DuPont Dynasty
Behind the Nylon Curtain
Gerard Colby
Eight
MERCHANTS OF DEATH
8.1.
TIES TO A WINDFALL
In the spring of 1914 a cold chill swept over Europe with the news of the assassination
of Archduke Franz Ferdinand, pretender to the ancient Hapsburg throne of Austria/Hungary.
Within hours, the cold war of intrigue and market rivalry that had gripped the
capitals of Europe in fear and suspicion for over a decade heated up with stormy
ultimatums that flashed like lightning over the breadth of the continent, turning its
landscape into fiery holocaust. Only after five years of firestorms and mass murder
would ten million bewildered refugees finally emerge from the poisoned smoke,
wandering in shock over the shattered continent, groveling in rubble craters that once
were cities, stumbling into bloody trenches where ten million more of their friends and
brothers, once strong young men, now silently lay, unable to hear the wail of their five
million widows and nine million orphans. And carrying that wail, winds rose and swept
over the scarred countryside, trying desperately, and also futilely, to bring fresh air to a
stale, diseased civilization.
From this global tragedy emerged a total of 23 million dead and, in the United States
alone, 20,000 new millionaires—one new American millionaire for every six American
boys killed. Among these new Croesus's were the DuPont's.
Of all the DuPont's, only the direct family of Alfred I. DuPont suffered any personal
danger from the war. Alfred’s son Victor saw combat in France. Alfred’s wife, Alicia,
almost did likewise, although, unlike Victor, not by choice.
Alicia had sailed to France in the spring of 1914 with her brother, Ed Bradford, in the
hope of improving her health and spirits. She was pregnant again, desperately trying to
give Alfred a son. The trip would do her good, Alfred had thought, and it did. Letters
returned to Nemour's describing delightful tours through France’s wine-growing regions
and Alicia’s improving condition.
Then the impossible but inevitable finally occurred, shattering forever Alicia’s lazy
afternoons. As declarations of war hurled across Europe in the last week of April 1914,
German armies smashed through Belgium and rumbled into France toward Paris. Alfred
was nearly frantic when he learned that the war’s outbreak had caught Alicia separated
from her brother. She was stranded alone, trapped between the ocean and the
approaching war, prevented by the hysteria from returning to America as the French
army crumbled before the German advance. Unable to book passage to France, Alfred
kept the cables to Europe burning with advice to his pregnant wife. Finally, to Alfred’s relief, Ed found his sister and they managed to buy passage on a ship to America in
September.
Back in the palatial peace of Nemours, Alicia gave birth on October 21 to a son,
Samuel. Alfred was overjoyed, but the baby lived only one day. At Nemours, beside his
infant sister, Samuel was buried along with Alfred’s last hope, for it was Alicia’s last
pregnancy. With tragedy hovering over his second marriage, Alfred’s face took on a
hardened, icy look, which his glass eye only accentuated.
For other DuPont's, however, times were more fortunate, especially for Alfred’s
cousin, Pierre DuPont. At the time of the Ferdinand assassination Pierre was abroad
also, in London, signing international trade agreements with German and British
munition makers.
1 With the outbreak of hostilities between countries of two parties to
the agreement, Pierre considered the new treaty in abeyance. He knew that this was a
different kind of war, a war of trenches and heavy fortifications, requiring more high
explosives for assaults than probably either the English or German parties could
provide. And DuPont was only too happy to oblige.
Pierre and his syndicate were deep in World War I long before the United States was.
They executed the largest powder contracts in history through credit extended to the
British government by J. P. Morgan & Company, Pierre’s friend in the purchase of the
Coleman DuPont stock. Between August and December 22, 1914, 21,621,300 pounds of
explosives were ordered from DuPont by Britain and her allies. When the war broke
out, DuPont had the capacity to produce 8.4 million pounds of smokeless powder per
year; within six months Pierre had contracted to supply thirteen times that amount.
Most of the cost for the required plant expansion by DuPont in those early years of
the war was paid by the British. “The United States is not in the war, gentlemen,” DuPont’s vice-president in charge of military sales, Colonel E. G. Buckner, told the Allies.
“We can produce the explosives you need and we think we can produce in time, but only
if you assume the financial risks of an emergency expansion.… I repeat, it’s your war,
and the risks must be yours!”
2
In 1915 the British paid the DuPont's. $100 million
through J. P. Morgan & Company to expand the plant capacity of their explosives
division. That year, DuPont’s annual smokeless powder capacity, which had been 8.4
million only a year before, reached 200 million pounds; by 1916 it was 290 million
pounds; by 1918 it grew to an astronomical 455 million pounds.
World War I was a windfall for the DuPont's. By February 1915 the money value of
Allied contracts had already exceeded $59 million. And higher profits meant higher
dividends to the shareholders, especially the family. The split-up of the company had
reduced the common stock dividend in 1913 from $12 to $8, but the war more than
made up for lost ground. “We were not taking any chances of the war ending in six
months,” recalled Colonel Buckner. “We asked the Allies one dollar a pound of powder."Our demand was a cash payment of 50%.… Our demand was finally agreed to.”
3
One year later, in 1915, the DuPont's lowered their price to 97½ cents per pound, a
questionable generosity when one considers that smokeless powder cost them only 31
cents a pound to produce. That year DuPont’s net earnings reached an all-time high of
$57.4 million. Within one year, net earnings would jump to $82.1 million, although, with
increased volume in sales, the elimination of capital construction costs through Allied
funding, and other factors which mitigated many of the rising costs of raw materials, DuPont was able to reduce its price per pound to 51.3 cents by May 1917, thus spurring
demand even further. As one historian noted, “It was, therefore, the confirmation of
Pierre’s hard bargain with the Allies, together with the unexpectedly long duration of the
war, that was the key to big profits for the DuPont Company.”
4
Such unprecedented earnings were quickly reflected in DuPont’s rising stock value. In the summer of 1914 a common share of DuPont stock sold for $160. By the following April the price was quoted at $390. By June it hit $670; in September, $775, at which time Pierre split the company’s common stock, issuing two new shares for every old one. But by October, DuPont stock had climbed to $430—or $860 under the former reckoning!
During all this time, the DuPont's tried to keep their financial alliance with the British a secret from the U.S. government. Since 1908, after the government filed its anti-trust suit against DuPont, no government representatives had been allowed entrance into a DuPont plant without signing a secrecy pledge. In 1909 Pierre issued a decree that no information was to be given to anyone by any employee without specific approval from DuPont headquarters in Wilmington.
These restrictions were further tightened when the war broke out and Pierre, with the family’s full approval, rejected a plea from the U.S. Secretary of War for information on his contractors. The United States was certainly concerned then that a financial entanglement might draw America into the war; and, as Wilson was particularly concerned with Germany as a potential rival to U.S. market expansion, he was anxious to know whether DuPont munitions were finding themselves in German hands.
Such was not the case, but Washington certainly had cause for suspicion. Pierre DuPont himself wrote Coleman on February 5, 1915, that if the Germans “came forward with orders in quantity similar to the orders of the Allied nations we would be willing to sell.” 5 This, despite promises to British Imperial’s Kraftmeier to the contrary two weeks earlier. To Pierre, World War was just a matter of profitable business. That year, when Congress was considering a bill prohibiting U.S. munitions sales to belligerents, the DuPont's considered opening a plant in Canada, and eventually did.
In 1917, two months after the United States entered the war, the DuPont's again refused the government information on their trade secrets. A similar but more urgent request in 1918 from the War Department was also turned down. Finally, an angry personal demand from Secretary of War Baker for information on DuPont’s TNT plant drew an informative reply from Wilmington, but only after the government placed its first TNT order with DuPont.
Congress’s declaration of war on Germany was a day for which some DuPont's had worked for years. As revealed by a Congressional investigation in 1919, T. Coleman DuPont in 1915 established with other leading industrialists and bankers the infamous National Security League to promote America’s entry into the war. For two years before the declaration of war, the League, aiming to draw America into the conflict, published vicious attacks on congressmen who opposed entering the slaughter. When German submarine warfare threatened DuPont munitions shipments, the League demanded that America defend her right to “freedom of the seas” and the right to sell military aid to Germany’s enemy.
It was precisely this “aid” that moved Coleman and Pierre to be staunch supporters of Britain’s war effort. In 1915 DuPont held more than $46 million worth of British one year notes in partial payment for DuPont powder. $9.2 million worth of French credit was also in DuPont hands, along with Anglo-French bonds worth $36,350,000, and $19,350,000 worth of other Allied obligations. 6 By 1919, the DuPont family held Allied credit worth $111.6 million. 7
The best explanation for DuPont concern for these credits came from Pierre himself. “If the war had ended we would have been in a bad condition,” he testified years later, “because I know that there was one case in which we owed $100 million. We were obligated to return that $100 million to the Allies who furnished the money to go ahead with our contract. We had spent the $100 million and about $60 million more in plants and furnishing money for materials, and our company would have gone broke if we had been compelled to return that money.” 8
The only alternative was the war’s continuation, and the only way that could be accomplished successfully by Britain was through America’s intervention, breaking the battlefield deadlock and dipping the scales in favor of Allied victory. To this end, the DuPont's made no small contribution.
8.2
MARCHING AS TO WAR
…
In June 1916 the cobblestoned streets of Wilmington shook with beating drums and
marching feet. It was as if war had come to Delaware months before any formal
declaration from Washington. And, in fact, it had. Pierre DuPont—inspired by Allied profits and by vivid descriptions of French suffering and urgent appeals from two French cousins, Madeleine de Tregomain and Marguerite Bidermann—had been moved late in 1915 to send $1,000 to French war relief. But more than Pierre’s personal inclinations were involved. For what was personal policy for the president of DuPont soon became unofficial, albeit persuasive, company policy. Publicly, Pierre never endorsed Coleman DuPont’s warmongering National Security League, but privately he did not frown on marching DuPont employees down the main street of Wilmington in one of Coleman’s pro-war “preparedness” parades.
Such parades had become part of a national hysteria after the sinking of the Lusitania a month before by German submarines. But DuPont support for the war, because of their vulnerability to criticism, remained covert. Officially, DuPont Company took no position. Yet charges were made publicly in the New York World on October 18, 1915, that the company prohibited its workers from wearing Wilson buttons; Pierre denied the reports. But no one denied that the DuPont family was deeply involved in the preparedness movement, including Coleman’s pro-war National Security League, nor that the DuPont's openly gave financial support to the pro-war Republican presidential candidate, Charles Evans Hughes. There was more than a grain of truth to the charges of Senator Robert La Follette in the Milwaukee Journal of August 28, 1916, that pro-war propaganda was being paid for by the “Maxims and the DuPont's.” Three years later a congressional investigation into the National Security League confirmed the charges.
Pierre’s denials did receive support from another U.S. senator—Henry A. DuPont. Like Pierre, Henry denied his family’s involvement in the preparedness movement. Yet when Coleman set up the National Security League, the senator wrote Coleman of his approval and stated that such an organization should have been founded even sooner. 9 There is no doubt that Henry was in favor of a declaration of war against Germany, and he voiced his opinion openly in the Senate.
Henry was a bitter opponent of anti-war senators La Follette and William J. Stone. Taking time off from his check-writing for the French government, in 1916 he helped defeat the Gore Resolution, which would have warned Americans to stay off armed ships of foreign nations. When, in 1916, a tax on munitions profits was proposed in Congress, Senator DuPont was among those who led the attack against it, eventually forcing a modest reduction in the tax. Pierre, like his father Lammot DuPont during the Civil War, also lobbied against the tax on behalf of the company. All of this, of course, did not help to dampen the DuPont's dislike of Woodrow Wilson with his claims for peace.
Pro-war sentiment was by no means confined to the DuPont's, however. By 1917 war hysteria had been whipped to a fever pitch. Coleman DuPont was not alone in setting up the National Security League. Joining him were other economic royalists: John D. Rockefeller, George W. Perkins of U.S. Steel, William K. Vanderbilt, Nicholas F. Brady of New York Edison, Henry H. Rodgers of Rockefeller’s Standard Oil, Simon and Daniel Guggenheim of the copper trust, and, predictably, J. P. Morgan.
“What do Morgan and Schwab [the head of Bethlehem Steel] care for world peace,” cried Senator La Follette, “when there are big profits in world war? The Schwab properties which stood at a market value of seven millions before they began supplying the Allies are today given an aggregate value of forty-nine millions!” 10
It was a futile cry. The President, who had been reelected on the platform of “He kept us out of war,” was now trying to put Americans into the war. “Our industries have expanded to such a point,” Wilson had explained in 1912, “that they will burst their jackets if they cannot find a free outlet to the markets of the world.… Our domestic markets no longer suffice. We need foreign markets.” 11 Wilson was right. In 1913 the U.S. economy again sank into a frustrated depression that threatened to be worse than that of the 1890’s. Even DuPont suffered a drop in sales in 1914. Then the European war came to the rescue, a war which involved rising Germany, the very power Wilson saw as America’s main competitor for the economic empire of overseas markets needed to pull the country out of depression. 12
By 1916 Wilson had forced the resignation of Secretary of State William Jennings Bryan because of Bryan’s objection to official government sanction of U.S. munitions trade to European belligerents, including that of the DuPont's.
The man who replaced Bryan was Robert Lansing, Bryan’s assistant. Lansing, after a conference with an officer from the National City Bank on October 23, 1914, had convinced Wilson to change his position from Bryan’s “true spirit of neutrality” to one based upon “strict legality” and allow Wall Street to grant short-term credits to European governments so they could purchase American supplies and thereby help stimulate the depressed economy. 13 After Lansing replaced Bryan, Wall Street’s short term loans became long-term loans, H. P. Davidson of J. P. Morgan convincing Wilson’s son-in-law, Secretary of Treasury McAdoo, that “to maintain our prosperity we must finance it.” 14 By 1917 Wilson was chiming, “The world must be made safe for democracy,” 15 never managing, however, to explain how the British Empire’s rule over India and Ireland, the French Empire’s rule over Indochina and Central Africa, the Russian Empire’s rule over Poland, or the Italian regime were any more “democratic” than the German Empire. As Wilson himself admitted to the pro-war American ambassador to Britain, Walter Hines Page, “England owned the earth and Germany wanted it.” 16 At that time the American business community also wanted it. “Perhaps our going to war” cabled Page to Washington, “is the only way in which our present prominent trade position can be maintained and a panic averted.” 17 Just one month later Wilson demanded a declaration of war from Congress, and got it.
When the war was over and the American dead had been forgotten amid the glee of domestic prosperity, Wilson no longer needed to explain the war in terms of democracy. “Why, my fellow citizens,” he could wearily admit, “is there any man here, or any woman—let me say, is there any child here—who does not know that the seed of war in the modern world is industrial and commercial rivalry.” 18 Only once, in 1913, had Wilson been more frank. “Suppose you go to Washington and try to get at your Government,” he had explained. “You will always find that while you are politely listened to, the men really consulted are the men who have the biggest stake—the big bankers, the big manufacturers, the big masters of commerce … the masters of the Government of the United States are the combined capitalists and manufacturers of the United States.” 19
So the DuPont's, the Rockefeller's, the Morgans, and the rest of “the big bankers, the big manufacturers, the big masters of commerce” got their war, but not without objections from many Americans. Some brave individuals pointed out that U.S. political alliances only followed the economic alliances of monopoly capital. The crusade against German submarine warfare made mockery of reason, they felt, when no such crusade was made against Britain’s deadly mining of the North Sea. British mines had established a blockade of food and medical shipments that was inflicting heavy casualties among the German civilian population and blocking American ships from using international waters, in violation of international law. Yet Wilson insisted that “the present German submarine warfare against commerce is a warfare against mankind.” 20 “The only difference,” protested Senator Morris two days later, “is that in the case of Germany, we have persisted in our protest of violations against neutrality on the sea, while in the case of England we have submitted.… We are going into war upon the command of gold.… By our act we will make millions of our countrymen suffer, and the consequences of it may well be that millions of our brethren must shed their lifeblood, millions of broken-hearted women must weep, millions of children must suffer with cold, all for the commercial right of American citizens to deliver munitions of war to belligerent nations.” 21
And millions did suffer, horribly. Some 3,700,000 Americans were sent into the slaughter; 130,274 never returned. Of those that did, 203,460 came back with wounds. The American loss was light compared to the rest of Europe: 10 million soldiers dead, 20 million more maimed, crippled, burned, or otherwise injured. Another 13 million civilians died.
For years, life, such as was possible, was carried on in endless miles of trenches that stretched over the face of Europe like diseased scars. For all, it was a nightmare of terrified eyes plunging forward behind deadly steel bayonets, of thundering distant cannons and the deafening answer of batteries nearby, of flashing bombs showering a fiery rain of shrapnel, of towering barbed wire ripping into a muddy flight from the steady, murderous clatter of machine guns, of enormous machines that chased and crushed men under their spiked treads, of bullet-spitting biplanes swooping down and dropping their load of explosives, and finally, of enormous lakes scooped out of the muddy landscape by falling bombs where, if it rained hard enough, the dead could be silently buried at sea hundreds of miles from any ocean. John Dos Passos perhaps conveyed it all in one sentence: “The blood ran into the ground, the brains oozed out of the cracked skull and were licked up by trench rats, the belly swelled and raised a generation of bluebottle flies.” 22
8.3
A BANQUET OF GOLD
Pierre DuPont’s belly also swelled during the war, but from cakes and wines.
Because of the war, he was now drawing an annual income of over $1 million after
taxes, as were many of his DuPont brethren. Even Alfred raked in over $3 million in
1915 on his DuPont holdings alone. In the first half of 1916 he reaped another $3.8
million, although $2.8 million of it was tied up in Anglo-French bonds.
For the DuPont's, World War I was a great banquet of gold: over $1 billion in gross income was raked in by them during the war. Public criticism of DuPont profiteering was typically brushed aside, Colonel Buckner candidly explaining, “I am proud to admit we have made millions of dollars. I, for one, am ashamed of our conduct for remaining out as long as we did.” 23
Now few at DuPont felt any reason for shame. In fact, corporate pride was the order of the day. Pierre DuPont, for example, celebrated his new fortunes of war by building one of America’s largest and most extravagant estates, Longwood, near Kennett Square, Pennsylvania, just seventeen miles north of Wilmington. Worth over $15 million, Longwood encompassed over a thousand carefully tended acres of Japanese waterfall, flowered pools, and sunken gardens, including six glassed acres of greenhouses for rare tropical flowers and exotic fruits.
Longwood had many features that were unparalleled among America’s great estates. One was an open-air theater capable of seating 1,200 guests, completely equipped with a stage and a curtain of dancing colored fountains. Another was a huge authentic Norman bell tower imported from Europe. Still another were the immense multi-leveled fountains that gushed hundreds of feet into the air as colored lights played on them, spraying a rainbow veil to the accompaniment of a ten-thousand-pipe organ which, according to Fortune magazine, was capable of filling three cathedrals with melody and took 14 railroad cars to transport. Pierre hired Firmin Swinnen, former organist at the world-famous Antwerp Cathedral, as its attendant. Another feature at Longwood were the magnificent trees—hundreds of them—and flowers that were to make the estate one of the horticulture wonders of the world. Within this splendor Pierre contentedly settled in a 30-room mansion at the center of the estate, staffed by over one hundred servants who carefully looked after the bald-headed bachelor.
One of these servants was a dark, handsome lad named Lewis Mason. Lewis had come to work for Pierre as a young boy of 17. Faithful, gentle, and always humble, Lewis was particularly close to Pierre, so close that rumors began to fly along the Brandywine. The boy ate with Pierre, slept at the mansion, and never wore a uniform. Although he did serve as Pierre’s chauffeur, Lewis was much more to him, serving as a constant companion, even on long trips.
In June 1913 Pierre suffered what may have been the greatest loss of his life—his mother. Without her, Pierre, now a middle-aged man, suddenly seemed lost. Plagued by loneliness that even his close companion Lewis was unable to resolve, Pierre gave his mother’s estate, St. Amour, to his brother Lammot and took up a suite of rooms at the Hotel DuPont for weekdays when he did not wish to return to Longwood. Sometimes he attended dinner at Lammot’s and at the home of his sister Isabella and her husband Rodney Sharp. There, he developed a close relationship with a frequent house guest and old friend, Alice Belin. Alice, who was some years younger than Pierre, came from a wealthy family in Scranton, Pennsylvania. Her father, Henry Belin, Jr., was head of DuPont’s Pennsylvania operations and president of Scranton’s Trader’s National Bank. But Henry Belin was more than just wealth—he was family, the brother of Pierre’s mother. It was only natural, then, that in June 1915 Pierre asked Alice to be his wife. Unfortunately, Alice could not be married from her home: Pennsylvania law forbade the marriage of first cousins. They were quietly married instead in New York on October 6, 1915, at the home of Alice’s brother, Ferdinand Lammot Belin. Pierre was 45.
Alice showed no resentment toward Lewis when she moved into Longwood and, in fact, apparently grew genuinely fond of the boy. In 1918, caught in the influenza epidemic that swept across the country, Lewis Mason died. Lewis’s passing deeply depressed Pierre.
He never had a child by Alice, but years later he tearfully laid the cornerstone for the $1.2 million Chester County/Memorial Hospital at West Chester, Pennsylvania, in his memory. As long as Pierre lived, he never forgot Lewis.
Nor did other DuPont's ever forget Pierre for the wealth he brought them during the war.
With World War I, DuPont Company moved from a tertiary to a primary American industry, producing 40 percent of all explosives shot from Allied cannons. The DuPont's didn’t flinch a muscle when Secretary of War Baker called them “a species of outlaws.” They just kept counting their $1.011 billion in military contracts, the equal of 276 years of previous military business and 26 years of regular business from all DuPont commodities. In one year, 1915, DuPont war contracts totaled $347 million. That year Pierre wrote Coleman that “The march of the smokeless powder business is going on uninterruptedly.” 24
Everything was done on a gigantic scale. Whole cities of shanty shacks were raised for workers. The construction and engineering departments alone raised their manpower from 800 to 45,000. The water-pumping capacity for all DuPont plants exceeded the daily water supply of Philadelphia and Boston combined. Refrigerating apparatus generated 9 million pounds of ice a day, equal to all of Chicago’s ice consumption. The world’s largest gun cotton plant was built at Hopewell, Virginia, financed mostly by the British government; the world’s largest smoke less powder plant at Old Hickory, Tennessee, was financed by the U.S. government. DuPont sold 125 million rounds of special ammo for airplanes, 206 million black powder pellets for loading in shells, and 90 different varieties of powder. Profits in 1916 alone reached over $80 million and there seemed no end to the dizzying shower of gold and blood. The 1918 Annual Report summed it up in one sentence: “It is difficult to imagine a more satisfactory result.” 25
By the time this report was released in 1919, the war’s end was in sight. DuPont by then had raked in $237 million in net profits, an amount unparalleled in those times for four years of business. Of $140,983,000 distributed to stockholders, the bulk went to the DuPont family. This was a dividend of 458 percent of the stock’s par value.
Pierre couldn’t have been more popular along the Brandywine, giving many DuPont's an annual income of over a million dollars. Even Alfred enjoyed an annual income of over $3 million. Many DuPont's bought additional vast country estates in the hills surrounding Wilmington. Colonel Henry enlarged his estate, Winterthur, to include hundreds of acres of botanical gardens and a mansion of 150 rooms, including 40 bedrooms, each furnished in priceless antiques of a different period. Pierre’s brilliant little secretary and now treasurer of DuPont, John J. Raskob, built a fifty-room Italian Renaissance mansion equipped with an electrically lighted tennis court and an organ on which with a single finger he pecked such tunes as “There’ll Be a Hot Time in the Old Town Tonight,” obviously unaware of the historic link that the tune conveyed of World War I as an economic (European market) extension of the Spanish-American War for overseas (Caribbean and Asian) markets.
Alfred was also building an enormous mansion, called White Eagle, on a 250-acre plot at Sands Point, Long Island, that he had purchased to satisfy a whim of his wife, Alicia. White Eagle was an expensive whim, costing Alfred $236,000, but Alicia wanted to be close to her husband, who was busy in New York setting up a new company, the Nemours Trading Corporation.
