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Banned
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This is a followup to a post yesterday, on this thread:
http://www.tfproject.org/tfp/showthr...=136670&page=5
Quote:
http://www.guardian.co.uk/world/2004...secondworldwar
Ben Aris in Berlin and Duncan Campbell in Washington The Guardian, Saturday September 25, 2004 Article history
How Bush's grandfather helped Hitler's rise to powerRumours of a link between the US first family and the Nazi war machine have circulated for decades. Now the Guardian can reveal how repercussions of events that culminated in action under the Trading with the Enemy Act are still being felt by today's president....
Bush was also on the board of at least one of the companies that formed part of a multinational network of front companies to allow Thyssen to move assets around the world.
Thyssen owned the largest steel and coal company in Germany and grew rich from Hitler's efforts to re-arm between the two world wars. One of the pillars in Thyssen's international corporate web, UBC, worked exclusively for, and was owned by, a Thyssen-controlled bank in the Netherlands. More tantalising are Bush's links to the Consolidated Silesian Steel Company (CSSC), based in mineral rich Silesia on the German-Polish border. During the war, the company made use of Nazi slave labour from the concentration camps, including Auschwitz. The ownership of CSSC changed hands several times in the 1930s, but documents from the US National Archive declassified last year link Bush to CSSC, although it is not clear if he and UBC were still involved in the company when Thyssen's American assets were seized in 1942.
Three sets of archives spell out Prescott Bush's involvement. All three are readily available, thanks to the efficient US archive system and a helpful and dedicated staff at both the Library of Congress in Washington and the National Archives at the University of Maryland.
The first set of files, the Harriman papers in the Library of Congress, show that Prescott Bush was a director and shareholder of a number of companies involved with Thyssen.
The second set of papers, which are in the National Archives, are contained in vesting order number 248 which records the seizure of the company assets. What these files show is that on October 20 1942 the alien property custodian seized the assets of the UBC, of which Prescott Bush was a director. Having gone through the books of the bank, further seizures were made against two affiliates, the Holland-American Trading Corporation and the Seamless Steel Equipment Corporation. By November, the Silesian-American Company, another of Prescott Bush's ventures, had also been seized.
The third set of documents, also at the National Archives, are contained in the files on IG Farben, who was prosecuted for war crimes.
A report issued by the Office of Alien Property Custodian in 1942 stated of the companies that "since 1939, these (steel and mining) properties have been in possession of and have been operated by the German government and have undoubtedly been of considerable assistance to that country's war effort".
Prescott Bush, a 6ft 4in charmer with a rich singing voice, was the founder of the Bush political dynasty and was once considered a potential presidential candidate himself. Like his son, George, and grandson, George W, he went to Yale where he was, again like his descendants, a member of the secretive and influential Skull and Bones student society. He was an artillery captain in the first world war and married Dorothy Walker, the daughter of George Herbert Walker, in 1921.
In 1924, his father-in-law, a well-known St Louis investment banker, helped set him up in business in New York with Averill Harriman, the wealthy son of railroad magnate E H Harriman in New York, who had gone into banking.
One of the first jobs Walker gave Bush was to manage UBC. Bush was a founding member of the bank and the incorporation documents, which list him as one of seven directors, show he owned one share in UBC worth $125.
The bank was set up by Harriman and Bush's father-in-law to provide a US bank for the Thyssens, Germany's most powerful industrial family.
August Thyssen, the founder of the dynasty had been a major contributor to Germany's first world war effort and in the 1920s, he and his sons Fritz and Heinrich established a network of overseas banks and companies so their assets and money could be whisked offshore if threatened again.
By the time Fritz Thyssen inherited the business empire in 1926, Germany's economic recovery was faltering. After hearing Adolf Hitler speak, Thyssen became mesmerised by the young firebrand. He joined the Nazi party in December 1931 and admits backing Hitler in his autobiography, I Paid Hitler, when the National Socialists were still a radical fringe party. He stepped in several times to bail out the struggling party: in 1928 Thyssen had bought the Barlow Palace on Briennerstrasse, in Munich, which Hitler converted into the Brown House, the headquarters of the Nazi party. The money came from another Thyssen overseas institution, the Bank voor Handel en Scheepvarrt in Rotterdam.
By the late 1930s, Brown Brothers Harriman, which claimed to be the world's largest private investment bank, and UBC had bought and shipped millions of dollars of gold, fuel, steel, coal and US treasury bonds to Germany, both feeding and financing Hitler's build-up to war.
Between 1931 and 1933 UBC bought more than $8m worth of gold, of which $3m was shipped abroad. According to documents seen by the Guardian, after UBC was set up it transferred $2m to BBH accounts and between 1924 and 1940 the assets of UBC hovered around $3m, dropping to $1m only on a few occasions.
