoption by the amiable Mr. Biddle, I suggest that you may
also uncover certain subversive individuals or groups who still appear able
to obtain a mysterious immunity from investigation and prosecution, an
immunity which constitutes a distinct menace to our national unity and to our
national defense.
This bill is not merely an attack upon the freedom of the press, it is
also an attack upon the freedom of any American citizen who may hereafter
join in a demand that our long-delayed effort to preserve our future
liberties must be purged of individuals whose past records prove them
unworthy of trust in this crisis.
This bill, if passed, would make it a criminal offense for me to offer to
state to your committee, under oath, my knowl-edge of corrupt protection of
subversive agencies from inside government departments. This bill would make
it a crime punishable by jail for me to reveal the fact that members of Mi.
Biddle's own staff have already threatened to resign because they have been
ordered to discontinue investigation of influential subversive individuals,
and that some of these men have been threatened with reprisals because of
having revealed these protests.
It would also attempt to make it a crime for any public official to resign,
and publicly protest because of protection and immunity which criminal or
subversive individuals may be receiving while we are engaged in war.
I trust that your committee will permit me to testify before it to support
the above with greater detail. It may be obvious that the writer, a private
citizen who possesses neither political nor any other kind of influence, may
not make such statements as above unless he is either prepared to prove them
or to go to jail. Mr. Biddle would very properly order me locked up tomorrow
if what I have said here is either untrue or unjustified, or is impelled by
unpatriotic motives.
The chairman did not reply, but able and upright Senator Warren R. Austin
advised me that he had added my name to the list of witnesses to be called.
In acknowledging receipt of the Senator's letter on March 9, 1943, I outlined
the testimony I intended to present if called before the committee as:
A summary of the numerous alleged official secrets which I have encountered
in recent years . . . regarding each of which I have already demanded
investigation and action. And in each instance there has been indicated a
secret power and influence to provide official secrecy and immunity.
Although many of these cases involve what might be termed ordinary crimes and
criminals, there are certain of them which also involve subversive and
fifth-column activities, and in nearly every instance the secret immunity
granted is related directly or indirectly to the activities of individuals
acting as agents, representatives, or attorneys receiving compensation from,
or under direction of, either a foreign political organization or a domestic
organization subsidized by a foreign corporation or government.
I suggest that there is no use whatsoever in passing any more laws about
protecting official secrets for national defense as long as every Tom, Dick
and Harry who has a friend or an accomplice planted in some government
department can walk in and see what he wants, or can phone and have it
brought to his side door.
I think that it is a matter of plain common sense, for our urgent
self-protection in this crisis, that the first thing the Congress should do
is to identify and demand prosecution of these official-secret fixers,
including the author of the original bill as presented. The least that should
be done is to run these rats out of the nation's capitol, and keep them out
until the war is won.
Chairman Hatton Sumners of the House judiciary Committee wrote me that if
hearings on the bill were held I would be advised. That was the last I heard
about that official-secrets bill; it died in Committee when the 77th Congress
ended, and was not reintroduced in the 78th.
However its significance appears in the source and time of its inception. The
failure of this bill, with its threat to officials who might talk, did not,
however, end the profound silence by Government officials on matters relating
to Farben and its affiliatesa silence which extended to matters of public
record.
In March 1943, I sent to the office of Earl G. Harrison, then justice
Department Commissioner of Immigration and Naturalization, a lengthy list of
individuals involved in the activities of I.G. Farben. This list included
executives and employes of Sterling, Winthrop, Bayer, and Alba, who had been
removed as undesirable; and other American citizens who had been indicted or
kicked out of General Aniline, General Dyestuff, Agfa Ansco, Magnesium
Development, Synthetic Nitrogen, Chemnyco and other of Farbees ersatz
American fronts. My request for information about the internment,
de-naturalization or deportation of these Farben stooges was met with the
response that the Immigration and Naturalization office was forbidden to
discuss the subject. Also, that no copy of the regulations on which that
refusal was based could be supplied.
Addressing Assistant Attorney General Wendell Berge, then in charge of the
Criminal Division, I requested:
Which if any of the 53 individuals named on my fist have ne-naturalization or
other court proceedings pending, which involve the revoking of their
citizenship?
Which if any of those named has been interned?
Which if any has had any other type of criminal proceedings instituted
against them?
If no such proceedings are now completed or pending, what is the reason why
people who have been engaged in subversive and other criminal activities are
not being prosecuted?
Receiving no reply I wrote again asking why those individuals on my list who
had been involved in activities inimical to our national defense had not been
indicted and prosecuted under the conspiracy statute for interfering with the
functions of the government. My letter continued, in part, as follows:
I have asked this question of the justice Department more than once in the
past and I have been advised more than once in conversations with members of
the staff (who had sought my assistance in this Farben mess) that they agreed
with me that such prosecutions-for conspiracy to obstruct the functions of
the government-offered the most effective way to proceed against certain
individuals because it obviated the necessity of utilizing any of the
statutes relating directly to subversive acts
Why are men, of this stripe immune? Is it because of their political
influence?
The only reply to either of these letters was advice that the Assistant
Attorney General was not permitted to reply to my queries. The reasons for
not prosecuting Farben criminals were "deemed confidential."