Alfred was trying to do a little profiteering of his own from the war. He billed his new company as a merchandising business organized to supply war-torn Europe with desperately needed supplies—for a price, of course. Alfred took insurance against any possible ugly publicity by leasing his Grand Central Palace Hotel in New York to the government as a hospital for wounded soldiers. Behind this veil of patriotism Alfred performed his tricks of financial wizardry. His Nemours Trading Corporation soon engendered over forty different departments which exported to Europe, and mostly France, everything from shoes and chemicals to food and automobiles. At first, Alfred’s enterprise seemed destined to set new records in profits; it enjoyed invaluable assistance, in obtaining orders, from Myron T. Herrick, a member of the board of directors and an old friend of Alfred’s. Herrick had a more important asset, however. He happened to be the U.S. ambassador to France.
8.4
ALFRED’S COUP DE GRACE
Like his business ventures in New York during the war, Alfred DuPont’s continued
court struggle in Delaware against his cousin Pierre looked like it might have some
prospects for success. In court, Pierre looked nervous for the first time in all the years
Alfred had known him, the bald-headed president of DuPont warily eyeing Alfred’s
counsel: William A. Glasgow, Jr., former anti-trust prosecutor for the Justice
Department; and John J. Johnson, a highly reputable corporation lawyer who had a
distinguished record in fighting the anti-trust suits against Standard Oil, American
Tobacco, and Northern Securities, and now hoped to save his capitalist soul by
establishing a legal precedent for minority stockholders. Such a formidable legal battle on top of recent ugly publicity about DuPont’s war profits alarmed Pierre, especially when Johnson raised the point of privileged information that should have been open to all shareholders. “These men,” Johnson bellowed with his characteristic flamboyancy, “played with marked cards. They were blinded by the gigantic fortunes before them. When Raskob went to New York to begin negotiations with the Morgans for the $8.5 million … he knew that he could not have obtained any such loan if it had not been for his connections with the DuPont Company and the Morgans’ knowledge of the vast profits that were in sight for the company.” 26
“He double-crossed the powder company,” argued Glasgow, “and he double-crossed Coleman who was selling the stock … there was no question about the ability of the company to buy it … but Pierre had never made a legitimate offer to sell the stock which he had purchased and he knew J. P. Laffey, the counsel for the powder company, was ready with an opinion that the company could not legally make the purchase. This Your Honor is what you would call a lead pipe cinch.” 27
Six days after the United States declared war, Judge J. Whitaker Thompson finally handed down his decision on the Philip F. DuPont vs. Pierre S. DuPont case. Thompson declared Pierre guilty of fraudulent transactions. The company’s rejection of Coleman’s stock was never final, the court held, but only temporary, and Pierre should have consulted the stockholders before purchasing the stock for himself. The court ordered a special stockholders meeting to allow the purchase of Coleman’s stock.
Although he had already had Alfred, William, and Francis I. thrown off the Board of Directors, Pierre was nevertheless worried: the judge had barred voting with any of Coleman’s stock now held by Pierre’s syndicate. An appeal, Pierre reasoned, based on profitable leadership during the war, had to be made to shareholders. He fired off a quick letter to all stockholders claiming that the company’s leadership had not been found “in bad faith, betrayal of trust, or wrongdoing,” in effect, calling the court a liar. Judge Thompson couldn’t let this attack go by, and forced Pierre under threat of penalty for contempt of court to send a second letter withdrawing his previous claims. For a short while, at least, it looked like Alfred might be vindicated.
Whatever such hopes Alfred may have held were soon dimmed. He heard rumors that Pierre had secretly warned the Justice Department that any bad decision in the case would hurt DuPont’s war effort. The first concrete sign, however, that things were not going so well for Alfred after all was Thompson’s appointment of Daniel G. Hastings, a political hack for Coleman, as special master for the stock meeting. Alfred protested, but to no avail.
Pierre was calmly preparing Alfred’s coup de grâce. He needed 230,717 of 461,432 shares (excluding Coleman’s holdings) to win a majority control. His syndicate held 100,000; blood relatives, another 50,000; and directors whom he had installed, another 14,000. That made a total of 164,000 shares, not nearly enough. But Pierre had one great advantage over Alfred: he was the active president of the company. Against company employees, high and low, who held another 30,000 shares, Pierre turned on the pressure. Using the company’s resources, he also began putting the squeeze on defenseless independent pensioners and other stockholders, emphasizing that a defeat for him would be a repudiation of the company management that had brought dividends worth 183 percent of par value within fifteen months.
Pierre used every angle imaginable. Friendship, threats, he even frantically waved the flag of patriotism, hiring Charles Evans Hughes (and his reputation as a former Justice of the U.S. Supreme Court) to write a booklet that attempted to legally justify Pierre’s maneuvers. Pierre had the booklet widely distributed throughout Delaware and among stockholders across the country. It was rumored that Hughes received a “fee” of $50,000 for that little gem. But one fact that is indisputable concerning Hughes was that he won the Republican presidential nomination that year with the full support of the Delaware delegation and later received his largest single campaign donation—over $92,000—from none other than Pierre DuPont. Mrs. T. Coleman DuPont, in a personal gesture of support for the pro-war candidate, donated another $2,000. 28
Alfred soon found himself swamped with desertions. By the time of the stock meeting, he held only 140,842 shares, including William DuPont’s 27,994. Pierre grossed 312,507 shares for a smashing victory; Judge Thompson dismissed Alfred’s bill of complaint. Alfred, “the savior of the DuPont's,” was left with his moral victory. Pierre, never too concerned with such matters, wasn’t impressed. He preferred power.
8.5
THE HOME FRONT
In 1916 only twelve states in the United States had a greater illiteracy rate than
Delaware. Yet, because of the enormous wealth concentrated in the small circle of DuPont's around Wilmington, Delaware ranked fourth in the country in per capita income.
While the DuPont's lounged royally on their lavish estates, one-fourth of the state still
remained under marsh. During World War I, draft examinations in southern Delaware showed that 20 percent of youths under 21 could not even write their own names. 29 Yet corporate leaders such as Henry A. DuPont, who served on the Senate Committee on Military Affairs during the 1916–17 hearings on universal military training, fully endorsed the drafting of these hapless youths. These were the men who were forced to fight and die in muddy trenches thousands of miles from their homes while Alfred DuPont light-heartedly explained his war service between cocktails. “My war record,” he wrote his brother Maurice, “consisted in staying home and trembling for fear I would be eaten by a Boche. I believe I did less than nothing for the war.” 30 Alfred was being modest. He did manage to smuggle funds into Germany to his daughter Maddie, while her husband was fervently fighting for the Kaiser.
The rosters of active service from Delaware always show a marked deficiency of DuPont names, and World War I was no exception. Only one DuPont saw active service in that war. Alfred Victor DuPont, the son whom Alfred thought would bring disgrace to his name, enlisted in the U.S. Marine Corps as a private and eventually saw combat. Only years later would Alfred learn of his son’s wartime activity.
DuPont “soldiers” on the home front didn’t have it much easier than their brothers overseas. While a dozen DuPont's enjoyed an annual income of over $1 million during the war, workers at DuPont plants were paid only $1 an hour. With the depression and starvation of 1914 still fresh in their minds, 100,000 men, women, and even children swarmed into the plants, willing to risk violent death, injury, or chemical poisoning for that precious one dollar. Sixty thousand of them were housed in shanty barracks, dorms, boardinghouses, or DuPont-built “hotels.” Working conditions were even worse. In DuPont’s Deepwater, New Jersey, plant across the river from Wilmington, workers died from poisonous fumes of the lethal benzol series, their bodies turning a steel blue. At the Penns Grove, New Jersey, plant workers were called “canaries”: picric acid had actually dyed their skins yellow. Picric acid poisons the mucous membranes of the respiratory tract, attacks the intestinal tract, and destroys the kidneys and nerve centers.
Throughout most of DuPont’s high-explosives war plants, deadly fulminate of mercury was generated. DuPont didn’t bother to take any statistical tests, but a contemporary British study reported that 40 percent of all workers who handled it suffered dangerous chemical poisoning. There were other criminal dangers. Nitroglycerine, the essential ingredient in dynamite production, gives off fumes that cause permanent damage to the lungs and heart. Inhalation of smokeless powder dust also causes lung diseases, including tuberculosis. According to DuPont’s own statistics, of those workers who contracted TB, 30 percent died; most never recovered.
But perhaps they were the lucky ones. There were 347 workmen killed in DuPont plants during the war, a figure that Pierre’s production speed-up no doubt contributed to. There is no record of the number injured.
A cold terror swept through Longwood in October 1917. The success of the Russian workers and their Bolshevik Party was a threat to every capitalist in the world. Herbert Hoover wrote that the fear of the new revolutionary Soviet Union hung like a pall over every conversation at Versailles. It was also a personal blow to the DuPont's. Since the Crimean War over fifty years earlier, Czarist Russia had been one of DuPont’s best customers. In fact, the Czar had been their very first customer in World War I, ordering 960,000 pounds of TNT on October 8, 1914. As late as August 1917 the capitalist government of Kerensky, still pursuing the unpopular war and licking its wounds from a popular insurrection a month before, ordered 20 million pounds of DuPont powder. As DuPont had an overabundance of war contracts, Kerensky’s order could not be accepted, although it gave Pierre hope of even more profitable contracts in the future. Then came the Bolshevik insurrection in October to spoil it all, socialists and workers’ factory councils (Soviets) replacing Kerensky’s corrupt regime.
Overnight, the DuPont's lost millions of dollars in contracts and bonds simply because the Russian people dared to demand an end to a slaughter that had become endless. In retaliation, the “Armorers of the Republic” fully endorsed the American armed invasion of Russia from 1919 to 1922 in the futile but bloody attempt by Allied armies to overthrow the soviet government of Lenin.
The DuPont's, however, were not prepared for the popular support given the Soviets in Russia, nor for the organized efficiency of the Bolshevik Party. They fully anticipated quick victory with the strategy of intervention. Their confidence was no doubt bolstered by recent success in a similar, though more covert, intervention in Hungary. There, the workers’ government of Bela Kun was overthrown by conservative forces financed and armed by the European and American governments. Key in weakening that government was the manipulation of International Red Cross and the U.S. relief commission’s food shipments by Herbert Hoover, then head of the U.S. Food Administration, and later Secretary of Commerce and President of the United States. Hoover’s maneuvers caused thousands of people in Hungary to starve to death. His right-hand man in that crime was William Glasgow, the former Assistant Attorney General under Taft who helped preserve DuPont’s continued monopoly of smokeless powder, and later Alfred I. DuPont’s lawyer and close consultant.
Glasgow’s role was echoed in the U.S. Senate by Willard Saulsbury, for a time president pro tem of that body and an in-law of the DuPont's. Saulsbury, despite his personal differences with Colonel Henry DuPont, took up the role of guardian of the clan’s interests. Alfred DuPont wasn’t satisfied, wanting one of his own hand-picked men, Dr. Lewis Ball, in Saulsbury’s seat. It wasn’t that Alfred considered Saulsbury a poor senator. Alfred admitted privately that his in-law was actually quite proficient at protecting the interests of munitions makers. It was just that Alfred wanted a puppet, which Saulsbury refused to be. In the election of November 1918 that refusal cost Saulsbury his job.
That year brought victories also to Pierre, although of a more financial nature. On July 2, near Nashville, Tennessee, Du Pont completed construction of the largest smokeless powder and nitrating plant in the world. Called Old Hickory, it was also the largest fraud in the world.
8.6
FRAUDS AND FIRINGS
Six months after the United States entered the war, the U.S. government asked DuPont
Company to submit a proposal for building government plants. DuPont’s capacity,
which in 1917 was close to fifty-four times that of 1914, was simply not enough to meet
U.S. needs. Pierre DuPont must have known this because he was expecting the request.
Within only five days DuPont’s proposal was on a desk in Washington: $90 million for
construction, $187 million more for operating expenses. Robert S. Brookings of the War Industries Board studied Pierre’s proposal and decided it was outrageous. According to Brookings, the DuPont plan would realize for DuPont a net profit of 15 percent or $13.5 million on construction, and $30 million on the operation of completed plants—a total haul of $43.5 million!
Brookings immediately warned Secretary of War Newton Baker, who, in turn, appealed to Pierre to lower his estimate. But the wily DuPont was adamant. Patriotism is fine for the workers, but after all, the DuPont's had all the men, the experience, the engineering and research facilities
… Secretary Baker called the DuPont's “a species of outlaws,” but his breath was wasted. If the government wanted to build powder plants to meet its war needs it would have to surrender some profits for DuPont. When the contract was finally signed, a gross profits ceiling of $2 million was agreed upon, far below the original profit calculated by Brookings. This estimate, however, proved to fall far short of final costs. It also proved to be a source of national scandal.
According to the contract, five plants were to be constructed: two in Virginia, one in Wisconsin, one in Pennsylvania, and one in Tennessee. The last, Old Hickory, was supposed to be built by DuPont on a cost-plus basis, the Wilmington company charging a fee of only $1. DuPont estimated its cost at $75 million when ground was broken in March. By the beginning of operation in July, the cost had risen to $90 million. When it was later sold by the government, however, its value was placed at only $3.5 million. Someone, it was clear, had made a huge profit, and many sources agreed that that “someone” went by the name of DuPont.
In 1921 a Special House Investigating Committee headed by Representative William Graham of Illinois found that Old Hickory wasn’t even needed during the war. The United States had an abundant supply of nitrate stockpiled all during the war. “The committee finds that there has been expended for construction upon the Government’s nitrate program to the present time the sum of $116,194,974.37 and that this expenditure produced no nitrates prior to the armistice, and contributed nothing toward winning the war.” 31 Old Hickory was an “enormous waste and extravagant expenditure of public funds not in any way justified and … the ones primarily responsible for these things very properly merit the disapproval and condemnation of the people of the country in this and upcoming days of the Republic.” 32
Pierre’s pockets may not have been hurting, but his pride may have suffered some reversals. After the charges of the Graham Committee, any DuPont propaganda dealing with Old Hickory lauded the company’s “sacrifice” and efficiency in its construction. Pierre agreed with Bernard Baruch’s declaration that the $90 million plant was necessary because of the threat of German submarines cutting off the Chilean nitrate supply. The Graham Committee, however, specifically held that argument unjustified, since the U.S. Navy had firm control of the Panama Canal and the lower Atlantic.
Then the Graham Committee exposed another DuPont fraud. DuPont, which at the beginning of the war priced its powder at 50 cents per pound to the U.S. government, lowered its price to the U.S. by only one cent per pound during the entire war, although it increased its volume by over 54 percent by 1918. If that wasn’t bad enough, the committee also found out that DuPont powder cost only 33 to 36 cents per pound to produce. At the least, that meant a profit of 33 percent per pound for the DuPont's. The profit was even higher from Allied customers. “Theretofore the plants built by the DuPont's,” concluded the Congressional committee, “had been paid for out of the profits of contracts made with the Allied nations before we entered the war.” 33
But the government wasn’t the only party claiming to have been cheated. Other charges were made that DuPont had committed terrible irregularities in paying wages. One more incredible charge accused the company of cheating dead victims of the influenza epidemic out of burials and stealing their personal belongings. 34 Pierre, as always, was patient, calmly counting his money while government investigations were lost in the mire of postwar administrations rife with scandal, first under Harding’s Attorney General, Harry M. Daugherty, an intimate of T. Coleman DuPont—who donated tens of thousands of dollars to Harding’s presidential campaign 35—and later under John G. Sargent, Attorney General under Calvin Coolidge, also the proud recipient of a $10,000 campaign donation by Irénée DuPont, the president of DuPont Company. 36
“And doesn’t it make you feel ‘chesty,’” boomed Colonel Buckner to his conscience smitten salesmen in 1918. “I am proud I am a DuPont man … Great God! And some of you are in doubt, some of you have lost sight of all these Great, Big, Magnificent things your Company is doing for our country and the world—and can only hear the voice of some measly little mice barking at your heels. Stamp the life out of the brute, hold your head erect, expand your chest and be proud that you belong to an organization that the world knows can do things!” 37
And do things they did. Gunpowder, explosives, and poison gas were produced at an unprecedented rate. Production problems were worked out in the Experimental Station and the Smokeless Powder Department. Water drying replaced air drying of powder, for instance, cutting drying time from sixty to ninety days down to eight days. The men worked fourteen hours a day at the plant with no time and a half for overtime after the regular eight-hour shift.
While DuPont workers risked their lives to work in the grime of black powder and gun-cotton, Pierre always amazed visitors by appearing cool and calm, greeting everyone in a fresh clean suit and polished head as if he had just stepped out of a bubble bath. In fact, he had. Longwood satisfied his every whim with its acres of colorful flowers and refreshing pools and fountains. Seldom delving into high society, Pierre found Longwood to be a peaceful refuge from the noise of the office’s paper shuffling. But as 1918 drew to a close, the end of the profitable war was in sight. Eighty-five percent of DuPont’s business was involved in the slaughter, holding over a hundred war contracts. Between sips of a cool drink in Longwood, Pierre realized all good things must come to an end. Something had to go. Something did. That Christmas week Pierre laid off over 37,000 workers.
This curious gift of season cheer startled the entire country, but Pierre remained his cool, calm self. The remaining workers who were loyal Americans and bought their DuPont-sponsored Liberty bonds were appropriately rewarded at the war’s end—Pierre fired close to 70,000 more. This hatchet job chopped DuPont’s plant force down from 85,600 to 18,000 within only seven weeks. It wasn’t that Pierre wasn’t fond of the workers. After all, their sweat had generated over $237 million in profits. It was just any good businessman’s way of saying thanks when you’re no longer needed.
8.7
COMETH THE REPRESSION
…
In 1919, after two years of soaring prices and a government ban on strikes, 4 million
hungry workers hit the streets in picket lines, fighting to raise wages to the level of
prices. The cost of living had doubled since 1914, yet real wages were 14 percent less
in 1919 than in 1914. The government, backing the “open shop” drive of the National
Association of Manufacturers, answered the strikes with the armed intervention of
troops and veterans. DuPont fully supported the heavy government repression of
strikers under the guise of stopping “creeping Communism.” Ruly Carpenter’s army of
spies began looking for the Red Terror under every worker’s lunch pail. The DuPont witch hunt did not confine itself to company plants. A large percentage of the American work force, and perhaps the most militant, were immigrants, who had always been an important pool of cheap labor for the owners of industry. Now these workers became scapegoats for government repression. Thousands, including whole families, suffered overnight arrest and detention in barbed wire camps in a nationwide terror raid conducted by Attorney General Mitchell Palmer. Thousands were deported, their civil rights totally denied. Those who escaped the raids were subjected to further intimidation from foreign-language newspapers which constantly tiraded against socialism and everything else “un-American.” For most immigrants—and there were millions of them—these were the only newspapers they could read.
In 1920 Colonel William Boyce Thompson, testifying before Senator Kenyon’s Privileges and Elections Committee, exposed the fact that the American Association of Foreign Language Newspapers acquired 400 foreign-language newspapers with a circulation of 5 million, in order to promote “Americanism.” The necessary $400,000 fund, he explained, had been established under the leadership of T. Coleman DuPont, former president of DuPont Company and a leader of the National Security League. But Coleman was not alone. Joining him were some of the leading businessmen of the day: financier Cleveland H. Dodge, Andrew Mellon, copper magnate Daniel Guggenheim, John T. Pratt of Standard Oil, and Francis Sisson of Morgan Guaranty Trust Company.
The DuPont's were also a leading force in the creation of the Boy Scouts of America, at that time conceived of as the nationalistic, para-military alternative to alleged socialist “corruption” of youth. The early Scout Law required unyielding loyalty “to the President, and to his officers, and to his parents, his country, and his employer.” Coleman DuPont was on the Scouts’ first National Council and remained a member until 1915, when the Boy Scout organization endorsed Coleman’s “preparedness” movement with its “Be Prepared” slogan. In 1925, Coleman’s son, Francis V. DuPont, resumed the DuPont presence on the National Council. The DuPont's also had a hand in the early days of the American Legion, a veterans organization originally founded by Wall Street interests in 1915 and reestablished by Theodore Roosevelt II in 1919 and used against strikers after the war. Later, the Legion would allegedly be included in even more reactionary plots by the Du Ponts during the 1930’s.
To the DuPont's, “Americanism” was, frankly, capitalism, and capitalism was DuPont. Those who dared to challenge DuPont were, as Colonel Buckner put it, “little mice barking at your heels.” “You will find their names are forgotten,” Buckner boasted, “but DuPont Company lives on, growing bigger and bigger and grander and grander with each day of its existence. Ashamed of DuPont? No! And so long as Pierre S. DuPont is at its head and has the power to shape its policies you shall never have reason to.… I am proud to admit we have made millions of dollars.” 38
And so was Pierre. “I am firmly of the opinion,” he stated, “that we have now reached another turning point in the conduct of affairs of E. I. DuPont de Nemours & Co.” 39 In April 1919 Pierre, not yet 50, resigned as president, turning the company over to the “next line of men,” namely his brother Irénée. Pierre did not leave the company, however. He stayed on as chairman of the Board of Directors and retained the presidency of the family holding company, DuPont Securities, renamed Christiana Securities in 1919. …
And Expansion
Pierre had already begun the turning point for DuPont. Early in the war Pierre realized that Mars would someday end his rain of gold. With the advice of his new Development Department headed by Ruly Carpenter and his brother, Walter S. Carpenter, Pierre bought into the chemical field during the war, diversifying the company’s interests. In 1915 DuPont purchased the Arlington Company, maker of lacquers, pyroxylin plastics, and enamels; in 1916, the Fairfield Rubber Company, maker of rubber-coated fabrics; in 1917, Harrison Brothers & Company, producer of dyes, paints, varnishes, and heavy chemicals. From 1917 to the end of the war in 1919 Pierre bought out five more chemical firms: the Beckton Chemical Co., Cawley Clark & Co., Bridgeport Wood Finishing Co., Flint Varnish and Color Company, and New England Oil, Paint and Varnish Company.
But this was only the first step, a base on which to build the greatest chemical empire the world has ever known. With $90 million in surplus profits from over $1 billion in gross income during the war, the Du Ponts could easily ignore their newly won title, “the merchants of death.” While millions of weary Americans were trying to adjust to the ways of a peacetime economy, Pierre was casting his eyes over the financial world, searching for new markets, new frontiers to conquer, facing a decade of international intrigue and even greater treasure that would make his family one of the richest in the world.
Nine
BUILDING OF THE EMPIRE
9.1
THE DYNAMO
The 1920’s were in many ways the formative years of modern American society. In that
decade the country became truly urban in its economic base, and subsequently in its way
of thinking, its ideals, and its heroes.
For some, it was a desperate age, when men wished only to soothe their wounds and
forget their scars, to leave to nightmares the madness of World War I. For others, it was
a futile age, of attempting to pick up the pieces of a world shattered by the war no one
wanted yet everyone endured. For all, it was a frenzied age, with Victorian morals
overwhelmed by raccoon coats and the dancing heels of the wild Charleston, the
speakeasy’s “rap three times and walk in slowly” becoming the hallmark of America’s
Roaring Twenties. And roar it did, propelled by an industrial expansion that met no competition from war-exhausted Europe. It was an age of flourishing technological innovation: mechanical coal-loaders and mine locomotives, power shovels, pneumatic drills, continuous strip-sheet rolling, the Gammer machine for glass tubing, the Ross carrier for lumber, automatic cigar-makers—all of which increased the volume of production. This was the time when the Czech term “robot” was integrated into the American language, and for good reason. Greater productivity meant lower labor costs, and these were reflected in prices. Goods became cheaper, for the first time available to the common man who, if he escaped technological unemployment, enjoyed a gain of 10.9 percent in average real earnings from 1923 to 1928. 5
Lower prices for goods provided a higher standard of living, among the highest in the world, and the assembly-line techniques of one of the decade’s most prominent antisemitism, Henry Ford, made the Model T available for the first time to an expanding mass market, making masses of people mobile to an extent not known since early migratory pioneers, and generating not only the expansion of roads and suburbs, but ways and institutions sharply different from those of a more sedentary population.