In 1941, Thyssen fled Germany after falling out with Hitler but he was captured in France and detained for the remainder of the war.
There was nothing illegal in doing business with the Thyssens throughout the 1930s and many of America's best-known business names invested heavily in the German economic recovery. However, everything changed after Germany invaded Poland in 1939. Even then it could be argued that BBH was within its rights continuing business relations with the Thyssens until the end of 1941 as the US was still technically neutral until the attack on Pearl Harbor. The trouble started on July 30 1942 when the New York Herald-Tribune ran an article entitled "Hitler's Angel Has $3m in US Bank". UBC's huge gold purchases had raised suspicions that the bank was in fact a "secret nest egg" hidden in New York for Thyssen and other Nazi bigwigs. The Alien Property Commission (APC) launched an investigation.
There is no dispute over the fact that the US government seized a string of assets controlled by BBH - including UBC and SAC - in the autumn of 1942 under the Trading with the Enemy act. What is in dispute is if Harriman, Walker and Bush did more than own these companies on paper.
Erwin May, a treasury attache and officer for the department of investigation in the APC, was assigned to look into UBC's business. The first fact to emerge was that Roland Harriman, Prescott Bush and the other directors didn't actually own their shares in UBC but merely held them on behalf of Bank voor Handel. Strangely, no one seemed to know who owned the Rotterdam-based bank, including UBC's president.
May wrote in his report of August 16 1941: "Union Banking Corporation, incorporated August 4 1924, is wholly owned by the Bank voor Handel en Scheepvaart N.V of Rotterdam, the Netherlands. My investigation has produced no evidence as to the ownership of the Dutch bank. Mr Cornelis [sic] Lievense, president of UBC, claims no knowledge as to the ownership of the Bank voor Handel but believes it possible that Baron Heinrich Thyssen, brother of Fritz Thyssen, may own a substantial interest."
May cleared the bank of holding a golden nest egg for the Nazi leaders but went on to describe a network of companies spreading out from UBC across Europe, America and Canada, and how money from voor Handel travelled to these companies through UBC.
By September May had traced the origins of the non-American board members and found that Dutchman HJ Kouwenhoven - who met with Harriman in 1924 to set up UBC - had several other jobs: in addition to being the managing director of voor Handel he was also the director of the August Thyssen bank in Berlin and a director of Fritz Thyssen's Union Steel Works, the holding company that controlled Thyssen's steel and coal mine empire in Germany.
Within a few weeks, Homer Jones, the chief of the APC investigation and research division sent a memo to the executive committee of APC recommending the US government vest UBC and its assets. Jones named the directors of the bank in the memo, including Prescott Bush's name, and wrote: "Said stock is held by the above named individuals, however, solely as nominees for the Bank voor Handel, Rotterdam, Holland, which is owned by one or more of the Thyssen family, nationals of Germany and Hungary. The 4,000 shares hereinbefore set out are therefore beneficially owned and help for the interests of enemy nationals, and are vestible by the APC," according to the memo from the National Archives seen by the Guardian.
Red-handed
Jones recommended that the assets be liquidated for the benefit of the government, but instead UBC was maintained intact and eventually returned to the American shareholders after the war. Some claim that Bush sold his share in UBC after the war for $1.5m - a huge amount of money at the time - but there is no documentary evidence to support this claim. No further action was ever taken nor was the investigation continued, despite the fact UBC was caught red-handed operating a American shell company for the Thyssen family eight months after America had entered the war and that this was the bank that had partly financed Hitler's rise to power.
The most tantalising part of the story remains shrouded in mystery: the connection, if any, between Prescott Bush, Thyssen, Consolidated Silesian Steel Company (CSSC) and Auschwitz.
Thyssen's partner in United Steel Works, which had coal mines and steel plants across the region, was Friedrich Flick, another steel magnate who also owned part of IG Farben, the powerful German chemical company.
Flick's plants in Poland made heavy use of slave labour from the concentration camps in Poland. According to a New York Times article published in March 18 1934 Flick owned two-thirds of CSSC while "American interests" held the rest.
The US National Archive documents show that BBH's involvement with CSSC was more than simply holding the shares in the mid-1930s. Bush's friend and fellow "bonesman" Knight Woolley, another partner at BBH, wrote to Averill Harriman in January 1933 warning of problems with CSSC after the Poles started their drive to nationalise the plant. "The Consolidated Silesian Steel Company situation has become increasingly complicated, and I have accordingly brought in Sullivan and Cromwell, in order to be sure that our interests are protected," wrote Knight. "After studying the situation Foster Dulles is insisting that their man in Berlin get into the picture and obtain the information which the directors here should have. You will recall that Foster is a director and he is particularly anxious to be certain that there is no liability attaching to the American directors."
