DuPont Dynasty
Behind the Nylon Curtain
Ten
DECADE OF DESPAIR
1. THE FRUIT OF DROUGHT
The crash of 1929 released a virtual Pandora’s box of stored-up economic ills. And
in their wake, like a terrible plague spreading across the land, into every factory and
every home, came the Great Depression.[Which was brought on by the Bank of England,as part of their plan to arm their Central European hit man Hitler,see Conjuring Hitler for yourself DC]
The initial reaction from Wilmington and Washington was one of mixed alarm and
disbelief. President Hoover, holding that one does not encourage a sick man to recover
by reminding him of his illness, cheerily attempted to allay the population’s mounting
fears with bedside manner and false obituaries over the dead body of the Depression.
“I don’t see how such a shrinkage in stock value,” wrote an irritated Alfred DuPont,
“totaling, I presume, several billions of dollars, can take place, involving a proportionate shrinking of credit, without causing a period of depression.”
1 That was in
January of 1930, when the number of jobless had already soared from 450,000 at the
time of the crash to over 4 million. By the following October the unemployed topped 5
million. “Millions of men going around with empty dinner kettles,” Alfred noted. “One
can never tell what social upheaval may be imminent.”
2
In this crisis Herbert Hoover, despite popular belief to the contrary, was a man
lacking neither purpose nor resolve. In his foreign trade policies as Secretary of
Commerce, he had been a vigorous expansionist, and although he saw the real
preservation of domestic prosperity in the development of foreign markets, Hoover had
also been a strong advocate of labor-management cooperation, government economic
regulation, and public works spending in the domestic field.
As early as 1921 Hoover had encouraged a program of collaboration between union
leaders, chiefly William Green and Sidney Hillman, and corporate leaders, and
proposed a regular policy of federal intervention in the areas of unemployment, welfare,
and labor distribution. His Conference on Unemployment that year, over which he was
the presiding and guiding force, endorsed planned public works. The following year, in
1922, Hoover founded with Franklin Roosevelt the American Construction Council to
plan the construction industry as a trade association, denouncing rugged individualists
and unbridled profit seekers as mavericks dangerous to the balanced order of giant
corporate trusts.
A sponsor of a series of federal labor-management conferences, Hoover supported
the drive to end the twelve-hour day in steel and backed the Railway Act of 1926. He also helped found the American Association of Labor Legislation, the decade’s most
important organization of developing corporate liberalism, bringing together such
financial celebrities as Bernard Baruch, G.E. president Gerard Swope, banker Frank
Vanderlip, and Standard Oil’s George Pratt.
Although his 1928 victory was billed as a triumph of the WASP middle class,
Hoover’s whole record was clearly a commitment to the business aristocracy. “America
is not yet dominated by its great cities,” hailed the St. Paul Pioneer Press at the time of
his election. “Control of its destinies still remains in the smaller communities and rural
regions, with their traditional conservatism and solid virtues.… Main Street is still the
principal thoroughfare of the nation.”
3 Nevertheless, it was from Wall Street, not Main
Street, that Hoover selected his cabinet: Secretary of State, Henry Stimson, a Roosevelt
administration relic related to two partners of Morgan’s Bonbright & Company;
Commerce, Robert Lamont, president of American Steel Foundries and a Morgan protege; Treasury, Andrew Mellon, succeeded by gold magnate Ogden Mills; Navy,
Charles Adams, director of A.T. & T. and father-in-law of J. P. Morgan’s son Henry.
It was in this spirit, then, that Hoover invited Pierre DuPont, Alfred Sloan, Henry
Ford, and other leading industrialists to a special manufacturers’ conference in
November 1930. By that time, with unemployment up to 6 million, the deepening crisis
had moved Hoover to conclude that the economic problems of the country could not
“work themselves out” without some initiative and coordination on the national level.
The result was a pledge by Pierre and his industrial brethren “on their individual
behalf” not to initiate any “movement for wage reduction.” In return, labor leaders
including John L. Lewis, John Frey, and William Hutcheson, pledged that “no movement
beyond those already in negotiation should be initiated for the increase of wages.”
4 To
further break down the dam of corporate fears holding back capital investment and to
stimulate jobs, on November 23 Hoover wired the country’s governors to encourage
their state and county governments with the “energetic yet prudent pursuit of public
works.”
In many ways, Hoover laid the groundwork for the future New Deal by initiating the
steps toward federal involvement in many areas of the economy, including welfare,
public works, stock market regulation, farm subsidization, and oil price support (by
encouraging state laws restricting the tapping of resources and therefore oil volume).
But in each area, Hoover failed to take the necessary step toward a highly centralized
state capitalism. He did establish the Federal Farm Board in 1929, with Alexander
Legge—Baruch’s protege and president of International Harvester—as chairman of a
committee of other large agricultural industrialists with a direct stake in the new price support
program; but he was yet unwilling to restrict the volume of food production.
Although he encouraged local and state public works projects, Hoover was unwilling to establish a massive $1 to $3 billion federal works program along the lines proposed by
the National Unemployment League or his own Emergency Committee on
Unemployment, settling for a small $150 million appropriation. Again, while he
established the Federal Employment Service to help the states mitigate unemployment,
Hoover also vetoed the Wagner Bill, which would have replaced the F.E.S’s twenty-four
independent offices with a grants-in-aid system conforming to minimum federal
standards. Still again, with regard to relief, although he encouraged expanded state and
local programs, Hoover was reluctant to move toward direct federal aid and regulation.
In each area, Hoover was hesitant to resolve the need of a national economy of huge
trusts for a rationalized economic system through a centralized political state, relying
instead on inadequate local and private resources to solve a national crisis. While he
grasped the economic and social implications of industrialization probably before many
others even suspected their existence, Hoover lacked the necessary personal character
to initiate adequate measures in the face of substantial corporate opposition (including
that of Lammot DuPont) that had earlier endorsed his candidacy.
Yet, it was just this deficiency in action that stirred some corporate desertions from
his ranks. “Hoover,” wrote Alfred DuPont in Florida, “is not handling the situation with
the force it needs. The emergency is much more drastic than we were facing during the
war.”
5 Alfred’s concern was shared by many of his relatives in Wilmington, particularly
Irénée and Pierre, who well understood that an irate labor movement was indeed more
of a threat to America’s established order and property values than any foreign enemy.
When unemployment reached 8 million in January 1931, doubt rose over the
feasibility of Hoover’s “voluntary” wage maintenance policy. But when the number of
jobless workers topped 9 million in October, its failure was unquestionable. In
December 1929, corporate leaders had imposed “only” twenty-three wage cuts on the
working class; by August 1931, wage cuts had climbed to 221, among them, Du Pont controlled
U.S. Rubber. Between wage cuts and layoffs (which hit recently migrated
Blacks from the South hardest because of discrimination and their relegation to the most
expendable unskilled jobs), starvation racked the cities. Pennsylvania, for example,
recorded a 25 percent rise in cases of undernourishment among its school children. Ford
Motor Company’s medical department reported that workers were increasingly catching
infections because of malnutrition, while Henry Ford disclaimed any responsibility for
public welfare. Bread lines lengthened, and the number of street beggars and apple
sellers doubled and redoubled until the avenues of the cities were so filled with poverty
and humiliation that the rich took to ocean voyages to escape the miserable scene.
With unemployment and resultant starving families came despair, soon leading to a
mass of emotional breakdowns and even suicides. In 1929 the suicide rate was 14 per
100,000 people; in 1930, 15.7; in 1931, 16.8; in 1932, 17.4—an increase of 24 percent since the depression had begun.
Families, lacking an economic base on which to survive, deteriorated by the hundreds
of thousands, as over 2 million men became transients, riding the rails in a futile search
for jobs. Southern Pacific alone reported ejecting 683,457 staggering transients from its
trains in 1932.
Hoover’s response to this crisis was totally inadequate. Although he helped Wagner
enact the Employment Stabilization Act of 1931, the law’s effectiveness was largely
contingent on the quality of its administration, quality which Hoover’s appointments
undermined.
The F.E.S board became an impotent statistical body, a fate which Hoover’s
own Committee on Recent Economic Changes also shared.
One of the leading members of that committee was DuPont director John J. Raskob.
Disturbed by Hoover’s failure to act on its findings, Raskob was also concerned over
Hoover’s increasing attacks against the New York Stock Exchange. Throughout the
Coolidge years Hoover had been critical of stock manipulation and the market’s drain
on credit. In 1930 he turned his wrath on speculators like Raskob, threatening the
Exchange with federal regulation unless it “voluntarily” restricted credit for short
selling. Here was the nailed fist beneath the velvet glove of Hoover’s famous (and often
misunderstood) “voluntarism.” But by 1932 Hoover’s demand for a “rational” market
had become hysterical: he charged that the continuing fall of stock prices was the result
not of the fall in earnings, but “sinister” forces. This prompted a Senate investigation
that resulted in still further restraints on speculation. But here again, Hoover stepped
back from taking the plunge into federal regulation. That would have to wait until later,
with FDR’s founding of the Securities Exchange Commission (which, by the way, also
won Raskob’s ire).[Hoover was correct and the source of the SINISTER forces were and are as far as America goes right up until 2018 are located on that piss ant little island called England DC]
Despite their concern over Hoover’s lack of dynamic leadership, Raskob and Pierre
initiated no direct reform on their own with regard to assistance to the unemployed.
Delaware’s workers had no unemployment insurance, nor were there any relief laws.
DuPont Company, which did give loans to employed workers, refused to provide these
loans or any assistance to its workers once they were laid off and needed help most.
And Lammot, despite pledges to Hoover’s wage maintenance policy, had fired 20
percent of DuPont’s work force, over 7,000 industrial workers and hundreds of
chemists and engineers, in order to keep up DuPont’s traditional 10 percent profit yield
on invested capital. In 1932, when scores of other firms were struggling under the threat
of bankruptcy, DuPont showed a $26 million profit.
On the national front, Pierre served on Hoover’s Committee for Employment. The
committee’s title exemplifies Hoover’s concern with presenting a positive appearance
—in effect, ignoring negative realities. The committee’s role in aiding the racist
suppression of jobs for Filipino and Mexican-American agricultural workers in California was a dramatic display of the bankruptcy of its “positive” approach in
practice.