With the rise of mass production came also the rise of the modern consumer society. Everything from the Sears Mail Order Catalog to the traveling salesman encouraged the spending of the dollar, even in the rural countryside. The radio industry, in 1920 a feeble wireless telegraph service, by 1930 was a billion-dollar industry with practically all its revenue dependent on corporate advertising, spreading the new urban culture throughout the land. Advertising flooded newspapers, doubling the paper volume consumed by the population. The Post Office was also drafted into the search for consumer markets: 80 percent of all mail was ads. Concrete mixers, dump trucks, and highway-finishing machines pushed roads through remote areas, and close behind them came the migratory hordes of the motorized urban middle class. New privately owned service industries—from restaurants to Hollywood studios to record companies—rose to profit from the increased “free time” available to millions. Government expenditures also rose for libraries, parks, and, to meet the needs of advanced industrial society for a literate but socially disciplined work force, corporate-controlled education. In thousands of schools, only those texts were used that were approved by corporate publishers and state and local school boards, all dominated by the business ethic and its myopic view of history and social goals.
Resting on the solid security of an expanding economy and leisure time, the Twenties became an age of flourishing arts in which Gershwin brought America into the musical world, Hemingway completed The Sun Also Rises, while playwright Eugene O’Neill captured the anxious, frantic, suicidal impulses of the mechanical consumer age in his Dynamo. Unheeded and to this day unrecognized, young intellectuals like Waldo Frank, Van Wyck Brooks, Harold Stearns, and George Doran fired broadsides of social critique that penetrated into the fog of the American soul.
Great fortunes rose overnight with great skyscrapers, as American capitalism zoomed to seemingly endless heights. American corporations, their market needs not misled by government rhetoric about “isolationism,” expanded direct overseas investment from $94 million in 1919 to $602 million in 1929. Between 1922 and 1929 the undistributed earnings of American corporations averaged more than $2.5 billion a year. 6 Dividends rose a phenomenal 110 percent from $3 billion in 1922 to $6.3 billion in 1929, 7 the new market quotation ticker clicking madly in attempt to keep up with the profit boom. It was an age that made the richest families, including the DuPont's, dizzy with gold and self confidence.
Services, if they had been measurable, probably climbed at a higher rate than manufacturing in the Twenties, and with the new private and government service industries there rose a new urban “middle class.” These were unlike the old middle class of the self-employed and professionals. Rather, this was a non-manual, white collar work force, not actually a middle class but a new strata of the working class that was increasing at a faster rate (38.1 percent) than the manual work force (7.9 percent). While still in the minority—14.5 million white-collar workers as compared to 30 million blue-collar workers—the white collar workers yet constituted a reliable bedrock of political conservatism, identifying in values and life styles with their corporate employers in private industry or in government’s highest circles. As such, they politically supported corporate leaders in their struggles against both the reactionary rural right and the radical urban left. But just as important, their purchasing power played a crucial role in fueling the developing consumerism of American capitalism.
The employed manual work force was also infused with the new corporate ideology, and with wages steadier than ever before, collective bargaining had little impact. Trade unionism went into decline, while installment buying made consumer durable's available for the first time to many with small cash resources. The push for spending encouraged acceptance of overtime for wages, workers often sacrificing the leisure time made available by labor-saving and time-saving technology.
“I think the most striking thing about labor in America,” wrote an Australian visitor, “is that it has become the slave of the paymaster. In Australia, men value their hours of leisure too highly to sell them for any wages. In America, men can be got to work … for almost any hours if it means extra pay.” 8
No doubt inflation, the cheap-labor pool, and employers’ demands played important roles, but the overwhelming factor in employees’ willingness to work overtime was undoubtedly the honest desire to participate in the new higher standard of living. This meant, in effect, accepting the values that went with that standard of living, the values of the new corporate ideology that defined people by externals—their home, their dress, and the quantity of new, shiny products they owned. And it was this ideology that led the worker into the constant debt that disciplined him in the workplace. In this way, the worker’s product returned through the marketplace to enslave him.
Indeed, the Twenties were not golden for most Americans. Dazzling, yes, but made more of tin than gold. The Brookings Institution records that of 27,474,000 families of two or more people, over 21 percent had incomes of less than $1,000 a year, 42 percent had less than $1,500 a year, and 71 percent (nearly 20 million families) made less than $2,500 a year. The combined incomes of the bottom 42 percent equaled the incomes of merely .01 percent of the rich families at the top of the scale. Further, 78.4 percent had no aggregate savings at all, while 0.9 percent (only 24,000 families) possessed 34 percent of the total savings in the country. With rising mechanized productivity came also rising unemployment—4 million workers idled during the Twenties as compared with 1 million before the war, a startling hike of 300 percent, much of it reflecting increasing technological unemployment. This, along with workplace abuses, unresolved grievances and resentments, the teeming population growth in the cities (helped by farm mechanization and rural migrations), and the crime and corruption of prohibition, all made a social powder keg ready to be ignited by a Black Thursday.
But until that day, the Twenties were a materialist Eden, whose God was Profit. Faith in business as a way of life became a religion and was even accepted in universities as a science justifying an assortment of special degrees. The University of Pennsylvania had opened the first College of Business in 1881, but it was not until the Twenties that the Business School rose to prominence throughout the country. In 1929 Stanford opened the first graduate school of business in the West, rivaling Harvard’s leadership in the East, and soon a variety of “business degrees” spewed forth across the land.
In the midst of all this, people with leisure time indulged in an assortment of time consuming nonsense and games, from flagpole sitting to Mah-Jongg and crossword puzzles. Spectator sports blossomed: in one year there were over 17 million admissions to college football games, 27 million attending major league baseball. Participatory sports grew also, two million golfers playing on 89 municipal golf courses around the country, and over half a million tennis players. It is not surprising that it was in sports that Americans found heroes to identify with, in contrast to their own mass anonymity in the factory production line, the sterile business world, and their memories of mass deaths on the battlefield. Here were Bobby Jones in golf, Babe Ruth in baseball, Red Grange in football. There was also a decent “all-American” boy named Charles Lindbergh, who was honored for integrity as well as aerial daring, and was greeted on his return by Secretaries Wilbur, Davis, and Charles Evans Hughes and a host of admirals and generals and given a ticker-tape parade in Manhattan. For millions, these figures were in sharp contrast to the “national leaders” in the White House, Harding and Coolidge, who seemed to sit silently doing nothing while others, including their cabinet members, made millions.
And as much as it was a new age—when old habits and patterns of thought were broken down and replaced with a mass culture of consumerism, of changing moral standards and the breakdown of the old marriage and family ties, of the liberated “Flapper,” of bathing beauty contests and shorter dresses, and women as consumer objects—it was also an age when the old society fought back—an age of cultural and legal conflicts between religion and science, between the old morality and the new, between the large, tightly knit family and the “nuclear” family; of conflicts over prohibition, race, and immigration; of the “old-time religion” of Holy Rollers and the infamous Scopes “Monkey” trial; of the resurgent Ku Klux Klan and “Jim Crow” union policies and the lynchings of hundreds of Black Americans. It was an age when Sacco and Vanzetti could go to their execution innocent and generally unheard, while people seriously listened to Chicago’s king of crime, Al Capone, harangue that “Bolshevism is knocking at our gates.… We must keep the worker away from red literature and red ruses.” In the golden insanity of stock speculation and overnight fortunes, who had time to notice that industrial speed-ups, according to the Federal Bureau of Labor Statistics, were killing 25,000 workers, permanently disabling another 100,000, and injuring some 3 million workers every year?
It was in the midst of all this that the DuPont's of Delaware built the greatest industrial empire known to history, an empire that encompassed everything from chemicals to automobiles, from politics to culture, from war to peace.
The Twenties were the years the DuPont's made their greatest impact on American society. Though not capturing the headlines as often as in the decade that followed, the DuPont's during the Twenties set the course for their future. To a great extent, they became a symbol of the new age and directly contributed to the development of some of its most important aspects.
In technology, the DuPont's secured dye patents and processes that stimulated the clothing and paint industries to new heights. Their attractive and practical “Duco” lacquers encouraged the growth of the automobile industry, as did their tetraethyl lead for high compression gasoline. Their organization of General Motors charged Chevrolet forward eventually to outpace Ford’s Model T. Their cellophane stimulated the market volume of the food industry. Their Pyralin plastic increased radio sales and helped develop shatterproof glass for auto windshields. Their rayon and synthetic leather boosted both the fabrics and women’s apparel industries.
In consumerism, it was the DuPont's who pioneered the way for installment buying with Pierre DuPont’s G.M. Acceptance Corporation. In advertising, the DuPont Company developed the most imaginative and efficient publicity bureau in American business history. “DuPont Magazine” was a pioneer in corporate propaganda.
DuPont produced one of the first cheap motion picture cellulose films for Hollywood during the Twenties.
DuPont was one of the first large companies to help in the industrialization of the South that began in the Twenties.
Henry B. DuPont, Richard C. DuPont, A. Felix DuPont, and A. Felix, Jr., were all pioneers of the aviation industry.
Pierre S. DuPont was considered by many during the Twenties as the “hero of education.” His secretary and treasurer, John J. Raskob, was called the “Wizard of Wall Street.”
Alfred I. DuPont was hailed as the hero of pensions.
T. Coleman DuPont, founder of the National Highway Association, was known as the hero of roads.
When it came to financing the erection of the tallest building in the world, the Empire State Building, again it was the DuPont's.
When it came to the fraudulent land boom in Florida, again the DuPont's were on hand.
During the Twenties it seemed the DuPont's were everywhere and into everything. And, in fact, they were.
Whether in the halls of Congress or the halls of Versailles, the hushed rubber fields of Malaya or the loud Big Board of Wall Street, the name of DuPont was heard and, in most cases, feared.
The Twenties were the golden years for the DuPont's. And as much as they contributed to the development of the Second Industrial Revolution in the Twenties, they were more aided by it. While they directed the labor of others, they themselves did little actual production or work. In that real sense, the closing of the Brandywine powder works in 1920 was the symbolic end of the first half of the DuPont saga, for it marked the family’s move from the grime of industrial production to the polished sterility of the financier-industrialist’s office. From this corporate Olympus, the DuPont's directed their financial legions into areas of investment, carving out a market from conquest only to find that it had created another market need, and so on it went, from powder to chemicals and dyes, from chemicals and dyes to General Motors, from General Motors to U.S. Rubber, tetraethyl lead gasoline and Phillips Petroleum, from powder to Remington Arms Company, from chemicals to synthetic textiles. Each was a building block for the next, each driven by market needs through economic and political conquests. This is the fifty-year second half of the DuPont saga, a saga which began with the conquest of chemicals.
9.2
THE CONQUEST OF CHEMICALS
For one hundred years the DuPont's had displayed little interest in venturing into
nonexplosive chemicals. Then, in 1908, in the storm of publicity over an anti-trust suit,
Washington raised the threat of establishing its own government plants for the
manufacture of gunpowder. This threat was apparently taken seriously in besieged
Wilmington, prompting the DuPont's to consider other fields of investment that could
also serve as outlets for their nitrocellulose, a nitrated cotton which was the principal
raw material in DuPont’s manufacture of smokeless powder. A search for such outlets uncovered the requirement of nitrocellulose in the manufacture of lacquers, celluloid, artificial leather, and artificial silk (rayon). It was not surprising, then, that the DuPont's took their first step outside gunpowder that year by purchasing the Fabrikord Company, then the largest manufacturer of artificial leather in the United States. Later, in 1913, the new acquisition was absorbed directly into the parent and reorganized as a DuPont company. By then, however, the government’s threat seemed less pressing, especially as war loomed on the European horizon.
World War I with its enormous powder orders temporarily interrupted DuPont’s expansion program, but soon provided the additional capital needed for capturing other markets for nitrocellulose: in 1915 the Arlington works, one of the country’s largest celluloid manufacturers, and from 1917 to the war’s end five more manufacturers of paints, varnishes, and acids. This was the family’s first step into chemicals.
To protect these newly acquired paint and lacquer markets, as well as to open a new market for benzol and toluene, the basic ingredients of their TNT, TNX, and picric acid industries, the DuPont's endeavored to capture the synthetic dye industry. Toluene and benzol are both coal-tar crude's, and such coal-tar derivatives were the basis of the entire synthetic dyes industry.
Before World War I, German corporate interests had captured a monopoly of the dyes industry through secret patents and processes for superior dyes. During the war the United States was starved of these dyes, first by a British naval blockade, and then by President Wilson’s declaration of war. To add to their concern for their own markets, the DuPont's were also encouraged into the dyes industry by cries for dye intermediates from other textile, paper, and leather firms. For the DuPont's, the war presented an opportunity no blood relative of E. I. DuPont could resist. In February 1917 Irénée DuPont’s executive committee appropriated $600,000 for the construction of a synthetic indigo plant at Deepwater, New Jersey, just across the river from Wilmington. Later, that plant would be the center of death and a national scandal. Irénée set up the company’s first Organic Chemicals Division, putting his younger brother, Lammot DuPont, in charge. “We ought to be as smart as the Germans,” declared Irénée. “Let’s see if we are.” 9
They weren’t. Du Pont scientists had begun experiments in the previous March, but their inability to crack the secrets of German processes led Du Pont in September to send agents to England. The government there had seized a German-owned indigo works and handed it over to Levinstein, Ltd., the largest chemical combine in Great Britain. As the major supplier of gunpowder and explosives to wartime Britain, Du Pont was in a strong position to pressure the British for access to German-patented manufacturing processes. The result was predictable: a contract by which Du Pont provided capital for the plant facilities in exchange for manufacturing information. More than one Briton must have noted the irony of seeing badly needed British capital, paid to the DuPont's for war materials, returning to Britain at the price of its newly acquired scientific know-how. Soon, DuPont engineers and technicians were in Britain taking notes and gathering experience and, according to later charges by the British, Levinstein’s customers. Meanwhile, Irénée allocated an initial $7 million for investment in dyes.
The alliance between Britain’s largest chemical combine and the United States’ largest powder combine caused only applause in Washington. But the U.S. entry into the war brought DuPont an even greater boon.
In 1918 Congress passed the Trading-with-the-Enemy Act, and the federal government seized all German-owned property in the country. All German patents subsequently fell under the jurisdiction of the office of the Alien Property Custodian, A. Mitchell Palmer, and his successor, Francis P. Garvin. Eventually, however, these patents came under the jurisdiction of DuPont. How this remarkable feat was carried out has become the tale of one of the great public thefts in American history.
Through the long hand of Wilmington, Alien Property Custodian Garvin was crowned president of the Chemical Foundation, a company set up by DuPont and some smaller chemical interests. Then, in April 1919, a full five months after the Armistice ended the war, Alien Property Custodian Garvin began to sell hundreds of secret German patents to Chemical Foundation President Garvin, and through the Foundation to DuPont, 10 which had set aside $12.5 million of its war profits for investment in the new field. 11 In this quick and bloodless coup, DuPont acquired the secret patents that became the key to its growing monopoly on dyes. Government records later revealed that some 5,700 German patents were sold by the Alien Property Custodian for the paltry sum of $271,000. 12 Most of them went to the Chemical Foundation.
DuPont’s helping hand extended even to Versailles. There, alongside Wilson at the great peace conference table, sat Bradley Palmer. On the first day of Garvin’s patent sales, Palmer received an urgent cable from Washington, in which Garvin encouraged the U.S. Mission to destroy the German chemical industry. He asked that all imports of German dyes, which Wilson had arranged as part of Germany’s harsh reparations payments, be handed over to the Chemical Foundation to protect the higher-priced American dyes. To underscore his position, Garvin then laid down an open threat. “Doubtful,” he wired, “if any dyes will be used even if imported. You may face a new tea party.” 13 If the President undertook to arrange for such importation, he might well face, as one federal prosecutor later charged, “a new revolution in the United States.”
A month later, on May 20, Wilson clarified his position for the American chemical corporations by urging Congress to legislate protection for dye stuffs and related industries. Then, in June, Wilson and his allies incorporated into the final draft of the Versailles Treaty certain provisions for the break-up of the German chemical monopoly.
But Wilmington had won only half the battle. Despite these gains in the realm of law and scientific formulas, and despite Wilson’s additional calls for dye tariffs in December of 1919 and 1920, the DuPont's still lacked the most important ingredient in dye-making—practical know-how. Without German experience, most of the newly acquired German patents were indecipherable. The DuPont's decided to resolve this problem by dealing directly with the Germans. In November 1919, DuPont agents met secretly in Zurich, Switzerland, with representatives from Badische-Anilin und Soda Fabrik Co., one of Germany’s largest chemical firms and later part of the I.G. Farben monopoly.
The negotiations, of course, were weighted in favor of DuPont right from the start The German corporation realized it lacked the power to stop Washington’s sale of their patents to the Chemical Foundation. But to weaken its adversary even more, DuPont threatened crucial economic leverage against the Germans through its ability to turn the regulatory screw of the American tariff on German chemical imports. At first, the Germans reacted defensively, then they retreated prudently, finally they capitulated shamelessly to DuPont terms, agreeing to surrender the practical secrets of the BoschHaber ammonia process in exchange for a share of the world market. DuPont, in turn, agreed to set up a multinational corporation, controlling about 25 percent of its stock, and to put up its working capital. 14
But the DuPont's were to gain more than a process for cheap ammonia production. “A successful ammonia arrangement,” explained DuPont agent Charles A. Meade, “certainly would lead at once to a dye exchange.” 15 As one irate member of a Senate Investigating Committee charged years later, “At the moment when you were showing the country here that it was very important to take over the control of the chemical monopoly, to take it away from Germany and get a well-developed chemical industry in this country, you [DuPont] were dealing with the Germans over there.” 16
All would probably have gone well “over there” for the DuPont's if they had not been so rash. But the thirst for practical knowledge apparently led to corporate espionage and bribery, and ultimately the seduction of German scientists from their homeland to Wilmington. This was too obvious a show of bad faith for the insulted Germans, and the entire pact was scrapped and negotiations terminated. Eventually even the top DuPont negotiator, Eysten Berg, resigned in protest. But DuPont agents did succeed in smoothing some ruffled German feathers for future deals. “We parted as good friends,” 17 remarked one DuPont official.
By now, however, the DuPont's had decided they had no friends in Germany, only competitors. Moreover, the legal gains won for them by Wilson in the Versailles Treaty were lost as new deals were struck between French and German corporations. Clearly, the French government was impairing the Reparation Commission’s ability to demand the opening of the sealed German manufacturing processes.
Wilmington was enraged.
In desperation, the DuPont's turned again to the U.S. government for a tariff wall to pressure the Germans into submission. To bring Congress into tow, the DuPont's launched the greatest international publicity drive the world has ever seen.
In 1920, Charles K. Weston, DuPont’s dapper publicity head, was dispatched to London. There he was cabled by M. R. Poucher, head of DuPont’s dye sales, that “Disarmament is a farce while Germany retains organic chemical monopolies.” 18 Poucher’s cable became, with the endorsement of Chairman Pierre S. DuPont, the official company line that was soon incorporated in scores of articles carried in hundreds of American newspapers. Dashing between London (where he saw the British bill restricting German dyes imports through Parliament) and Paris, Weston succeeded in reversing popular opinion that had been overwhelmingly against the use of poison gas in war. This was done by developing a public hysteria over alleged German control over poison gas production through the dyes industry. By December 10, 1920, he was able to send the DuPont's a glowing report:
My mission seems to be going fairly well; I have met a number of our American newspaper correspondents, and have I think succeeded in selling them our ideas. One cannot tell, of course, until the results begin to appear in American newspapers.
The correspondents in Paris report to the offices here, so it is apparent that if the men in London get the right angle, it will be wonderfully helpful.
In Paris I shall devote my energy very largely to bringing the correspondents in contact more closely with American sources of news, at the same time trying to give them the proper angle so that they will appreciate the importance of the news. 19
Appreciate they did. Within a few months one of Du Pont’s top executives, J. J. Byrne, wrote back to Weston:
Recently there have appeared a number of dispatches in the American papers along the lines that are very desirable to us. These look to me as if they have been cabled to this country as a result of your visit to the other side:
1. The Boston Transcript of December 21, 1920, carried a fine story on “Britain Foresees Gas Warfare,” dated from London.
2. The Washington Herald had a cable dispatch written by Wythe Williams from Paris about German dye plots against the U.S. This was taken up by the Manufacturers Record and made the subject of a splendid full page editorial.
3. The Evening Bulletin of Philadelphia had a dispatch from London talking about the importance of British action passing the dye bill and its relation to American affairs.
4. The Public Ledger of January 8, 1921, had a dispatch from Paris about “Germany Sets Dye Trade Trap.”
These dispatches are syndicated in many cases to appear in different places throughout the country, so that the publicity on these four items I mentioned must have been considerable. 20
Weston hired a newspaperman, Ben A. Raleigh, to run the Paris end. “Guy Martin and the articles which he wrote for the Paris edition of the New York Herald Tribune and the Chicago Tribune throw an interesting sidelight on my visit,” Weston wrote DuPont’s Charles Meade. “They were written by Ben A. Raleigh, an old newspaper acquaintance whom I left on guard in Paris. He assumed the name of Guy Martin for publication purposes.… He as my agent will carry out any suggestion.” 21 It was this Mr. Raleigh who, on January 25, 1921, also reported:
The Associated Press carried a cable on the substance of an interview I had with Prof. Blondell.… The Public Ledger Syndicate and the Chicago Tribune Syndicate papers are to be supplied with a story I have arranged which will point out that the French Government, upon confidential information from its investigators in Germany regarding a coming great German dump of goods, will further increase its coefficient tariff rates on dye stuffs, chemicals, etc.… This story should bring out some editorials in the American press, and it might be possible to have it suggested to some of the newspapers that editorial treatment of the cable would be of public service.…
I sent you a cable yesterday notifying you of the coming appearance of the stories for the Public Ledger Syndicate and the Chicago Tribune papers. I hope to get some more material over the Associated Press wires shortly.…
By the way, I suppose that an occasional luncheon, etc., in the furtherance of the project would not be objected to, but I should like authorization. In this case Dr. Chapin paid for the lunch, but I want to be in a position to come back at him and the other people who we want to cultivate, including such men as [Wythe] Williams of the Public Ledger, Roberts of the Associated Press … Floyd Gibbons of the [Chicago] Tribune.
Carl Ackerman, who dropped into the Ledger Bureau while I was there, over on a visit from London, requested me to remember him to you.…22
(Roberts was then head of Associated Press; Carl Ackerman later became head of Columbia University’s School of Journalism.)
More than luncheons were involved. From 1918 to 1925 DuPont doled out over $130,000 to organizations participating in the publicity campaign. 23 Two of Washington’s leading firms, Thomas R. Shipp & Co. and Bronson Batchelor, Inc., handled DuPont’s newspaper publicity on this side of the Atlantic. Speaking campaigns were launched to address conventions and civic and service clubs, while personal interviews were arranged with prominent businessmen. Government officials were also enlisted in the DuPont campaign, employing the very willing War Department and the Chemical Warfare Service. Irénée DuPont became the country’s leading spokesman for “preparedness,” wrapping his case for a dyes monopoly in the U.S. flag. The textile industry, in which DuPont was also becoming involved, was also recruited for appeals to Congress. Finally, DuPont pressure was brought to bear directly on the electoral arena. And here, in the person of Senator William S. Kenyon, Delaware’s first family met their greatest political challenge since Frank Waddell’s vengeful campaign brought on the 1907 anti-trust indictment.
This revelation came when other events were also bearing down on the DuPont golden image—charges of war profits, of the “Old Hickory” fraud, of dye patent bribery and political machinations, of huge campaign donations and cheating on contracts with British allies. From 1920 to 1923 Senator Kenyon’s forces took up all these charges and launched penetrating searches into DuPont family closets. His second target, after Coleman’s League, was DuPont’s dyes campaign.