But the ownership of the CSSC between 1939 when the Germans invaded Poland and 1942 when the US government vested UBC and SAC is not clear.
"SAC held coal mines and definitely owned CSSC between 1934 and 1935, but when SAC was vested there was no trace of CSSC. All concrete evidence of its ownership disappears after 1935 and there are only a few traces in 1938 and 1939," says Eva Schweitzer, the journalist and author whose book, America and the Holocaust, is published next month.
Silesia was quickly made part of the German Reich after the invasion, but while Polish factories were seized by the Nazis, those belonging to the still neutral Americans (and some other nationals) were treated more carefully as Hitler was still hoping to persuade the US to at least sit out the war as a neutral country. Schweitzer says American interests were dealt with on a case-by-case basis. The Nazis bought some out, but not others. ....
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Quote:
http://news.google.com/archivesearch...l+ford+mellons
IT'S GRAND, EVEN BY PB STANDARDS
Pay-Per-View - Palm Beach Post - NewsBank - Feb 9, 1997
It was built for Edsel Ford and for the past couple of decades has been owned by the Mellon banking family. But a 1940 Art Deco home on Jupiter Island just ...
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Quote:
The Bush family's home
at that time was in Greenwich, Connecticut. But it was just then that
George's parents, Prescott and Dorothy Walker Bush, were wintering in a
peculiar spot in Florida, a place that is excluded from mention in
literature originating from Bush circles.
Certain national news accounts early in 1991 featured the observations on
President Bush's childhood by his elderly mother Dorothy. She was said to
be a resident of Hobe Sound, Florida. More precisely, the President's
mother lived in a hyper-security arrangement created a half-century earlier
by Averell Harriman, adjacent to Hobe Sound. Its correct name is Jupiter
Island.
During his political career, George Bush has claimed many different "home"
states, including Texas, Maine, Massachusetts, and Connecticut. It has not
been expedient for him to claim Florida, though that state has a vital link
to his role in the world, as we shall see. And George Bush's home base in
Florida, throughout his adult life, has been Jupiter Island.
The unique, bizarre setup on Jupiter Island began in 1931, following the
merger of W.A. Harriman and Co. with the British-American firm Brown
Brothers.
The reader will recall Mr. Samuel Pryor, the "Merchant of Death." A partner
with the Harrimans, Prescott Bush, George Walker, and Nazi boss Fritz
Thyssen in banking and shipping enterprises, Sam Pryor remained executive
committee chairman of Remington Arms. In this period, the Nazi private
armies (SA and SS) were supplied with American arms -- most likely by Pryor
and his company -- as they moved to overthrow the German republic. Such
gun-running as an instrument of national policy would later become
notorious in the "Iran-Contra" affair.
Sam Pryor's daughter Permelia married Yale graduate Joseph V. Reed on the
last day of 1927. Reed immediately went to work for Prescott Bush and
George Walker, as an apprentice at W.A. Harriman and Co.
During World War II, Joseph V. Reed had served in the "special services"
section of the U.S. Army Signal Corps. A specialist in security, codes and
espionage, Reed later wrote a book entitled "Fun with Cryptograms". Note #2
Sam Pryor had had property around Hobe Sound, Florida, for some time. In
1931, Joseph and Permelia Pryor Reed bought the entirety of Jupiter Island.
This is a typically beautiful Atlantic coast "barrier island," a half-mile
wide and nine miles long. The middle of Jupiter Island lies just off Hobe
Sound. The south bridge connects the island with the town of Jupiter, to
the north of Palm Beach. It is about 90 minutes by auto from Miami --
today, a few minutes by helicopter.
Early in 1991, a newspaper reporter asked a friend of the Bush family about
security arrangements on Jupiter Island. He responded, "If you called up
the White House, would they tell you h ow many security people they had?
It's not that Jupiter Island is the White House, although he [George Bush]
does come down frequently."
But for several decades before Bush was President, Jupiter Island had an ord
inance requiring the registration and fingerprinting of all housekeepers,
gardeners, and other non-residents working on the island. The Jupiter
Island police department says that there are sensors in the two main roads
that can track every automobile on the island. If a car stops in the
street, the police will be there within one or two minutes. Surveillance is
a duty of all employees of the Town of Jupiter Island. News reporters are
to be prevented from visiting the island. Note #3
To create this astonishing private club, Joseph and Permelia Pryor Reed
sold land only to those who would fit in. Permelia Reed was still the
grande dame of the island when George Bush was inaugurated President in
1989. In recognition of the fact that the Reeds know where "all" the bodies
are buried, President Bush appointed Permelia's son, Joseph V. Reed, Jr.,
chief of protocol for the U.S. State Dept., in charge of private
arrangements with foreign dignitaries.