Of all the DuPont's, only Pierre’s archenemy, Alfred, took any direct action. “They
[the Republicans] are not willing to obligate the government to take care of those out of
employment, when it is patently their duty to do so,” he wrote angrily. In Florida, Alfred
took up what Hoover hesitated to do, using his personal fortune for what he believed
should be paid by public taxes. Every morning he sent a string of trucks through
Jacksonville which gathered up jobless men, white and black, to put them to work
maintaining parks and other public places. Alfred paid each man a daily “survival”
wage of $1.25. For two years Alfred continued this $400 a day project, until the New
Deal took over with a more realistic program. Alfred was active also in Delaware,
where the new governor, C. Douglas Buck, Coleman DuPont’s son-in-law and political protege, appointed him chairman of the state’s Old Age Welfare Commission in
exchange for Alfred’s willingness to mail every month 800 personal checks averaging
$16 each. By 1931, when the state legislature passed an old age pension bill, Alfred had
spent some $350,000, and, as vice president of the American Association for Old Age
Security, was also personally directing a national crusade.
Alfred’s doles, however, were not merely humanistic, but humanism seen through a
sophisticated class perspective. “If capitalism is not to fall by the wayside,” he
explained, “then it must work out some plan which will secure the laboring man against
all economic conditions. This, in my opinion, can be readily done, provided a fair and
comprehensive plan of profit-sharing could be worked out so as to provide a surplus to
be devoted to the welfare and maintenance of the working class, just as there is now a
surplus devoted to the interests of invested capital.”
6
Although Lammot DuPont was definitely opposed to profit-sharing, his brothers were
close to Alfred on this question of the need for some comprehensive plan. Such a plan
had been proposed in 1931 by G.E. president Gerard Swope to the convention of the
National Electrical Manufacturers Association. Swope proposed a compulsory
cartelization of all major American corporations into federally controlled trade
associations for each industry. Each association would regulate both production and
prices, keeping the former down while keeping the latter up. Codes for “fair practices”
would be enforced by the government, and central planning would be implemented by a
national economic council of corporate leaders and “responsible” union leaders.
The Swope Plan was recognized at the time as an obvious flirtation with the
economic order of fascism that had already been established in Italy by Mussolini and
was then being proposed by Hitler in Germany, and Hoover accurately denounced it as
such. Fearful of so far-reaching a step, Hoover stepped back from the abyss, while
others, including John J. Raskob and Pierre and Irénée DuPont, stepped forward.
The Swope Plan, in many ways the child of Hoover’s own encouragement of trade
associations throughout the Twenties, won wide acclaim in the business community,
particularly from three powerful organizations, the National Association of
Manufacturers, the U.S. Chamber of Commerce, and the National Industrial Conference
Board. The DuPont's were active in all three, particularly the N.I.C.B, whose economist,
Dr. Virgil Jordan, solemnly declared that American business was ready for an
“economic Mussolini.”
7 Significantly, the chairman of the National Industrial
Conference Board was none other than Irénée DuPont.
Nothing has Changed
Irénée was in no way alone in his enthusiasm for such “planning.” From a poll of its
members in 1932, the U.S. Chamber of Commerce reported that 90 percent of its
members favored national planning of some sort. The American Legion’s 1931 national
convention proposed a “national defense council” for the purpose of immediate
concentration and utilization of the resources of the nation. In the summer of 1932 Owen
Young, chairman of General Electric, backed Swope with a call for “strong
government.” C. T. Revere, Wall Street broker, was a bit more candid, writing: “If any
country in continental Europe were confronted by a crisis of the character indicated in
the United States today, there would be a demand for a dictator. Unless conditions
improve—and improve very soon—we are not certain that we ourselves may not be
involved in a situation that may call for just such a step.” [And that is what the country got in FDR,if the reader cannot grasp that the Farm Act was straight out of the Bolshevik playbook.the same reader is left to wonder.The Congress
“Give the President,” spoke financier Henry I. Harriman in May 1932 “so far as it
can constitutionally be done, the right, when Congress is not in session, to suspend the
operation of existing laws and to provide for emergency measures required by public
welfare.” Harriman, who was elected president of the U.S. Chamber of Commerce later
that month, called for a reorganization of the Federal Trade Commission “so as to
enlarge the power of the trade associations and to permit them to adopt fair basic rules
governing the conditions under which each trade shall be carried on.” Echoing Swope,
Harriman suggested that “business itself establish its economic council to consider the
fundamental problems that affect all business.” The myth of anti-trust was fully
discarded; the trusts were now nakedly visible for all to see.
Even Alfred DuPont enjoyed his personal fantasies in this controversy over political
regimentation. “Were I a dictator of the United States today,” he wrote to a relative, “the
first thing I would do would be to cancel or repeal every bonus and every pension that
might be termed unearned, giving only to such as have suffered by injury or old age in
the service.… I would put every dollar to work in the country and in addition to that, I
would put every son of a gun, or daughter of a gun, back of that dollar and make them
work.”
8 Alfred even dreamed of an island prison surrounded by vicious sharks where
he would imprison, among others, some of his relatives. For people like Pierre and
Raskob he reserved a special treat: he would have them shot.[nice folks DC]
Pierre and Raskob’s political protege Al Smith, had more serious proposals,
suggesting in October 1931 that “to say the least, a mild form of dictatorship, honestly
operated, honestly intentioned, must be set up, or else we will simply have the promise
of relief on paper.”
9
Smith by then had reversed his earlier “retirement” from politics and was openly re-seeking the Democratic presidential nomination, backed again by Pierre DuPont and
John J. Raskob. And it was within this tense political atmosphere that DuPont, merely a
month earlier, made its first investment in Remington Arms, the second largest gun
manufacturer in the country, which, in turn, was also negotiating to buy an interest in
Winchester Repeating Arms, then in receivership. This DuPont investment, made
mainly for a gunpowder market, was charged three years later before a Senate
committee with having other, more military designs. But more on that later.
Pierre’s public political activities, however, centered around his continued campaign
for prohibition repeal and liquor taxes as a source of government revenue. In this
campaign he was joined by Raskob and Smith, both of whom were directors of his
National Association Against Prohibition.
On April 23, 1930, Pierre appeared before the House Judiciary Committee with a
thick volume of categorical replies to all the “dry” arguments. It was his finest hour.
“The people were surprised at the ratification of the Eighteenth Amendment,” he
claimed. “They may be surprised in a year or so by finding it repealed.” Then he
delivered the committee a stern warning, which, coming from a former chairman of DuPont and General Motors, struck a chord of concern throughout the hearing room. “No
one should refuse to submit questions to a vote by the people. To refuse is to invite
reference to that court of last resort referred to in the Declaration of Independence, in
these words of unmistakable meaning: ‘Whenever any form of government becomes
destructive of these ends [the security of the rights of the people], it is the right of the
people to alter or to abolish it.’”
A stir swept the room, but Pierre continued, citing violation of the Constitution by
Congress and the executive branch, the embarrassment of the Supreme Court, and the
experience of liquor legislation in England, including statistical evidence. While giving
perhaps the most comprehensive testimony against prohibition ever delivered before
Congress, Pierre also spoke in ominous terms.
“If there were such agitation over any other amendment as there is over this one,” he
said, “I would favor reconsideration of it, too.”
“Or reconsideration of the Constitution itself?” asked Kansas’s Congressman Sparks.
“Yes,” Pierre answered, looking straight at Sparks, “the Constitution itself.”
10
Such statements may seem strange in their force of conviction when they are
considered against the more burning questions of those days; they serve to demonstrate the limitations the “liberal” DuPont's imposed on themselves through their extreme
caution in making public statements in these early years of the Depression, and their
unwillingness to commit themselves ideologically to either the Hoover camp (which
they saw as feeble) or the Swope camp (which they mildly distrusted).
For Pierre, prohibition represented the only clear safe ground on which to publicly
stand in the political whirlwind, agreeing with Colonel Grayson M. P. Murphy (a
Morgan banker and broker who later allegedly played a crucial role with the DuPont's
in a more dangerous political conspiracy) that prohibition was harmful to industry. But
even there, on the secure turf of prohibition, the DuPont's were subject to mild
discomfort. On the same day of Pierre’s testimony, in one of the few perceptive remarks
of her tee totaling life, Dr. Mary Harris Armor addressed the National Conference of the
Women’s Christian Temperance Union, charging that “big business” sought to bring back
liquor so that “the poor man will drink the liquor to pay their taxes.”
11 Although Dr.
Armor never expressed much active concern for the plight of the poor whites and blacks
that constituted the majority of her own state of Georgia, nevertheless, even Pierre
couldn’t argue with her point, having long advocated a liquor tax to replace the tax on
corporate incomes. In this regard, Hoover’s National Law Enforcement Commission,
which tried futilely to find some solution to “the entire question of law enforcement and
organization of justice,” lent weight to Pierre’s cause, issuing a report which thoroughly
destroyed the notion that prohibition had reduced crime; in fact, it proved that
prohibition had created more widespread evils than ever. The commission, headed by
former DuPont lawyer and U.S. Attorney General George Wickersham, submitted its
report to President Hoover, who promptly filed it away, his dry convictions unshaken:
More effective than either Pierre or Wickersham was John Raskob: while others
talked, Raskob organized. What Raskob was organizing was to prove to be the most
formidable force in American politics for twenty years—a “new” Democratic Party.
2
RASKOB, THE PARTY BUILDER
Perhaps more than anyone else, John Raskob grasped the essence of the 1928 election
—the revolt of the cities.
In 1920 the Republican candidate, Harding, had carried all twenty-seven of the
non southern cities; in 1928 the Democratic candidate, Smith, won over eight of those
cities and made considerable gains in sixteen more. As Smith’s campaign manager and
Democratic National Chairman, Raskob had geared the Democratic appeal to the new
immigrant and migrant population that made up the bulk of the unskilled industrial work
force of the northern cities. The results of this strategy were conclusive: for the first
time since Wilson, the Democratic Party had won majorities in Boston, New York,
Jersey City, Providence, New Haven, Milwaukee, St. Louis, and San Francisco.