The lack of action under the conspiracy statute against two decades of
pre-war plotting could have been justified if the antitrust actions against
Farben's accomplices had resulted in heavy penalties of fine and
imprisonment. But not one of these offenders has gone to jail, and many of
the most conspicuous among them have been immunized from prosecution with the
official excuse that to try them would interfere with the prosecution of the
war.
We may ponder how it could have interfered with the prosecution of the war to
lock up these indicted gentlemen from Germany, at least for the duration? Or
why such matters have been none of the public's business? Or why not try them
after the war?
It should be noted that in numerous other cases naturalized German nationals
of little or no importance have been rightfully stripped of citizenship on
the circumstantial evidence that they must have had mental reservations when
they took the oath of allegiance to the United States-and then joined a
German-American Bund. As compared with the subversive activities in which
some of these immunized Farben gentry have taken part as mem bers of our
higher cartels, membership in some guttersnipe Bund is indeed small potatoes
A special War Policies Unit of the justice Department took over enforcement
of the statute requiring the registration of foreign agents when this was
transferred from the State Department in 1942. Publication of lists of all
those registered as alien agents was then discontinued.
My request for information as to what prosecutions had been instituted
against agents of Farben or of Farben's affiliates for failing to register
brought the response that no such proceedings had ever been instituted
against any such Farben agents.
I then supplied the War Policies Unit with a list of individuals, lobbyists,
lawyers and law firms, which included some of Farben's most important agents,
and requested advice as to whether any or all of those named were registered
as agents of foreign principals. The response indicated that the only one of
those listed bad ever been registered as an agent of I.G. Farben. He was our
friend Rudolf Ilgner, the Farben employe who, as told elsewhere, Pleaded
guilty in 1941 to destroying files and records of Chemnyco, Inc., and got off
with a token fine of $1,000 instead of a jail sentence.
The official reason given by the justice Department as to why none of the
others listed by me were required to register was that their activities were
regarded as "non-political" and confined to "bona fide trade and commerce."
This seems a rather strange reason for not requiring the registration of
individuals who are known to have been involved in criminal conspiracies, and
in subversive activities here and in Latin America�activities which in some
instances at least the courts have held did not constitute bona fide trade
and commerce.
According to House Majority Leader, John W. McCormack, the Foreign Agents
Registration Act was the most important legislation of its kind to pass in
the last fifty years, and was enacted as result of efforts of the
1934Committee of which Mr. McCormack was chairman. This was the committee
that publicly exposed some of the Farben-Nazi propaganda of super press agent
Ivy Lee and others, but locked and sealed other evidence secured.
When, in July 1945, Tom C. Clark succeeded Francis Biddle as Attorney General
it was stated that the latter's antitrust policies would be continued (which
might have meant more than was intended). Later Mr. Clark announced publicly
that there would be "strict enforcement . . . but no witch hunting," and
following this the new Attorney General was quoted as stating that civil
actions were sufficient in cases where "a certain industry
practice, operated openly for years, is a violation of Sherman Act . . . it
does not seem fair under such circumstances to institute criminal
prosecutions."
On the basis of the long-standing history of the Farben tie-ups in this
country, and the fact once denied, but now proven, that most of these illegal
partnerships were common knowledge, this pronouncement from the new head of
the Department of justice did not offer much encouragement to those of the
staff who really wanted to put some of Farben's criminal associates behind
bars. Subsequent to these indications of a soft post-war enforcement policy,
several Anti-Trust resignations, long deferred under the Biddle regime, were
handed in. Mat was aptly described by Mr. Clark himself as a "political
anti-trust system" was now in order.
The hush-hush policy on Farben and its affiliates has not been confined to
the justice Department. Ominous when considered in their relation to events
to come are some of the matters involving the office of The Alien Property
Custodian.
Leo T. Crowley, shortly after he qualified as Custodian in March 1942,
informed the Senate Patents Committee of his intention to seize all
enemy-owned patents which had been assigned to American holders when such
patents had placed restrictions upon American industries, and particularly
those which might impede war production.
Despite this gratifying declaration, it was not long before members of the
Custodian's staff were at loggerheads with officials of other departments
because of the gentle treatment of the Farben-Sterling-General
Aniline-Winthrop-owned patents. The Secretary of the Treasury announced his
right to define as a foreign national any person, even an American citizen,
who was found by the Treasury to have been acting directly or indirectly for
the benefit of, or under the direction of, an enemy country.
>From these two pronouncements it would appear that it had
been the intention of both the Secretary of the Treasury and the Custodian
to seize the Farben patents held by such companies as Sterling, whose
agreements were illegal conspiracies. Such patents would be seized under the
precise language of the 1926 Supreme Court decision (referred to in Chapter
XVI).
On the basis of fact and of law the only explanation for the .refusal to
seize the property and patents of the Sterling-Winthrop-Bayer-Alba group may
well be found in the reports that certain of Mr. Crowley's staff failed to
agree with their chiefs policies, and got away with it while he was otherwise
engaged.
It so happens that the same member of the Custodian's staff who first advised
me that there was no intention to break the Winthrop-Atabrine monopoly also
pronounced the fantastic conclusion that there was no intention to seize any
property which had German ties or control in cases where the possibility
existed that the former owners might recover the property by court action
after the war ended.