Averell Harriman made Jupiter Island a staging ground for his 1940s
takeover of the U.S. national security apparatus. It was in that connection
that the island became possibly the most secretive private place in
America.
Let us briefly survey the neighborhood, back then in 1946-48, to see some
of the uses various of the residents had for the Harriman clique.
Residence on Jupiter Island
Note #b|Jupiter Islander "Robert A. Lovett," Note #4, Prescott Bush's
partner at Brown Brothers Harriman, had been Assistant Secretary of War for
Air from 1941 to 1945. Lovett was the leading American advocate of the
policy of terror-bombing of civilians. He organized the Strategic Bombing
Survey, carried out for the American and British governments by the staff
of the Prudential Insurance Company, guided by London's Tavistock
Psychiatric Clinic.
In the postwar period, Prescott Bush was associated with Prudential
Insurance, one of Lovett's intelligence channels to the British secret
services. Prescott was listed by Prudential as a director of the company
for about two years in the early 1950s.
Their Strategic Bombing Survey failed to demonstrate any real military
advantage accruing from such outrages as the fire-bombing of Dresden,
Germany. But the Harrimanites nevertheless persisted in the advocacy of
terror from the air. They glorified this as "psychological warfare," a part
of the utopian military doctrine opposed to the views of military
traditionalists such as Gen. Douglas MacArthur.
Robert Lovett later advised President Lyndon Johnson to terror-bomb
Vietnam. President George Bush revived the doctrine with the bombing of
civilian areas in Panama, and the destruction of Baghdad.
On October 22, 1945, Secretary of War Robert Patterson created the Lovett
Committee, chaired by Robert A. Lovett, to advise the government on the
post-World War II organization of U.S. intelligence activities. The
existence of this committee was unknown to the public until an official CIA
history was released from secrecy in 1989. But the CIA's author (who was
President Bush's prep school history teacher; see chapter 5) gives no real
details of the Lovett Committee's functioning, claiming: "The record of the
testimony of the Lovett Committee, unfortunately, was not in the archives
of the agency when this account was written." Note #5
The CIA's self-history does inform us of the advice that Lovett provided to
the Truman cabinet, as the official War Department intelligence proposal.
Lovett decided that there should be a separate Central Intelligence Agency.
The new agency would "consult" with the armed forces, but it must be the
sole collecting agency in the field of foreign espionage and
counterespionage. The new agency should have an independent budget, and its
appropriations should be granted by Congress without public hearings.
Lovett appeared before the Secretaries of State, War, and Navy on November
14, 1945. He spoke highly of the FBI's work because it had "the best
personality file in the world." Lovett said the FBI was expert at producing
false documents, an art "which we developed so successfully during the war
and at which we became outstandingly adept." Lovett pressed for a virtual
resumption of the wartime Office of Strategic Services (OSS) in a new CIA.
U.S. military traditionalists centered around Gen. Douglas MacArthur
opposed Lovett's proposal. The continuation of the OSS had been attacked at
the end of the war on the grounds that the OSS was entirely under British
control, and that it would constitute an American Gestapo. Note #6 But the
CIA was established in 1947 according to the prescription of Robert Lovett,
of Jupiter Island.
/ Note #b|"Charles Payson" and his wife, "Joan Whitney Payson," were
extended family members of Harriman's and business associates of the Bush
family.
Joan's aunt, Gertrude Vanderbilt Whitney, was a relative of the Harrimans.
Gertrude's son, Cornelius Vanderbilt ("Sonny") Whitney, long-time chairman
of Pan American Airways (Prescott was a Pan Am director), became assistant
secretary of the U.S. Air Force in 1947. Sonny's wife Marie had divorced
him and married Averell Harriman in 1930. Joan and Sonny's uncle, Air
Marshal Sir Thomas Elmhirst, was director of intelligence for the British
Air Force from 1945 to 1947.
Joan's brother, John Hay ("Jock") Whitney, was to be ambassador to Great
Britain from 1955 to 1961 ... when it would be vital for Prescott and
George Bush to have such a friend. Joan's father, grandfather, and uncle
were members of the Skull and Bones secret society.
Charles Payson organized a uranium refinery in 1948. Later, he was chairman
of Vitro Corporation, makers of parts for submarine-launched ballistic
missiles, equipment for frequency surveillance and torpedo guidance, and
other subsurface weaponry.
Naval warfare has long been a preoccupation of the British Empire. British
penetration of the U.S. Naval Intelligence service has been particularly
heavy since the tenure of Joan's Anglophile grandfather, William C.