BIG P.O.S.
On May 7, 1920, Senator Kenyon read before the Senate an extraordinarily blatant
letter from DuPont’s Charles Weston to Senator Moses of New Hampshire. In it,
Weston threatened to withhold support from the candidacy of General Leonard Wood for
the Republican presidential nomination unless Senator Moses, Wood’s campaign
manager in the East, ceased his opposition to DuPont’s bill calling for a 20 percent
tariff on foreign dyes. Dated April 16, 1920, Weston’s letter was directed against
Moses’ proposed amendment to the bill. The amendment which you have offered and your active opposition to the preparedness features of the dye bill seem to some of us to be not in accord with your fervent appeals to us to support him [Wood] because of his stand for national preparedness.
Personally, I want to support General Wood, but I find it difficult to reconcile the two attitudes of one of his important campaign managers—the one on the floor of the Senate and the other one on the public platform—sufficiently to have full faith in his cause.
I am outlining a publicity campaign to inform the public concerning the present status of the proposed dyes legislation. May I ask you to set me straight as to the apparent contradiction in your attitude on the dyes bill as that I may be perfectly accurate in what I write? 24
“We have,” exclaimed Kenyon angrily, “the remarkable spectacle of a U.S. Senator who is engaged in managing a presidential campaign practically threatened as to what may happen to that campaign if he does not withdraw his opposition to this bill.” 25
This was no small threat. Pierre DuPont had been the Republican Party’s largest contributor in the last presidential election in 1916, donating $92,500, and thus carried great weight in the party.
Irénée immediately released a statement claiming the letter was only a personal one desiring information. On the very next day, however, the New York Times revealed that after Weston’s letter was sent to Moses, Richard Sylvester, former Washington chief of police and then DuPont confidential agent, approached General Wood while he was campaigning in Indiana and asked him to pressure Moses to stop his opposition to the dyes bill. 26
Congress was in an uproar. Debate on the Dye Tariffs Bill was in full heat. Senator Thomas of Colorado, in the dramatic moment of the day, read the terms of a contract between DuPont and Levinstein, Ltd., of Manchester, England, for a world monopoly of dyes. Interestingly enough, Thomas had acquired the contract from the Boston court where Levinstein had filed suit against DuPont for a breach of faith.
“If I am correct in this,” he charged, “I believe the purpose of this bill to be little short of infamous. The nature and support of the DuPont's is known as well to other Senators as to me. That letter and this contract seem to me almost positive proof of the interests and influences behind this bill which drew up its provisions and which counted it as an asset for carrying out this purpose.” 27
The bill was killed by a filibuster. For once, it seemed the DuPont's had lost.
The dyes tariff defeat, however, was only a temporary setback for the family, one that egged them on into even deeper involvement in national politics.
“The Republican Party has picked a pair of winners,” Coleman declared. “Delaware is for the ticket, I know. Our delegates left me on the third ballot and when the time came to go Harding they went solid.” 28 Coly was right. Delaware, or DuPont, was solid. Both he and his wife, along with Alexis I.DuPont, were listed by the Kenyon Committee among those who gave $1,000 each from two to twelve times. 29 Years later it was revealed that Coly gave an additional $25,000. 30 Irénée gave $14,722 (on top of the $8,110 he had donated only the year before), while Pierre gave $12,378. 31 Harding,the Standard Oil Man from Mark Hanna’s Ohio machine, who enjoyed universal toleration by all the major families of America, had full DuPont endorsement. Even old Colonel Henry A. DuPont christened Harding as “our magnificent candidate.” 32
Harding, history records, was anything but “magnificent.” In fact, the most generous description that has been rendered his tenure in the White House was that he “did nothing” at all except play poker and drink. With Mellon seated as king of the Treasury and Morgan and Standard Oil/Sinclair Oil representatives filling the rest of his “Black Cabinet,” Harding was left to his sublime idleness.
The country had Coleman DuPont, among others, to thank for Warren Harding’s presidency. After Harding’s nomination Coleman was among the top party officials who gathered at the Marion Club in Ohio (where Harding’s office was located) to plan the campaign. Arriving too early, the politicians found no chef on hand, whereupon Coleman charged into the Club’s kitchen, donned an apron, and cooked the entire party a breakfast of eggs and meat. It was typical Coleman.
Harding’s Democratic opponent, Governor James Cox of Ohio, was unable, despite his partnership in the Pure Oil Company, to pull his fellow plutocrats over to his side.
“I hold in my hand,” he stated dramatically before a hushed audience in Cleveland, “the letter and circular issued by Coleman DuPont as Chairman of the Traveling Men’s Bureau of the Republican National Committee. I think that everyone knows that Coleman DuPont is not a traveling man and that he has no great public interest in this campaign. I can understand how he would undertake to organize groups and stir up prejudices to encompass my defeat, because Coleman DuPont, as the Krupp of America, a member of a great munitions family, knows what it means should I be elected and secure the ratification of the Treaty of Peace and the League of Nations.
“This family has grown financially fat and insolent on the profits of the war. When men bleed and die on the battlefield, the munition makers receive dividends, and the League of Nations definitely provides against this sort of profiteering in the future.
“Not only is the League of Nations designed to make peace permanent, but it provides for taking away the agencies of war for a general disarmament and war prevention, it declares against the manufacture of munitions in any event by private concerns, because such concerns inspire and invite war.
“No wonder Coleman Du Pont is interesting himself in behalf of the reactionary candidate whose motto is ‘scrap the League of Nations.’” 33
It was a new “devil theory” that simplistically ignored the reality that one did not have to be a munitions maker to profit from war. Indeed, Cox’s own Pure Oil Company had benefited from the war mobilization. The key difference was in the interpretation of the League’s potentiality. Cox, like Wilson, saw it as a way of enforcing a preservation of the existing world order. Their opponents, including most of the DuPont and Morgan families, saw the League as a restraint on the freedom of American business and its political flexibility in foreign affairs.
“I would keep America as she has been,” explained Senator Henry Cabot Lodge, a Morgan protege, “not isolated, not prevent her from joining other nations for these great purposes—but I wish her to be master of her own fate.” 34 Certainly the DuPont's had concern regarding their manufacture of arms, but more likely their opposition to the League stemmed from their fear of the reciprocal trade relations it might involve, relations that could remove their infant dye industry from its tariff incubator before it was strong enough to face the world of competition. But even with munitions, Cox erred in his facts, opening himself to a lashing from Pierre’s sharp tongue.
As chairman of DuPont, Pierre leaped to Coleman’s defense, characterizing Cox’s charge of war profiteering as a “gross injustice.” Coleman had severed ties with the company before the U.S. entry into the war, Pierre pointed out; he also asserted the “untruth” of any connection between his cousin and any “corruption fund of $10 million.” Meanwhile, Coleman remained cool and confident, lounging on his new lavish estate on the Hudson, Nevis, the former home of Alexander Hamilton.
While the DuPont's cultured their political gardens, they kept up the steady barrage of company propaganda calling for the dyes tariff in the interest of “patriotism and national security.” Newspapers across the country reprinted the articles prepared by Weston’s publicity bureau and marveled at DuPont’s patriotic fervor.[The first hardcore flag waving cult in the land DC]
“Fulfilling the largest Federal war contract of the kind ever given,” ran one of the most circulated articles, “… this corporation served the country so well that not one complaint was recorded by Government officials.” Even contemporary evidence showed this to be graphically untrue, there having been many complaints about prices by government officials, including Secretary of War Baker. As Colonel Buckner, DuPont’s military sales director, joyously calculated in 1918, if only military business was considered, then the world war orders amounted to 276 years of DuPont business. As
the Graham investigating committee pointed out in 1921, for DuPont, patriotism ended with the pocketbook.
Nevertheless, the DuPont's were displayed by Weston’s articles as titans of family integrity, worthy of study and admiration by all Americans. “The disintegration of American home life,” the same article contended, “could be largely arrested by a national study of how to make a family a thinking, working unit like that of the DuPont's.” Again, Weston was careful to avoid the deluge of divorces that had swamped the family in recent years, spilling over in feuds that tore the family asunder.
More than one of Weston’s publicity employees must have winced at the claims of their own department that “It is the business of a corporation to tell the public what it is doing, and why; giving out the information regularly, freely, widely, accurately, forcefully. We maintain a Publicity Bureau whose sole function it is to tell the truth about our business, apart from any advertising or press agent considerations.”
This claim, however, did not prevent Weston’s bureau from integrating the same article into the campaign for DuPont control over German dyes. “Not until the DuPont's perfected standardization of dye colors was it possible to match a tint or shade of any but German dyes. When you wanted a certain blue, for example, you could not order by a catalog number with any likelihood of getting the hue desired—unless the maker of the dye was a German. The DuPont's now have such control of the pigment processes that the outcome is identical, for shade and wear, strength and delicacy, evenness and density, with the highest class German products.” 35
Yet, one of the most important factors in the development of DuPont dyes was the company’s luring of German scientists to Wilmington with bribes. Finally, in February of 1921, a bizarre set of circumstances led to the swearing out of warrants in Cologne, Germany, for the arrest of four leading German scientists. The scientists, Dr. Joseph Hachslander, Heinrich Jordan, Otto Runge, and Max Engelmann, all former “old and trusted” employees of Friedrich Bayer & Company of Leverskursen, had all secretly accepted jobs with DuPont. Working with a Dr. Kunze of Zurich, the scientists were charged with “illegally appropriating valuable recipes, formula, etc.,” and were allegedly smuggling the documents and drawings across the German-Dutch frontier in a truck which, by pure accident, had been discovered by Dutch officials, impounded, and returned to Cologne.
Two of the scientists subsequently disappeared. Two others, Runge and Hachslander, were later found in Wilmington happily tinkering away in their new DuPont labs with handsome salaries of $25,000 per year. Irénée interpreted it simply as an example of company integrity and innocence. “The DuPont Company has not violated any law or any business principle,” he explained, “and these accusations made by the German cartel are simply another move in its campaign to prevent the development of an industry here. They are in line with the propaganda against the passage of protective legislation in the United States which it has been spreading since we began to seriously threaten the German monopoly.
“In the absence of any formal answer which may be made to the charges, it is only justice to the accused German chemists to say that the DuPont Company employed Dr. Hachslander and Dr. Runge as the best experts it could find to interpret and help put into practical operation the processes and formula covered by the German patents which were seized and made available to American manufacturers when this country went to war with Germany.” 36
Case closed.
Five months later the DuPont Company received a boon almost as important politically as the German scientists were technically—a U.S. senator. Almost immediately, it became known around the country as
“Delaware’s Dirty Deal.”
Delaware’s Dirty Deal
Coleman DuPont had wanted to be a U.S. Senator for a long time, possibly since
helping his cousin, Colonel Henry A. DuPont, in his twelve-year struggle to defeat
“Gas” Addicks for the senatorial seat. And Coleman’s hardheaded persistence, along
with his renowned financial power, usually got him what he wanted. 
Again, as in his maneuvers for leadership in the DuPont Company, Alfred had been overconfident and had not weighed the timing of his announcement. It was a critical mistake.
Fear swept the ranks of the Republican Party. Most erroneously suspected that Alfred’s financial well had run dry. Rumors had begun to leak out in the past year of Alfred’s very real pecuniary difficulties. The Nemours Trading Corporation, which Alfred had formed during the war to sell badly needed American goods to Europe at high prices, had been the victim of his usual economic miscalculations, for Alfred had ignored in Europe the inevitable result when anything is bled white. With its factories destroyed, profitable markets lost, and currencies depreciated, Europe’s finances—and his company’s prospects—collapsed. Alfred suddenly found himself besieged by calls for more money. In addition, in October 1919 he was sued for his takeover of Allied Industries and the French-American Construction Corporation through Nemours Trading. Charging that their property had been made valueless, five Allied stockholders demanded $270,000 in compensation. To add to his problems, Alfred was also hit by a government demand for $1,576,000 owed on his 1915 income taxes. Insult was then added to injury. On March 6, 1919, the Court of Appeals ruled on Alfred’s 1916 DuPont Company stock defeat to Pierre. Not only did the three-judge panel agree with the lower court’s dismissal of Alfred’s suit, but it dissented with every criticism the lower court had made of Pierre’s conduct during the struggle for control.
But much worse was to come for Alfred. His wife’s illnesses were growing more frequent, becoming a pattern of steady decline. That summer Alicia was bedridden at her new Long Island estate, White Eagle, occupying her time by writing a book on wine making.
By fall, both Alicia and Nemours Trading Corporation were disintegrating before Alfred’s eyes. In November Alfred made out his final check to Nemours Trading for $300,000, raising his total investment to close to $5 million. “That will have to last,” 38 he told its president. It didn’t.
Alicia’s spirits picked up around Christmas time, and Alfred took the opportunity for a vacation from his woes. He decided to visit his old friends, the Balls, who had moved to California. Old Captain Ball was dead now, and his widow lived there with two sons and a daughter, Jessie, who was probably the main reason for the compulsive 3,000- mile “visit.” Alicia insisted on seeing him to the station, and on the platform she waved good-bye as the train pulled out. She never saw him again.
Four days later, on January 7, Alfred arrived at the San Diego station, where he was met by Miss Ball. But no sooner had plans been made for a luncheon the next day, when Alfred received a telegram: Alicia was dead. She had accompanied Francis DuPont and his wife to Charleston to attend a debutante party for a young relative. The trip was too much, and after an attack during the night, she died the next day at a nearby hospital.
Alfred buried Alicia at Nemours beside her infant daughter and son. It was the final, demoralizing blow. The fighting spirit seemed gone. He abandoned White Eagle, his business, everything.
Two weeks later, on January 21, he wrote the president of Nemours Trading Corporation, James Dashiel, that “I have decided to liquidate the Nemours Trading Corporation.” He expected a loss of some $5 million. Before it was all settled, Alfred found himself in debt to the tune of $10 million.
The announcement of the firm’s collapse shook Dover’s politicians out of their characteristic slumber. Then came the thunderbolt of January 24, merely three days later. “There is nothing in politics but wear and tear, mudslinging and an awful lot of expenditure,” 39 Alfred explained. [He is spot on there DC]
Alfred’s brother-in-law, Ed Bradford, Jr., warned of the possible rout of the Republicans into the camp of Coleman DuPont’s “Bazaza & Company.” “I do not think your fears well founded,” answered Alfred. “Bazaza and Company are just about as near dead ducks in this state as anything above ground could be.” 40 Alfred was simply too busy setting his financial house in order to bother with Coleman. Coleman, for his part, had sent condolences to Alfred on Alicia’s death (as Alfred did likewise ten days later when Coleman’s youngest son suddenly died), and had even offered financial assistance, which Alfred, fearing such a personal obligation, had politely refused. Rumors may well have spread, however, that family differences were being bridged, rumors fanned by Alfred’s sale of the Morning News and six weeklies, which eventually found their way into the hands of Pierre DuPont. Abruptly, the Morning News’s editorials reversed gear and called for the seating of Coleman DuPont in the U.S. Senate.
No sooner was Denney in office in 1921 than whispers began to fly of a deal involving Coleman. That May, Coleman paid a visit to Senator Josiah Wolcott in Washington, and Dover buzzed in anticipation. On May 6 Alfred wrote his sister Marguerite:
I understand there is a scheme to put Coleman in the Senate by Governor appointment. The plan is to get the present Democratic Senator, Wolcott, to resign by offering him the Chancellorship of the State, which appointment is made by the Governor next month, and then to have the Governor appoint Coleman in his stead. While it is merely a rumor, it comes from a good source and I do know that Coleman was in Washington the other day and saw Wolcott. Coleman has recognized for some time that he has no chance of being elected to the Senate by the people as long as I was alive and kicking.… [In 1916] when the Colonel tried to make the grade and I threw him out, there was a distinct understanding, or so I am told, between the Colonel and Coleman that the Colonel would serve only one half the time and resign, and have the Governor appoint Coleman instead. That was really my chief reason for throwing the Colonel out. I do not see how to meet this new threat of having the state represented by Coleman. Possibly the rumor was invented.…41
On May 24 Governor Denney himself confirmed it wasn’t by announcing that Josiah Wolcott was his appointee for the highest judicial office in Delaware. Alfred came out of political retirement to try to stop the tidal wave of desertions, but Wolcott expressed his willingness to resign. The other senator, Lewis Ball, who also owed his position to Alfred, gave an interview to the Morning News in which he praised Coleman. Protest, however, burst like a storm. Ten members of the New Castle bar petitioned against Wolcott’s confirmation by the state legislature. Even Colonel Henry, his sense of moral dignity outraged, had his Evening Journal voice its opposition. But it all came too late, too disorganized. On July 7, amid a wild tumult, the legislature confirmed Wolcott’s appointment by a mere three votes.
“You will regret this to the end of your life,” was Alfred’s bitter comment to a former follower who tried to justify his vote. “You have chosen and there is no turning back, as you will find out.” 42
Coleman, meanwhile, had steered clear of all the mudslinging by “vacationing” in Colorado. He had already suffered the indignity of close fighting with Senator Kenyon over his controversial stand on immigration. Since the Russian Revolution of 1917, Congress had established laws that discriminated against immigrants from peasant and poor working-class backgrounds, most of whom came from southern and eastern Europe, where socialism was widely accepted. The war’s end brought a flood of strikes and the promise of a flood of immigration, and in 1921 Congress limited immigration from any nation to 3 percent of its national residents in this country in 1910, a provision particularly favorable to British, German, and Scandinavian immigrants.
Coleman openly opposed this policy as chairman of the Inter-Racial Council, “an organization of more than 1,200 of the leading industrial establishments,” 43 and published articles in national magazines in 1920 that called for nonrestrictive laws. “Will the shutting off of immigration afford protection against ultra-radicalism, as so many seem to think,” he asked, “or will it threaten our commercial supremacy?” 44 Listing the number of key basic industries in which immigrants made up the majority of workers—coal, steel, iron, clothing, cotton and woolen goods, sugar refining, and railway maintenance—and citing the $25 billion worth of goods they created and the savings they accumulated for use by bankers, Coleman warned that literacy tests could result in a shortage of cheap labor. He warned of the 275,000 immigrants, mostly able bodied men, who were returning to their homelands, taking with them $550 million earned in the United States. “We are losing at both ends, our entrances and our exits— the women and children coming in, the able-bodied males going out.” 45
Women and children were not Coleman’s concern; cheap labor was.
“Our native-born workmen [meaning the AFL leadership] do not realize that without immigrants for our unskilled grades of work, there would be little work available for the skilled American workers.… The need for unskilled immigrant labor in industry has even now not been met.… That need is mentioned in order to emphasize the importance of the immigrant to industrial expansion and to show how industry is vitally concerned with the stabilization and assimilation of our immigrants and with so fundamental a thing as our attitude toward the immigrant on his arrival.
“Receive the immigrant with a smile,” advised this financial fox. “Next, we might offer him a little protection, if not for altruistic purposes, then for the selfish purpose of building up a national reputation that will attract the best immigrants.
“The immigrant must feel that he is protected. He must be inspired with confidence in our form of government and in our institutions. He must be attracted to citizenship; for citizenship, if it is to mean anything, must be sought after, not thrust upon the immigrant.” 46
In this interest, he encouraged “spontaneous Americanization which, by indirect methods, can be delicately but effectively stimulated.” All this could be done, Coleman suggested, while a federal board of assimilation “distributed immigrants to industrial centers to meet the manpower needs of the owners of industry.” Coleman disclaimed the “red hysteria.” “Only 1% of the foreign-language newspapers have shown a tendency toward communism,” he noted, “a much lower percentage than among the Englishlanguage newspapers.” That same year a Senate investigating committee, led by Coleman’s indomitable foe, Senator Kenyon, explained why this was so: Coleman du Pont controlled about 90 percent of the foreign-language newspapers in the United States. Through his American Association of Foreign Language Newspapers, Coleman pushed “by indirect methods” his particular brand of “Americanism,” which was indeed “delicately but effectively stimulated.”
“Day by day the money-masters of America become more aware of their danger,” wrote an angry Upton Sinclair that year; “they draw together, they grow more class conscious, more aggressive. The war has taught them the possibilities of propaganda; it has accustomed them to the idea of enormous campaigns which sway the minds of millions and make them pliable to any purpose. They have been terrified by what happened in Russia and Hungary, and they propose to see to it that the foreign population of America is inoculated against modern ideas. They form the ‘Publishers’ Association of the American Press in Foreign Languages,’ whose purpose it is ‘to foster unswerving loyalty to American ideals’—that is to say, to keep America capitalist. Then a group of our biggest exploiters, headed by Coleman DuPont of the Powder Trust, buy the ‘American Association of Foreign Language Newspapers.’ They give a dinner to the heads of all the newspaper advertising agencies, at the Bankers Club of New York, and explain that in the future all advertising must be placed through this great association. So the massed advertising of American corporations is to be wielded as a club, to keep the newspaper columns of foreign language newspapers free from radicalism. So when there is a strike anywhere in the ‘Powder barony,’ and Poles and Hungarians are being bayoneted and shot, the powder barons will know that the Polish and Hungarian newspapers are printing no news of the shooting and giving no encouragement to the strike.” 47
Needless to say, such attacks by the famous muckraker did not make Coleman’s day. Nor did his grilling before Kenyon’s committee on September 25, which made front page news in the New York Times the next day. Coleman was receiving too much notoriety for many of his business partners. Besides, many of them simply disagreed with his immigration campaign. The problem, they explained, was growing unemployment, which the unskilled immigrant would only make worse. Industrial expansion, moreover, was no longer tied to employing more and more workers, but rather fewer, through mechanization, which reduced the cost of labor while producing more, thus reducing prices and thereby opening new consumer markets. What cheap labor was needed could easily be acquired by the millions of rural people 19,436,000 between 1920 and 1929 who would soon leave the farms as the new trucks, tractors, and combines replaced agricultural jobs and reduced farm prices. These people, bringing the conservatism and individualism of the rural mind, would help business in its fight against socialism, while immigration laws that restricted any other growth of the unskilled labor pool would shore up workers’ wages generally and narrow the gap in wage differentials.
As usual, Coleman’s thinking was simply behind the times. To avoid any further embarrassment or antagonisms, in February 1921 he resigned his chairmanship of the Inter-Racial Council. That year the 1917 restriction on immigration was further tightened, as it would be again three years later. Coleman’s campaign had clearly collapsed. He never raised its banner again.
It was only three months later, then, that Denney made his appointment of Wolcott to the Chancellery, and Coleman was safe in Colorado, far from the flying sparks and ugly slurs. On July 7 Denney wired Coleman at Colorado Springs of his appointment to the United States Senate.
“As you know,” Coleman telegraphed back to Denney, “I have never cared for any political ambition, but when called to duty by one’s State or country, there is but one thing to do—give the best in you. This I will do. There are men in the State who could fill the position more brilliantly and with greater credit, but there are none who would work harder for the good of the nation and for Delaware. I hope to show you and the good people of Delaware my appreciation of this great honor by acts rather than words.” 48
Brave words indeed for someone who as a senator became best known for his absenteeism.
National magazines, such as Outlook, termed Coleman’s appointment “peculiar.” The Philadelphia Record called it “Delaware’s Shameful Deal.” Across the country it became known as “Delaware’s Dirty Deal.”
Dirty or not, Coly wore his senator’s toga with distinct pride when he came to Washington in November, becoming a frequent visitor to the house of Harding’s largest pre-convention contributor and now attorney general, Harry H. Daugherty, the dispenser of favors in the administration. When a public furor arose over the Graham Committee’s exposure of DuPont fraud on World War I powder prices and the useless Old Hickory plant, Attorney General Daugherty refused to prosecute, even after it was revealed in April 1922 that the selling of DuPont’s war plants had netted $14 per share for the stockholders in Pierre’s dummy DuPont Chemical Company, and even under the threat of Daugherty’s impeachment voiced in Congress on April 11 by Representative Woodruff.