Torn by internal divisions and “Coolidge prosperity,” that revolt of Catholic and Jew,
of unskilled immigrants and dispossessed Anglo-Saxon farmers, had failed. But Raskob
was well aware that the social revolt of the teeming masses in the cities would continue
and intensify, and he was determined that its political form should remain and develop
within the confines of the Democratic Party, where liberal business reformers could use
it for their own purposes. With the Crash and growing social discontent, the importance
of confining the urban revolt within the Democratic Party was made even more
paramount. After 1929 the revolt of labor and the dispossessed became the driving
motor for a party steered by corporate leaders like Raskob, Pierre DuPont, Bernard
Baruch, and Gerard Swope, who all realized the necessity of structural reform in order
to save the basic system of private ownership and corporate control.
Raskob’s first move in this direction was to write off some of the 1928 Democratic
deficit with a personal contribution of $150,000. Pierre also helped, writing a check for
$25,100. These and an additional $735,000 in donations from Smith supporters,
including financiers Herbert Lehman, Bernard Baruch, and William F. Kenney, helped
soothe the party’s anger over the fact that the National Chairman, in his enthusiasm for
his friend, had overspent the National Committee’s $4 million authorization by some $3
million. John J. Raskob, “the man who made eighty millionaires,” had left the party
broke.
Criticisms of Raskob continued throughout 1929, particularly from Dixie Democrats,
many of whom had bolted to the Hoover campaign banner in 1928. This crack in “the
solid South” had been engineered by the resurgent Ku Klux Klan, whose anti-Catholicism
was not exactly appreciated by such a papal favorite as John Raskob.
During the last days of Smith’s campaign, KKK bigotry had so enraged Raskob that he
exploded in a public attack that many claimed lost Smith the election. Raskob, however,
was not a man to attack a force that was not a challenge: it was the fact that the Klan had
already been successful in its anti-Smith drive that prompted Raskob to drop his usual
calm demeanor. The election, it was clear, had already been lost.
After Smith’s defeat, Raskob correctly saw the Klan’s backwardness as the major
obstacle to his moving the Democratic Party forward and rebuilding it into an urban based
organization. What complicated matters for the chairman was the rich financing
the Klan enjoyed from many of Raskob’s fellow businessmen, providing the financial
backbone for a mass rural alternative to Raskob’s own plans for the party. It was this
rural strength that gave the Klan its danger as a powerful organization of the Right with
many analogies to European fascism: its backward ideological roots were deep in
country and village folk; its financial backing by the business class; its rabid anticommunism
and opposition to the labor movement; its use of minorities as scapegoats;
its stress on nationalism and racial “purity”; its hostility to many manifestations of the new urban culture of industrial society; its calls for a return to mystical visions of the
past; its “Spartan” opposition to sensual and indulgent living in the cities; and its
demand for a new social discipline, a new order to return to the ancient mystical virtues
of the “old pioneer” stock and its “Protestantism.”
It was this force, guided by the southern agricultural aristocracy who made up the
bulk of the Dixie bloc in Congress, that challenged Raskob’s leadership by demanding
his resignation. That Raskob was able to resist such pressure reflected the strength of
new urban forces in the Democratic Party. It was in the cities that the party had made
solid gains, cutting 900,000 votes from the Republican 1924 victory in New York alone.
After the crash the southern assaults intensified, reaching their peak in April 1930 in
the Senate. There, Senator Robinson, ranking Republican member of the Senate Lobby
Investigating Committee investigating the anti-prohibition lobby, called the Democratic
National Chairman before the committee in revenge for attacks by Democratic
committee members on Claudius Huston, Republican National Chairman. But Robinson
had another, more deadly motive: he was hoping to exacerbate dry-wet divisions within
the Democratic Party. Raskob, by affirming his $65,000 contribution to the National
Association Against Prohibition, gave the Republicans exactly what they wanted.
Thunderous demands broke out from Dixie for Raskob to resign. “Mr. Raskob’s own
testimony before the Senate Committee,” declared North Carolina’s Senator Simmons
on the floor of the Senate, “disclosed that the money he and others are contributing to the
Association is being used, or is to be used, for the defeat of dry Democrats who are
opposed by wet Republicans.”
12
From amid this storm, Raskob emerged calm and unmoved. “I have no intention of
resigning,”
13
the little Du Pont lieutenant quietly told Washington correspondents, and he
dug in, waiting for the barrage to end and the 1930 campaign to begin.
The election of 1930 strengthened Raskob’s hold on the party by providing new
leadership from the “wet” cities of the North. On a pledge of unemployment insurance,
Franklin Roosevelt was reelected governor by 750,000 votes, twice the plurality rolled
up by Governor Al Smith in 1922 when he set the Democratic record. Republican states
like Ohio and Illinois also elected Democrats, and unemployment insurance became the
battle cry of the Democratic organizations in New Jersey, Rhode Island, New
Hampshire, Nebraska, Idaho, and of course, Delaware. Vilified for months, the National
Chairman now became referred to as “canny, soft-spoken little Raskob.”
14
For Raskob, the question of unemployment insurance was entwined with the question
of how to finance it. Always, this returned him to the battle against prohibition, an issue
which he saw as an opportunity to both strengthen his hold on the “wet” North and purge
his “dry” enemies in the South. He became determined to push rural southern forces into
a confrontation.
At the Democratic National Committee meeting in Washington, D.C., the following
March, Raskob submitted Pierre’s “home-rule” liquor plan, warning that if it were
rejected, “we must squarely face the fact that our party is really divided into two
parties”
15 of the rural “dry” South and the urban “wet” North. Boos, jeers, hisses, yells,
and cheers filled the hall which, according to one report, “bordered on the riotous.”
Worried over a split which would hurt the party’s election chances in 1932, Franklin
Roosevelt, then the front runner for the presidential nomination, sided with the South,
holding that only the National Convention could voice party policy. Roosevelt was
obviously consolidating his position for the nomination. The Raskob-Roosevelt feud
was on.
Raskob walked out of the National Committee meeting empty-handed, only to pursue
his campaign the following month. In April he sent out a memorandum asking every
member of the National Committee to send in his individual position on major issues,
particularly prohibition. The results, he explained, would be tabulated and submitted to
the National Convention.
Again an uproar. “The best service that Mr. Raskob can render the Democratic
Party,” cried the Raleigh News and Observer, “is to pay up the debts he contracted and
get out of the chairmanship.”
16 The Republican press had a heyday. The New York
Herald Tribune, organ of the Republican Mills-Reid family, printed a cartoon showing
Raskob forcing the Democratic mule’s face into a barrel of whiskey, while saying, “If
you don’t want to drink, all right, but at least say so.” Likewise, the Ford-controlled
Detroit News showed Raskob at a restaurant table bellowing for a beer, while a
tee totaling “Miss Democracy” held her head in mortification.
But Raskob’s letter was in reality a shrewd call for a vote which had been denied
him at the Washington meeting. As one admiring national magazine put it, “For ‘an
amateur in politics,’ Mr. Raskob seems to be getting things he wants and to want things
worth getting.”
17 The vice president for the National Association Against Prohibition
had the “drys” and their rural southern power on the run.
Raskob’s next move was to centralize the Democratic Party. He put up $122,000 to
open a permanent national headquarters in Washington for daily work, abandoning the
previous approach of a national presence only four months every four years. There,
Raskob placed as head Jouett Shouse, a popular wet Missourian; he held a dinner in
Shouse’s honor, mentioning only his own intention not to resign before slipping away to
leave Shouse in the limelight and everyone with the impression that he had delegated his
authority to another. Hardly.
Through Shouse and his $25,000 publicity assistant, Charles F. Michelson, Raskob
worked silently and unseen, enjoying his anonymity. While publicly dismissed as “the
man who puts up the dough,” Raskob moved deftly behind the scenes, building his organization in the cities, bringing in the labor movement, particularly the Teamsters
Union. In the South he supported challenges of party loyalty against Dixiecrats who had
abandoned Smith in 1928. Purges occurred in South Carolina, Virginia, Alabama, and
North Carolina. Although everywhere bolters were forced out through well-financed
primaries or challenges that put them into the political isolation that set them up for the
chopping block, nowhere was the hand of the little butcher from Wilmington publicly
seen. By the end of the year, Johnny Raskob had consolidated the Democratic Party from
a battered, incoherent organization into a party moving faster and faster toward
assuming a positive urban character.
As the national spokesman for the Democratic Party, Raskob offered proposals that
reflected this new power base, suggesting old age and unemployment insurance and his
old favorite, a five-day week without a diminution of weekly wages, a sharp contrast
with Hoover’s “share-the-work” policy which encouraged accompanying wage cuts.
“The last [the five-day week] we have, in eminently good company,” Raskob stated,
“been urging as a solution for the present unemployment caused by the improvement of
machinery, and for the depression of business caused by the falling off in buying power
because of unemployment. Old age and unemployment insurance, we believe to be the
bulwarks for the capitalist system against communism. With the capitalist system
effectively producing abundant wealth, it should be able to assure these human
minimums to all its people. These are the greatest fears, old-age pauperism and
unemployment, which if left unsatisfied might drive the masses to put their faith in
another social order.”
18
Raskob backed Swope’s protege, U.S. Steel president Owen D. Young, in his presidential ambitions. But like Hoover, he also stepped back from endorsing the Swope Plan’s call for a formal move toward a centralized state capitalism. Government should stay out of business, Raskob felt, “except to safeguard the public by regulation against monopoly and unfair trade practices.” Beyond this tongue-in-cheek concession by a DuPont G.M. director to political expediency, Raskob’s corporate intentions were clarified by a proposal “that citizens contemplating a business merger may beforehand obtain by the decision of a federal commission an assurance not only that their labor shall not have been in vain, but also that they will not be subject to criminal prosecution under the terms of the Sherman Law. Businessmen, we believe, will favor these suggestions as being helpful and fair.”
Many did. But some, like Swope and Baruch, felt Raskob’s suggestions were also inadequate. Already, John Garner, Speaker of the House, was proposing that Congress give the President almost dictatorial powers, while Roosevelt, who had enjoyed backing in 1930 from Baruch and Young, expressed interest in Swope’s proposals. Subsequently, Young endorsed Roosevelt.