Whitney, as secretary of the Navy for President Grover Cleveland. This
traditional covert British orientation in the U.S. Navy, Naval Intelligence
and the Navy's included service, the Marine Corps, forms a backdrop to the
career of George Bush -- and to the whole neighborhood on Jupiter Island.
Naval Intelligence maintained direct relations with gangster boss Meyer
Lansky for Anglo-American political operations in Cuba during World War II,
well before the establishment of the CIA. Lansky officially moved to
Florida in 1953. / Note #7
/ Note #b|"George Herbert Walker, Jr." (Skull and Bones, 1927), was
extremely close to his nephew George Bush, helping to sponsor his entry
into the oil business in the 1950s. "Uncle Herbie" was also a partner of
Joan Whitney Payson when they co-founded the New York Mets baseball team in
1960. His son, G.H. Walker III, was a Yale classmate of "Nicholas Brady"
and Moreau D. Brown (Thatcher Brown's grandson), forming what was called
the "Yale Mafia" on Wall Street.
/ Note #b|"Walter S. Carpenter, Jr." had been chairman of the finance
committee of the Du Pont Corporation (1930-40). In 1933, Carpenter oversaw
Du Pont's purchase of Remington Arms from Sam Pryor and the Rockefellers,
and led Du Pont into partnership with the Nazi I.G. Farben company for the
manufacture of explosives. Carpenter became Du Pont's president in 1940.
His cartel with the Nazis was broken up by the U.S. government.
Nevertheless, Carpenter remained Du Pont's president, as the company's
technicians participated massively in the Manhattan Project to produce the
first atomic bomb. He was chairman of Du Pont from 1948 to 1962, retaining
high-level access to U.S. strategic activities.
Walter Carpenter and Prescott Bush were fellow activists in the Mental
Hygiene Society. Originating at Yale University in 1908, the movement had
been organized into the World Federation of Mental Health by Montague
Norman, himself a frequen t mental patient, former Brown Brothers partner
and Bank of England Governor. Norman had appointed as the federation's
chairman, Brigadier John Rawlings Rees, director of the Tavistock Clinic,
chief psychiatrist and psychological warfare expert for the British
intelligence services. Prescott was a director of the society in
Connecticut; Carpenter was a director in Delaware.
/ Note #b|"Paul Mellon" was the leading heir to the Mellon fortune, and a
long-time neighbor of Averell Harriman's in Middleburg, Virginia, as well
as Jupiter Island, Florida. Paul's father, Andrew Mellon, U.S. treasury
secretary 1921-32, had approved the transactions of Harriman, Pryor, and
Bush with the Warburgs and the Nazis. Paul Mellon's son-in-law, "David K.E.
Bruce," worked in Prescott Bush's W.A. Harriman & Co. during the late
1920s; was head of the London branch of U.S. intelligence during World War
II; and was Averell Harriman's Assistant Secretary of Commerce in 1947-48.
Mellon family money and participation would be instrumental in many
domestic U.S. projects of the new Central Intelligence Agency.
/ Note #b|"Carll Tucker" manufactured electronic guidance equipment for
the Navy. With the Mellons, Tucker was an owner of South American oil
properties. Mrs. Tucker was the great-aunt of "Nicholas Brady," later
George Bush's Iran-Contra partner and U.S. treasury secretary. Their son
Carll Tucker, Jr. (Skull and Bones, 1947), was among the 15 Bonesmen who
selected George Bush for induction in the class of 1948.
/ Note #b|"C. Douglas Dillon" was the boss of William H. Draper, Jr. in
the Draper-Prescott Bush-Fritz Thyssen Nazi banking scheme of the 1930s and
40s. His father, Clarence Dillon, created the Vereinigte Stahlwerke
(Thyssen's German Steel Trust) in 1926. C. Douglas Dillon made "Nicholas
Brady" the chairman of the Dillon Read firm in 1971 and himself continued
as chairman of the Executive Committee. C. Douglas Dillon would be a vital
ally of his neighbor Prescott Bush during the Eisenhower administration....
....From the late 1940s, Jupiter Island has served as a center for the direction of covert action by the U.S. government and, indeed, for the
covert management of the government. Jupiter Island will reappear later on, in our account of George Bush in the Iran-Contra affair.
http://www.padrak.com/alt/BUSHBOOK_2.html
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This is an account of the "high water mark" of the struggle for power between "the people" and the PTB....it only took place because of the recent depression driven demands for investigations into the abuses of the wealthiest against everyone else, and because of the question of whether these greedy bastards put country first, instead of profits, in a war that they were instrumental in financing the armaments buildup that preceded it, in the first place. Ironically, the guilty were able to use the perceived "expediencies of war", to escape further scrutiny and horror, or horrors....possible accountability for their actions. Instead of jailing them, confiscating their ill gotten gains....condemning them and their reputations for their crimes, we instead permitted them to design the CIA, conduct the cold war, and voted for their two sons as our presidents !