Coleman’s cousins, meanwhile, launched their final drive for their dyes bill. In 1921 DuPont stock had been dragged down with the general stock decline of the post-war recession. Not wishing to cut into profit margins or dividends, Irénée had rectified the situation temporarily by slashing the wages of all employees by 10 percent. This, of course, hurt the average DuPont worker most, but as the company was not unionized, there was little the individual workers could do but voice impotent complaints.
All three cousins realized that this was only a temporary expedient, however, and put their long-range hopes on capturing the dyes monopoly and other areas of investment. The dyes campaign fell under the personal direction of Irénée and Lammot, the latter being in charge of the organic chemicals division. But it was lean, spectacled Irénée who, as president, mapped the strategy and led the struggle.
Irénée was a man obsessed with business, precisely because it was his business. Years ago, as a lower executive, even his play was business oriented. Every Thursday night he, John J. Raskob, and three other minor executives would play at being the executive committee dealing with the company’s major problems. Occasionally, they even produced a good idea, which they dutifully passed on to higher executives.
Coleman was also there, “frankly and openly” close to Harry Daugherty’s Alien Property Custodian, Thomas B. Miller. During Miller’s tenure, with Charles Weston’s publicity bureau showering “public opinion” on Washington, the DuPont's managed to buy up most of the important German dye patents remaining under Miller’s custody. Miller eventually wound up in the Atlanta Penitentiary for taking a $50,000 bribe. Coleman never paid him a visit.
Wrapping their case in the U.S. flag, the DuPont's continued a barrage of mounting pressure on Congress in 1922. Senator T. Coleman DuPont, when he could spare time from his financial speculation in such fields as professional boxing, did his part, writing Irénée that “Senators Watson, Frelinghuysen, Pepper, and one or two others will defend the DuPont Company.” 50 The result was a complete victory for the DuPont's in the 67th Congress: the passage of House Resolution 2435, the Tariff Act of 1922.
By then the DuPont's had $40 million invested in dyes and related chemicals, building on their first wartime expansion when they committed 60 percent of their total investment of commercial properties and equipment in chemicals. 51 Now, armed with German patents and scientists, and protected from foreign competition by a tariff shield, the DuPont's became the Number One dye maker in America. Eventually they produced over 500 different dyes and extended their chemical holdings across the country: in 1924, the Viscoloid Company, maker of Viscoloid, a pyroxylin material much like DuPont’s Pyralin (originally made by the acquired Arlington Company), and Lazote, Inc., which made synthetic ammonia; in 1925, the Eastern Alcohol Corporation was formed with the Kentucky Alcohol Corporation as partners to make ethyl alcohol from West Indies molasses; in 1926, the National Ammonia Company; in 1928, a 50 percent interest in the Bayer-Samesan Corporation, maker of seed disinfectants, and the Grasselli Company, since 1839 a leading manufacturer of acids, and a 50 percent interest in the Pittsburgh Glass Company (sold later); in 1929, a 70 percent interest in the Krebbs Pigment and Chemical Company, maker of lithopone, and Capes-Viscose,Inc., maker of cellulose caps and bands; in 1930, the Roessler and Hasslacher Chemical Company, specialists in electrochemicals, peroxides, and insecticides, and a 51 percent interest in Kinetic Chemicals, Inc.; in 1931, the Commercial Pigments Corporation, maker of titanium pigments, and the Newport Company, compounder of dyes and synthetic organic chemicals; for $834,000, an interest in the Bakelite Corporation; for $2 million, a one-third interest in the Niacet Chemical Corporation; for $250,000, a 50 percent interest in the Old Hickory Company; and a 62 percent controlling interest in Acetol Products, Inc.
It was just like the old gunpowder trust days, as the DuPont Company quietly grew into the world’s largest chemical empire through a hearty diet of smaller entrepreneurs. As Irénée once put it, “It’s nice to be friendly with competition.” 52
Not only the domestic market, but also the foreign market succumbed to DuPont’s demands. But it was not the Germans who were the first to be pressured by the tariff wall into releasing their technical secrets, as had been anticipated; it was the French.
Rayon
The French signed their first agreement with the DuPont's in 1920, under the shadow
of rabbled cities and the first American tariff bill on chemicals (doomed to defeat that
year). With a 60 percent investment, Wilmington formed the DuPont Fibersilk Company
with France’s largest manufacturer of viscose rayon, Comptier de Textiles Artificiels,
and bought up the patent rights for North America. Under the guidance of French
technicians, the DuPont's set up the country’s first rayon plant at Buffalo, New York, and
soon thousands of pounds of wood pulp were being turned into millions of skeins of
artificial silk fiber.
Establishing the “rayon” name in 1924, the DuPont's moved its production into the South, escaping the North’s protective legislation enforcement, unionism, and decent wages. Thriving in an area where wages were 43.6 percent lower than in the North, 53 cotton and rayon mill owners easily controlled state and local governments. From here, representatives were sent to Congress “to protect Southern industry” by hostilely opposing any proposed child labor laws or protective legislation for women that might interfere with the hiring of keen young eyes and nimble fingers held so dearly (and paid for so cheaply) by the textile industries. The old, who were unemployable in these industries, became a burden assumed by the younger relatives, rather than by the employer. It is not surprising, then, that DuPont Company consistently opposed social security insurance throughout the Twenties.
The DuPont's built three rayon plants in this decade. All were in the South: near Richmond, Virginia; at the Old Hickory plant site in Tennessee; and at Waynesboro, Virginia, the site of eight production units worth $46 million and employing 6,400 workers, all non-union. From the Richmond (actually, Ampthill, Virginia) site, the DuPont Engineering Company built a special concrete roadway to the Richmond-Petersburg Turnpike to facilitate the marketing of manufactured rayon. By 1927, rayon workers in the South were producing one-third of DuPont’s total income. DuPont’s $3.3 million in research was soon returning over $5 million in profits every year. 54
Cellophane
Cellophane was originally marketed as an attractive eye-catcher in packaging, without any practical use. Predictably, no one would touch it. But Chairman Pierre was not to be beaten. While pontificating about “A principle laid down one hundred years ago by DuPont: the sound way to success is in filling needs,” 55 Pierre encouraged an expansion of the company’s advertising department to create those needs. It was only after repeated attempts at selling DuPont cellophane had failed that stubborn Pierre finally agreed to pour money into research to find some practical use for his product. Eventually, in 1927, after 2,000 experiments, cellophane’s moisture-proof practicality was developed, and by 1931 was being applied to packaging everything from cigarettes to bread. Within a decade of their first investment in 1924, cellophane was grossing over $5 million every year for the DuPont's, 56 with four out of seven factories, again, in the South.
Film and Ammonia
Two other big money-makers also came from the market-hungry French. One was
photographic film. With Pathé Exchange, Inc., which manufactured a cellulose plastic for photographic film, DuPont secured a 51 percent majority interest in establishing the
DuPont Film Manufacturing Company. Again, they soon bought out their French
partners, while DuPont Film supplied booming Hollywood with 40 percent of all its
negative film and one-fifth of all its positive film. The other lucrative product was synthetic ammonia. In 1924 the DuPont's purchased rights of the Claude Process for the fixation of nitrogen out of the air, a method that was an improvement over the German process for which DuPont Company had negotiated in Switzerland in 1919. Using this as a basis for the production of ammonia, the DuPont's launched a high-pressure synthesis plant at Belle, West Virginia. From here, spewed forth ammonia for refrigeration; light clear plastics for aircraft and for other uses; urea for fertilizers and medicines; and alcohols and solvents for anti-freeze solutions.
All of these investment areas (dyes, cellophane, rayon, ammonia, cellulose film, etc.) supplied markets for DuPont’s original powder-making ingredients, particularly nitrocellulose. But all, in turn, demanded their own markets. It was this search for markets for their new chemical acquisitions that led the DuPont's to their greatest treasure house of all: General Motors.
9.3
THE G.M. GIANT
Few investments in the history of world capitalism have returned such pure gold as
the DuPont's involvement with General Motors. From an initial $43 million
contribution to G.M.’s treasury sprang DuPont Company’s greatest market. Over $20
million in dividends were reaped every year, to say nothing of family dividends and
salaries and fees as G.M. executives and directors, the market it provided for other
companies (such as the family-controlled U.S. Rubber Company), and the enormous
economic and political power such control carried. Clearly, the history of DuPont in
the twentieth century is closely tied to the history of G.M. 
In 1904, after testing its luxury product on every imaginable road, 43-year-old Billy Durant bought the financially troubled Buick Motor Company. Within ten months, by enlisting the financial aid of New York bankers, he had increased Buick’s initial $75,000 capitalization twenty-fold. Soon Durant was building more plants, hiring more labor, increasing production, and selling the fashionable Buick's by the hundreds to wealthy clients. By 1908 his firm was producing 8,000 cars a year, earning him the title “the Little Giant.”
That year Durant organized his life’s great love, the General Motors Corporation, as a holding company. Within two years, swaggering about Michigan with his firm’s $12 million capitalization, Durant began buying out his less fortunate smaller competitors in a series of lightning maneuvers: Cadillac, Oldsmobile, Oakland Motor Companies, Northway Motors Company, Weston Mott Company, and fifteen others. Except for the hesitancy of his nervous bankers, he would also have bought out Henry Ford, then the leading auto manufacturer.
This enormous expansion drained Durant’s working capital, however, and with a sales drop in the 1910 recession, he was forced that year to surrender control to Boston and New York bankers for a contracted period of five years in exchange for a badly needed $15 million loan. It had become typical of the new industrial age that the financiers, through their control of the purse strings, dictated to the industrialist.
With only five years to raise $15 million to restore his control over General Motors, Durant thought he had hit pay dirt with the Chevrolet, his medium-priced answer to Ford’s Model T. While forming the $20 million Chevrolet Company in Delaware, where tax laws and fees were more favorable, “the Little Giant” was unaware that he was being quietly watched by a bigger giant in that state, the DuPont family.
Pierre DuPont’s wry little secretary, John J. Raskob, was convinced by February 1914 that General Motors, with an enormous plant capacity and economies of scale, would double its earnings within a year. That month he bought 500 shares of G.M. common at $70 a share; Pierre bought 2,000 at $82 out of G.M.’s 65,000 total. Raskob proved to be right. G.M.’s stock rose to $200 by the summer of 1915, to $350 by September.
By then, about half of Pierre’s stock portfolio (besides his DuPont holdings) was filled with G.M. shares. The interest of the president of DuPont was very real and very obvious.
Apparently, a business acquaintance of Pierre’s, Lewis G. Kaufman, caught wind of this. Kaufman was the president of New York’s Chatham & Phoenix Bank, and had once asked Pierre to join its board. More importantly, however, Kaufman was also a member of the Board of Directors of General Motors and an ally of Durant. Durant’s showdown with the bankers was approaching, and what more formidable ally could Durant have than the DuPont's? Perhaps he could use the DuPont's. An invitation was extended to Pierre to attend the G.M. board meeting in New York on September 16, 1915. Would he come? Certainly, Pierre replied. But it was not the DuPont's who were to be used.
Pierre and Raskob arrived at the meeting and immediately grasped the situation. G.M. and Chevrolet had netted enough income to enable Durant to pay off the bankers, but regaining control was another matter. Both sides were deadlocked on the composition of a new board of directors, and as Pierre’s control of about 3,000 shares made him the largest minority stockholder, both sides immediately intrigued to win him over. Following Raskob’s sound advice, Pierre ignored all temptations, insisting on remaining a neutral. It was a shrewd move. This peacemaker role soon resulted in one of the great coups of corporate history: Pierre was invited to assume the chairmanship of General Motors as a neutral arbiter! And he was also asked to name three other associates to serve as neutral directors between the two warring camps! Twinkling his blue eyes with all due humility, Pierre accepted, naming Raskob, DuPont Vice President J. Amory Haskell, and cousin and brother-in-law Henry Belin. DuPont had its foot in G.M.’s door.
Pierre was no sooner in office than he began a whirlwind tour of Detroit, making contacts both within and outside of G.M., always encouraging the adoption of DuPont’s centralized corporate structure as essential in tying together the vast G.M. empire under one leadership. But for this proposal one problem consistently emerged—Billy Durant.
Durant naturally wanted to regain control over the company he had founded and organized. But when he voiced that desire at the November 12 board meeting, he received a chilling silence from the DuPont's. Pierre, in fact, wrote that he was “disturbed”; but being preoccupied with DuPont’s wartime profiteering, he was unable to devote much time to directing G.M. operations or organization. He was also unable to stop Durant’s surprise takeover in December. Through a syndicate that used the proceeds from a sale of Chevrolet stock to buy up a controlling block of G.M., Durant regained control, but not for long.
Throughout 1916 “the Little Giant” did pretty much what he wanted as president, despite a constant struggle with the DuPont's over their suggestions for modernizing the corporate structure into a more efficient system like that of their own company. His only concession that year came in December, when he agreed to allow another in-law of Pierre’s, Hamilton Barksdale, to take a seat on the board of Chevrolet, which was marked for eventual merger into G.M. Otherwise everything seemed under control,that is, until Wilson went to war.
While the war proved a windfall for the DuPont's, it was a disaster for Durant. Suddenly G.M. stock plummeted to new lows. Speculators, uneasy about the threat of curtailment in wartime supplies and diminished demand for automobiles, unloaded their G.M. holdings by the thousands, sending the stock’s value down to $75. With Raskob’s eager assistance, Durant foolishly began buying up all the unloaded shares he could find in an attempt to shore up its price. It was a futile gesture, at best, and Durant eventually had to turn to Wilmington for additional capital. It was then that the DuPont's made their historic move. “Our interest in the General Motors Company,” Raskob explained to his DuPont chieftains on December 19, 1917, “will undoubtedly secure for us the entire Fabrikord, Pyralin, paint, and varnish business of these companies, which is a substantial factor … it is the writer’s belief that ultimately the DuPont Company will absolutely control and dominate the whole General Motors situation.” 57 Two days later, the Du Pont's authorized the purchase of $25 million worth of G.M. stock.
There was a specific incentive for this investment. By then, DuPont had bought six large chemical companies from the $90 million expansion fund it had set aside out of war profits. These firms were all markets for DuPont’s nitrocellulose and related chemicals. But they, in turn, could use General Motors as a market for their own products: lacquers, paints, varnishes, Pyralin, and artificial leather (Fabrikoid). One company, Fairfield Rubber (purchased in 1916), even made rubber-coated fabrics for auto and carriage tops as its chief product. Durant’s misfortune provided a rare opportunity. There was still $50 million left in the investment purse. It was into this that the family reached to pull out their G.M. prize.
Pierre’s first move was to establish his own way of doing things in G.M. Using DuPont Company as a model, he set up a modern centralized corporate structure with a financial committee dominated by himself, Raskob (who assumed the chair), Pierre’s brother Irénée, his cousin Henry F., and J. Amory Haskell. Durant, of course, was also a nominal member, but he had few doubts about his own stature there. His realm, rather, was the Executive Committee, where he presided over other representatives from the major managing divisions. But Durant was not left alone in G.M. management as president. Haskell was also on hand to watch over things and report back to Pierre.
Meanwhile, Pierre frankly explained the acquisition to DuPont’s stockholders: “The motor companies are very large customers of our Fabrikoid and Pyralin as well as paint and varnishes.” 58
Between 1917 and 1919 DuPont bought another $24 million worth of G.M. stock. In the space of two short years the DuPont's had completed a $49 million investment in G.M. and controlled 23 percent of its stock. It was a commanding position. “The large engineering and construction forces of the company,” Pierre explained in the 1918 Annual Report, “the development, legal and accounting department facilities, coupled with the demands of the motor industry for talent of that kind, has furnished a connecting link which seems desirable in all investments. The consumption of paints, varnishes, and Fabrikoid in the manufacture of automobiles gives another common interest.” 59
Furthering this “common interest” became the direct responsibility of Vice President Haskell, DuPont’s sales manager, who was shifted over to G.M. in charge of its operations committee. There, he watched what products were used, pushed Fabrikoid as a substitute for genuine leather, and sponsored the use of DuPont Pyralin. “It is not pure imagination,” commented the Supreme Court some forty-five years later, “to suppose that such surveillance from that source made an impressive impact upon purchasing officials. It would be understandably difficult for them not to interpret it as meaning that a preference was to be given to DuPont products.” 60 Haskell’s presence did its job. As early as 1918, when he first appeared on the G.M. scene, other chemical companies “saw the handwriting on the wall.” Flint Varnish and Chemical Works, an old associate of G.M., was probably the first to capitulate. Its president showed up one day to state to Durant that he “knew DuPont had bought a substantial interest in General Motors and was interested in the paint industry.” He did not wish to lose his greatest customer, he explained, and eventually be ruined. Perhaps he should be bought out instead? He was. Later, DuPont dissolved his company and absorbed its plants.
DuPont control over finances quickly undermined what remaining control over operations Durant enjoyed. In 1919 Chevrolet was absorbed, increasing G.M.’s capitalization to over $1 billion. A huge Cadillac plant was built in Detroit, which also was the site of a new $20 million office building. With acquisition of Fisher Body Company and other firms, G.M.’s profits from its 86,000 employees and thousands of consumers topped $60 million. Additionally, over $50 million had been invested in unconsolidated companies, $47 million for new property and plants, and $12.7 million more in properties had been acquired through consolidation. That year, also, since the wartime burdens of DuPont had lessened, Pierre and Raskob gave up their DuPont positions to devote their full attention to the company’s investment in General Motors. This move produced quick results, including $60 million worth of G.M. plant design and construction business to DuPont’s engineering department. Meanwhile, to pay for all this expansion, Pierre invited two old friends to join the board of G.M. as sources of capital: Nobel, DuPont’s powder ally in England, and J. P. Morgan. This weakened Durant’s hold even further, but it was the enormous expansion program that finally backfired on G.M. when the post-war recession of 1920 hit—and Billy Durant was the victim.
That year, dealers returned cars by the score and G.M. machinery soon lay idle, choked with $84.9 million worth of unsold inventory. It was a classic case of overproduction clashing head on into an economic contraction of government wartime spending. G.M. stock lost its attractiveness and, in the press for working capital for other investments, was sold by speculators. On a single day in July, 100,000 G.M. shares were suddenly dumped on the market and the rout was on. G.M.’s price broke to $20½.
It was a desperate Billy Durant who again tried his ruse of buying up dumped G.M. shares. And it was an even more desperate Billy Durant who, swamped by the deluge of selling that had further broken the stock to $12 a share, found that his funds had run out and began borrowing on his own General Motors holdings. It was a foolish move—and a fatal one.
When the market closed on November 18, Durant found himself in urgent need of $940,000 before the market reopened the following morning. Without that sum he would be unable to meet his creditors’ demands for additional collateral and would be ruined. As a last resort, he phoned J. P. Morgan & Company and asked them to buy 1.1 million shares of his G.M. holdings at $12, the day’s closing price. Then he informed Pierre and Raskob.
What ensued was Durant’s undoing. Pierre met with the Morgan partners before their meeting with Durant. All agreed the situation was very dangerous for the entire stock market, for if Durant suddenly defaulted to the brokers who carried his loans, they in turn might be forced to close their doors, triggering a general financial collapse. Quickly, a plan was outlined. Durant would be bailed out, but only if he sold his control and resigned from the presidency. Then they laid their ultimatum on Durant, offering to buy $27 million worth of his stock at $9½ Per share, well below the market price, Durant had little choice but to surrender, a broken man. By having J. P. Morgan float a $35 million bond issue, DuPont Company completely bought Durant into corporate oblivion.
Two weeks later, on December 1, 1920, Pierre DuPont assumed the presidency of General Motors, occupying both the top executive job and the chairmanship with no more than a quip about coming into “a receivership of our own.” 61 The conquest of G.M. was complete.
9.4
ALFRED’S LAST BATTLE
Only three months after his wife Alicia died, Alfred had begun seeing Jessie, and no sooner had the first anniversary of Alicia’s death passed, ending the proper year of mourning for his marriage out of pity, than he joined Jessie in wedlock. Immediately, Alfred’s life became calmer, his composure more stable, his actions less erratic. Jessie, who had taught Alfred to combat his growing deafness with sign language, brought a new peace to Alfred, a peace which had taken him three marriages to find.
Alfred’s financial condition improved with his disposition. Relatives offered help, including Willie DuPont, his partner in the Delaware Trust Bank, who agreed to write off a $300,000 investment in Nemours Trading. But when it came to cousin Coleman’s offer to help, Alfred answered with a polite refusal. That would be going too far, indeed.
Curiously enough, rumors of a $6 million loan from Pierre, or arranged by him, have persisted through the years and been recorded in many family biographies, but have absolutely no base in reality. Instead, under the legal guidance of William Glasgow, Alfred paid his debt entirely by his own effort. He sold out the goods of his Nemours Trading for $1 million, which he gave to J. P. Morgan who, in turn, lowered the 9 percent interest rate on the remaining $3 million debt to 7 percent. By hypothecating half his total DuPont stock holdings, worth $12 million, he secured loans. He sold all his Liberty bonds and, worst of all woes, laid up his beloved yacht. In November 1921 a Federal District Court dealt another blow, deciding in a test case against Alfred’s attempt to avoid paying back income taxes owed for 1915.
“I shall have to pay $2 million more,” he wrote his sister Marguerite du Pont Lee, “not a pleasant prospect with the obligations which I have already to bear.… If I refuse to pay, they may issue a distrait warrant … and grab Nemours and everything else they can lay their hands on.…” 62 Alfred met this crisis the following month by simply locking up Nemours himself and moving with Jessie into Hotel DuPont.
Yet, in spite of all this, Alfred still managed the luxury of personal satisfactions only a plutocrat could enjoy. He completed the construction of his fourteen-story Delaware Trust Building in Wilmington, relishing the feeling of looking down at the twelve-story DuPont Building across the street. In May, after failing to interest J. P. Morgan in buying his entire 75,000-share holding in DuPont (Morgan suggested he sell to Irénée who offered only $82 a share), he sold 20,000 shares at $100 each, bringing in $2 million. Then a federal court order allowed Alfred to put off paying his back taxes until a Supreme Court reviewed his case. Meanwhile, the value of his remaining DuPont stocks climbed higher with the end of the recession. By June, his financial crisis was over.
Through all this, Jessie had been Alfred’s sole source of strength. “The Brid [one of his names for her], I must confess … is a million times more wonderful than I hoped. Think of spending one whole year with a girl and never a cross word or having the slightest misunderstanding or receiving anything but constant loving, thoughtful emotion!” 63 Alfred wrote that little testimony on the eve of his first wedding anniversary. It was a month later, in February 1922, that he took her for that winter vacation in Miami, and there met the surprise that began his last great political battle in Delaware.
One day, Alfred and Jessie were playing cribbage in the swank lobby of Miami’s Flamingo Hotel, when Jessie noticed a tall man approach and stand over them. Alfred finally looked up. “Hello, Coly,” he said without enthusiasm. He did not accept his cousin’s offered hand. “I want you to meet Jessie.” “Cousin Jessie,” greeted Coleman in his typically pretentious manner, and drew up a chair. A friendly chat ensued, the first in years. But Jessie did manage to voice her lack of enthusiasm for Coly’s card tricks. She had learned them all, she explained, while still in her teens. Yet family ice had been broken.
In May, apparently on Coleman’s suggestion, Democrat John Raskob sent Alfred an invitation to a buffet party he was throwing to launch Coly’s Republican senatorial campaign. Coleman wished to run in November not only for the remaining six months of Wolcott’s term in the Senate, but also for the regular six-year term beginning in March. Alfred returned the invitation, curtly wishing Raskob “a very pleasant evening.” 64 Coleman’s fortune became not so “pleasant,” however, when cousin Alfred appeared on Memorial Day at the formal opening of the Washington Memorial Bridge in Wilmington. Alfred had organized and chaired the commission that built the bridge spanning the Brandywine, and had attracted that day a large gathering of his former political followers. Coleman suspected such a gathering boded him no good, and he was right.