Then Raskob made one fatal mistake. His personal crusades, whether in the form of prohibition or his friendship with Al Smith, prompted him to launch a prohibition poll of 90,000 contributors to the 1928 war chest, most of whom were wets. As this put Roosevelt in an awkward position as a “moderate wet” between anti-prohibitionists and the southern support he had won by his non-committal stand at the Republican National Committee meeting, the poll would definitely hinder Roosevelt’s nomination chances.
“It is unfair,” Raskob answered, “to suggest that I am using my position as National Chairman to help or hinder any candidate.” 19 Yet it was clear that Roosevelt opposed any plank which would read out of the party anyone who wished to be prohibitionist in his local election. Raskob’s credibility as National Chairman began to slacken among his former northern liberal supporters. When Raskob joined Garner in supporting the Republican proposal for a federal sales tax, the battle lines were drawn. Roosevelt made his appeal for the “forgotten man,” and Al Smith came back fighting. “I will take off my coat and fight to the end,” retorted the crusty little banker, “against any candidate who persists in any demagogic appeal to the masses of the working people of this country to destroy themselves by setting class against class and rich against poor.” 20 Raskob announced his support of Smith and the battle was on.
Actually, it had already begun. In January 1932, soon after Raskob’s prohibition poll, ugly reports began appearing in the national press connecting the party’s debts to Raskob’s control. The influential New York Times charged that the National Chairman “has soaring ideas about the tariff and prohibition, which, through merit acquired by his generosity, and a steadfastness in bleak Democratic weather, he hopes to get into the party platform.” 21 In response, Raskob could only hurl charges of religious bias at those who raised the issue of the party’s debts.
Yet the attacks continued; the liberal New Republic called for an end to his “one-man control” of a national political party by the whip hand of money and credit: “He, on his part, tempted by the prospect of dictating a platform, naming a candidate, and perhaps running an administration, has connived rather than protested at the rising debt obligation.
“The Democratic Party’s debt to Mr. Raskob is now the largest known political commitment in our history. It is nearly three times as large as the Republican ‘debt of gratitude’ that gave us Teapot Dome. Nor is it an outright gift, one that might, for theory’s sake, leave the party free. Mr. Raskob has given his party some money, but this is a living loan, an indeterminate mortgage—the sort of debt that reeks of obligation.… The debts that Chairman Raskob was influential in incurring, Banker Raskob has taken up.” 22 [Now that is interesting because Teapot Dome was something the other side would not let go,and is taught as part of 'official' history today in 2018 DC]
So stinging an attack would normally draw a heated response. But there was none.Nor could there be, since Chairman Raskob was indeed Banker Raskob. After the 1928 disaster a $400,000 note in the party’s name was left in the hands of the County Trust Company of New York. The late James J. Riordan, Al Smith, W. F. Kenney, and Raskob himself had all contributed to Smith’s campaign and were also all directors of County Trust. Curiously enough, the Democratic note was underwritten by Democratic officials Riordan, Kenney, and Raskob. By March of 1932, when the New Republic article appeared, $33,766 had been added by the bank to the debt as accrued interest.
Raskob’s new Washington headquarters, likewise, had cost $10,000 a month to operate. By January 1, 1932, the party owed Raskob $354,250 for this alone, raising the grand total of notes held by Raskob to $779,106. 23 Although Pierre’s $5000 in 1930 and $12,500 and other contributions in 1931, and Raskob’s own $125,000 donation in 1932 (accompanied again by a check from Pierre for $27,000), helped eliminate much of this debt, 24 the publicity damage had already been done.
The publication of these facts did not enhance Raskob’s image among the party’s new urban rank and file, nor did his endorsement of Al Smith, who had lost most of his New York power base to his successor, Governor Franklin Roosevelt, the creator of the country’s first comprehensive system of unemployment relief and a strong proponent of public power works. By the time of the convening of the National Convention in Chicago late in June 1932, it was apparent Smith could not win. Pierre, Raskob, and Baruch then convinced Smith to throw his support over to former Secretary of War Newton Baker in an effort to block Roosevelt’s nomination. “I was four years ahead of my party,” a dejected Al Smith told the convention, “and look what happened to me.”
Between the candidacy of Baker and that of Texas’s John Garner (who was backed by newspaper magnate William Randolph Hearst, William McAdoo, and the Ku Klux Klan), Raskob had succeeded in preventing Roosevelt from gathering the two-thirds vote necessary for nomination. By the fourth ballot, only pressure from Louisiana’s Huey Long prevented the Mississippi delegation from beginning a desertion from the Roosevelt camp that might have turned into a disastrous rout.
Fortunately for Roosevelt, Smith had made many enemies. William McAdoo, who
controlled the large California delegation, held a deep grudge against Smith for
preventing his own nomination in 1924 by similar means. Nor were Klan forces from
the South any friend of “the happy warrior” or Raskob, and Hearst hated the
internationalist Baker almost as much as he did Smith. The outcome of this animosity
toward the Smith camp came late in the evening when lean William McAdoo mounted
the speaker’s platform to announce that California was casting its 44 votes for
Roosevelt. The Smith galleries jeered, but the dam had burst. Within minutes, riding a
flood of endorsements, Franklin D. Roosevelt was the Democratic nominee for
President.
A master compromiser, Roosevelt selected Garner as his running mate while also moving quickly to placate the DuPont forces. A. Mitchell Palmer, the Attorney General under Wilson who had secured German dye patents for the DuPont's, was asked to draft the nominee’s platform. A conservative document, Palmer’s platform ignored unemployment and Roosevelt’s “forgotten man.” In their stead, prohibition was raised as the main issue of the campaign. Raskob continued as National Chairman, and his labor lieutenant, Irish Catholic Dan Tobin, head of the Teamsters, was named head of the Democratic Labor Committee.
Roosevelt received substantial aid from Pierre and Raskob. Pierre donated $15,000 and Raskob $23,000. 25 But the greatest boon for Roosevelt was Raskob’s national party machine, based in Washington with political strings to every American city. Without it, campaign manager Jim Farley would have been hard put to wage an effective unified campaign capable of turning out the vote in such large numbers as was done.
Roosevelt’s was a low-keyed campaign, completely avoiding any statement on collective bargaining (despite a plea by John L. Lewis), deficit spending, the NRA, federal housing, or increased income taxes on the wealthy, and in fact it was often contradictory. Roosevelt contented himself with attacks on Hoover’s expenditures, while he advanced unemployment-aid and public works that would require huge sums of government spending. He called for an end to growing centralization of power in Washington, yet proposed planning and federal regulation of utilities and the stock market. In all this, his tone was low and even at times discordant, allowing public animosity toward Herbert Hoover to win his vague case for him.
Hoover’s image had already suffered a crushing blow by the Depression. Industrial production was down 50 percent, according to the Federal Reserve Board; iron and steel, 85 percent; lumber, 77 percent; cement, 65 percent. Factory payrolls had been slashed 65 percent, employment 44 percent. Over 13 million workers were jobless and over 4,000 banks had failed.
But the coup de grâce to Hoover’s career was delivered in June 1932, by his own hand. A “bonus army” of thousands of tired, unemployed veterans and their families arrived that month in Washington demanding a federal bonus promised them by law, but not payable until the 1940’s. They had traveled thousands of miles in battered jalopies, trucks, and wagons; many had even walked. And when Hoover wouldn’t even receive them, they pitched tents, erected shacks, and slept in the capital’s parks to petition Congress. As soon as Congress adjourned after refusing to grant the marchers any relief, Hoover made a show of force. On July 28 a police attempt to evict some of the squatters resulted in the killing of two veterans. Hoover then called in the Army. Army Chief of Staff General Douglas MacArthur, who described the marchers as “a mob … animated by the essence of revolution,” 26 delayed the use of troops only long enough to have his swagger stick and medal-covered uniform arrive from a nearby fort.
Aided by Colonel Dwight D. Eisenhower and Major George Patton, MacArthur ordered tanks, four troops of cavalry with drawn sabers, and a column of steel-helmeted infantry with fixed bayonets to enter downtown Washington and advance on the unarmed veterans. From Pennsylvania Avenue, MacArthur’s proud army marched across the Anacostia Bridge, thousands of veterans and their wives and children fleeing before them, and advanced on their shanty village, lobbing tear gas bombs and setting its shacks and tents afire. An infant died from the tear gas, an 11-year-old boy was blinded for life, and many veterans were wounded. MacArthur, responding to a reporter’s claim of having seen a cavalryman use his saber to slash off a veteran’s ear, explained, somewhat amused, that that was quite impossible. “You don’t slash with a saber,” he told the press, “you lunge,” 27 and, striking the correct pose for photographers, he demonstrated the proper thrust.
That night, from the windows of the White House’s Lincoln Room, Hoover watched the red glow from the burning camps in the southeast and retired. The next day the press was informed that “the President was pleased.” 28
Such crude brutality only spurred desertions already underway in Hoover’s ranks, even among some leading Republicans. After Roosevelt privately expressed interest in the Swope Plan, corporate desertions mounted. Finally, Henry Harriman, president of the U.S. Chamber of Commerce, confronted Hoover with the fact that FDR had agreed to the Swope Plan’s enactment. If the President persisted in his opposition, he warned, he would lose the support of many leaders in big business.
Hoover persisted, and many of the most “enlightened” corporate leaders, particularly in the light-goods industries who suffered most immediately from the loss of retail sales, decided to throw their full weight behind Roosevelt. Among Roosevelt’s top supporters were W. N. Reynolds (R. J. Reynolds Tobacco), William K. Vanderbilt, Cyrus McCormick, Edward Harkness, Edward Guggenheim, Jesse Straus (R. H. Macy Co.), Harry Warner (motion pictures), and Mrs. Harry Payne Whitney. Many were registered Democrats; others, including Republican senators Robert La Follette, Jr., Hiram Johnson, George Norris, Smith Wildman Brookhart, and Bronson Cutting, were not. Additionally, rumors persisted of secret Rockefeller contributions despite their public donations to the Republican ticket, their traditional stronghold.
Other than Pierre, most of the DuPont's were publicly for Hoover, although many with
some private reluctance. “We may not yet be coming out of this depression,” Lammot DuPont told some 400 Buick dealers convened in New York, “but we are on the verge of
coming out of it.”