Quote:
http://findarticles.com/p/articles/m...g=artBody;col1
I. THE NEW DEAL AND ANTITRUST
ANTITRUST LEGACY OF THURMAN ARNOLD, THE
Waller, Spencer Weber
....As Robert Jackson commented in his memoir of the New Deal, "[FDR] knew that there were evils in the suppression of competition
and that there were evils in competition itself, and where the greater evils were he never fully decided."7
The entire history of the New Deal and competition was a contradiction.8 It had been preceded by the experience of war
mobilization during World War I, where industry cooperated with government and colluded under the direction of Bernard Baruch and
his War Industries Board. The era of associationalism followed in the 1920s, when the antitrust laws were sporadically enforced
and key government officials, up to and including President Hoover, preferred industry cooperation to the robust competition
mandated by the antitrust laws......
....III. THE TASK AHEAD
Arnold had a profoundly difficult task ahead of him. Throughout the 1920s, the antitrust laws were barely enforced, if at all.46 ....
IV. THE TEMPORAEY NATIONAL ECONOMIC COMMISSION
April 1938 brought the planning for Roosevelt's antimonopoly message to Congress, with which Arnold, Cummings, and Jackson
assisted, along with Donald Richberg, the head of the NRA, and Ben Cohen, the author of the Utility Holding Company Act. It was a
stark illustration of the balance of power between the planners and the advocates of competition. It was apparent to all that
Roosevelt finally intended to make a real attack on the problem of monopoly. Predictably, only Richberg dissented from the plan.77
The message itself was symbolically important but rather mild in actual content. The President decried the "concentration of
economic power" in the country and deplored the "concealed cartel system" and "the disappearance of price competition."78 The
President thundered: "[T]he liberty of a democracy is not safe if the people tolerate the growth of private power to a point where
it becomes stronger than their democratic state itself . . . ."79
....The TNEC met for the first time on July 1, 1938 and immediately was embroiled in battles over the scope of subpoenas, the site
of hearings and which industries to study. Finally, the Committee agreed it would work in teams of one legislator and one agency
official with hearings to begin in September, later postponed until after the November elections. The investigation meandered
through the insurance, banking, steel, oil, liquor, investment banking, and automobile industries and further examined the impact
of cartels, state fair trade laws, patents, and various other competitive practices.
Arnold was assigned to head the inquiry into patents. To facilitate the hearings, Arnold agreed on behalf of the Justice
Department that the TNEC's investigation would not be used to gather evidence for Antitrust Division prosecutions.89
Eventually, the TNEC produced thirty-seven volumes of testimony and forty-three monographs. In all, there were 20,000 pages of
testimony, 552 business witnesses, and over 230,000 copies of the hearings and monographs sold by the Government Printing
Office.90 The TNEC and the various agencies working with it spent virtually the entire budget allotted to them, returning a paltry
$8000 of more than $1,000,000 to the Treasury.91
The TNEC issued its final report on March 31, 1941. The report recommended: repealing the Miller-Tydings Act, which had authorized
state fair trade laws; prohibiting horizontal mergers in excess of $5 million unless approved by the FTC; prohibiting basing point
pricing; raising penalties for criminal antitrust violations to $50,000; creating federal regulation of trade associations;
requiring mandatory licensing of patents at fair prices; and establishing the national chartering of corporations.92
The TNEC produced detailed, thoughtful studies on the state of competition in various industries and the state of antitrust more
generally, and made reasonable recommendations for its time, but no new antitrust legislation emerged directly from the effort.