Two rural newspapers, the Newark Ledger and Dover State News, began firing stinging attacks at Coly and eyebrows raised along the Brandywine. These newspapers had belonged to Alfred, but the Ledger had been recently given to Ed Davis and the State News to the son of Frank Allee. Both Davis and Allee were chief lieutenants of Alfred DuPont, and suspicions especially arose when it was revealed that Alfred was meeting the Ledger’s enormous deficits. Alfred publicly disclaimed any political role “that might split the Republican Party,” 65 only to seize control of the New Castle County Republican organization the following week, throwing out most of Coleman’s supporters. The first shot had been fired, and the war was on.
The state’s leading newspapers, controlled by Pierre, unleashed a counterattack, while William G. Taylor, the banker Alfred had made the reform mayor of Wilmington, deserted his former ally and led a victory parade for Coleman.
Meanwhile, Alfred came out publicly for the Democratic candidate, Thomas Bayard, as did Willard Saulsbury. It was the height of political hypocrisy, with Bayard and Saulsbury, both wealthy DuPont in-laws, loudly trumpeting for control by “the people.” “Shall Delaware belong to the DuPont's? Are we a free people, or shall we permit ourselves to be crushed under the weight of DuPont wealth?” 66
Coleman’s greatest liability, however, was probably himself. His own record in the Senate, marred by absenteeism and a vote against the bonus bill for World War I combat veterans, provided fuel for his adversaries. During the campaign Coleman even supported President Harding’s veto of the bonus bill, although it is unclear how Coly reconciled the President’s opposition to this “class legislation” with Harding’s own giveaways to the oil industry or his own lobbying for DuPont’s dyes tariff bill that year. Coleman may well have succeeded in this feat of logic to his own satisfaction, but thousands of voters in Delaware remained unconvinced, especially when on October 28, only a little more than a week before the election, the federal government filed suit in Wilmington against the dyes monopoly held by the DuPont-controlled Chemical Foundation.
At noon on November 9 the canvassing board in Wilmington showed Bayard ahead in both elections. Coly immediately filed a protest, but the final tally two days later proved that Bayard had won both terms, the short term by 60 votes, the long term by 325 votes.
Only the most naive believed a new “people’s day” had come to Delaware with the election, for Bayard was little different in his prejudices than his father, a former U.S. senator and secretary of state. And it came as no surprise to anyone when it was revealed that of the $6,125 Bayard had received in donations, all but $25 had come from his mother-in-law, Elizabeth Bradford DuPont, widow of Dr. Alexis DuPont, Coleman’s cousin, and the very woman whom Alfred had sued years before for slandering his now deceased Alicia. Alfred too, it seems, was not immune to the rule that politics makes strange bedfellows.
His thirst for family revenge quenched, Alfred now began to consider leaving all the bitterness behind by leaving Delaware behind. That year he began building the new 125-foot steam yacht that was soon to take him to a new life, and family empire, in Florida.
9.5
IRÉNÉE’S SECRET WAR
In DuPont’s transition from powder to chemicals as its major product, the Twenties
were the key years, years of a process of change which was not without its financial
pains. In 1919, despite its great diversification into chemicals and automobiles, DuPont Company was still in possession of a multi-million dollar investment in powder-making capacities, factories which produced munitions requiring markets. With peace threatening to curtail the domestic market for war explosives, Pierre and Irénée cast their eyes abroad in search of overseas markets. Before the ink was even dry on the Versailles peace treaty, DuPont had established its first arms export company. 67 Colonel William Taylor was put in charge of European sales, and ordered to contract agents throughout the continent. Europe, its face scarred by the war, was not to be left in peace.
Three years later, the same year DuPont hired its first military sales agent in Poland, the Allies held the first of their many postwar disarmament conferences amid fevered rumors of German rearmament. And to Irénée’s dismay, one of the central questions to be discussed was government control of the world chemical industry and trade.
C.K.Weston, DuPont’s publicity chief, was immediately dispatched to the capital. There, Weston succeeded in contacting Dr. Edgar Fahs Smith, whose name appeared on the list of delegates as a member of the technical staff in regard to chemical warfare. Weston soon was reporting back to Irénée that, as far as advisers to the disarmament commissioners were concerned, the situation was “well in hand.” 68 By December, when the conference was in full session, Weston was working with Smith daily in handling publicity favorable to DuPont interests, 69 and the central issue of government control was soon dropped by a conference subcommittee as “inadvisable.” Not surprisingly, many delegates joined England’s Lord Balfour in noting that the conference had sublimely accomplished nothing. 70
By 1924 DuPont had military sales agents in Sweden as well as Poland, while Taylor worked out of an office in Paris. Business, however, was still not up to Irénée’s standards, for the Germans were already successful competitors of DuPont’s smokeless powder division in Europe. “A German-English group,” reported Taylor years later, “were attempting to control the military supplies in Europe with a view to large profits through the future rearmament of the European nations which was destined to take place.” 71
The “German-English group” mentioned by Taylor were the great chemical firms Koln Rottweiler, A.G., and Nobel, Ltd. Irénée was familiar with both of these companies. As far back as 1897, DuPont had signed the Jamesberg Agreement with these companies, dividing up the world munitions market like so many pieces of cake. In 1907 both companies were parties to another cartel agreement with DuPont. Irénée was indeed familiar with these firms. In fact, the DuPont's owned substantial blocks of stock in both of them.
On April 22, 1924, Taylor wrote DuPont’s vice-president for military sales, Major K. K. V. Casey, confirming German rearmament. This rearmament was in direct violation of Article 170 of the Versailles Treaty, which forbade the manufacture or importation of arms of any kind. The United States, although not a signer of the treaty, had included Article 170 by reference in its own peace treaty with Germany, stating that “Violation of articles 170 and 198 [which forbade Germany any military, naval, or air forces] by Germany would constitute, therefore, not only a violation of Germany’s obligations to the other parties of the Treaty of Versailles, but also a violation of its treaty obligations to the United States.” 72 The DuPont's never officially informed the U.S. government of the German violations, for as annoyed as they were over the German competition, they were even more alarmed by new political developments in Geneva.
Taylor’s letter was apparently not the only report of German rearmament. Rumors had grown so strong that the League of Nations felt compelled to announce plans for another disarmament conference the following year in Geneva. Irénée was well aware that the Geneva Conference, if successful, could undermine the entire world munitions market for all private corporate enterprise, including DuPont. Clearly, this was not the time to squabble publicly and provide the peacemakers with ammunition. Instead, as this was an election year, this was the time to give over $34,000 in DuPont family donations to the incumbent Republican administration.
Fortunately for the DuPont's, this was one of the rare occasions when their characteristically narrow concerns about their own company coincided with the long range vision of others in Washington for a more powerful United States. Led by Senator Henry Cabot Lodge, these political forces had more than one disagreement about a disarmament conference that would attempt to stop the arms race, set arms limitations, and thereby freeze the status quo of economic and military power in favor of Europe (which collectively would enjoy control over more arms and markets) rather than America. Such reservations were also held by many of the corporate “liberals” who controlled the scandal-rife White House of Harding and his equally incompetent successor, Calvin Coolidge. Next to Secretary of Treasury Andrew Mellon, magnate of banking, steel, and oil, the most powerful man in this circle was the secretary of commerce, Herbert Hoover.
Hoover saw the Geneva Conference as a possible impediment to the market expansion of American arms manufacturers. If American disarmament negotiators were to protect the market interests of American industry, they must be informed of corporate opinion. And what better way than to hear it from the war horse’s mouth?
“You are invited,” wrote Hoover to American arms manufacturers, “to send a representative to an informal preliminary conference to discuss the economic phases of the forthcoming Geneva Conference for the control of the International Trade in Arms, Munitions, and Implements of War.… It is important that the American representatives at Geneva be fully posted as to the views of American manufacturers of sporting arms and ammunitions, so that he may be able to safeguard their interests.” 73
Irénée was probably not surprised by this invitation. Although the Geneva Conference was supposed to be a secret, news of it had been leaked to him before the general public was told. But more importantly, the name of the secret U.S. delegates had also been leaked. Even before the formal announcement was made, DuPont’s lobbying machine had already been unleashed on Washington. K.K.V. Casey, Colonel Aiken Simons, A. Felix DuPont’s maternal cousin, and W. J. Kinsman—all DuPont executives —had already had conferences with Admiral Andrew Long, Major General Ruggles, and the State Department’s Allen Dulles, delegates to the Geneva Conference. General Ruggles had been approached a full eighteen days before his appointment was officially made. “As directed, I called on General G. L. Ruggles, Assistant Chief of Ordnance,who is to go to Geneva,” reported Simons of his March 25 visit. “General Ruggles stated that the United States was committed on the policy of cooperation in the limitation program, and that the following license plan seemed to be the most harmless.… The War Department would take care that the Department of State protected such American industries … to which I replied that this had not been done heretofore.… General Ruggles then suggested that the license be put under the Department of Commerce [Hoover], which I agreed was better.” 74
Years later, at the Munitions Hearings, Irénée explained the company’s preference for Hoover. “I should think that the Department of Commerce would be more competent to handle a commercial transaction, probably, than would the State Department”; 75 the State Department was in favor of disarmament as part of a general strategy to win its political and economic objective without recourse to war. (The DuPont's did not know that this was a design also held by Hoover.)
“Does it strike you as singular,” Senator Clark asked Irénée at the same hearings, “that a delegate to the Geneva Conference, whose appointment was considered as being very secret, should be in close conference with your representative on the subject two weeks before his appointment was announced by the State Department?”
“All I can say,” Irénée answered, “is that apparently he did.” 76
The April 1925 pre-conference in Washington was attended by every major arms manufacturer in the country. “The meeting was called to order by Secretary Hoover,” DuPont representatives reported back to Irénée, “who suggested that the representatives present express their views and that these views be put in writing and a committee be appointed to represent the interested industries at a later meeting, at which, it was hoped, that the delegates appointed by our government to attend the Geneva Conference would be present.… It was the unanimous opinion of the representatives of the industry that there were grave objections to the proposed draft in its present form.” 77 “Mr. Hoover [was] very sympathetic and helpful throughout,” recalled Simons three years later, “and with his assistance a call was sent to 36 other industries.… Resolutions were drafted showing the objections of the American manufacturers to the proposed international agreement.… It is believed by the action of Mr. Hoover in appointing this committee and the committee’s subsequent work, the Geneva Conference was prevented from adopting international agreements which would have been burdensome to American manufacturers, and so far as I know the committee has never been dissolved.” 78
Hoover was indeed helpful, pledging to the arms manufacturers that “he intended to have a system whereby all United States customs commissioners would have absolute instructions to issue licenses automatically upon presentation of a consular visa and that every effort would be made by the United States Government to eliminate red tape,delay, or hindrance. In the case of some large and purely military materials such as heavy guns, battleships, etc., it might be necessary to refer the matter to Washington but even then every effort would be made to eliminate delay or annoyance to the manufacturer.” 79 Gone was any pretension about “sporting arms and ammunition.” Now the subject was clearly in the area of big guns and battleships.
Gone also were any pretensions about preventing German rearmament. Allen Dulles, chief of the State Department’s Near Eastern Division (and later head of the CIA), made it clear that in the control of arms traffic, the draft convention would have to ignore Germany’s violations. “Coming to the article 32 which defined what countries should ratify the convention in order to make it effective, Mr. Dulles stated that notwithstanding the fact that it was known that Germany was exporting arms and munitions, it was not possible, from a diplomatic standpoint, to mention Germany or any of the Central Powers in this connection since they were supposed to abide by the treaties which put an end to the World War.” 80 “Clearly,” explained the Senate report on munitions in 1936, “the inference was that in order to swell the reparations fund, the Allies were winking at the German treaty violation.” 81
Although DuPont and other American arms manufacturers were concerned about German arms competition, there was nothing that could be done to prevent it if Germany was to acquire the capital fuel to keep up its reparation payments to the Allies. Therefore, the State Department advised, U.S. arms manufacturers had better fend for themselves and protect their own economic ambitions now being threatened by the Disarmament Conference. To this cause, they were assured, the State Department would lend its assistance.
Predictably, the Disarmament Conference held two months later in Geneva was a complete failure. The real issue of government control of the world’s chemical industry and trade was dropped, a subcommittee terming it “inadvisable.” Hoover, urging a modification of regulations “too drastic and too unenforceable,” 82 had established a committee which put the views of the DuPont's and other arms manufacturers into writing and then into the hands of U.S. delegates to the Geneva Conference. “These views,” reported the Senate Munitions Committee in 1936, “were in large measure written into the Treaty for the supervision of trade in arms, signed at Geneva on June 17, 1925, and ratified 9 years later by the U.S. Senate.” 83 The Senate needn’t have bothered. By then it was too late. The nailed boots of fascism were already on the march.
“The munitions industry is on record that it [the disarmament accord] is a workable agreement,” commented the Senate Munitions Committee, “and one that does not seriously interfere with its business.” 84 It was a contradiction in terms.
“In reference to our conversation regarding the International Convention on the Trade in Munitions,” Simons wrote in a company memorandum right after the Conference, “it may be of interest to you to hear that on my recent visit to Washington I saw a copy of the convention finally signed at Geneva, and it is not nearly as bad as we thought it might be. There will be some few inconveniences to the manufacturers of munitions in their export trade, but in the main they will not be hampered materially.…” 85 Significantly, Commerce Secretary Hoover was given the licensing power for such military trade with full DuPont endorsement.
In 1929 Irénée contracted another sales agent in Europe, this one in Latvia. He also fought a secret price war with Dynamite Aktien Gesellschaft, later part of I. G. Farben, the giant German chemical combine, over a slice of the powder business in Mexico. As usual, DuPont won. But Irénée had decided to win even if he lost this market to the Germans: in order to profit from German rearming and soften its market aggressiveness in Latin America, he invested $1,785,522 in I. G. Farben, 86 bought up 7.9 percent of the stock of both Dynamite Aktien Gesellschaft and Koln Rottweiler Pulverfabrikey, A.G., and with Britain’s Nobel, set up an alliance with Badische Anilin to produce and sell his newest success—and scandal—tetraethyl gasoline.
9.6
DEEPWATER’S SILENT TERROR
On the southern edge of New Jersey, situated along the banks of the Delaware, was
one of the strangest cities in the United States. Although nightly it cast a vast 6-square mile
panorama of blinking lights, this city had no mayor, no legal government at all.
Although it was one of the country’s busiest ports, it was not listed on nautical maps.
Press releases were issued in its name, yet it had no post office. 
Deepwater was the result of a collaboration between DuPont and General Motors, or, to be more precise, Irénée DuPont, president of DuPont, and Pierre DuPont, president of General Motors and chairman of both companies. In 1922 General Motors researchers discovered that tetraethyl lead, when added to gasoline, could supposedly make one gallon do the work of two. But before G.M. even filed its patent application, Pierre informed Irénée of the discovery. By October 6 the brothers had signed an exclusive contract handing over the manufacture of its no-knock compounds to DuPont, which was already producing the appropriate gases. Deepwater, publicly billed as a dye works, had become a complex of poison gas plants, producing phosgene and chlorine gases and the deadly benzol series. Already, strange rumors had begun to circulate in the area of “the House of Butterflies,” the five-story brick building where workmen drew pictures of winged insects on the walls and paused to snatch at the empty air. On September 2, 1923, these rumors were capped by terror. Frank Durr, a 37-year-old man who had worked for DuPont since he had been a lad of 12, suddenly died at his home in nearby Penns Grove, New Jersey. Listed by DuPont as a “dyeworker,” he, like many of his co-workers, had been recently plagued by frightful nightmares, and he died in a straight-jacket like a madman.
Yet there was silence, the kind of silence known only in a company town. Durr’s wife was given a small $17 a week pension for only four years and Deepwater continued its deadly production without interruption, constantly striving to keep up with the new demands of Standard Oil’s Bayway plant to the north.
Standard Oil joined Pierre’s General Motors to form the Ethyl Gasoline Corporation in 1924. A fifty-fifty alliance, Ethyl Gasoline marketed the new “no-knock” power fuel treated with tetraethyl lead supplied by DuPont. This arrangement created a boom in DuPont’s tetraethyl lead production. Just as Pierre was anticipating profits from the new firm, he was hit in October by screaming headlines. Five workers in Standard Oil’s Bayway plant had suddenly gone violently insane, dying in raving delirium. Their deaths were attributed to fumes from DuPont’s tetraethyl lead, which the newspapers promptly condemned as “looney gas.”
Efforts were quickly made to point out that only the year before the Bureau of Mines had given tetraethyl a clean bill of health. Then, to Pierre’s embarrassment, it was revealed that General Motors had financed the Bureau’s investigation. Furthermore, the deaths by poisoning of two workers at G.M.’s Canton, Ohio, plant were also exposed.
The country was in a furor. New York City health authorities forbade all ethyl gasoline sales, and cities across the country followed suit. Yet the spotlight fell only on Bayway and the Standard Oil/G.M. alliance. Deep-water, although the subject of many queries, escaped exposure. But when the discoverer of tetraethyl lead, Thomas Midgely, commented that “The DuPonts have been having trouble, too,” Irénée decided a statement was in order. “Tetraethyl lead is poisonous,” he conceded, “and its manufacture involves risk, but no more so than many chemicals manufactured and used in enormously greater amounts. The DuPont Company, during the experimental period, experienced much trouble with men becoming poisoned, even to the extent of fatalities. During the past year of production, when more than 100 men have been employed continuously, the difficulty has diminished steadily. In the past several months, under full production, only slight difficulties have been encountered.” 87
Irénée’s “slight difficulties” assertion came just one week after the third death at Deepwater in three months: Joseph Cianci, a 24-year-old “dyeworker” and operator, had died on July 30, 1924; Frank Hanley, a 28-year-old “dyeworker,” had died on August 12; and Sim Jones, a 47-year-old janitor, died on October 20. All died with the same “looney gas” symptoms; all died in Salem Memorial Hospital, which was only a 20-minute ambulance run from Deepwater.
Yet word of the deaths was not publicized until the following year. Wilmington’s three daily newspapers, all owned by Pierre and Irénée’s Christiana Securities, failed to report the deaths. Salem also was silent. The editor of its major newspaper was also the president of Salem Hospital, which, while being a public tax-free institution, owed its electric laundry system and a good part of its revenue to the DuPont's. The DuPont's made donations annually and often paid for the treatment of patients from Deepwater three times as much as the hospital received from the Salem city budget; the budget, in turn, allegedly received as much as 50 percent of its tax revenue from the DuPont's. No one in Salem, therefore, questioned why a DuPont executive from Deepwater was also on Salem Memorial’s Board of Managers. Nor did anyone question why no coroner’s inquest was ever held about Deepwater’s strange deaths. Dr. E. C. Lyon, Salem’s county physician, between praises of the DuPont's care for their men, explained why to a national magazine writer: “No, it was not an accident. It was an occupational disease and there is no occasion to call in the coroner.” 88
Another such case of “occupational disease” was John Demesse. Demesse, a plumber, died with “looney gas” symptoms at Delaware Hospital in Wilmington after doing some work in the Deepwater plants. The hospital listed the death as typhoid. Mrs. Mary Casey, a cousin, who spoke with the attending doctor, recalled that “He said there were typhoid germs in the body, but that John’s lead poisoning didn’t help him any.” 89 Efforts by Nation’s investigating reporter to reach the physician, Dr. Lawrence J. Rigney, were futile. Curiously enough, it was not he, but a member of the hospital staff, Dr. John Russo, who signed the death certificate. Russo, when questioned, claimed to have no recollection of the case and reported later that he could find no record of it in the hospital. The death certificate, furthermore, gave no contributory cause of death, nor was the question, “Where was disease contracted if not at place of death?” ever answered. The space was left blank.
Another case was that of Charles Hendricks, a painter, who became delirious and tried to kill himself by jumping off a ferry crossing the Delaware between Deepwater and his Delaware home. Still another was Harry Baker, who jumped out of a window at Salem Memorial after being taken there from Deepwater. Baker was caught and returned to bed. But, for once, publicity got out, and he was whisked off to a private sanitarium at Gladwyn, Pennsylvania, his bills paid by the DuPont's and his wife given a small allowance.
Still, Irénée had his ever-willing publicity director, C. K. Weston, insist that “illnesses have gradually decreased since the early stages of the work.” 90 The reality, however, was the opposite. “To scores of poisonings at Bayway,” reported Silas Bent, Nation writer, “there had been hundreds at Deepwater. A physician who worked there during but half of the period of production told me he himself handled hundreds of cases.” 91 Many had actually been poisoned only to be treated and sent back to the poorly ventilated plant to be poisoned again and again.
On February 13 Frederick DeFiebre, a 21-year-old “dyemaker,” became the fourth of Irénée’s “slight difficulties” to die at Salem Memorial. Nothing was said about it. Three days later another “dyemaker,” Robert Huntsinger, died in a straight jacket, grinning and gritting his teeth, at Cumberland County Hospital for the Insane at Bridgeton, New Jersey, his home. This time, far enough from Deepwater’s curtain of silence, the news was carried even in the New York papers, and Weston was forced to concede the death in a twelve-line item printed in the Wilmington papers.
Then, only a week later, on February 28 Loring M. Boody, a 53-year-old carpenter, died at Carney’s Point, New Jersey, an industrial town of one-story cottages owned and policed by the DuPont's. Dr. Lee, a Du Pont Company physician, attributed Boody’s death partly to uremic poisoning. But at this point no one believed it, especially since Boody’s friend and co-worker, James Connell, had come down with “looney gas” symptoms only the day before Boody’s death. Connell never returned to Deepwater. A month later, on March 27, he too died.
By this time the deaths had become too blatant to ignore. Deepwater was closed. DuPont headquarters released a statement mentioning that the deaths of Boody and Connell had inspired the company “to make modifications to insure greater manufacturing safety,” while news items reported “some difficulties in the experimental stage” but “none within the past few months.” Actually, the plant had been ordered closed by New Jersey’s Labor Commissioner, Dr. Andrew McBride. After five weeks of “mechanical readjustments,” including a new $60,000 ventilating system, McBride allowed the plant to reopen only to see it closed shortly thereafter pending a federal investigation by the U.S. Surgeon General. With 300 million gallons of ethyl gasoline already having been distributed throughout twenty-eight states, and after the highly publicized strange death of a garage mechanic in Weston, West Virginia, federal intervention was necessary to avoid a national panic.
Altogether, in eighteen months over 300 DuPont workers had been stricken, not including those slightly poisoned and cases of hysteria from anxiety. Eight workers had died, four of them in Salem Memorial Hospital, three in a single month. Although there were some cries of voluntary manslaughter and murder, no charges were pressed against DuPont management. Instead, the case went to the inner circle of Coolidge, the recipient only two years before of over $34,000 in election donations from Iréne and Lammot DuPont, and the acknowledged guardian of corporate interests. Surely the billion dollar industry was the subject of much concern.
In January 1926, a year after the last Deepwater deaths, now a distant memory, Coolidge’s Surgeon General, Hugh S. Cumming, released his report. Although labeled an occupational hazard, tetraethyl gasoline was okayed for use as a motor fuel. Four months later Irénée reopened the Deepwater plant. His faith in the Republican Party upheld, he also wrote out a personal check for $37,500 to its campaign treasury. According to the Senate Munitions Committee’s Report in 1936, his was the only DuPont donation that year.
The embarrassed withdrawal of Standard Oil from the tetraethyl production during the investigation left the field to DuPont. DuPont continued its production of tetraethyl lead, and through the Ethyl Corporation, the DuPont's policed the pricing of all gasoline companies (except Sun, which had its own process) through a monopoly of the antiknock compound that it sold to refiners. Among the conditions for a franchise or license, for example, was the maintenance of a two-cent differential on the sale of so-called “premium” gasoline over regular. The monopoly was effective up to 1940. 92
And what of Deepwater’s silent terror? The company’s annual report of 1936 explained that the Deepwater deaths were “no sudden holocaust, due to the neglect of precautions,” but rather the “slow and gradual toll which humanity has always paid, and perhaps must always pay, for the conquest of new and dangerous ground.” By then, tetraethyl lead production was returning $3.5 million in clear profit every year.