Another member of the Custodian's staff when asked what pledge of continued
American ownership was being exacted from those to whom seized properties
were sold, replied by asking what was the use of such a pledge in view of the
fact that after the war was over the Germans could come over again and buy
back any property they bad a mind to. (just as they did after World War 1.)
Later it developed that the Custodian's office had not adopted the rules for
the sale of seized properties that were in effect in the first World War,-
and which required a very real pledge of' permanent American control with
penalties for violation. So it seemed that in this war, properties controlled
by Farben or by Farben's allies need not always be seized, and if seized and
later sold, all such foolishness as pledges of permanent American control
might be dispensed with.
The rules finally adopted when sales of seized property got under way,
required the purchaser to state that he was an Amen*-* can citizen or a
foreign national who had complied with all regulations; also that no one ever
connected with the office of Alien Property Custodian had any interest in the
bid, and that no agreement with respect to the purchase had been made with an
undisclosed principal or with anyone on the Governmenes blacklist.
On April, 1945, these regulations were apparently waived when the Alien
Property Custodian sold the Farben-General Aniline-owned 50 percent of
Winthrop Chemical for some $9,500,000 to Sterling, of which company Earl
McClintock, a former attorney in the office of the Alien Property Custodian
in the first World War, was a director and vice-president.
Sterling was required to deposit the purchased Winthrop stock with the
Custodian in a ten-year voting trust to ensure that until 1955 it would not
get back into Farben's clutches, as the Bayer Company did after World War I
despite Sterling's promise not to permit this. Unless of course the Alien
Property Custodian should decide to release the voting trust-or Farben's
Swiss I.G. Chemie should upset the whole apple cart by getting back title to
Geneial Aniline through a phony act of Congress or a phony judicial decision.
Great uncertainty has been manifest as to the administration and ultimate
disposition by the Custodian's office of the General Aniline and Film Corp.
after that very valuable property was taken over from the Treasury by Mr.
Crowley in March, 1942.
Little official information was forthcoming about the affairs of the company
save that the Custodian's office was operating it as trustee for the
foreign-held (Farben) shares, to which the Custodian had taken title.
However, early in 1943 reports appeared in the press that another new board
of directors for General Aniline was to be appointed, several of them being
directors or business affiliates of Standard Gas & Electric Co., of which Mr.
Crowley, in his spare time, was the $50,000 (or was it $75,000?) a year
president and chairman. Then came an announcement that the Custodian proposed
to sell at public auction some of the more important properties seized,
including General Aniline. This was followed by a statement that the
announcement had been an unfortunate error.
Finally a new board for General Aniline was appointed, mainly of men having
no experience in the dyestuff, photographic, or other chemical industries.
Tom Stokes, in the Scripps-Howard newspapers, took his usual
jab at the situation with the remark that Mr. Crowley was a triple-job man
with two government titles and one in private industry. Stokes then added�a
hasty reminder of what happened during the Harding Administration:
The office of Alien Property Custodian is considered here. to be extremely
important. This same office was investigated after the first World War with
some unpleasant results.
In July, 1943, when Mr. Crowley received a fourth job as head of the Office
of Economic Warfare, replacing Vice-President Wallace, it was reported that
he would take a leave of absence from his public-utility presidency, but for
the time being would retain his other government titles. However, he still
held on to his Standard Gas jobs and salary.
It appears a proper comment to make that in the Custodian's office, as in
other agencies dealing with Farben and its affiliates, there existed a
vaguely defined line-up�of those who wanted to be gentle with Farben and with
Farben's friends as opposed to those who wanted to turn on the heat. And
between those two extremes the play-safe brigade moved whichever way the wind
blew.
Regardless of the power of the lobby in peacetime, it is almost unbelievable
that such a condition could exist when the United States was actually at war.
On the record, however, nothing relating to Farben is unbelievable.
In March 1944, when Mr. Crowley stepped out as Alien Property Custodian to
devote more time to his expanding duties as the President's Foreign Economic
Administrator, and his assistant, one James E. Markham, who was also a
salaried director of Standard Gas & Electric, stepped in to succeed him as
Custodian, it was reported on reliable authority that another man who was
recognized as much better qualified through long experience had actually been
decided upon to succeed Mr. Crowley until outside intervention at the WlAte
House caused the appointment of Mr. Markham.
The situation regarding General Aniline and General Dyestuffs continued with
conflicting reports that they would or would not be sold, and with no change
in what might be termed the strange clemency toward former important employes
under the Farben regime.
Not only Mr. Halbach, as previously mentioned, remained on the payroll of
General Dyestuffs at a very fancy annual stipend, but two of the others who
recovered sizable sums for their stock in General Dyestuffs were still listed
in the Directory of Directors for 1944 as executives: R. Lenz, as
Vice-President, and A. T. Wingender, as Treasurer.
These were all among the group described by Mr. Markham in his December,
1944, affidavit before the General Dyestuff stock suits were compromised, as
having acted "in behalf and for the benefit of I.G. Farbenindustrie, a
national of an enemy country, Germany," and as having held that stock as part
of the "complicated threads of a conspiracy extending over many years and
involving persons in many different countries."
The Alien Property Custodian seized more than 44,000 foreign patents, some
32,000 enemy owned, mostly German. Licenses, free save for a $15 fee, were
granted to all comers on several thousand of these patents but a difficulty
about the free grants was a reservation by the Custodian of a right to revoke
any license�which provision hardly encouraged heavy investment to operate
under such patents.