29 Publicly, Lammot backed his convictions with a $30,000 donation to
the Republican treasury; privately, he voted for Roosevelt. R. R. M. Carpenter gave
$19,600, Walter Carpenter gave $2,000, William DuPont, Jr., gave $5,500, and Irénée, $10,200.
30
(Irénée also voted secretly for Roosevelt.) In the Republican camp they were
joined by most of the richest families: the Morgans, Bakers, Carnegies, Fords, Pratts,
Mellons, Firestones, most of the Guggenheims, and ever reliable Alfred Sloan. Many of
these, however, may have noted the temper of the country and, like Lammot and Irénée,
saw Hoover’s cause as already lost.
The White House, sensing the inevitable, was a palace of gloom. “If you put a rose in Hoover’s hand it would wilt,” 31 remarked sculptor Gutzon Borglum. “Down with Hoover, slayer of veterans!” was Hoover’s only greeting on a campaign visit to Detroit. Thousands of auto workers lined the streets of that city as he passed by, but they remained sullen and silent. When the President finally arrived at the speaker’s platform, his face was ashen, his hands trembling. Hoover looked a pathetic, beaten man. A “hero” only four years before, Hoover was now the national villain.
Election day came almost as an anticlimax, Roosevelt’s 22.8 million votes totally overriding Hoover’s 15.75 million. Roosevelt’s victory was clearly a city return based on the vote of labor and the rural disinherited. Roosevelt swept thirty-two of the thirty six largest cities. For the first time since before World War I, a Democratic candidate had won majorities in Cincinnati, Indianapolis, Cleveland, Chicago, Detroit, Pittsburgh, Baltimore, Minneapolis, Kansas City, Salt Lake City, Denver, Seattle, Portland, Oakland, and Los Angeles. Two hundred and eighty-two counties were won that had never before gone Democratic. The South, based on the returns in its cities, had again become reliably “solid.” Miners of the six Appalachia states also joined the Democratic landslide, giving Roosevelt 39 of 45 counties. Many Blacks abandoned their traditional loyalty to the party of Lincoln, a desertion no doubt aided by their increasing migration from rural Dixie to the industrial cities of the North.
It was the most dramatic electoral reversal in American history, and Roosevelt owed much of it to the Democratic National Chairman’s four-year effort to build an urban based party. It was Raskob who had financed the party through its difficult transition years. It was Raskob who had formulated the grand urban strategy and forged a coherent, centralized organization. And it was Raskob who had grasped the lightning of the urban revolt and put it in the Democratic machine to power it to victory. As Charles Michelson, Democratic Party publicity director, put it two months after the election, Raskob was “the man who saved the Democratic Party.” 32
Whatever pangs of conscience Henry may have had privately, he showed none in public. When Julia’s father, Manuel Avila, sued for the loss of his daughter, Henry, true to family tradition, claimed innocence and for six months fought the suit in court. The jury, however, was not convinced and finally ordered him to pay Julia’s family $11,168.
Such a sum was a small fortune in those grim days of the Depression, when children went to school in shoes soled with cardboard and some witnessed their unpaid teachers passing out in the classroom from lack of food. Yet for the DuPont's, $11,000 was an expendable pittance from a financial reservoir grown even larger since 1929. For, despite its bitter bequest to most Americans, the Depression had been kind to the DuPont's. In fact, in terms of the competition it destroyed and the avenues for cheap investments it provided, the Great Depression had been very kind, indeed.
Alfred I. DuPont, for example, continued collecting failing banks in Florida,
complaining that he had to tighten his belt and was able to spend “only” $300,000 to
have the new architectural firm of his son Alfred Victor complete America’s rival to the
sunken gardens of Versailles: Nemours.
Likewise, William DuPont, Jr., began designing the Delaware Race Track, the first of twenty-five such ventures around the world, while directing the $50 million investment of the American Horse Shows. Meanwhile, Anthony Drexel, the husband of Francis G. DuPont’s granddaughter, rode the green as a leading player of that most aristocratic of sports, polo.
Henry F. DuPont pursued his epic wanderings through the country’s shops and auctions in search of antiques for his Winterthur mansion, now expanded to 180 rooms. In 1930 he lent his art experts to police to track down fraudulent dealers who had undermined the market. Ernest DuPont, whose home was robbed of $50,000 to $75,000 worth of jewelry in 1931, engaged in a similar hunt, only to be shocked with the revelation that the thief was his own maid.
The Depression, like previous panics, also provided the bankruptcies and credit shortage of which empires are made, and the DuPont's used the crisis to expand their holdings into many new fields of investment.
With land prices plummeting, Maurice DuPont became president, treasurer, and director of Realty Accumulating (sic!) Company and the Great Hills Improvement Company. Francis I. DuPont joined the New York Cotton Exchange and became a director of the Missouri-Kansas Pipeline Company. Raskob increased his financial holdings, adding American Surety Company, Emigrant Industrial Savings Bank, and American International Corporation to his DuPont, G.M., Missouri Pacific Railroad, and County Trust directorships. Donaldson Brown, DuPont in-law and G.M. director,also became a director of the St. Louis-San Francisco Railway. Walter Carpenter, Jr., joined the board of Bell Telephone of Pennsylvania.
DuPont executives also followed DuPont investments. Vice President Jasper Crane joined the board of D. Van Nostrand Company; Harry Haskell, Sr., the boards of Noranda Mines, Ltd., International Mining Corporation, Triplex Safety Glass Company, and Equitable Trust of New York; Leonard Yerkes, the board of Seabord Air Line, a firm many naive stock investors had mistaken during the Twenties for an airline with growth prospects. William P. Allen became chairman of Childs (Restaurants) Company of New York, and Francis B. Davis, settling into his new post as head of U.S. Rubber, also served as the president of Sampson Corporation and director of New York Trust Company, Malayan-American Plantations, Ltd., Meyer Rubber Company, Nangatuck Chemical Company, Dominion Rubber, Ltd., Rubber Plantations, Ltd., Columbus Rubber Company, Ltd., and U.S. Rubber Plantation Products.
Irénée DuPont joined the board of the troubled Reading Railroad (which he left in
1935), while Eugene DuPont invested heavily in Phillips Petroleum, Inc., and the
Delaware Motor Sales Company. Eugene’s life was not all pleasant during these days,
however, for his was the only DuPont home in which tragedy struck during the decade.
One day, while decorating a chair in the studio of her Dogwood estate, his wife forgot
that she had left the car running in the closed garage that was directly below. After a
while, she grew drowsy and fell asleep; she never awoke.
Besides that unhappy experience, the DuPont's ran a streak of luck in the early Thirties. Alfred, on a trip to Cairo, stopped in a curio shop and bought for $17.50 a vase in which he found a strange mineral formation. Later his chemists uncovered a fortune in gold and silver coins dating back to Ptolemy, 300 B. C. His cousin and fellow exile, William, Jr., received a boon of a more traditional nature. Wilmington’s federal judge ruled that four transfers of his father’s amounting to $6,433,000, which had been made to old Willie’s children two years before his death, were not made “in contemplation of death,” and ordered the Internal Revenue Service to begin repaying Junior the taxes paid on his father’s estate.
A more personal treasure came to Richard C. DuPont in 1932—his life. While he was cruising in the West Indies with his cousin Victor DuPont and friends Thomas Laffey and Scott Townsend, Richard’s sloop, the Nahma, disappeared. Frantic, the DuPont's made a special appeal to the U.S. Coast Guard to spare no expense in a search. A. Felix, Sr., was already in Norfolk organizing an expedition to save his son when an Army transport reported finding the sloop foundered off the Carolina coast, all hands alive and well. The ship carried the young men to Panama where, like proper DuPont's, they refused the pauper’s aid of the Salvation Army and headed for home assuring all they could care for themselves. They did.
This harrowing experience did not diminish Richard’s flare for danger one bit. He continued his glider flying, which won him world distance records and the National Soaring Championship in 1934, 1935, and 1937. In that last year he also won the $1,500 Silver Evans Trophy for flying his glider into two thunderheads and riding them successfully for the first time in history. His father, A. Felix DuPont, Sr., and brother, A. Felix, Jr., were also airplane buffs. Felix DuPont, Jr., even built a cradle in his plane for his 4-month-old son Felix III. All these DuPont's managed to crash occasionally, but always without serious injury. A. Felix, Jr.’s 19-year-old wife, the former Eleanor Hoyt (who was Lindbergh’s 16-year-old pilot after his triumphant return from Paris), also skimmed the brink of aerial disaster. Flying home to Wilmington in her familiar scarlet monoplane, she encountered a blinding fog over Staten Island and dropped down, trying to fly beneath the clouds. The mist was so bad she was barely able to sight an open field, and she decided to try to land. As she approached the ground, the plane suddenly hit a high wire fence and crashed. Fortunately, she was neither far from Seaview Hospital nor seriously hurt, and later was whisked away by private ambulance to her mother’s luxurious home in Manhattan.
None of these incidents dimmed the DuPont craze for airplanes, Henry B. DuPont increasing his holdings in Trans World Airlines (over which he reigned as chairman), Bendix Aviation, and North American Aviation (which also owned Eastern Airlines until 1938, when it was sold to Kuhn, Loeb, & Co. and Smith Barney & Co., Wall Street brokers). Apparently, the only serious aerial casualty the family suffered during the Thirties was a year-old heifer. Peacefully grazing on Coleman DuPont’s Irvington on the Hudson estate, the heifer dropped dead from fright as a roaring U.S. Army air armada swooped overhead toward New York City.
Coleman’s son Frank had less aerial ambitions. Francis V. DuPont succeeded his father as president of the Equitable Trust Company of Wilmington and managed Coleman’s substantial investments in McHenry Coal Company, Jellico Mountain Coal Company, Louis Sherry, Inc., and Savarin Restaurants. By 1937, while others had gone bankrupt, Frank had expanded into Empire Trust Company, Continental American Life Insurance Company, and Prudential Investors.
Pierre DuPont’s holdings also increased. He became a director of the Pennsylvania Railroad, largest railroad in the country, and joined Raskob in building the Empire State Building, tallest building in the world—all this while retaining directorships in DuPont, Wilmington Trust, and General Motors.