Meanwhile, “the House of Butterflies” continued its output of other deadly gases, seldom releasing its casualty reports. As one former DuPont physician once remarked, “But why make all this fuss about tetra lead? The DuPont's make other poisons in there in even greater quantity which kill a man like that!” (He snapped his fingers.) “And those plants are still going full blast.” 93
9.7
THE GOLDEN DECADE
Except perhaps for the decade of 1952–1962, the Twenties remain the golden years of
the DuPont saga; and the five years from 1924 to 1929, despite the tragic scandal of
Deepwater, were perhaps the most rewarding half-decade that Delaware’s first family
ever experienced. These were the years when their political power almost equaled their
enormous economic power, making the DuPont's—perhaps for the first and last time—
even seem progressive, raising the family’s national prestige to new heights. For Pierre’s intimate circle, these were the years of legal victories in the courts and elected offices in Delaware. First, Wilmington’s Judge Hugh Morris in January 1924 dismissed the weak federal challenge against the Chemical Foundation, DuPont’s conduit for obtaining German dye patents. Morris even praised the Foundation’s officers for their conduct during “the test of actual trial,” and concluded that “the evidence is overwhelming that they [the patents] were and are without substantial value to American citizens.” 94 How Morris reconciled this statement with Irénée’s cries that national security was at stake and the patents’ worth of $17 million remains one of the great mysteries of U.S. judicial history. “The sale was in effect to America and its citizens,” Morris held in his circle of contradictions, “not to those then engaged in chemical and allied industries.” 95
This, of course, was the government’s argument for public ownership; but according to Morris’s “Delaware reasoning,” where “public” is synonymous with “DuPont Company,” this was an argument for DuPont ownership. Francis Garvin, the former federal Alien Property Custodian who had handed over the bulk of the 5,700 patents to the DuPont’s Chemical Foundation, of which he was also president, saw defeated Germany behind the U.S. government prosecution. “I and my associates are very much gratified. But this is only one more victory in a struggle which has been going on now for six years and will go on for many years more before our country has become chemically independent. Germany does not intend, even though this decision is a setback, to give up her attempts to regain her world monopoly.… This is a bitter, many fronted battle for the national defense, industrial progress, and freedom from diseases of our children and our children’s children.” 96 Thus, by this reasoning, the U.S. government, victorious conquerors of Germany in war, had become pawns of the defeated nation in peace, and by one stroke of Judge Morris’s hand, the DuPont's became the champions of American progress and the world’s sick. It was judicial absurdity without historical parallel.
While Pierre had much to celebrate, his arch foe and cousin, Alfred, was not so fortunate with the courts. Alfred had tried to avoid paying income taxes on additional stock gains from Pierre’s profitable 1915 reorganization of the company. Having filed his return before March 15, 1915, and not having been assessed for the stock until the Bureau of Internal Revenue caught up with him in December 1919, Alfred claimed that the three-year period for additional assessment had already expired. He stubbornly fought the case through all the federal courts, right up to the Supreme Court. There, he met the scowling face of an old adversary—William Taft.
As President, Taft had been humbled by Alfred in 1911 during negotiations over DuPont’s anti-trust conviction. A year later he lost many of Delaware’s votes when Alfred first opposed his renomination at the Republican Convention and then bolted to the Democratic Party’s slate in Delaware.
After his presidential defeat to Wilson in 1912, Taft had returned to his law practice. In 1921 Harding’s Attorney General, Harry Daugherty, urged Taft’s appointment as Chief Justice of the Supreme Court in order to reorganize the courts to facilitate the government’s prosecution of the labor movement, at that time rising in response to the post-war recession. Daugherty’s arguments fulfilled Taft’s long-held judicial dream, and as Chief Justice, the ex-president led the court in a swing to the right, invalidating many labor laws.
Alfred had few friends in Washington when his case finally came before the Court in 1923, but he had an ample supply of enemies. In the Court, the maverick Republican faced Taft and three other Harding appointees. He also had to confront Charles Evans Hughes, now in the powerful office of secretary of state; Hughes had backed Pierre’s legal struggle against Alfred in 1915 with a pamphlet, allegedly in return for $50,000 worth of Pierre’s gratitude. Alfred had also not done much to win Coleman’s favor, helping in his election defeat the previous year, and Coleman was a member of Harding’s powerful inner circle. Alfred justifiably suspected his cousin would “do everything he can to prevent a revision [in my favor] and I am not sure that [Senator Lewis] Ball is not working with him.” 97
The decision was predictable. On May 22, 1923, Taft ordered Alfred to pay $1,576,015 in taxes and sue for recovery afterwards, if he preferred. Alfred waived the meaningless right to a futile recovery suit in exchange for the Treasury’s writing off of $200,000 worth of interest. His final payment came to $1,694,207. Fortunately, by then his DuPont stock and other corporate holdings had risen in value with the new prosperity, securing his fortune. Yet the Court decision may well have been one factor in Alfred’s resigning from active politics in Delaware and leaving the field free to his ever-watchful and ever-ambitious cousin, T. Coleman DuPont.
“P.S., Irénée, and Company,” commented Alfred, “seem to forget that their day is past and that no individual … can dictate to the people. My work is bearing its natural fruit. Of course, the vote of Delaware is always close and they may be able to spend enough money to divide the Republican ticket, but that is about all.” 98 With scandals ripping through the Republican administration and Harding’s mysterious death, Alfred never thought Coleman would be audacious enough to run again on a Republican ticket. He was wrong, as usual underestimating his wily kin.
Through Colonel Henry’s persuasions on weak Calvin Coolidge, the new President, Coleman retained his position as Republican National Committeeman. Then Coly was given the senatorial nomination, while the Democrats picked one of his supporters to remove the “Dirty Deal” of 1921 as a campaign issue. In November 1924 Coly rode the Coolidge landslide into his long-sought goal—the U.S. Senate. Irénée wrote Alfred that the result reflected his non-participation in the contest. Alfred replied that he hoped this could mend old family ties. After almost twelve bitter years, Alfred was finally tiring of feuding.
“Dear Alfred,” wrote an appreciative Coleman, “I would like you to feel that, if there is anything I could do for you or for your interests in Washington, you will not hesitate to call on me.” 99
A little more than a year later Alfred received a check for close to $2 million from the Treasury Department of Andrew Mellon. The Internal Revenue Bureau, upon Alfred’s request, was refunding $1,461,979 of his 1918 tax returns, plus $499,618 in interest. For the first time, Alfred was enjoying the wind blowing in from Washington.
Under Mellon’s encouragement, the maximum surtax on incomes from $2 million upward was reduced in 1921 from 65 percent to 50 percent. In 1924 he introduced another bill, proposing a further reduction to 25 percent. This was too much even for a subservient Congress, and a Senate investigation was launched, headed by Senator James Cousens of Michigan. Coolidge, under Mellon’s tutoring, drafted a letter of rebuke to the Senate, and a storm of protest broke. As recipients of Mellon’s favor, the DuPont's leaped to his defense.
“Their recent actions are as bad as anything in red Russia,” Irénée told the New York Times while boarding the luxury liner Aquitania for a European cruise. “It is time to call a halt. The idea that the Senate should take exception to President Coolidge’s note and even suggest that it be expunged from the record is the most preposterous thing that has happened in Washington.” 100 Pierre also jumped into the act, supporting Mellon’s contention that great wealth in America is not dangerous as it is in other countries, since inheritances do not go to single individuals, but are spread out throughout families. There are 160 DuPont's, Pierre claimed, and he denied published reports that his cousin, Alexis I. DuPont, was worth over $30 million when he died in 1921. Pierre, of course, failed to mention that of those 160 DuPont's, only he, his two brothers, and cousins Alfred and Coleman possessed the real power of the family fortune. Wealth, the DuPont family’s own history had shown, did not break up, but tended to aggregate.
Mellon’s bill was defeated that year. The House even threatened to include an amendment raising the inheritance tax on great wealth. “Carried to an excess,” the Secretary angrily retorted, “they differ in no way from the methods of the revolutionists in Russia.” 101
Saved from “the perils of socialism,” Mellon’s tax policies played a large role in fueling the dangerous speculative boom of 1924–1929, releasing many funds for which there was no constructive economic outlet.
The DuPont's, however, found imaginative ways to spend their money. Some sixty DuPont households in and around Wilmington turned Delaware into their private playground. Roaring through towns and countryside in speedy roadsters or swooping overhead in colorful airplanes, these 300 DuPont's totally dominated the state’s social life. Under the urging of Senator T. Coleman DuPont, “the hero of roads” who founded the state’s highway department, Delaware became the site of an extensive paved-road building program.
Many of those roads led to the twenty-four Du Pont estates that surrounded Wilmington. Here was Bessie Gardner du Pont’s “Chevannes,” Eugene’s “Owl’s Nest,” Francis I.’s “Louviers,” Victor’s “Guyencourt,” Edmond’s “Centerville,” and Irénée’s magnificent “Granogue.” Here were the estates of Ernest du Pont, A. Felix du Pont, S. Hallock du Pont, Mrs. Philip du Pont, and many others, including those of in-laws, the Cope-lands, Lairds, Bayards, Carpenters, Sharps, and Mays.
Here old Colonel Henry tinkered away in his 180-room Winterthur, writing on the subject that fascinated him most, his own family. During the Twenties, Colonel Henry wrote four books: Story of Huguenots (1920), Early Generation of the DuPont's and Allied Families (1923), Campaign of 1864 in Valley of Virginia (1925), Rear Admiral Samuel F. DuPont, U.S.N. (1926)—before dying at the age of 88 in his 35-room Washington mansion facing Massachusetts Avenue, on December 31, 1926.
His son, Henry F., who was at his deathbed, got the bulk of Colonel Henry’s estate. Two years later William DuPont, Jr., reaped the bulk of his father’s estate also. Old Willie had survived the Colonel’s bitter threat to keep him out of the family cemetery, and now his bones rest next to those of his kin at Sand Hole Woods.
Here also in the outskirts of Wilmington was Alfred’s reopened Nemours, ready for the “Count” ’s occasional visits, its glass-chipped walls as foreboding as ever to Pierre’s kin. And here, of course, was Pierre’s 200-room Longwood, the envy of Europe’s royal houses, built atop the site of the old Anvill Tavern, in whose cellar was carried on a thriving bootleg slavery trade. Now six acres of land were housed under glass, where peaches, apricots, nectarines, and melons thrived that would honor a king’s banquet. In these winter gardens, warmth was provided for Pierre’s flourishing South African violets, his exotic kumquats, banana and guava plants, papaya, Indian mango, Arabian coffee bush, and even coconut palms.
It was from these regal heights that Pierre accepted Alfred’s public challenge that “our whole school system is archaic and lifeless from lack of funds.” 102 In fact, Black children were being taught in sheds, suffering from a law on Delaware’s books since after the Civil War that prohibited taxing whites to build schools for Black children. White schools were little better in terms of quality education. Twenty percent of all Delaware youths, both black and white, could not even write their own names.
Pierre had himself appointed to the State Board of Education and revised the school code, curbing local powers which controlled funds and the selection of texts. He then demanded that local districts pay half the cost of a new construction program. “What does DuPont care if you go bankrupt,” thundered the opposition. These adversaries, made up mostly of rural landowners who still needed large tenant families to work their lands, were no competition for the industrial-financial power which Pierre represented. The needs of Delaware’s high-technology chemical companies for a literate working class would not be frustrated by rural landlords who were fighting a losing battle to preserve the old agricultural society. That way of life was already being smashed by Coleman DuPont’s roads and farming machines that increasingly eliminated field jobs and sent the unemployed to Wilmington in search of work. Nor would the DuPont family—living in a precarious luxury surrounded by growing poverty and restlessness, and depending on Wilmington’s atmosphere of social stability for the smooth functioning of their executives—be denied their measure of social control through a rationalized educational system they could dominate.
The school districts were forced to bend, while Pierre personally paid out over $4 million to replace 100 dilapidated schools. He became a national sensation as “the hero of education.” Pierre enjoyed the title and merely took the sum off his taxes.
Cousin Willie was not so fortunate in the tax area. He spent huge sums to construct not schools, but Bellevue, his palatial estate near Wilmington complete with two private race tracks and a stable of some of the country’s finest mounts. As if that were not enough, Willie had three other estates: one at Newton Square, Pennsylvania; his Hopeton plantation near Brunswick, Georgia; and Montpelier, the estate of James Madison, in Virginia. Willie was Delaware’s number one taxpayer in 1924 at $250,000. Right behind him in second place was his cousin Coleman DuPont, at $160,000. Both learned the hard way Pierre’s lesson that it was better to give than to have to pay.
It was in response to this tax burden that Pierre assumed an even greater political role. In 1925 Coleman had his crony, Governor Robinson, appoint Pierre to the post of income tax collector. Under Delaware law, all income taxes went to Pierre’s pet project, the public school system. Outlook, a national magazine secretly financed by James Stillman, president of National City Bank, hailed this coalition of power between school builder Pierre and his cousin Coleman, “the exponent of good roads in the state”: “It will be a case of expert knowledge both in school matters and road building, and of business genius applied to collecting taxes, which up until now have never been satisfactorily gathered.… The eyes of education all over the country have been on Mr. DuPont for some time, and this will increase the interest felt in his plans and methods.” 103
Pierre’s methods were more than “satisfactory”—tracking down tax delinquents, including many poor in the state who simply couldn’t afford to pay, and hauling them into court. By Pierre’s third term as tax collector, Delaware ranked tenth in the country in literacy rate, DuPont-controlled schools providing the hope for upward social mobility that helped dissipate social unrest and labor militancy in the state. “In Delaware schools,” reported one contemporary biographer, “the children chirp George Washington, Abraham Lincoln, and Pierre DuPont in the same breath.” 104 Pierre’s compulsory education had made its mark.
Not everyone was caught by Pierre’s tax witch hunts however. One of those who escaped was his own cousin, Alfred. In fact, between 1920 and 1926 Alfred paid no income tax at all. Then he left the state.
Alfred, it seems, was trying to bridge old family rifts, not only to Coleman and others, but also to his immediate family. In April 1927 Jessie arranged a triumphant reunion at Nemours between him and his daughter Victorine and son Alfred Victor.
Alfred V. had never forgiven his father for the charges of infidelity laid on his mother, Bessie Gardner DuPont. Despite being disinherited for siding with his mother, young Alfred V. was still his father’s son. During a summer vacation from Yale, he took his very first job—as a strikebreaker for the Pennsylvania Railroad, on whose board his cousin Pierre sat as a director. After graduation from Yale, Irénée gave Alfred V. a manager’s post at the DuPont works at Louviers, Colorado. There he married Marcella Miller, Denver society belle and sister of Helen Edward Stokes of New York fame and fortune. In April 1927 while serving in Wyoming at DuPont’s Barksdale Mills, he traveled to Wilmington to confront cousin Lammot with a demand for greater opportunity. Lammot turned him down, and he resigned from DuPont convinced that he had inherited his father’s curse from the family.
It was then that young Alfred sought and got a reconciliation with his father. Three years later, when he established an architectural firm in Wilmington with a young gifted French partner, Gabriel Massena, his first commission came from his father. This was no small gift. Alfred V. was to build an elaborate sunken garden for Nemours that would rival that of Versailles. By then, Alfred V. was also enjoying a $12,000 annual income from a bequest of some of Dad’s stocks.
The same month that he reconciled with his family, Alfred, Sr., decided to leave Delaware. With the shrewd help of Jessie’s brother, Ed Ball, Alfred’s finances were now solid. He had lost over $12 million by refusing to enter his Nemours Trading Corporation into bankruptcy. But now his conscience was clear to enjoy the rest of his money in other speculations.
One of these was Florida. As early as 1923 his interest had been captured by Jessie’s purchase of a $33,000 beach-front property in Miami Beach. Despite his prophecies of doom over the Florida land boom, Alfred tinkered with the idea of purchasing a million dollar estate at Coconut Grove, but was dissuaded by Jessie. Occasionally, he would come across Coly, who was also involved in the land boom, and these encounters may well have whetted his appetite for speculation.
Finally, in January 1926, the sales frenzy began to slow and the speculative dynamo began to grind to a halt. Jessie sold her property in time, reaping a $132,000 profit. Then came the Florida crash in March, prices collapsing, money scarce, banks failing, speculators unable to pay for land they had not intended to keep. About a month later, on April 5, Alfred ended his waiting.
Alfred bought four river-front lots on the St. John’s River for $100,000 and began the construction of a mansion that was described at the time as “one of the most pretentious in the Jacksonville area.” 105 Named Epping Forest, after an old Ball family Virginia homestead, the two-story mansion was a seven-bedroom hacienda complete with fountains and docks for Alfred’s boats and yacht. From there, Alfred could travel twenty miles up the river to the busy port of Jacksonville, where his new office was located in the Barrett National Bank Building.
By then Alfred had quietly bought up 66,081 acres of timberland in northern Florida, and 800 lots in the fishing village of Carrabelle. At the depressed prices of the crash, the total cost was only $808,311. The following year he bought control of the Florida National Bank of Jacksonville, the first in a series of banks that would eventually dot the map of Florida.
“You will doubtless be surprised at my taking this step,” he wrote Delaware tax commissioner P. S. DuPont of his renunciation of Delaware citizenship, “but … I had no other course left to pursue. The golden tentacles of the wealthy class have been quietly laying hold of the whole state of Delaware. They have managed to control every office, both in the state and in the city of Wilmington.” 106
Soon Florida too would be held in the grasp of golden tentacles—those of Alfred du Pont. But the story of the Du Pont empire in Florida—a story encompassing the modern history of Florida—will be recounted later.
Alfred was not the only Du Pont to enter new fields of investment or move beyond the Brandywine. The adventurous Coly was rumored to be a heavy speculator in Mexican oil lands. Gentle natured Francis I. du Pont used his experience in explosives to set up three firms, the Delaware Chemical Engineering Company, the Ball Grain Explosives Company (manufacturing fuses for military explosives), and the U.S. Flashless Powder Company, in which he was joined by Ernest, Archibald, and E. Paul du Pont. Paul du Pont took to automobiles, manufacturing a car which he appropriately named the “DuPont”; as he was unable to secure finances from Alfred or any other source, his venture could not stand up to the competition from such giants as Pierre’s Chevrolet and soon folded. Later, E. Paul DuPont would have better luck as president of the Indiana Motorcycle Company, anticipating and capturing a market that grew out of a popular fad of the Thirties.
Many of the DuPont's took apartments in Paris, Rome, and New York. New York was Coleman’s roosting place. Here he rode like a king through the teeming streets of the world’s largest city in a chauffeured limousine which bore the prestigious “P.D.” (police department) license plate. This license plate, one of 250 issued to bankers, millionaires, contractors and corporation heads, allowed the General to enjoy special traffic privileges in a city where most of the working population had just enough to eat, never mind privileges. When an investigation was launched into this undemocratic practice in 1925, the Delaware Senator explained that he had been a Special Deputy Police Commissioner for the last five years and had “taken an active interest in police affairs during that time,” including the study of “European police systems with a view to improving conditions in New York.” 107
Coleman’s privileges and studies continued throughout the Twenties. Despite his famous habit of distributing gold coins to New York’s “finest,” it seems Coleman DuPont, a director of Bankers Trust Company, was taking no chances on retaining armed state power in the most efficient manner possible.
Besides Coleman, who had a new estate on the Hudson River, only a few DuPont's actually bought estates outside Wilmington and these usually served as only seasonal homes away from their Wilmington estates. Lammot DuPont, to whom Pierre gave his mother’s Wilmington estate, St. Amours, also bought a summer estate on fashionable Fisher’s Island off Long Island, paneling it with thousands of dollars worth of woodwork from the finest old homestead mansions of the Eastern shore of Maryland. His brother Irénée bought a winter estate on the north coast of Cuba’s Mananzas Province, which he named Xanadu, after the fabled kingdom of Coleridge’s “Kubla Khan.” Soon the DuPont Xanadu was to have legends of its own.
Not only estates, but also yachts were a symbol of the DuPont's during the Twenties. The Delaware family owned more of them than any other family in America. Irénée owned the 60-foot-long Icacos; Lammot, his 76-foot Nemea; A. Felix, Jr., his 73-foot Orthia; E. Paul, his 58-foot Theano; Ernest, his 74-foot Edris and 38-foot Ponjola; Eugene E., his 50-foot High Tide; Henry B., his 54-foot Nor’ Easter; Henry F., his 35- foot Sea Urchin; Coly, his Tech I, Tech II, and Tech III; his son Francis V., his 84-foot Tech Jr.; and Alfred, his 125-foot Nenemoosha and the 101-foot Gadfly, the last one for scurrying over Florida swamps. DuPont in-laws also steamed through the high seas, Donaldson Brown of G.M. in his 149-foot Oceania, Ruly Carpenter in his 121-foot Galaxy, and his brother, Walter Carpenter (then DuPont treasurer and married to a former DuPont governess) in his 65-foot Grey Gull.
During the Twenties, major newspapers often ran stories of the gay times enjoyed by the rich on their yachts. In 1924, for example, Coleman DuPont’s fishing trip with his son and two friends off the Florida coast was duly carried by the New York Times, as if Coly’s landing of a 600-pound shark rivaled in heroics and importance the worldshaking events of the day. Again, in 1927, when E. Paul’s wife slipped off a bobbing yacht into the Delaware River and had to swim to shore, her feat was recorded by history.
Some of the family were infected with the aviation craze sweeping the country since Lindbergh’s flight and became early pioneers of the new industry. Henry B. DuPont owned the first private plane licensed by the Department of Commerce. Richard C. DuPont, son of A. Felix DuPont, was so fascinated with soaring planes that he became one of the country’s leading experts on gliders, while his brother, A. Felix, Jr., casually flew by plane every day to work in Camden, New Jersey, where he inspected aviation finishes in the paint department.
In 1927 Henry B. opened the DuPont Airport just outside Wilmington, and rumors soon reached New York that Giuseppe M. Bellanca, one of the world’s foremost designers of monoplanes, was being lured to Wilmington from his Staten Island plant. The DuPonts were offering a landing field with 1,100 feet of Delaware River frontage and a complete factory on 350 acres of land only fifteen minutes from the Du Pont Hotel. By the following January the rumors were confirmed with the announcement that the Italian-born designer, after failing to interest Henry Ford, had accepted the presidency of a $1 million company established by Henry B. DuPont. “Businessmen here,” commented the New York Times, “consider it significant that members of the group so closely identified with General Motors, the greatest rival of Henry Ford, should be following him into the aircraft industry.” 108 “Significant” was an understatement. Henry B.’s Atlantic Aviation became the largest business aircraft sales and service organization in the world, spurring Henry’s substantial investments in helping develop Trans World Airlines, North American Aviation, and Bendix Aviation.
Henry B. DuPont’s airport often became a center of suspense in the late Twenties.Once in 1928 A. Felix, Jr., who had joined the Army Air Corps, was overdue in a flight home from his Texas training camp. A mist had developed near Wilmington, and, as these were the days before electronic guidance systems, the waiting DuPont's were frantic with worry. Finally, Felix’s father could stand the suspense no longer; he mounted a plane and flew off into the clouds in search of his son. High above the field, Felix peered through the clouds, anxious over added dangers that would come with night. Then just as dusk approached, the white and gold plane of young DuPont was sighted.
Another incident, although of a less personal nature, occurred a year later. Charles Lindbergh, the famous “lone eagle,” flew in for a secret conference with the DuPont Company. The subject was a revolutionary new idea—rocket power. At the DuPont headquarters Lindbergh explained that black powder could be used in solid-propellant rockets. He tried to capture their interest by suggesting some immediate practical application. “Now, we could develop a rocket that could be attached to a plane for the purpose of giving it one minute of thrust in case of engine failure on takeoff, thus avoiding having to land it in a city or in trees.” 109
The DuPont's were openly dubious, expressing the opinion that there seemed no future in rockets connected with airplanes. A month later Lindbergh received a final letter of rejection, which claimed that “to equal the thrust of one minute of a Wasp engine would require about 400 pounds of black powder, and the heat would be so intense that the powder would have to be burned in a fire-brick combustion chamber.” 110
What escaped the DuPont's, however, was the possibility of liquid propellant, which needed a metal lining only 1/32 of an inch thick. Goddard, “the father of modern rocketry,” knew this and, after talking with Lindbergh, visited Wilmington the day before Thanksgiving and was interviewed by three DuPont laboratory men.