However, the numerous General Aniline patents, also enemy owned, were not
included in the $15 free license offer, despite the recommendations of the
President's Committee on Foreign Economic Policy, which was approved by him,
that these General Aniline patents should be licensed like the others, free
to all comers.
Request made to the Custodian long after the war ended for information about
these licenses was referred to General Aniline; whereupon Mr. George W.
Burpee, its president by designation of the Custodian, was emphatic in
declining to consider granting any free licenses and his company patent
counsel advised that the title to all of these Farben patents might still be
clouded by the claims of I.G. Cbemie, Farben's Swiss hideout, to ownership of
General Aniline itself.
Meanwhile the distinguished patent attorney, William H. Davis, under retainer
from General Aniline, protested publicly that it would be most unwise to open
up these patents to all comers be. cause that "futile method" had failed
after the last war whereas:
. . .the situation would have been quite different if the American patents
had held by a strong competitive organiza-tion in this country, able and
willing to enforce the German patents against them.
This illogical thesis of Mr. Davis disregards the historical fact that
after the last war the thousands of seized German dye trust patents which
were turned over to Francis Garvan's Chemical Foundation for licensing to
American firms did not get back into German control, whereas those which were
sold to what Mr. Davis might describe as "two strong competitive
organizations," Sterling and Grasselli, and which appeared "able and willing
to enforce the German patents against them," did exactly the oppo-site.
As will be recalled, some of these drug patents and all of the dye patents
were later banded over to the partial or complete ownership of General
Aniline-Farben-American I.G.
Mr. Davis must have been hard pressed for an argument when he made his plea
for exclusive retention of the Farben patents by General Aniline, the
management of which apparently still fears, or believes, that Farben's fake
Swiss title may some day restore Farben's control of this enemy property. In
the words of the poet, whatever there is concealed in this patents woodpile,
the odor is suspiciously like some of those of the 1920's when Frank Garvan
was being called names for not turning all of the dye trust patents over to
one or two strong organizations�like General Aniline.
Perhaps nothing could better illustrate the peculiar attitude of the Alien
Property Custodian's office than an incident in 1945, when request was made
to inspect so 'me thirty-seven claims which had been filed with the
Custodian demanding return of various items which had been seized. These
claims had been listed merely by number and name of claimant in the annual
reports of the Custodian, and it was stated in the 1944 report that full
publicity was given to all activities of the "Vested Property Claims
Committee" by which the justice of all such claims was decided, and that "the
records of the committee are also open to the public."
Despite this, the official secretary of the office of the Custodian refused
to permit inspection of these records until after vigorous protest, and even
then inspection of only one out of the thirty-seven was reluctantly,
permitted. The balance was kept under lock and key on the mumbo-jumbo
explanation that the attorney for the Custodian still had them and therefore
they were not public records.
The real point of this incident may be found in the fact that substantially
all of these particular claims had been filed by individuals or corporations
who had been either accused, convicted of or who had pleaded guilty to
violating the laws of this country in their relations with I.G. Farben.
Several were convicted criminals.
Press criticism of Mr. Crowley's conduct of his various positions, especially
that of Alien Property Custodian, appeared from time to time. These were
usually based on the conclusion that he held too many titles, official and
private, and had too many duties to do justice to all of them, or that his
relations with Victor Emanuel (to whom he owed his large salary from Standard
Gas and Electric) were incompatible with his official duties.
Perhaps the best way to permit the reader to consider the fairness of these
criticisms, and 'without any reflection upon the good faith and patriotism of
Mr. Crowley, or of Mr. Emanuel, would be to refer directly to the records of
the Securities and Exchange Commission of January 19, 1943 when that official
agency issued its Findings and Opinion that certain private banking firms
were affiliates of Standard Power and its affiliate Standard Gas and
Electric, and therefore there could not be the "arms length" trading between
them that the Public Utility Holding Company Act required in certain
transactions.
Among the firms involved in this opinion were Schroder, Rockefeller & Co.,
Inc., an affiliate of the J. Henry Schroder bank of New York and London; and
Emanuel & Co., of New York, in which Mr. Victor Emanuel was a partner.
In a voluminous statement of the ramifications of control of the Standard
Companies, and of the reorganizations of Standard Gas under the Bankruptcy
Act, the Commission discussed the�. . . close relationship between Emanuel
and the Schroder interests" and concluded that "The Schroder interests in Lon-
don and New York have Worked with Emanuel in acquiring and maintaining a
dominant position in Standard affairs."
The findings also showed that Leo T. Crowley replaced Emanuel as Chairman of
the Board of Standard Gas in 1939 when Emanuel became Chairman of its finance
committee, also that James G. Markham was then elected a director of Standard
Gas.
Just for good measure it might be added here that the celebrated Cravath law
firm appeared in the Securities and Exchange Commission case referred to as
counsel for one of the banking firms who were found to be too close for "arms
length" dealings with Mr. Emanuel's Standard Gas and Electric.
That Mr. Crowley should be obligated to Mr. Emanuel and the J. Henry Schroder
bank for the high salary he received during his tenure of public office (for
which he is said to have refused compensation) may appear unusual and,
insofar as is recalled such a situation had been seldom, if ever, duplicated
at Washington.