DuPont control of General Motors was further intensified in 1931 when their arch foes, the Fishers, were bought out. Subsequently, the Fisher Body Division bought increasing amounts of paint, varnish, and imitation leather from DuPont. In addition, that same year G.M. signed a contract with the DuPont's U.S. Rubber Company,agreeing to buy one-half of its tires from U.S. Rubber at market value in exchange for rebates. By 1934 these rebates amounted to $1,437,087 to the Chevrolet Division alone. The following year showed a $1,044,516 rebate, all in violation of anti-trust laws. 33 DuPont had other areas of G.M. locked up as well, as General Robert E. Wood, president of Sears, Roebuck and Company, discovered when he wrote DuPont Vice President W. F. Harrington in 1938 for permission to use Freon gas. “Very much to our surprise, we find that the [G.M.] Frigidaire Company has an exclusive arrangement for the use of this gas from [DuPont] Kinetic Chemicals, Inc. We know this has always been contrary to the policy of the DuPont Company—as a matter of fact, it is contrary to government policy.”
“I am appealing to you,” wrote Wood, reminding DuPont that Sears “has been a very large customer of the DuPont Company for many years and has maintained the most friendly relation with the DuPont Company.” 34 To no avail.
While other companies foundered, DuPont, with as much as 30 percent of its income coming from G.M. dividends, grew stronger during the Thirties, no doubt helped by its lack of outside funded debt, a trait characteristic of the chemical industry in general. In 1929, when the national average of eighteen of the largest companies earned 15.1 percent on their investments of capital, DuPont earned 17.3 percent. In 1930 the national average of 10.3 percent was still below DuPont’s 10.6 percent. By 1931 the national average had slipped to 7.8 percent, DuPont, still 10 percent; in 1932, 4.6 percent, DuPont 5.2 percent; in 1933, 7 percent against DuPont’s 7.8 percent; in 1934, 9.1 percent, DuPont 9.4 percent. From 1929 to 1931, in the depths of the Depression, Lammot still paid handsome dividends of at least $4.00 a share. Only in 1932 and 1933, when earnings slipped as low as $1.81, did he cut dividends to $2.75, only to raise them again in 1934 to $3.10, leaving over $115 million in working capital. 35 Key to this success, of course, was labor peace, which the vast reserve of unemployed in the labor market helped to enforce.
In 1931—the year the family installed the world’s largest oval table (30’ by 72’ of solid Brazilian mahogany) in their DuPont board meeting room—another “DuPont” company of national impact appeared on the scene: F. I. DuPont & Co. No sooner had the pillars of Wall Street stopped shaking from the Crash, than Francis I. DuPont jumped into the frozen investment waters, gambling that its low quotes would soon heat up again. Opening a brokerage house on Wall Street when the Dow-Jones Industrial Average was stagnating below 42 was a big risk. “I remember one day in 1934,” his son Edmond recalled years later, “when total volume on the New York Stock Exchange came to only 274,000 shares. My father tore off a section of the stock tape with that figure and handed it to me. But he was a scientist. He wasn’t downhearted by the Stock Market. He felt that corrective forces already were at work then at a time when the future looked black.” 36
Francis was not alone in this belief in “corrective forces.” Pierre, looking beyond the tired Hoover excuses that the market was only “shaking out” its overvaluation, had developed an enthusiasm for the Swope Plan and its dramatic enactment through Roosevelt’s NRA. The National Industrial Recovery Act, drafted mainly by Swope and Henry Harriman as a quick response to Senator Black’s thirty-hour-week bill, was one of the milestone laws that came out of Roosevelt’s 100-day “honeymoon” with Congress. It was also the hallmark of Roosevelt’s short-lived honeymoon with the DuPont's. Black’s thirty-hour week bill had been endorsed by AFL’s William Green as one that struck “at the root of the problem—technological unemployment,” and had been passed by the Senate. Swope, meanwhile, had already been working on a scheme of trade associations based on his experience with industrial mobilization and the War Industries Board during World War I. Presented as a compromise, and endorsed by labor legislator Senator Robert Wagner as “the first step toward a nationally planned economy,” the bill became law.
Pierre joined Swope on the NRA’s Industrial Advisory Board, and in December was elected chairman. “I feel that the result of the National Labor Board’s efforts will do away with strikes,” 37 he enthusiastically told the American Arbitration Association a month later. The N.L.B was Pierre’s darling, a way by which huge corporations like DuPont could enforce labor peace through arbitration, while at the same time burdening their smaller rivals with enforceable codes. Small industries correctly recognized this legalized discrimination of capabilities to meet organized labor’s needs as a further step by monopoly capital toward consolidation of power. As chairman of the Industrial Advisory Board, Pierre responded to their complaints by admonishing them: when they’ve “learned to settle their grievances in the proper way,” he explained, “and not by strikes and refusing to abide by their codes, there would cease to be these talks about hardships.” 38 This was not only corporate power speaking; it was the tone of history, of increasing and inevitable economic concentration.
For the first year of the New Deal, Roosevelt received general support from DuPont's. His public works program for the Tennessee Valley, the TVA, was fully endorsed by E. Paul DuPont: “Nothing, I believe, could be a better plan for recovery.” 39 Pierre, in addition to joining the N.R.A and its National Labor Board, also accepted appointment to the Business Advisory and Planning Council of the Department of Commerce. Irénée, despite his Supreme Court conviction for trying to evade taxes on $150,000 for 1924– 1926 through trust funds for his wife and children, also gave Roosevelt his endorsement and a check for $5,000. When FDR, responding to the domestic rush of bank deposits and the international rush on gold, ordered a Bank Holiday and called for private hoarders to turn over their gold to government reserves, Irénée cheerfully surrendered the many gold pieces he had accumulated as director fees over the past twenty years—to his own Wilmington Trust. “On my return from Cuba yesterday,” he announced to the press, “Mrs. DuPont asked me to deposit them in your institution. She feels it is her duty to get them into the government’s gold reserve, which I understand will be accomplished by this deposit.” 40 That year he donated $5,000 to the Democratic Party. 41 When FDR finally had to depreciate the dollar, even Lammot announced his approval, claiming that “Nothing can be more important to business than absolute certainty as to the basis of money, which is the medium of exchange in all commercial transactions.” 42 Roosevelt was balancing the budget, and the DuPont's were ecstatic.
What in Italy and Germany required violent coups and fascist parties to achieve, Roosevelt accomplished bloodlessly in his first 100 days, pushing through the new Democratic Congress an enormous federal, and particularly executive, centralization and regulation for the country’s political economy: The NRA, a $500 million unemployment relief bill, a farm subsidy bill (he would later restrict farm production), a railroad regulation bill, a Federal Deposit Insurance Corporation to shore up failing private banks, a public power bill (TVA), a Home Owners Loan Act, and the beer bill.
In December 1933 the twenty-first Amendment was ratified and prohibition ended. Pierre became Delaware’s first Liquor Commissioner, happily collecting the revenues he thought would soon replace the income tax. But in some ways it was a bitter victory. The man most responsible for giving the American people the chance for voting on prohibition and its repeal, John J. Raskob, the man who had built the Democratic Party into an urban power, had been summarily deposed by Roosevelt right after his election. From that day on, Raskob’s suspicion of “radical” Roosevelt grew. Throughout 1933 he watched the presidential drama with cautious support, waiting to judge the results and how they would affect the DuPont-Roosevelt honeymoon. His wait was not long.
For over 100 years this patriarchal relationship was the labor foundation of the company’s stability and growth. It was a hierarchical tradition which the DuPont's strove to maintain, not only because it represented what they considered the best and only way to make powder, but also because it gave them a double social power: on the one hand, it gave them influence over the entire life of their workers from their religion to the way they dressed; and on the other, because the male DuPont's were physically on the job with their employees and were familiar to them, a real bond held these workers together and separated them from workers of other companies. This, and the fact that DuPont workers were bound to the existing order by their simple interest in becoming managers or lower-echelon bosses themselves, effectively diminished their capabilities of self-realization as members of a working class, thereby retarding the development of their class consciousness.
It was this patriarchal attitude that guided DuPont’s labor policies throughout the reigns of E. I. DuPont, Alfred DuPont, “Boss” Henry DuPont, Eugene DuPont, and T. Coleman DuPont. As late as 1920, Coleman, an advocate of piecework, could maintain that an employee who needed a raise should put his trust in his boss’s good judgment. “If he has the right stuff in him,” he said, “and if he isn’t afraid to expend plenty of body or brain sweat to make himself a bigger and broader man, the matter of salary will work itself out quite satisfactorily in the end. As I said, I never asked for a salary raise in my life.” 43 Few believe Coleman DuPont ever needed to.
There had begun to be changes by then, however, symbolized by the closing of the old Brandywine powder works. Now DuPont's no longer worked with their men, but exchanged their blue overalls for a white shirt and tie. Mechanization and the assembly line was revolutionizing manufacturing, and the economic base for the hierarchical journeyman structure had been eliminated with the flood of unskilled labor into new DuPont plants during the war.
In the chemical industry, as in most other industries, mechanization enabled the unskilled worker to produce as much and more than the skilled journeyman. Whereas a skilled worker was capable of annually producing $3,239 worth of products in 1899, by 1929 an unskilled worker was able to produce $11,850 worth of products. 44 In 1931 the chemical worker’s output was 40 percent higher than in 1929, a mere two years earlier. This increase lowered the cost of labor, in chemical products, and while wages were increased to $23.40 a week in 1933 (higher than the $17.60 average for eighty-nine manufacturing industries), these wage increases barely kept up with the increase of chemical workers’ productivity. In fact, as its output increased, labor was getting a smaller and smaller piece of the pie. In 1919 wage costs amounted to 17.1 percent of the value of products; by 1933 they were only 12.4 percent. 45 The difference between the 17 percent and 12 percent was lost to the worker and went to the stock owners of the chemical corporations, the biggest of which was DuPont.
Such facts were proudly made known to DuPont stockholders but never released to DuPont workers, and they were the kind of facts a union would have brought to them. DuPont management knew this and enforced a strict anti-union policy.
