Manoeuvring Raw Materials.—In the first place, the Alien Property Custodian found unexampled, evidence of a definite German scheme to corner and divert certain important war materials destined for the Allies.
Chemical Exchange Association;—Doctor Albert's Letter.—Many such plots could be quoted, but we will limit ourselves to one,[1] chosen because on its stage move the chief figures of this espionage system. This case has been described under the name of the "Chemical Exchange Association," and is much more fitted for the pen of a Conan Doyle. The move appears to have been initiated by Dr. Albert, the financial adviser of the German Government in America, in collaboration with von Bernstorff. Its purpose was to corner the immediate supplies of American phenol in order to prevent its manufacture into high explosives, including the well-known picric acid. The outbreak of war instantly stopped the entry of phenol into the country. Further, this product was not manufactured there to any extent before. Large supplies were required for the production of synthetic resins, for the gramophone industry, This led to the development of a phenol industry by the Edison works, and there appeared, automatically, a phenol surplus. Dr. Albert, aware of the probable fate of this surplus as raw material for allied munitions, determined to seize it for the German Government, and he did this through Dr. Hugo Schweitzer, one of the most prominent members of the American agency of the great Bayer works. In June, 1915, Dr. Schweitzer contracted with the selling agents of the Edison Co. for the entire surplus of phenol available for sale, offering a large cash security which was furnished by Dr. Albert. A lapse of a week witnessed another contract with the Heyden Chemical Works, a branch of the German house, by which this phenol was purchased for conversion into salicylic acid and other products. To avoid exposing the nature of the deal, Dr. Schweitzer registered as the "Chemical Exchange Association." The profits amounted to nearly a million dollars, half of which belonged to Dr. Schweitzer. This, we are told, went immediately to the German Government. As a suitable climax to such a venture, a dinner was given at the Hotel Astor by Dr. Schweitzer in honour of Dr. Albert, and is described as a typical gathering of the most active German propagandists in the country. It was as a result of this deal that Dr. Albert sent Dr. Schweitzer a memorable letter in which he praises his "breadth of highmindedness," and compares his work with "a military coup accomplished by an army leader in destroying three railroad trains of forty cars containing four and a half million pounds of explosives."
[1] Alien Property Custodian Report, 1919, p. 43.
Dye Agency Information System;—Dr. Albert on Chemical Warfare.— Although a great deal has been said in America with regard to the activities of Dr. Schweitzer and his followers, very little has been heard on this side. Explaining the complete information system possessed by the Germans, Mr. F. P. Garvan informs us that the head of the system in America for years before the war was Dr. Hugo Schweitzer, President of the Bayer Company there, and he even quotes his secret service number given him by the Imperial Minister of War, stating that he came to America, became a citizen on the instruction of the German Government, and led the espionage and propagandist movements down to the day of his sudden death in November, 1917. The relationships between Dr. Albert and Dr. Schweitzer, when the former was leaving for Germany in 1917, are very illuminating. We learn from the same source how Dr. Schweitzer received from the former nearly one and a half million dollars, all to be spent in espionage and propaganda. Dr. Albert, leaving Dr. Schweitzer a letter of appreciation, to which we have referred in connection with the Chemical Exchange, makes a very significant reference to chemical warfare. "Of still greater and more beneficial effect is the support which you have afforded to the purchase of bromine. We have a well-founded hope that, with the exclusion of perhaps small quantities, we shall be in a position to buy up the total production of the country. Bromine, together with chloral, is used in making nitric gases, which are of such great importance in trench warfare. Without bromine these nitric gases are of slight effect: in connection with bromine they are of terrible effect. Bromine is produced only in the United States and Germany. While, therefore, the material is on hand in satisfactory quantities for the Germans, the Allies are entirely dependent upon importation from America." Making due allowance for the fact that Dr. Albert was not a technical man, this information possesses an element of truth, indeed France was driven to the extreme of establishing a bromine industry in the wilds of Tunis in order to counter the German attack.
The Moral Aspect.—Such facts tempt us to think hardly of these representatives of German culture. But they were, no doubt, fiercely patriotic Germans, and it is not difficult for us to understand their activities after the outbreak of war. An American, however, can hardly adopt such a lenient view, if, as has been claimed, many of these agents were naturalised Americans, for they were abusing the privileges and the confidence of their adopted country. We have no wish, however, to dwell on this aspect of the matter, and have no doubt whatever that many good Germans could justify all these activities according to their own codes. It would have been better not to have given this information the light of day, were it not of some value for the future.
Report of the New York World;—German Policy Regarding Dye Supplies to the U.S.A.—How far can the parent organisation of these dye agencies be regarded as aware of their activities? They were largely responsible for their inspiration. Mr. Garvan says, "Practically all the dye salesmen were only nominally in the employ of the branches here; all had secret and personal contracts with the Home Office." From these facts alone there can hardly be any doubt as to the connivance of the home organisation. Again, on April 28, 1915, the New York World printed an editorial explaining that "two large German chemical and aniline dye concerns are reported to be establishing factories in New Jersey, to supply American demands hither to supplied from Germany." This statement apparently alarmed Captain Boy-Ed, the German Naval Attache, and he communicated with Dr. Albert, the financial representative in New York, for the establishment of these factories would have countered the German policy of bringing political pressure by refusing dye shipments. Dr. Albert's reply to Boy-Ed contains the following phrase: "With regard to the dyes, I got into touch with local experts in order to determine what truth there is in the news. According to my knowledge of things, the matter is a fake, inasmuch as *our factories have bound themselves orally and by word of honour to do nothing in the present situation which might help the United States." As further evidence of this definite policy, witness a letter from Consul-General Hossenfelder to the Imperial German Chancellor, Dr. von Bethmann-Hollweg. This letter is dated New York, March 3, 1916, and, after a detailed examination of the economic relationships between Germany and America, states: "Further, we should, according to my conviction, hold ourselves absolutely passive in relation to the proposals for the exportation of potash, chemicals, and dyestuffs, and if the opportunity arises, make the sanction for them, not dependent upon the consent for an exchange of articles, but upon the abolition en bloc of all hindrances to intercourse contrary to international laws which have been instituted by England." Further, Dr. Albert, cabling to the German Government in April, 1916, on the export of dyestuffs, tells us: "The hope was entertained of bringing American industries which were solely dependent upon German deliveries of dyestuffs into a position that they would have to insist on the importation of dyestuffs under the conditions demanded by Germany." There can then be no doubt that the parent organisation of the I.G. was in close touch with the activities of its agencies.
This, then, is a brief account of the methods by which Germany created the monopoly whose existence threatened our success in the world war. Before leaving the question of the monopoly, let us inquire a little more closely into its exact nature and range. Various American official reports have revealed the desperate measures necessitated in that country in order to meet deficiencies in vital products when the German source of supply was removed.
Professor Stieglitz's Evidence.—Professor Stieglitz, of the University of Chicago, giving evidence before the United States Senate, stated:[1]
[1] Hearings before the Committee on Finance, U. S. Senate, 1920.
"I have come to the conclusion that we would have saved a great deal of suffering and a great many lives in this country, if we had had an organic chemical industry, as they have in Germany, before we started the war." Characterising the dye industry as the source of war chemicals, including explosives and poison gas, he emphasises the drug question and shows how their development depends absolutely upon the existence of certain raw materials, and facilities for comprehensive organic chemical research, which only find a raison d'etre in the existence of a flourishing dye industry,