An aspect of this which has provoked comment is the fact that the J. Henry
Schroder bank acted as financial agent for the Nazi Government just prior to
the start of the war and also was re-. ported to be a financial backer for
one of the firms in Farben's international nitrogen cartel: also the London
Schroder had close business and -family ties with the notorious General Kurt
von Schroeder, of the Stein Bank of Cologne, Germany, that particular member
of the Schroeder clan having been one of the strongest financial links
between Hitler and his Farben industrial backers.
By another coincidence, Sullivan & Cromwell, the law firm of John Foster
Dulles (advisor to Mr.. Crowley as Custodian and Counsel for General
Dyestuffs stock claimants), is also reported to be counsel for the Schroder
bank; and Allen W. Dulles, brother of John Foster and a member of that law
firm, likewise is one of the directors of the J. Henry Schroder bank.
It may be stated possibly in extenuation of Mr. Crowley's too' numerous
duties, that he has not been the only man holding high place. in official
Washington who appears to be under rather definite obligations to Mr. Victor
Emanuel-while at the same time wielding very considerable official powers.
Among others reputed to be indebted to Mr. Emanuel for various private
directorships is the former hotel manager George Edward Allen who, while
drawing approximately $50,000 a year from numerous corporations and acting as
a "public relations man" for private interests had been holding down various
Government jobs including a desk in the White House.
Mr. Allen was appointed by President Truman to be a Director of the
Reconstruction Finance Corporation with the chairmanship in prospect. He was
confirmed by the Senate on February 18, 1946, after a bitter debate in which
Mr. Allen was accused of knowing nothing about banking by his own testimony,
and of having been made a director of numerous corporations through his
friend Victor Emanuel and the latter's friend, Alien Property Custodian James
Markham:
These directorships included the General Aniline and Film Corporation and the
Hugo Stinnes Corporation, both controlled by the Custodian. Unfavorable
newspaper criticism of some of Mr. Allen's activities, by PM's omniscient I.
F. Stone, which were read into the Senate record caused Senator Bilbo to
praise Mr. Allen's family as Mississippi's best, and Senator Scott Lucas to
defend Mr. Allen vigorously. This Illinois statesman in 1942, as member of
the Senate Patents committee, had voted to halt Senator Bone's investigation
of the I.G. Farben tie-ups, and in 1946 he was chairman of the committee on
contingent expenses which voted to cut off the funds for Senator Kilgore's
investigations of the conspiracy to revive of I.G. Farben.
Said Senator Lucas in denouncing the critics of Mr. Allen:
Who is going to pay any attention to . . .speculation as to the influence
which George Allen might have upon some one in Washington with respect to
I.G. Farbenindustrie.
So Mr. Allen then became director of the Government's multibillion dollar
lending agency.
This is not to imply that Victor Emanuel or the Schroders wielded improper
influence upon any Government official.
Unhappily, many leading financiers and industrialists in this country,
patriotic and wise according to their lights, who have not been directly
involved with Farben, have seen no wrong in the part played by Farben before
and during the war, or in a revival of Farben's world cartel system after the
war. These beliefs and this policy not being the officially announced creed
of the United States, it may be regarded merely as a matter of judgment
(similar to the issue raised by justice Jackson against justice Black), as to
whether the two men who, as Alien Property Custodian, have had the direction
of General Aniline, General Dyestuffs, and other Farben properties,' should
be so friendly to Mr. Emanuel: and the Schroder banking influences. And it
may be of no significance that Mr. Emanuel and several of his associates have
been' appointed by them to the Board of Directors of these seized enemy
properties, which, vastly increased in size and financial strength, are still
holding intact the patents received from Farben and refuse to throw them open
to all comers with the excuse that the legal' ownership of General Aniline &
Film is still claimed by Farben's, Swiss I.G. Chemie. The latter now
disguised under the so innocent name "Society of International Industrial and
Commerce, Participation."
Investigation of the conduct of the office of the Alien Property Custodian
under Mr. Crowley, and under Mr. Markham, has been threatened more than once,
and in one instance actually started.
The Federal Deposit Insurance Corporation under Mr. Crowley also has been
criticized severely, once back in 1942, when a resolution was proposed in the
House of Representatives to investigate the F. D. 1. C. because of heavy
advances made to bankrupt banks in Jersey City, the baliwick of New Jersey's
Democratic Boss Mayor Hague. Other complaints have been registered because
Mr. Crowley's F. D. I. C. attempted to collect huge sums for alleged
liquidating expenses from officers of banks which had paid off 100 percent of
the bank's obligations after having been ordered closed for unexplained
reasons.
Finally, in July 1945, a Senatorial investigation was begun after severe
criticism of the handling of the American Bosch Company by the Alien Property
Custodian (this being a repetition of the seizure of the predecessor of this
company during World War 1).
A Senate sub-committee conducted a fact-finding expedition into Alien
Property Custodian affairs but refused to make public its findings when
request was made to the committee for same.
One important key to the situation in the Custodiaes office was supplied in
an interview with members of the staff in October 1942, when I had been
officially requested to supply certain information relating to Farben. In the
hectic conference which followed, I finally mentioned with some skepticism
that part which Mr. Corcoran was reported to be taking in the affairs of the
Alien Property Custodian. This comment met with an immediate challenge.
