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From The Militant, Vol. 6 No. 15, 11 April 1942, pp. 1 & 3.
Transcribed & marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
Despite powerful efforts of the Rockefeller interests and the nation’s capitalist press to put a lid on the truth, damning evidence continues to pile up about the Standard Oil-I.G. Farbenindustrie conspiracy.
Last week, tire Truman Senate Investigating Committee heard further government testimony showing that Standard Oil, in conformity with its arrangements with the Nazi interests, continued as late as December 1941 to provide oil and other necessary operating supplies for Nazi and Italian airlines bringing “spies, propaganda and profit-producing goods” to South America and returning to Europe with “essential war materials.”
The committee heard from the lips of a leading Treasury official the details of Standard’s efforts to turn over its Hungarian plants to the Nazis for $24,000.000 gold, a deal which the Treasury blocked because it would have “permitted the Standard Oil Co. to have been preferred by Germany over other American owners of capital investments in Germany” and would have furthered Nazi economic conquest in Europe.
These facts further brought out the close tie-up between Standard and the German capitalist interests and lent additional weight to the documentary evidence presented to the Truman Committee two weeks ago by Assistant. Attorney General Arnold, which established that Standard and I.G. Farben had an iron-clad cartel agreement, first made in Nov. 1929 to recognize each other’s exclusive rights in particular economic spheres. I.G. Farben was to have world control in chemicals and Standard, in petroleum products and synthetic gasoline.
By the terms of their agreement – which included a further understanding reached after the start of the war in October 1939 for a means of working together during the war “whether or not the U.S. came in” – Standard turned all its chemical patents over to I.G., including its invaluable butyl rubber process which it refused until two weeks ago to give to American concerns, and I.G. gave Standard its synthetic gasoline and similar patents and “the privilege of stifling competition.”
In accordance with its agreement with I.G. Farben and its “natural monopolistic desire”, Standard withheld its synthetic rubber processes from American industry, “frustrated the creation of an American synthetic rubber industry”, and contributed in a large measure to the present rubber famine which has seriously crippled American production and caused a drastic curtailment of consumers goods.
But the significant development before the Truman Committee last week is that Standard Oil – far from admitting its guilt – still defends its practices and brazenly denies the very documentary evidence from its own files which conclusively prove its conspiracy and its monopoly motives.
Thus, for two days last week the American people witnessed W.S. Parish and Frank Howard, president and vice-president respectively of the $2,000,000,000 Standard Oil Co. of New Jersey, arrogantly wave aside the government’s documentary evidence and blandly deny every charge against their corporation. They had the gall to go so far as to insist that the Standard-Nazi deal was to the “interests of the United States.”
Principally, their statement declared that there was not “a shadow of foundation” to the charge that Standard had “‘delayed’ or ‘retarded’ or ‘stifled’ synthetic rubber in this country.” They lyingly asserted that they had given “full information” to the government agencies about butyl rubber, and were, in fact, “anxious” to advance synthetic rubber production.
It was brought out, however, that in 1939 an official of the Navy’s Bureau of Construction and Repair had sought “first-hand information on the compounding” of butyl rubber, according to a letter from Standard’s files. This letter, from a Standard employee to the Standard officials, goes on to state that:
“You (Standard officials) will recall that I took up this question with you before his arrival. As agreed upon I took Mr. Werkethin over to see the K plant when it appeared that I could not very well steer his interest away from the process. However, I am quite certain that he left with no picture of the operation ...”
Farish and Howard tried to make it appear that they had sought to interest the government in the German buna rubber process; but it turned out, according to Standard’s own documents that Standard had no knowledge of this process and had not received information on it for eight years.
On this point, after Farish had read into the records that “the only thing I.G. Farbenindustrie was withholding was the detail of its government-sponsored program for producing Buna rubber,” he was forced to hand to the press a revised version excluding this assertion and admitting that as I.G. fell “more and more under the control of the German Government there was an apparent reluctance to respond to further request for information.” That “reluctance”, however, did not apply to Standard itself which in 1938 turned over its butyl lubber process to I.G.
Farish and Howard sought to show that butyl rubber was in an “experimental” stage and was too costly for large scale production. But, here again, the documentary record from Standard’s files showed that Standard was prepared to produce butyl rubber, which it admitted itself to be superior in most respects to natural rubber, for 6.6 cents a pound to a 14.4 cents cost for the German buna rubber and the 21 cents a pound price on natural rubber.