The foundation of this policy was the preservation of the hierarchical work situation that separated their employees from each other. Although the economic rationale for the skilled journeyman had been generally eroded by mechanization, DuPont kept the hierarchical workplace structure for its social control benefits. Journeymen became integrated into the management ranks as foremen. On these men the DuPont's built the Works Council, a company union composed of management and workers, as a buttress against any organizing drive by independent outside unions. In an attempt to maintain the personal patriarchal relationship between management and worker, the DuPont's encouraged identification with the firm: a proud “You are a DuPont man” approach, reinforced by a stock investment plan. DuPont was the first company to develop a course on HOBSO (How Our Business System Operates) to inoculate blue-collar workers against creeping socialism. Capitalism, to the DuPont's, was civilization itself, and as such, had to be defended at all costs. Otherwise, as Irénée warned in the early Twenties, “a dark age” would befall mankind.
Pierre DuPont at first was confident that the NRA would not disturb an organization of labor so fundamental to the profit-generating efficiency of the entire chemical industry, and particularly DuPont. The NRA’s chemical industry codes, after all, had been drafted by DuPont and other manufacturers. Minimum wages were set in 1933 at 35 to 40 cents per hour, and that year the industry was already paying 56½ cents, and 61.9 cents in 1934. Hours also should have required no further adjustments in Pierre’s mind; a 40-hour week was set in 1933, when the industry’s average was already down to a 41-hour week, and the week was further reduced to 38½ hours early in 1934. Neither wages nor hours, Pierre believed, were issues that outside unions could use for an organizing drive. But to further protect DuPont, Hercules, Atlas, and other chemical manufacturers from such a possibility, they installed in the collective bargaining codes for the industry a provision giving management the right “to engage, promote, or release employees.” 46 Pierre was confident that everything was under control. “The Recovery Act,” he said in January 1934, “has provided an opportunity to deal with strikes in the way labor wants to deal with them, so eventually I think strikes will disappear.” 47 Pierre had reason to feel that way. Already, in September 1933, the National Labor Board had broken strikes at Weirton Steel Company and Ford Motor’s Edgewater, New Jersey, plant, leaving grievances unresolved.
This concern for dealing with strikes “in the way labor wants to deal with them”
reflected the collaboration given to Swope’s NRA by labor leaders such as John L.
Lewis and Sidney Hillman. These were leaders of unions in industries (mining and
garment) whose conditions were far different from those of the better paid chemical
industry; they represented the majority of the country’s industries. In order to alleviate
the deplorable working conditions and low wages that were prevalent, Lewis, Hillman
and others readily agreed to the suspension of anti-trust laws that would have blocked the codes of the trade associations that the NRA made law. Industrial leaders like
Baruch and Swope, in return, also accepted the necessity of majority rule for a “closed
shop” in order to give union leaders like Hillman and Lewis control over an otherwise
uncontrollable labor rebellion. Most corporate members of the National Labor Board,
which reviewed labor-management disputes, understood union policing was necessary
to their own business interests if corporate stability was to be maintained. They
accepted the New Deal concept of labor as an “interest group” in its own right, one
which cannot be coerced but can be controlled through enticements. Only one member
of the Board, whose immediate industry was not faced with labor rebellion, could not
understand this “big picture”—Pierre DuPont.
On March 2, 1934, Pierre filed the N.L.B’s first dissenting opinion. It was over the right of majority rule in deciding a plant’s unionization. Pierre opposed this interpretation of Section 7A of the National Industrial Recovery Act (which had guaranteed collective bargaining), insisting on the right of minorities and individuals to negotiate separately with the company, a position which would have effectively made unions impotent. The specific case involved a company which refused to deal with a railway union after it had been elected into the plant. Instead, it “bargained” with its own “employees committee,” a company union. The analogy to DuPont’s own Works Council was obvious. In fact, soon after, in order to preserve the “legality” of the Works Council, the DuPont's had to permit the withdrawal of management’s 50 percent participation. Company control, however, remained firm, although in other DuPont controlled companies, which yielded DuPont over 40 percent of its income in 1933, company unions were not as strong and were soon challenged by rank-and-file labor. With these challenges, the anxiety of the DuPont's grew.
March 2, 1934, marked the end of the DuPont-Roosevelt honeymoon. Within a short period, Pierre resigned from both the N.L.B and the NRA’s Industrial Advisory Board.
Actually, by then Pierre was the only DuPont who hadn’t already abandoned the Roosevelt ship of state. Three months earlier, in January, Lammot had blasted Roosevelt for going too far in his reforms. “The year 1933,” he stated, “has witnessed an adventurous attack by the administration upon the political, social, and economic ills of the country.” 48 Lammot announced he was being forced to discontinue DuPont’s stock investment plan for its employees because the burden of restrictions of the Securities Act of 1933 was “so onerous.” 49 This “onerous” law, drafted by Sam Rayburn and future Supreme Court Justice Felix Frankfurter, had required each new stock issue to be accompanied by a statement fully disclosing relevant financial information for public inspection, and held corporate directors like Lammot criminally and civilly liable in case of any misrepresentation.
Roosevelt passed other bills in 1934 that prodded increasing corporate desertions:
Stock manipulators like Raskob and Pierre were disturbed by the Securities Exchange Act, which created the Securities and Exchange Commission (SEC) to regulate the securities market.
The Air Mail Act, which stipulated rigid controls in awarding federal contracts, forced the dissolution of Henry B. DuPont’s General Aviation Corporation, 48.5 percent of whose stock was held by General Motors. General Aviation had owned 300,311 shares of Henry’s North American Aviation, and Lammot had invested G.M. funds also in North American, buying over one million shares, a 30 percent interest, and another 13 percent interest in Transcontinental and Western Air, Inc. The passage of the act caused losses and General Aviation’s distribution of its North American holdups, followed by dissolution.
The Communications Act, which created the Federal Communication Commission (FCC), was an attempt to regulate the airwaves and stabilize and cartelize the radio, telegraph, and cable industries, but was looked at suspiciously in Wilmington as a step toward “radical” government control.
The Railroad Retirement Act, which required pensions for railway workers, also did not warm the hearts of railroad directors like Pierre, Irénée, Donaldson Brown, and Raskob. Moreover, FDR’s abandonment of a balanced budget in favor of huge government spending projects marked a new step toward making deficit spending a permanent feature of federal financial policy. Lammot had opposed such tendencies during the Hoover administration, even though Hoover’s $6 billion deficit had been incurred in salvaging banks, railroads, and insurance companies through his Reconstruction Finance Corporation. Now, with most of these funds going for public relief, mostly to dispossessed farmers and unemployed workers, Lammot was fuming with anger.
Lammot simply did not understand the economic realities of his age. Technology, by increasing productivity, was altering the entire social fabric of the United States. For, while the absolute numbers of industrial workers had increased due to industrial development, the number of workers it took to produce a given volume of products decreased. The rate of increase of employment relative to production volume was decreasing. For the first time in history, mechanization was reversing the time-old pattern of accumulating living labor power in order to increase production and meet needs; now, a pattern of dis-accumulation—and with it, mounting technological unemployment—was developing. Roosevelt’s economic advisers understood this as a key factor in the unusual severity and length of this Depression. This was no usual cyclical bust, but a different kind of depression, with a whole new, complicating factor of technological unemployment, requiring the intervention of the government to provide income and consumer ability—through publicly financed work projects such as the W.P.A or post office expansion, even at the cost of bureaucratic waste.
The DuPont's displayed an increasing mistrust of the new Democratic Congress. The
shock of the House’s rejection of a sales tax in March 1933, and its imposition, instead,
of higher taxes on large incomes and inheritances, had only begun to wear off when in
February 1934 Senator Gerald Nye attacked munition makers as the main cause of
World War I. One month after Pierre’s futile support of the “open shop” on the National
Labor Board, the Senate, acting on the impetus of a Fortune article which verified many
of Nye’s contentions, authorized Nye to form an investigating committee. This was in
April 1934, when a book attacking munition makers like DuPont, The Merchants of
Death by Englebrecht and Hanighen (described even by Business Week as an
“exhaustive presentation of the facts”
50
), became a best seller.
The DuPont's prepared for civil war, convinced that a major socialist upheaval was imminent. This delusion was enhanced by the stormy atmosphere in which they were trying to maintain old values and older profits: strikes were sweeping across the country from southern textile mills to the northeast to San Francisco, where a general strike, led by Communists, strove to right economic injustices but actually had little political intent or consequence. Self-proclaimed “radical” mayors and a governor, responding to the desperation of the times, were threatening “big business” with taxes and controls. The membership of the A.F.L, enjoying a revival protected by the NRA’s collective bargaining clause, jumped from 2.2 million in 1933 to over 4 million in 1934, and Lewis, breaking with the A.F.L’s “skilled labor” prejudices, led an organizing drive among the unskilled millions of industrial workers which was soon to develop into the Congress of Industrial Organizations.
“Many people,” Ruly Carpenter wrote Raskob in March 1934, were confused as to why Roosevelt was “doing many things.” People were unaware of “much of the truth” of Roosevelt’s aims, and unaware that the President was strangling free press and speech. “Thousands of men,” he claimed, were leaving jobs for better pay with the government. “Five Negroes on my place in South Carolina refused work this spring … saying they had easy jobs with the government.… A cook on my houseboat at Fort Myers [Florida] quit because the government was paying him a dollar an hour as a painter.…” 51 Perhaps Raskob could go to Washington for an explanation?
Raskob rejected Carpenter’s proposal, replying on March 20 that he was “entirely out of politics since July 1932, and I am anxious to keep out.” 52 Raskob withdrew from personal activity shortly after the Democratic Convention nominated Roosevelt, performing only his functional duties as National Chairman. During that period, he wrote Democratic official Jouett Shouse that “when one thinks of the Democratic Party being headed by such radicals as Roosevelt, Huey Long, Hearst, McAdoo, and Senators Wheeler and Dill, as against the fine, conservative talent in the party as represented by such men as you, Governor Byrd, Governor Smith, Carter Glass, John W. Davis, Governor Cox, Pierre S. du Pont, Governor Ely, and others too numerous to mention, it takes all one’s courage and faith not to lose hope completely.” 53 Apparently, by the time of Ruly’s letter in 1934, the Twenty-first Amendment had severed the last anti prohibition ties to Roosevelt. In 1934, $400 million in liquor taxes went into the Treasury, yet the cut in income taxes the DuPont's had expected never materialized. By March 1934 Raskob had lost all hope in the New Deal Democrats, and suggested to Ruly an alternative—an independent political organization “encouraging people to work, encouraging people to get rich, showing the fallacy of communism in its efforts to tear down our capital structure, etc.”