However, other members of the staff were anything but enthusiastic about Mr.
Corcoran's cooperation.
Meanwhile the nearest, approach to investigating the Farben lobby or Mr.
Corcoran developed late in 1941, when Senator Carl A. Hatch introduced a bill
to restrain former government employes from receiving fees for such lobbying
activities for two years after leaving office. This bill caused some talk-and
died in committee. The lobby did not approve.
Then came the Truman Committee lobby hearings in December 1941 (Chapter IX)
at which Mr. Corcoran declined to talk about his Sterling-Farben activities
and fees, and was informed that be would be recalled later to tell the
committee all about it. Mr. Corcoran was not recalled and he did not return.
After a number of unsuccessful efforts to induce this committee to permit me
to testify before it, I sent its chief counsel, Hugh A. Fulton, in April
1943, a reminder of the committee's intention to recall Mr. Corcoran, and
asked whether the reappearance of the Sterling consent-decree expert had been
required.
Mr. Fulton's reply was a bit childish; he requested a memorandum on the
subject (I had already sent the committee a dozen or more memoranda and
letters relating to Mr. Corcoran), and also made the strange allegation that:
The Committee does not have the facilities for complying with private
requests, such as yours, for analysis of material in the committee files.
Conceding freely the great value of work which the Truman Committee and its
counsel Mr. Fulton may have done on many other matters relating to the war,
this Committee apparently lost' interest in the Farben tie-ups in the United
States after its partial expose of the Standard Oil arrangements on Buna
rubber and other products. It was Senator Bone's Patents Committee that later
did attempt to explore all of the Farben tie-ups�until halted, allegedly
through the efforts of Mr. Corcoran.
In view of Mr. Fulton's effort to twist the plain meaning of my letter and
his refusal to explain why Mr. Corcoran had not been required to reveal his
activities relating to the Farben-Sterling drug tie-ups, it may be proper for
me to recall that Mr. Fulton's legal experience prior to entering government
service was gained as a junior attorney with the New York and Washington law
firm of Cravath, de Gersdorff, Swaine and Wood, now Cravath, Swaine & Moore,
which firm, and its predecessors, as discussed in Chapter XVIII for many
years had been the legal representative of Farben's German Hoechst and Farben
affiliates in America.
Mr. Fulton may also recall that in 1939, after he had become executive
assistant to John Cahill, United States Attorney of New York (who was later
attorney for Sterling), when I called upon him to discover if possible what
his official attitude might be with regard to the investigation of the drug
industry, he made a vituperative attack upon a visitor whose assistance in
those matters had already been solicited and acknowledged by the justice ay
Department.
This attack came after Mr. Fulton had stated to me that. because of his
former connection with the Cravath law firm in cases involving the drug
industry, he would take no part in the official investigation of that
industry then getting under way.
However the controversy about Tommy Corcoran's influence with Mr. Biddle and
others in the justice Department was not to die completely because of the
refusal of the Truman Conmittee's counsel to act on its Chairman's earlier
announcement that Mr. Corcoran was to return and explain things. The entire
humiliating record was revived and considerable new light was thrown upon it
when Assistant Attorney General Norman M. Littell began airing his side of
his row with Mr. Biddle in December 1944 about the Corcoran influence. And
after Mr. Biddle attempted to reply to the Littell charges, the latter let
loose a blast which was so strong that the Senate Committee on National
Defense (of which Mr. Fulton had been counsel) now beaded by Senator James M.
Mead, of New York, refused to make it public.
But on January 22, 1944, Republican Representative Lawrence H. Smith, of
Wisconsin, to his everlasting credit, courageously rose to the occasion by
inserting the Littell. statement in the Congressional Record, along with his
own accusations and a resolution demanding an investigation of the conduct of
Biddle as Attorney General with special reference to the influence exerted by
Mr. Corcoran in the Sterling case.
The Littell statement started with the indictment that the settlement of the
Sterling case "marks the lowest point in the history of the Department of
justice since the Harding Administration."
After summarizing the history of Sterling and its subservience to Farben and
the Nazi Government, also Sterling's 7 subversive activities in Latin America
(as discussed in Chapter XIII), Mr. Littell turned his guns on the record of
the Sterling case when Mr. Biddle became Acting Attorney General and traced,
step by step, the actions of Thomas Corcoran in "defeating the indictment of
the companies and individuals involved."
"Corcoran," said Littell, "was engaged in a race with time to (1) stop the
investigation before it reached such a conclusive stage and (2) get the cases
filed on a civil basis with consent decrees merely restraining further
violation of the Anti-Trust Laws, and above all things (3) prevent the
presentation of the evidence to a grand jury."
Mr. Littell also stated that the anti-trust staff working on the Sterling
case were apprehensive because Corcoran was in and out of the justice
Department and it was also known that he was working hard to secure Mr.
Biddle's appointment as Attorney General and "Biddle was then to urge Tommy's
appointment as Solicitor General, which be later did but without success."
In a time table of events leading up to its final disposition Mr. Littell,
with his prestige and knowledge as recently one of the highest officers of
the justice Department, confirmed in substance, and in fact the statements
and reports beard back in 1941 (as told in Chapter IX) about how Tommy
Corcoran rode rough-shod through the Department with Mr. Biddle's approval.