This information, incidentally, brought out the fact that Standard was not alone in desiring to frustrate synthetic rubber production. The British and Dutch rubber interests were just as eager to do so in order to maintain their market for crude rubber at a high monopoly price.
A memorandum in Standard’s files, dated Feb. 21, 1941, stated that: “Also Sir John Hay, representative of the British Rubber Control, has been very persuasive that the production of synthetic rubber is uneconomic ... will impose a drain on the American productive power ...”
Significant light was shed on the role of the government’s Reconstruction Finance Corporation and the big rubber companies in helping to block synthetic rubber production.
It was brought out that the RFC had given Standard contracts for a small gov’t-financed plant, also agreed to give Standard a three percent royalty on all synthetic rubber produced under the government program. This agreement was partially engineered by R.R. Deupree, president of the Proctor & Gamble Soap Co., which had a “limited partnership” in the Standard-I.G. cartel arrangement. Deupree had been head of the rubber division of the OPM and later special rubber adviser to the RFC.
Standard tried to get plants “to be financed 75 per cent by the RFC”, not, however, to get production, but to go into limited manufacturing in order to establish a stronger legal claim to its patent monopolies.
But most of Standard’s plans to get free plants were balked by the big rubber corporations which opposed expansion of synthetic rubber to be controlled by Standard because this would compete with the natural rubber industry and force down prices.
A battle royal, it appears, ensued between the agents of these contending interests. It was not until the Far East defeats cut off virtually all supplies of crude rubber that the government, under pressure of the rubber corporations in particular, two weeks ago finally extracted from its files the complete documentary evidence it had held for nearly a year about Standard’s conspiracy and forced Standard to release its patents royalty-free for the duration of the war.
Having obtained these patents, the administration has since tried to play down the Standard affair – the complete details of which make the Tea Pot Dome scandal look almost like a Sunday School picnic. The administration has demonstratively called for the cessation of all anti-trust prosecutions which “interfere with war production” and the Defense Plants Corporation has announced a program of government-financed synthetic rubber plants to be divided up principally among the rubber corporations and Standard Oil.
In their testimony about supplying the South American airlines of the Nazi and Italian Fascists, the Standard Officials argued that they had followed the policy laid out by the State Department. This, according to a subsequent State Department statement, appears to be true to a degree.
While Secretary Hull had urged Standard not to supply these lines from its American stocks and tried to discourage the practice, the State Department did permit Standard to continue giving these supplies to the fascists with the approval of the American ambassador in Brazil. According to Farish’s statement, which the State Department has not denied, after October 1941 when the government had threatened to black-list Standard’s Brazilian company, “limited deliveries to Condor (Nazi line) continued under the instructions of Ambassador Caffery in Rio.”
The indisputable documentary evidence proves that Standard Oil – and all the big trusts, according to Thurman Arnold’s own admission – have deliberately curtailed war production and given the Nazis exclusive industrial processes literally worth whole armies.
But most of the big capitalist papers, fearful lest the masses get a real picture of the “patriotism” represented by the American monopoly capitalists who run and control the war program, have joined in a frantic whitewash campaign of Standard Oil. Papers like the New York Times and New York Herald Tribune deliberately played down Arnold’s testimony and played up the lies of the Standard officials.
Both of these papers – giving the lead to the rest of the capitalist press which followed suit – avoided all editorial comment on the Standard Conspiracy, and then, as soon as the Standard agents had testified, came out with long editorials giving full credence to the Standard statements. Thus, the Times, April 2, asserts that: “In the light of this evidence (Standard’s) Mr. Arnold’s charges that the Standard Oil Company is responsible for the shortage of synthetic rubber simply evaporate.”
Far from “evaporating”, however, the demonstrable lies of the Standard officials serve to prove these charges to the hilt. They prove that the monopolies don’t give a tinker’s dam about a “war for democracy against fascism.” They prove that in war as in peace, the capitalists hold their profits and monopoly advantages above everything else, not hesitating to strike blows at their own government’s interests and to aid the Nazis if this is to their own interests. And this entire affair shows, finally, how unwilling the government is to take effective action against the powerful financial groups which dominate the economic and political life of the country.
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