Senator O'Mahoney steered the TNEC to lay out the record about the state of competition in copious detail, but to leave the
drawing of conclusions to others. No one ever really made any conclusions and Arnold viewed the final work product of the TNEC
with the same degree of enthusiasm that he viewed the earlier empirical work of the legal realists-as ignored and unread. After
initially participating halfheartedly in the work of the TNEC, Arnold soon left the work to his subordinates and concentrated his
efforts on the nationwide enforcement of the antitrust laws.93
A few developments came out of the TNEC which made the exercise something more than the gigantic waste of time portrayed by
Arnold. It was essentially "an anti-monopoly document" with a nod toward Chairman O'Mahoney's long-standing interest in the
national chartering of corporations.94 Although the final report of the TNEC was mild stuff calling for no dramatic changes in
antitrust, the hearings included a vivid demonstration of how the Hartford-Empire Company had monopolized the glass container
market through the acquisition and misuse of patent rights and collusion with competitors who held patent rights for related
technologies.95 The Antitrust Division eventually charged Hartford-Empire in a separate monopolization case and ultimately
required the company to license its vast array of patents and forego damages from past infringements.96 The revelations also
prompted Congress to amend the patent laws consistent with some of the TNEC's recommendations. Moreover, the TNEC was the key
impetus leading to the eventual 1950 strengthening of the merger provisions of the clayton Act and a source of the eventual
adoption of mandatory pre-merger notification.97
In addition, the TNEC stabilized antitrust policy and made it a fundamental part of the government's law enforcement and economic
regulation policies. The decade that followed the TNEC produced a high point in both the reach of antitrust doctrine and antitrust
enforcement, neither of which would have been possible without the dual efforts of Arnold as head of the Antitrust Division and
the buttressing effect of the TNEC as state of the art economic research on the condition of the American economy......
....V. ENFOECING THE ANTITRUST LAWS
Arnold's first large case involved the automobile industry. The "big three" car companies had long coerced dealers to finance
customer purchases through finance companies owned by the manufacturers and to bar-as much as possible-the use of independent
finance companies. ....
....VII. THE PATENT caseS
The one type of investigation that cut across industry lines was Arnold's crusade against the misuse of patents. Arnold railed
against the misuse of patents every chance he could as a tool of price fixing, division of markets among competitors, and
monopolization.150 In a speech before the American Business Congress, broadcast nationwide over the Mutual Radio Network, Arnold
said, "Since 1926 the most effective instrument of monopoly control and restriction of production has been the abuse of the patent
privilege."151 In a letter to one of Roosevelt's top aides he argued, "[t]he real vice of the patent system does not lie in the
law itself but in the various schemes which have perverted it into an instrument for the monopoly control of corporations."152 He
instituted numerous investigations and cases alleging that competitors used patent and other licenses as a disguise for
traditional price fixing and cartel arrangements in international markets.153 He publicized how the control of a patent for a
lowly screw fastener became a vital bottleneck slowing down aircraft production and the war effort.154
Arnold also brought a landmark case against the Hartford-Empire Company for monopolizing the glass container industry through its
accumulation of patents and its licensing practices.155 He continued the earlier Ethyl Gasoline case and personally argued it in
the Supreme Court, winning a ruling that patents could not be used to set prices for resale or to impose restrictions on matters
outside the scope of the patent.156 Moreover, Arnold argued the Univis Lens case in the Supreme Court where the Court also
condemned the use of patent licenses as a device to control resale prices of the licensee to the public.157.....
.....X. ANTITRUST AND THE WINDS OF WAR
Perhaps the gravest challenge Arnold faced as head of the Antitrust Division was the wholesale repeal or practical nullification
of antitrust in the face of the war planning and production leading up to the United States entry into World War II. The planning
process, such as it was, and the war effort itself threatened to derail antitrust enforcement as effectively as the NRA had done
during his predecessors' tenure. As early as July 1940, Arnold saw the threat war preparation meant for antitrust.176
Arnold fought back both within the Administration and publicly by using antitrust laws to attack profiteering and other
impediments to preparedness during the early days of the war in Europe before Pearl Harbor-linking the attack on international
cartels to the defense needs of the nations, showing the links between the international cartels and the Nazi war machine, and
arguing against the return of a cartelized economy in the postwar era.177 In Bottlenecks, Arnold eloquently described how
anticompetitive agreements were injuring the national defense by:
Throttling American capacity to produce essential war materials by foreign ownership and control of patents;
Cartelization of certain industries with price and production control in foreign hands;
Transmission to foreign companies of American military secrets;
Division of markets, fixing and restricting of price of materials essential to military preparation;
Collusive bidding on contracts for the Army and Navy.178
Arnold demonstrated how agreements between American and German firms in the optical industry had jeopardized war preparedness and
how the very same firms had unsuccessfully tried to threaten the War Department with delays if the antitrust suit was not
dropped.179 In a nationwide radio address in 1942, Arnold cited to a list of 162 cartel agreements between the thoroughly Nazified
LG. Farben Company of Germany and various American firms.180
United States v. Standard oil Co. was the notable success of this effort.181 Standard oil and LG. Farben of Germany had agreed as
early as 1929 to divide world markets, with LG. Farben having exclusive rights to artificial rubber and Standard oil controlling
the world market for petroleum products. The companies exchanged technology with Farben receiving a great deal of important
Standard oil work in the artificial rubber area and giving relatively little in return. One of the consequences of the deal was
Standard oil's inability to reenter the artificial rubber market without LG. Farben's consent, a decision which had profound
consequences for war preparedness in the United States.