“I realized soon,” he wrote shortly thereafter, “that the object of this questioning was … to find every last detail of the rocket I have developed during the last nine years, and after I saw this I avoided further questions as to these construction details, as much as possible.” 111 “All Goddard took away from it was the conviction,” wrote one author, “that the DuPont people, far from being interested in underwriting his work, were only interested in picking his brain.” 112 Goddard left Wilmington, turning instead to the Guggenheims for support.
This loss due to crude greed was perhaps the only economic opportunity missed by the DuPont's during the presidency of Lammot DuPont. Stern and somber Lammot had succeeded to Irénée’s position in 1926, when the company’s structural reorganization had been completed to meet its expansion into new fields of chemicals, following Pierre’s formula of management-decentralization/financial-centralization.
Although his abruptness had not made him renowned for popularity among his subordinates, Lammot still possessed a talent for detecting the crucial point in any proposition, and he applied this talent to his market concern for General Motors as well as DuPont.
Soon after Lammot’s succession, the DuPont's fully indulged in the speculative craze distinguishing that period. Although most of their speculation was for long-term investment purposes relating to the company’s market needs, one situation was the exception. In 1926 the DuPont's harvested $44 million in G.M. business. 113 Then in February 1927 Pierre sold $25 million worth of G.M. preferred stock. The unloading of so much stock on the market triggered criticism from angry brokers, analysts, and even G.M. stockholders.
Pierre, however, was also buying as well as selling. Pierre’s concern for his immediate family’s ability to retain control of the country’s gunpowder business prompted him to spend $2 million in 1922 for 16,500 shares of Atlas Powder, one of the 1911 spin-off companies in which cousin Coleman had also invested. Pierre used his Christiana Securities for this investment, and the following year, knowing that he would be without an heir, transferred 49,000 shares of Christiana and 24,000 shares of DuPont to a new holding company, Delaware Realty and Investment Corporation, the stock of which he divided into eight equal shares among his brothers and sisters. Still, Pierre’s fear of Coleman urged him on to further Atlas investments. By 1923 Christiana Securities—in which his immediate family owned a 60 percent interest and thereby 30 percent of Du Pont and 35 percent of G.M.—controlled 49,500 out of Atlas’s 261,438 outstanding stock. Of this, however, 33,000 was nonvoting stock, and Pierre continued to worry over Coleman’s share of this prosperous company. His concern eased in April 1927, when Coleman, tired of business, agreed to sell him 21,071 shares at $60 apiece. Thus, in 1927, 70,000 shares of Atlas Powder was firmly in DuPont hands.
During that year the DuPont's spied another prize—United States Rubber Company, the country’s largest producer of industrial rubber. Irénée, W. W. Laird, Sr., Henry Dowds, and eleven other family members or company directors purchased 97,750 shares of U.S. Rubber’s stock. The following June a second DuPont syndicate, which included Pierre, bought an additional 154,750 shares. By then the DuPont's held, through personal syndicates and the DuPont Company, a total 18 percent of U.S. Rubber’s common (324,516 shares) and 11 percent of its preferred (75,619). Wilmington Trust was named as the trustee for 150,425 shares held by Irénée, Lammot, and Henry B.
With this 29 percent control, the DuPont's installed one of their own company executives, Francis B. Davis, as U.S. Rubber’s president and chairman to watch over an international rubber empire that stretched from the Malaya forests to the hills of Dutch Java and included thousands of de facto slave laborers.
In 1910 U.S. Rubber had secured a concession from the Dutch colonial regime in Sumatra. By 1928 it owned 104,000 acres throughout the Dutch East Indies and another 30,821 acres in Malaya; of these, 87,000 acres were planted and harvested by Indonesian or Malayan labor at slave wages. In 1927, the year of the first DuPont investment, U.S. Rubber produced 25,677,000 pounds of the 35,484,997 total grown production of American corporations. 114 U.S. Rubber eventually became an important market for DuPont’s neoprene. General Motors, in turn, became a captive market for U.S. Rubber’s tires. In January 1931 G.M. signed a contract that provided for half of its tires to be bought from U.S. Rubber in return for rebates.
The DuPont's made other investments: … in American Sugar and Refining Company (Domino Sugar), 115 which had substantial sugar cane plantations in Cuba, Puerto Rico, and other parts of Latin America, paying slave wages.
… in United Fruit Company, 116 which maintained banana republics throughout Latin America. During the late Twenties United Fruit imported into Cuba 9,600 Blacks from Haiti and Santo Domingo to work on plantations not far from Irénée’s estate. The company paid the Cuban government $25 per man as a bond, promising to return them home. As it was cheaper to forfeit the bond than ship them home and hire new workers, United Fruit made it a habit of breaking its promise, stranding the workers in a foreign land. “These companies,” wrote one contemporary author, “intensify the chronic unemployment on the island by importing Negro laborers—under slave terms—from Haiti and Santo Domingo. These are kept in semi-military compounds, guarded by troops and denied every civil liberty.” 117 In 1928, 1,500 men, women, and children, employees of United Fruit, were murdered by troops in Santa Marta, Colombia, for striking in protest of receiving only 60 percent of their promised wages. The survivors were imprisoned on the banana plantation and flogged, while two U.S. warships were anchored nearby in readiness to intervene if necessary.
… in United States Steel, long a supply target for G.M.’s auto making. In June 1927 DuPont Company acquired 114,000 shares of U.S. Steel common at an average $122.80 price.
It was this last investment that began the reaction by the business community, particularly the Morgan interests, to the DuPont's unbridled power grabbing. Within a few hours, news of this $14 million investment sparked a flurry of activity on Wall Street, causing U.S. Steel’s stocks to advance 5¼ points, appreciating over $1 million. When the market closed, DuPont’s investment had made $600,000 in one day, and rumors began circulating that a DuPont was soon to replace recently deceased E. W. Gary as chairman of the giant combine.
On July 29 the Federal Trade Commission informed DuPont that it was investigating the U.S. Steel acquisition as a possible “community of interest among these three corporations (DuPont-G.M.-U.S. Steel).” “I think it is their opportunity to satisfy public curiosity or suspicion as to what they are doing,” declared F.T.C. Commissioner A. F. Myers. “Will General Motors buy all of its steel from the Steel Corporation and all its paint from the DuPont's, and if so, what would be the effect on other sellers?” 118
Pierre, as chairman of G.M., quickly responded two days later to reports of closer ties between G.M. and U.S. Steel. “There is no basis for the report,” 119 he assured the press, while Irénée, as chairman of DuPont, reported that out of a total 7,116,235 common shares of U.S. Steel, DuPont’s holdings were only 114,000.
The government remained unimpressed. Although controlled by Morgan interests, the federal administration was also concerned with an economy that had a balance of interests among the controlling financial groups in the country.
Hardly a few months after J. P. Morgan, Jr., was elected U.S. Steel’s new chairman, the DuPont's were forced to sell their steel stock. “The DuPont interests are now looked upon as the largest single stock holding group in the country,” the New York Times explained. “As long ago as last autumn it was reported in the financial district that the government would frown upon any additional purchases which would give the DuPont interests anything like a controlling voice in any of the large corporations of the country.” 120
It was a blow to the DuPont's, but one cushioned by the fact that their acquisition had caused such feverish speculation that the price of U.S. Steel stock had risen from $120 to $160.50. When they sold their 114,000 shares in March, they reaped a golden harvest of $2.6 million in profits.
Such market prices, inflated only by the exchange floor’s rumor and the speculator’s expectation of a quick killing, of course did much to overvalue securities and prepare the way for the bottom’s falling out the following year. But worse was yet to come.
The market’s investors, with fantasies of G.M. stock dancing in their heads from its present 187 to 225 predicated on Raskob’s prediction, became rabid. Wall Street broke into pandemonium, handling 1,989,500 shares in two hours, a large part bought and sold around G.M.’s post. As the New York Times put it, such was “the magic of his name,” that it put the market into a speculative boil. When it was over, G.M.’s stock was worth an additional $47,850,000, up to $3.3 billion, the highest value ever recorded for any American industrial security up to that time.
The magic of John Raskob, of course, was also the magic of Pierre DuPont. Ever since he had quit his first stenographer’s job after being refused a raise, and landed a job through a friend as Pierre DuPont’s personal secretary in Ohio, Raskob’s star had risen with Pierre’s. First, showing an aptitude for financial transactions, as treasurer of Pierre’s streetcar railway in Texas, then as treasurer and vice president of DuPont, Raskob was always at Pierre’s side, encouraging his boss’s original investment in G.M., then accompanying him when Pierre moved from Du Pont to G.M. in 1919 to protect DuPont’s investment in the troubled auto company.
G.M. rode on the boom of 1922–1929, and Raskob rode on G.M., serving on the board’s executive committee and as chairman of its all-important finance committee. It was in this latter role that Raskob’s words were noted by the market over the decade, especially as G.M. grew into the largest auto maker in the country, surpassing Henry Ford’s company in 1926.
The automobile was remaking America, widening it, spreading the city out with suburbs linked by paved roads. To further stimulate the mass market for G.M.’s low priced Chevrolet, Raskob fathered the G.M. Acceptance Corporation, pioneering the way for buying on the installment plan—buying now, paying later soon became G.M.’s answer to Wall Street’s dreams of unlimited consumption. To further management incentive, and consolidate DuPont control over G.M., Raskob assisted Pierre’s founding of the Management Securities Company, which bought $33 million worth of G.M. common. By 1928 the eighty G.M. executives who took interests in this company were all millionaires. In a few years, Raskob had made more millionaires than Andrew Carnegie had in a lifetime.
The rise of G.M. was also the rise of DuPont, and when DuPont made $41,113,968 in profits in 1927—a 10 percent increase over 1926—it was noted that nearly half came from General Motors dividends. After ten years of Pierre’s first investment, the DuPont's were realizing a 100 percent return in annual dividends on their total G.M. investment. Raskob, as the leading financial figure on the board of both companies, was credited with the fact that a $1,000 investment in DuPont in 1921 returned an average 1,000 percent profit in six years. Heralded by American Review of Reviews in 1928 as “the financial genius of the DuPont Company,” Raskob was by then a director not only of DuPont and General Motors, but also Bankers Trust, Curtis Airport Corporation, Lawyers County Trust Company, and the Missouri Pacific Railroad. As a director of corporations which employed over 300,000 people and on which at least one million Americans directly depended for their livelihood, this shy, small man had a commanding influence on the life of one out of every hundred Americans.
At the age of 49, John Raskob was reputedly worth $100 million, 122 owning a baronial estate near Wilmington called Archmere, a farm in Maryland, and a residence in New York City. Even the popes had honored Raskob, appointing him to the Knights of the Order of St. Gregory the Great for his gifts to the Hospital of Infant Jesus in Rome, for which Raskob responded with a $1 million pledge to the Catholic Diocese of Wilmington for “the advancement and preservation of the Catholic faith.”
Such was the financial flesh to the “magic of Raskob’s name.” But there is always a weak link in the chain of money. Raskob’s own functioning within Du Pont and G.M. underscored that weakness as being a lack of markets to absorb each company’s surplus of goods. Throughout the decade Raskob strove to create new markets by promoting installment buying, modern technology which could create cheaper goods, and the purchase of other companies in related industries. Like many of his class, Raskob recognized that such corporate expansion rested on the political foundations of the government they controlled; unlike many of his class, Raskob also recognized that those foundations were becoming increasingly unstable. Crime, he realized, is no mere act of individual aberration, but has social origins and political implications that undermine respect for the existing political order and its laws, especially those laws protecting the privileges of propertied interests like himself.
It was in response to this widespread flouting of existing law that Raskob began to enter directly into the political arena in 1926. It was the beginning of a struggle with leaders of his own class that was to take him out of the Republican Party and propel him to the highest post in the Democratic Party, earning him the title of its “savior.” And here, again, Raskob followed the lead of Pierre DuPont.
To be continued...next
9.8 THE GREAT CAMPAIGN
notes
Chapter 8
1. W. J. Reader, Imperial Chemical Industries—A History (Oxford, England: Oxford University Press, 1970), Vol. I, “The Forerunners—1870–1926,” pp. 212–15. Quoted also by Alfred D. Chandler and Stephen Salsbury, Pierre S. du Pont and the Making of the Modern Corporation (New York: Harper & Row, Publishers, 1971), p. 299. (Purported to be an objective historical account, this book is highly complimentary to Pierre du Pont, possibly because Chandler’s grandmother was a Du Pont; in fact his middle initial “D” stands for Du Pont.)
2. William S. Dutton, Du Pont—One Hundred and Forty Years (New York: Charles Scribner’s Sons, 1942), pp. 225–26.
3. John K. Winkler, The Du Pont Dynasty (Baltimore: Reynal & Hitchcock, Inc., 1935), p. 223.
4. Chandler and Salsbury, Pierre S. du Pont, p. 369.
5. P. S. du Pont to T. Coleman du Pont, February 5, 1915, United States vs. E. I. du Pont de Nemours, General Motors, U.S. Rubber, Delaware Realty & Investment Corporation, Pierre S. du Pont, Lammot du Pont, lrénée du Pont, U.S. District Court for Northern District of Illinois, Pierre S. du Pont Deposition, Exhibit No. 30.
6. Colonel Edmund G. Buckner (Du Pont vice-president in charge of military sales), “On the Relations of Du Pont American Industries to the War,” Speech at Du Pont General Sales Convention, June 19, 1918. (Cp.v.306l at the New York Public Library, Fifth Avenue.)
7. Ibid.
8. Testimony of P. S. du Pont, September 12, 1934, Nye Investigating Committee, United States Senate.
9. New York Times, October 11, 1915.
10. Senator R. M. La Follette, La Follette’s Magazine, September 1915.
11. William A. Williams, The Tragedy of American Diplomacy (New York: Dell Publishing Co., Inc., 1962), p. 52.
12. William A. Williams, The Contours of American History (Cleveland: The World Publishing Company, 1961), p. 412.
13. Richard O. Boyer and Herbert M. Morais, Labor’s Untold Story (New York: United Electrical, Radio and Machine Workers of America, 1970), p. 193, also, Williams, Tragedy, pp. 80–81, p. 75.
14. Ibid., p. 194.
15. Williams, Tragedy, p. 52.
16. Boyer and Morais, Labor’s Untold Story, p. 193.
17. U.S. State Department, Foreign Publications, 1917, supplement 2, I, pp. 516–8.
18. Woodrow Wilson, Speech at St. Louis, Missouri, September 5, 1919, reprinted in Congressional Record, Sept. 8, 1919, p. 5006.
19. Wilson, The New Freedom (New York: Doubleday & Company, Inc., 1913), pp. 57– 58.
20. Wilson, Speech before Congress, Congressional Record, April 2, 1917.
21. Senator Morris, Speech before U.S. Senate, Congressional Record, April 4, 1917.
22. Quoted in Boyer and Morais, Labor’s Untold Story, p. 23.
23. Buckner, Speech at Du Pont General Sales Convention, June 19, 1918.
24. Dutton, Du Pont, p. 209.
25. Annual Report, 1918, E. I. du Pont de Nemours & Co.
26. Philadelphia Public Ledger, July 21, 1916.
27. Ibid., July 27, 1916.
28. New York Times, November 28 and 29, 1916.
29. Wilmington Sun, November 1, 1919.
30. Alfred I. du Pont to Maurice du Pont, December 10, 1932, quoted in Marquis James, Alfred I. du Pont—Family Rebel (Indianapolis: Bobbs-Merrill Company, Inc., 1941), p. 315.
31. House Report No. 998, 66th Congress, 2nd Session.
32. Ibid.
33. Ibid.
34. Dutton, Du Pont, p. 249.
35. Ferdinand Lundberg, America’s Sixty Families (New York: Vanguard Press, 1937), pp. 154 and 156.
36. Ibid., p. 172.
37. Buckner, Speech at Du Pont General Sales Convention, June 19, 1918.
38. Ibid.
39. Chandler and Salsbury, Pierre S. du Pont, p. 429.
Chapter 9
1. Irving Bernstein, The Lean Years (Baltimore: Penguin Books, Inc., 1966), p. 54.
2. Harry Jerome, Mechanization in Industry (New York: National Bureau of Research, 1934), pp. 122–25.
3. Bernstein, The Lean Years, p. 54.
4. Ibid.
5. Ibid., p. 65.
6. William A. Williams, The Tragedy of American Diplomacy (New York: Dell Publishing Co., Inc., 1962), p. 145.
7. Bernstein, The Lean Years, p. 54.
8. Hugh Grant, An Australian Looks at America (London: Allen & Unwin, 1928), pp. 117–18.
9. William S. Dutton, Du Pont—One Hundred and Forty Years (New York: Charles Scribner’s Sons, 1942), p. 288.
10. The Foundation years later sued Du Pont in an attempt to regain its patents. It failed. (New York Times, November 20, 1928, p. 16).
11. John K. Winkler, The Du Pont Dynasty (Baltimore: Reynal & Hitchcock, Inc., 1935), p. 265.
12. New York Times, September 25, 1923, p. 9.
13. Ibid., also, Report of the Special Senate Committee to Investigate the Munitions Industry, 1936, p. 266, and Munitions Hearings, Exhibit 4874-C.
14. Munitions Hearings, Part 4, p. 2573, Exhibit 920.
15. Report of the Munitions Committee, pp. 266–68.
16. Munitions Hearings, Part 11.
17. Ibid.
18. Ibid., p. 2559, Exhibit 910.
19. Report, p. 270; also Munitions Hearings, Part 11, Testimony December 6, 7, and 10, 1934.
20. Munitions Hearings, Part 11, Exhibit 928, p. 2581.
21. Ibid., Exhibit 929.
22. Ibid., Part 11, pp. 2578–80, Exhibit 926.
23. Ibid., p. 2571, Exhibit 918.
24. New York Times, May 9, 1920, p. 1.
25. Ibid.
26. Ibid.
27. Ibid.
28. Ibid., June 15, 1920, p. 2.
29. Ferdinand Lundberg, America’s Sixty Families (New York: Vanguard Press, 1937), p. 153.
30. Ibid., p. 156.
31. Munitions Hearings; Report of the Munitions Committee.
32. William G. Johnson, “The Life and Political Career of Henry Algernon Du Pont” (Master’s thesis, University of Delaware), p. 100.
33. New York Times, October 17, 1920, p. 3.
34. Williams, Tragedy, p. 105.
35. Edward Earle Purinton, “Gunpowder for Peace,” The Independent, August 21, 1920.
36. New York Times, February 22, 1921, p. 15.
37. Marquis James, Alfred I. du Pont—Family Rebel (Indianapolis: Bobbs-Merrill Company, Inc., 1941), p. 336.
38. Ibid., p. 327.
39. Ibid., p. 336.
40. Ibid.
41. Ibid., p. 343.
42. Ibid.
43. Forum, December 1920.
44. T. C. du Pont, “Does America Want Immigration or Emigration,” Current Opinion, Vol. LXIX, No. 2, August 1920.
45. Ibid.
46. T. C. du Pont, “Better Treatment for the Immigrant,” Forum, December 1920.
47. Upton Sinclair, The Brass Check, A Study of American Journalism (Pasadena, Calif.: the author, 1920).
48. New York Times, July 8, 1921, p. 5.
49. Ibid., March 15, 1922, p. 5.
50. Munitions Hearings, Exhibit 4873-Z; also Report, p. 273.
51. Report, pp. 265–66.
52. New York Times, December 20, 1963.
53. Bernstein, The Lean Years, p. 10 (citing a report of the Bureau of Labor Statistics).
54. Winkler, The Du Pont Dynasty, p. 268.
55. “The Du Pont Story” (film), E. I. du Pont de Nemours & Co., Advertising Department, Wilmington, Delaware.
56. Winkler, The Du Pont Dynasty, p. 272.
57. Report by J. J. Raskob to the Du Pont Finance Committee, New York Times, February 18, 1953, p. 41; Winkler, The Du Pont Dynasty, p. 257.
58. 1917 Annual Report, E. I. du Pont de Nemours & Co.
59. 1918 Annual Report, E. I. du Pont de Nemours & Co.
60. New York Times, June 4, 1957, pp. 23–24.
61. Winkler, The Du Pont Dynasty, p. 261.
62. James, Alfred I. du Pont, p. 341.
63. Ibid., p. 346.
64. Ibid., p. 352.
65. Wilmington Sunday Star, August 27, 1922.
66. Winkler, The Du Pont Dynasty, p. 299. 67. Report, Parts 3 and 5.
68. Munitions Hearings, Part 12, p. 2846, Exhibit 1056.
69. Report, p. 273.
70. Conference on Limitation of Armaments, November 12, 1921-February 6, 1922 (Washington, D.C.: Government Printing Office).
71. Richard Sasuly, I. G. Farben (New York: Boni & Gaer, Inc., 1947), p. 81.
72. Munitions Hearings, Part 6, p. 1596, Exhibit 597.
73. Ibid., Part 9, p. 2138.
74. Ibid., p. 2143.
75. Ibid., p. 2146.
76. Ibid., p. 2143.
77. Ibid., p. 2140.
78. Ibid., p. 2242.
79. Ibid., p. 2158.
80. Ibid., p. 2254, Exhibit 837.
81. Report, p. 250.
82. New York Times, November 19, 1934, p. 1.
83. Ibid.
84. Ibid.
85. Report, Part 3, p. 16.
86. New York Times, November 16, 1946, p. 10.
87. Ibid., October 31, 1924, p. 6.
88. Silas Brent, “Deep Water Runs Still,” The Nation, July 8, 1925.
89. Ibid. 90. New York Times, November 3, 1924, p. 6.
91. Bent, “Deep Water.”
92. Anti-trust suit by Department of Justice, 1937, Equity No. E-84–321, District Court of the United States, Southern District of New York, U.S. vs. Ethyl Gasoline Corporation, Carle L. Webb and John Cord Taylor; plaingtiff’s petition filed February 19, 1937.
93. Bent, “Deep Water.”
94. New York Times, January 4, 1924, p. 2.
95. Ibid.
96. Ibid.
97. James, Alfred I. du Pont, p. 349.
98. Ibid., p. 381.
99. Winkler, The Du Pont Dynasty, p. 301.
100. New York Times, April 17, 1924, p. 20.
101. Ibid., May 11, 1924, Sec. IX, p. 11.
102. Wilmington Sun, November 1, 1919.
103. Outlook, October 14, 1925.
104. Winkler, The Du Pont Dynasty, p. 304.
105. New York Times, April 6, 1926, p. 10.
106. James, Alfred I. du Pont, p. 401.
107. Ibid., May 13, 1925, p. 2.
108. New York Times, January 8, 1928, Sec. IX, p. 5.
109. Milton Lamask, Seed Money—The Guggenheim Story (New York: Farrar, Straus & Company, 1964), p. 142.
110. Ibid.
111. Ibid.
112. Ibid.
113. Alfred D. Chandler and Stephen Salsbury, Pierre S. du Pont and the Making of the Modern Corporation (New York: Harper & Row, Publishers, 1971), p. 583.
114. “America’s Answer to the Rubber Monopoly,” American Review of Reviews, November 1928, p. 522.
115. TNEC study (1937) Cited by Ferdinand Lundberg, The Rich and the Super-Rich (New York: Lyle Stuart, Inc., 1968), p. 171.
116. Ibid.
117. Federated Press, March 20, 1930, article of Harvey O’Conner.
118. New York Times, July 29, 1927, p. 1.
119. Ibid., July 31, 1927, p. 23.
120. Ibid., March 19, 1928, p. 1.
121. Ibid., March 24, 1928, p. 30.
122. Henry F. Pringle, “John J. Raskob—A Portrait,” Outlook, August 22, 1928
No comments:
Post a Comment