This Littell blast also placed new light on certain aspects of the matter,
including the hiring by Earl McClintock and William E. Weiss, of David
Corcoran, brother of Tommy, to be an executive of Sterling's subsidiaries
which handled Latin-American business in the Farben partnership. This
engagement of a brother of the court favorite took place in the early 1930's
when Tommy Corcoran was the Mite House piano player and legislative deviser.
Other aspects of the case which Mr. Littell revealed were: that Sam S.
Isseks, friend and classmate of Tommy Corcoran, was moved mysteriously into
charge of the Sterling case over the heads of those handling the
investigations. that anti-trust violations had been clear, but far more
sinister facts appeared on the record because Sterling in its subservience to
Farben had in fact become an agent of Nazi Germany, carrying out policies
aimed at the security of the United States; that some of the justice staff
believed not only anti-trust indictments were justified but also indictments
for criminal conspiracy (against the Government of the United States) under
Section 88, Title 18, providing fines of $10,000 and two years imprisonment;
that while the battle was going on inside the justice Department Mr. Biddle
was merely Acting Attorney General, until August 24, 1941, when his
nomination for the office was announced, events then moving rapidly as it
thus became clear be would have authority to act. So on September 4th the
Senate confirmed the appointment and the next day the notorious consent
decrees and nominal fines were announced. And finally the fact that in the
meantime the new Attorney General had ordered the Justice Department staff to
stop' the Sterling investigation and mark the case closed (with no
indictments), after some thirty thousand documents had been assembled
revealing as conclusively as any case in the history of the justice
Department the means employed by Farben, in World War II as in World War I,
to serve the purposes of the German Government in the Western Hemisphere.
Following his timetable, Mr. Littell attacked Mr. Biddle's crude attempt to
defend his conduct at another Senate Committee meeting. He denounced as false
several of the Attorney General's statements especially an assertion that the
only conference Biddle had had-with Corcoran was in October 1941, after the
consent decrees were filed. This, commented Mr. Littell, was obviously
untrue, as the pressure prior to September 5, 1941, because of the
interference of Tommy Corcoran was so great that resignations were threatened
within the staff of the department.
As one commentator put it, Tommy Corcoran hung his hat in the Attorney
General's office, during this period.
Other allegations by Mr. Biddle which drew the fire of his former assistant
were that Biddle had asked for maximum fines in the Sterling case and that
jail sentences were never imposed in any anti-trust actions.
The "maximum fines" said Mr. Littell, were assessed not after action of a
grand jury but upon an information which "by no means includes all of the
acts or refers to all of the evidence in the Department of justice."
"And, furthermore," Mr. Littell declared, "Mr. Biddle's statement (regarding
prison sentences) is untrue" as in some 184 other anti-trust criminal cases
tried, 786 months of prison had been imposed.
Mr. Littell also expressed his own opinion, as a prosecutor, that many other
laws might have been invoked against the Sterling conspirators, including
those Federal Statutes dealing with trad. ing with the enemy, espionage, and
interference with our foreign relations, also that actions under the law
requiring registration of agents of foreign principals might have been
invoked because that law affects any:
. . .attorney for. or any other person, who receives com-pensation from, or
is under the direction of . . . a foreign business, a foreign political
organization, or a domestic organization subsidized directly or indirectly in
whole or in part by any of the above.
A grand jury, said Mr. Littell, might well have reached the conclusion that
Tommy Corcoran as well as executives of Sterling fitted into the above
definitions of terms prescribed by the Attorney General as foreign agents.
Finally, Mr. Littell dismissed as unfounded allegations by the Attorney
General that the action by the justice Department had purged Sterling of
German influence.
Taken all in all, Mr. Littell's accusations were so specific and, so
forcefully presented that immediate challenge and reply gut have been
expected from Mr. Biddle, Mr. Corcoran, and Sterling. But no reply in public
was forthcoming. Nor was reply ever made to the charges of Representative
Smith, which included statements that Sterling supplied the Nazi Government
with funds in 1938; that Sterling had had fake offices and secret hideouts in
New York and New Jersey where funds could be diverted to pay for German
propaganda and Gestapo agents, and that the Sterling officials "were
concerned not with the protection of American interests, but with advancing
the interests of our common enemy."
Along with the resolution introduced by Representative Smith was a second
demand along the same lines which was proposed by Representative Jerry
Voorhis of California. The latter, who has earned a name for himself similar
to that of the late Senator Norris for sincere, forthright action regardless
of who may be involved, also introduced a resolution demanding investigation
of the allegations of undue or improper influence upon officials of the
justice Department and the truth or falsity of the charges made by Mr.
Littell.
Coming from Representative Voorhis, who was a strong supporter of the
Roosevelt Administration, his resolution, to some appeared of even greater
significance than that of Republic;; Representative Smith. And Mr. Voorhis
had already paid tribute to Mr. Littell on November 30, 1944, and had
demanded an investigation of the situation in an earlier speech in the House
at the time when Biddle had induced the President to remove Mr. Littell for
alleged insubordination, but before the latter's counteraccusations had been
made public.
Both the Smith and the Voorhis resolutions were referred to the Rules
Committee, which promptly sat upon them, and, almost a year and a half later
was still withholding action which would permit the Congress to take a vote
on whether to investigate Mr. Biddle, or Mr. Corcoran, or the Sterling case
settlement.