Arnold had the law and facts on his side and was prepared to criminally indict the companies through the grand jury process. If
the United States had not already been at war, this probably would have happened. Instead, Standard oil was able to exert its
influence with the War Department and Arnold was forced into accepting a consent decree which freed up some key patents, but
required only the payment of a $50,000 fine.182
Arnold "leaked" the real story to the press and Congressional hearings which laid the record of the case before the public.183 In
a series of appearances before the Senate National Defense Committee, chaired by Truman and the Patent Committee chaired by Homer
Bone, Arnold laid out what he had been prepared to prove in court.
As if the original cartel arrangement was not bad enough, the companies continued to try to keep their private deal together,
despite the war. Even after World War II had begun in Europe, there was evidence that Standard oil had agreed with LG. Farben to
continue to suppress production of artificial rubber in the United States, even though the arrangement was increasingly one-sided
in favor of LG. Farben and the wishes of the Hitler regime. Arnold believed Standard oil attempted to keep its cartel going even
during the war and linked the company to near espionage in giving German companies vital technological information.184 Standard
oil limited its own development of artificial rubber and blocked its commercial development by others, leaving the United States
short of this vital commodity while production flourished in Germany thanks to LG. Farben's uncontested control of this commodity.
Although Arnold was always careful to attribute the cartel agreements to the desire to dominate world markets rather than lack of
patriotism, Senator Truman characterized Standard oil's conduct as approaching treason.185 Arnold demonstrated the existence of
similar agreements between Farben and other American companies for magnesium, titanium, and other products that had similar
effects and how the initial cartel agreements inevitably expanded to include other American and international firms until the
agreements encompassed all worldwide competitors in truly global cartels to the detriment of American consumers and the war
effort.186
Arnold himself was careful not to directly impugn the patriotism or loyalty of American companies as much as simply attribute
these actions as a regrettable, but understandable, attitude of greed that could only be cured through more antitrust enforcement
both during and after the coming victory against the Axis. For Arnold: "You cannot control prices unless you restrict production.
You cannot restrict production without depriving a nation of wealth in peace, and of strength in war."187
Click on first article image for larger, more readable print (it's worth it!)
Article above, continues here:
Quote:
http://www.time.com/time/magazine/ar...813379,00.html
No Worries?
Monday, Sep. 25, 1950
When U.S. industry mobilizes for war production, the antitrust laws are among the first casualties. Reason: industrywide
production allocations and patent pools, which are taboo in peacetime, are essential for the close integration of industries
needed for big-scale war production. Last week came the first sign that antitrust prosecutions would again be eased up—or perhaps
shelved completely—as they were during World War II. Lanky, eager Herbert Bergson, 44, the U.S.'s most vigorous trustbuster since
the early New Deal days of Thurman Arnold, resigned his job.
In two years as head of the Justice Department's antitrust division, Bergson had filed 135 suits, including those against Aluminum
Co. of America, E. I. du Pont de Nemours & Co. and the Great Atlantic & Pacific Tea Co. (TIME, Sept. 26 et seq.). He has won 80 of
his cases, lost only seven. The rest, including the big ones, are still pending. But lately there have been hints that Bergson
would have less & less to do. One hint: When the Government decided to build the hydrogen bomb, it handed the big job to Du Pont.
Washington no longer seemed to be worried that Du Pont, which the trustbusters had said was too big, would have to grow much
bigger to build the bomb.
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Despite these revelations, Arnold was losing the antitrust battle to defense preparation and the war effort on a daily basis. ...
In his seventies, Arnold summarized his philosophy:
The purpose of the antitrust laws is to ensure freedom of business opportunity. They are not designed to protect small business
from larger and efficient competitors. They are not designed to prevent the growth of nationwide business enterprises so long as
that growth is a product of industrial efficiency. Even if, through greater efficiency in operation and distribution, a
corporation achieved a monopoly, that in itself would not violate the Sherman Act. But this has never yet happened. Monopolies
have been built up by using financial strength to buy out competitors or force them out of business. It is this sort of growth and
only this sort that the antitrust laws are designed to penalize .... This process repeated in industry after industry during the
period between the first World War and the depression created a system of absentee ownership of local industries which made
industrial colonies out the West and South, prevented the accumulation of local capital and siphoned the consumers' dollars to a
few industrial centers like New York and Chicago.214....
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The government of the US, and it's intelligence apparatus seems to be controlled by the descendants of a group of greedy, war fomenting, profiteers with no allegiance to country, principles, or morals....and we've voted three times to put this cabal's two sons into the white house. WTF?
Last edited by host; 07-11-2008 at 11:00 PM..
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