One voice was raised in public, feebly, to defend Corcoran and Sterling.
Thurman Arnold from his dignified retreat in the Court of Appeals was
reported to have indicated publicly that his opinion as expressed in
September 1941, after the Sterling decrees had been filed, remained
unchanged. This reference to the weird press release issued from Mr. Biddle's
office in the name of Mr. Arnold on September 25, 1941, may not appear to be
much of a reply to the Littell charges, in view of the inaccuracies (noted in
Chapter IX) in this earlier makeshift exoneration issued over the Arnold name.
Aside from its startling revelations, the greater significance of the battle
between Biddle and Littell appears to be in the familiar pattern; that
charges of so specific a character could have been made during war-time on
the floor of the House against one of the highest officials of the
Government, involving collusive immunity for those accused of collaboration
with I.G. Farben and the Nazis-and thereafter, while the war went on into
peace, the charges remained hushed, and the immunity continued.
During my war-period efforts to bring about an investigation of matters
relating to I.G. Farben, Dr. J. B. Matthews, celebrated researcher for the
Dies Committee explained to me in August, 1942, that such an undertaking
would be difficult because the com-mittee had no investigators competent to
make such an inquiry. Furthermore, Dr. Matthews, with asides from R. E.
Stripling, the Dies chief investigator, lectured me on the thesis that I
should dis-tinguish between the commercial and political significance of
in-ternational agreements, such as Standard Oil had with Farben. This
argument may well indicate the competency of the Dies in-vestigational staff.
Another example of Congressional war-time silence on matters relating to
Farben was the squelching in October 1942, of one of the most robust
two-fisted members of the lower house, Representative John M. Coffee. Mr.
Coffee, in a fiery speech, did not mince words in describing an attempted
sabotage of the war effort by Farben allies, but his resolution to explore
the matter was then buried in the trash basket of the House Rules Committee.
Other incidents of hush and immunity will be related, but those mentioned
should suffice to show how soon the pattern of hidden protection for Farben's
allies which prevailed during the long pre-war years had actually begun to
reappear, after the brief period of partial expose' and abortive prosecutions
which followed Pearl Harbor.
Perhaps the most disturbing aspect of this renewed defiance of the integrity
of a Nation's war-time mobilization was in the Congress of the United States,
where no member of either house, with ample knowledge of these facts, was
permitted to stand up and hold the floor in protest until his colleagues and
the Nation should have been compelled to listen, and to act.
Even in the Senate, with its unlimited debate and its high powers, no such
voice was raised.
This aspect of the Farben pattern has never been described more concisely
than it was in a public address delivered by Supreme Court justice Robert H.
Jackson, in June 1941, shortly before he retired as Attorney General of the
United States. Mr. Jackson appealed for assistance to defeat what he defined
as the . . . pattern of a premilitary and nonmilitary invasion Of business,
finance, labor, public opinion and political organizations . . .
alien-directed and financed propaganda against the policy of our Government .
. . at Congressional hearings in court . . . against investigational
officials and agencies, prosecution policies, and law enforcement itself.
It was just at this time that pressure was being brought to bear upon
members of the Attorney General's staff to relax their ef-forts in several
investigations and prosecutions which Mr. Jackson had ordered into Farben's
long-standing illegal tie-ups and sub-versive activities in the United
States. As Attorney General, Mr. Jackson had given Thurman Arnold the green
light to get tough and clean out the Farben framework. In view of what
occurred thereafter, it is unfortunate that Mr. justice Jackson did not
remain as Attorney General until the last vestige of the Farben pattern
should have been rooted out and eradicated in this country, in anticipation
of a similar clean-up by America's Prosecutor Jackson in. Europe.
pps. 350-377
-----
Aloha, He'Ping,
Om, Shalom, Salaam.
Em Hotep, Peace Be,
All My Relations.
Omnia Bona Bonis,
Adieu, Adios, Aloha.
Amen.
Roads End
<A HREF="http://www.ctrl.org/">www.ctrl.org</A>
DECLARATION & DISCLAIMER
==========
CTRL is a discussion & informational exchange list. Proselytizing propagandic
screeds are unwelcomed. Substance�not soap-boxing�please! These are
sordid matters and 'conspiracy theory'�with its many half-truths, mis-
directions and outright frauds�is used politically by different groups with
major and minor effects spread throughout the spectrum of time and thought.
That being said, CTRLgives no endorsement to the validity of posts, and
always suggests to readers; be wary of what you read. CTRL gives no
credence to Holocaust denial and nazi's need not apply.
Let us please be civil and as always, Caveat Lector.
========================================================================
Archives Available at:
http://peach.ease.lsoft.com/archives/ctrl.html
<A HREF="http://peach.ease.lsoft.com/archives/ctrl.html">Archives of
[EMAIL PROTECTED]</A>
http:[EMAIL PROTECTED]/
<A HREF="http:[EMAIL PROTECTED]/">ctrl</A>
========================================================================
To subscribe to Conspiracy Theory Research List[CTRL] send email:
SUBSCRIBE CTRL [to:] [EMAIL PROTECTED]
To UNsubscribe to Conspiracy Theory Research List[CTRL] send email:
SIGNOFF CTRL [to:] [EMAIL PROTECTED]
Om