Raskob encouraged Carpenter, who had organized the DuPont spy system during the war, to head the new organization. “You haven’t much to do,” he wrote, “and I know of no one that could take the lead in trying to induce the Du Pont and General Motors groups, followed by other big industries, to definitely organize to protect society from the suffering which it is bound to endure if we allow communistic elements to lead the people to believe that all businessmen are crooks, not to be trusted, and that no one should be allowed to get rich.” Then Raskob became more specific about power. “The reason I say that you are in a peculiarly good position to do this is that you are young enough to undertake the work, you have the time, you are wealthy enough to not have to depend upon a job or salary for a living, and are in a position to talk directly with a group that controls a larger share of industry through common-stock holdings than any other group in the United States. When I say this I mean that I believe there is no group, including the Rockefeller's, the Morgan's, the Mellon's, or anyone else that begins to control and be responsible for as much industrially as is the DuPont Company.” 54
Five months later, on August 15, 1934, the District of Columbia issued a charter to a new organization pledged to “combat radicalism”—The American Liberty League. Founded to “uphold the Constitution” and “to preserve the ownership and lawful use of property when acquired,” with a greater emphasis on property rights than civil rights, Irénée, Raskob, Al Smith, and Shouse made up four of its six officers.
The League’s national executive committee included John W. Davis of U.S. Steel,
Sewell Avery, president of Montgomery Ward and director of U.S. Steel, and Grayson
M.P. Murphy, a director of Guaranty Trust Company. These and six other corporate
leaders represented Morgan interests which were upset by Roosevelt’s abandonment of
the gold standard, the handling of J. P. Morgan before a Senate committee investigating
nonpayment of two years of taxes, and the passage of the Glass-Steagall banking act,
which was supported by and favored Rockefeller banking interests. Rockefeller
interests were also on hand in the League, but did not play leading roles. President
Alfred Sloan and Vice President William Knudsen, both DuPont proteges, represented General Motors.
The League’s Advisory Council completed the sketch of total DuPont defection from the Roosevelt camp: there, prominently displayed, appeared the name of Pierre S. DuPont and his wife Alice. But it was Irénée who was now the voice of DuPont, denouncing Roosevelt for “doling out other people’s money for relief.” 55
The legitimacy of the new government system itself was called to question as “unconstitutional.” The federal government, Irénée said, “apparently believes it can tax those who have and hand it to those who have not, but that act is clearly unconstitutional.” 56
Roosevelt chided the League as an organization formed to uphold two of the Ten Commandments. Apparently, he didn’t take the League seriously. He was soon to learn how much he was mistaken.
DuPont reaction to the administration was not limited to the Liberty League. In the same month that the League’s founding was announced, Pierre also used his membership on the Department of Commerce’s Business Advisory and Planning Council. Joining William Harriman, chairman of Union Pacific, and Walter Gifford, president of A.T. & T., on August 20 he denounced the protection of small investors in legally requiring uniform accounting and reporting in corporate financial reports. The following year he resigned also from this agency.
The DuPont's did more than protest. They also took direct and forceful measures, hiring an army of Pinkerton's and other private detectives to infiltrate the labor ranks of DuPont and General Motors as company spies. 57 In May 1934 the Wilmington headquarters of the Delaware State Police sent fifty revolvers to company gun men at the DuPont Hopewell plant for possible use in a textile strike. 58 Federal Laboratories, with which DuPont shared a joint agency and in which Atlas Chemical Company had a substantial holding (with Lammot and Pierre DuPont as large shareholders),59 sold various vomiting and tear gases to corporations and police departments throughout the country. Among its corporate clients were General Motors and Pacific R & H Chemical, a DuPont-owned corporation.
The tense year of 1934 was also when the DuPont's suddenly bought a 56 percent interest in Remington Arms, the manufacturer of small arms and one-third of the country’s “sporting” ammunition. This investment secured a market for DuPont gunpowder, as well as Remington’s additional asset as the largest producer of steel knives in the country. Soon afterward, DuPont also acquired the Charles Packer Company, one of the country’s largest makers of shotguns, the Peters Cartridge Company, and the King Powder Company of Ohio. 60 These were all market-related acquisitions, but, according to charges before a Senate committee later that year, may also have been marked for more illegal purposes.
For in these same summer months of 1934, Remington Arms, the treasurer of the American Liberty League, and the name “DuPont” were all implicated in one of the most bizarre plots in American history, a plot confirmed by the Dickstein-McCormick House Investigating Committee, to forcibly overthrow the Roosevelt administration and with it, the government of the United States.
In the summer of 1934 Gerald MacGuire, a lawyer in the Morgan brokerage office of
Grayson M.-P. Murphy and an official of the American Legion, visited General Smedley
Butler at his home in Newton Square, Pennsylvania. Butler, former Commandant of the
Marine Corps and holder of two Congressional medals of honor, had ended his 33-year
career in the Marines three years earlier amid a storm of diplomatic protest over his
public description of Italian dictator Benito Mussolini as “a mad dog about to break
loose in Europe.” The General had stubbornly rejected Hoover’s demand for a
retraction and had retired from the service a proud but bitter man. But he was also
probably the most popular soldier in America. As such, he was an attractive prize for
any movement, and it was for this reason that MacGuire, mistakenly banking on the
General’s personal bitterness and the then frequent branding's of Roosevelt as a
“dictator,” paid the old soldier a call.
America, MacGuire told Butler, was in great danger from a “communist menace,” and needed a complete change of government. Then MacGuire made his pitch. A “militantly patriotic” veterans’ organization, like the fascist Croix de Feu operating in France, was the only kind of organization that could force a change in Washington; he suggested Butler lead such an organization in “a march on Washington.” “We have three million dollars to start with on the line,” he told Butler, “and we can get three million more if we need it.” 61
“To be perfectly fair to Mr. MacGuire,” Butler testified some months later, “he didn’t seem bloodthirsty. He felt such a show of force in Washington would probably result in a peaceful overthrow of the government. He suggested that ‘we might even go along with Roosevelt and do with him what Mussolini did with the King of Italy.’ … Mr. MacGuire proposed that the Secretary of State and Vice President would be made to resign, by force, if necessary, and that President Roosevelt would probably allow MacGuire’s group to appoint a Secretary of State. Then, if President Roosevelt was ‘willing to go along,’ he could remain as President. But if he were not in sympathy with the fascist movement, he would be forced to resign, whereupon, under the Constitution, the Presidential succession would place the Secretary of State in the White House.… He told me he believed that at least half of the American Legion and Veterans of Foreign Wars would follow me.” 62
Butler was amazed at MacGuire’s plan but played along to uncover details. “Is there anything stirring yet?” he asked MacGuire.
“Yes, you watch,” the broker replied. “In two or three weeks, you will see it come out in the papers. There will be big fellows in it. This is to be the background of it.” 63
Exactly two weeks later, on August 23, the American Liberty League publicly announced its existence, with MacGuire’s employer, Grayson M. P. Murphy, as its treasurer.
Butler knew MacGuire spoke for certain financial interests, mostly those of J. P. Morgan & Company. A year before, in July 1933, MacGuire and another Legion official, William Doyle, had payed him a similar visit to ask him to lead a well financed “rank-and-file” movement to oust the Legion’s autocratic leadership at the Chicago convention that autumn. To assure Butler of backing, MacGuire showed him two entries in a bank deposit book, for $42,000 and $64,000. Butler’s suspicions grew —“Soldiers don’t have that kind of money,” he said later—but he suggested he be given some time to think it over. “I wanted to get to the bottom of this thing and not scare them off.” 64
MacGuire took the bait and at a second meeting presented information that nine very wealthy men were doing the financial backing, one being Grayson M.P. Murphy. “I work for him,” MacGuire assured the General, “I’m in his office.” 65
“What has Murphy got to do with this?”
“Well,” answered MacGuire, “he’s the man who underwrote the formation of the American Legion for $125,000. He paid for the field work for organizing it and has not gotten all of it back yet.”
“That is the reason he makes kings, is it?” remarked Butler. “He has still got a club over their heads.”
“He’s on our side,” insisted MacGuire. “He wants to see the soldiers cared for.” 66
What Murphy really wanted, as did most of Morgan’s “sound money” circle, was a reversal of Roosevelt’s abandonment of the gold standard. Only on the solid arbiter of gold, reasoned Morgan, could the economy recover. Butler suspected this when MacGuire handed him a drafted speech to be read at the convention, calling for a resolution urging that the United States return to the gold standard. MacGuire tried to mask the request in terms of the veterans’ interests. “We want to see the soldiers’ bonus paid in gold. We don’t want the soldiers to have rubber money or paper money.” 67
Butler insisted on meeting some of “the principals” involved, and shortly afterwards
the General had another caller—Robert Sterling Clark, Wall Street broker who had
supported Al Smith’s 1928 campaign with a $35,000 donation.
68 Clark identified
himself as one of the men interested in seeing the General become the Legion’s new
National Commander. “Our group is for you,” he remarked, but “the Morgan interests say that you cannot be trusted, that you are too radical, and so forth, that you are too
much on the side of the little fellow.… They are for Douglas MacArthur.” After Clark
mentioned that the “gold speech” “cost a lot of money,”
69 Butler remarked: “It looks to
me as if it were a big business speech. There is something funny about that speech, Mr.
Clark.”
Clark’s answer was calm but blunt. “I’ve got thirty million dollars,” he explained. “I don’t want to lose it. I am willing to spend half of the thirty million to save the other half. If you get out and make that speech in Chicago, I am sure that they will adopt the resolution and that will be one step toward the return to gold, to have the soldiers stand up for it.”
At that, the General dropped his pretense and flatly refused. Undismayed, Clark asked to use the phone and called MacGuire long distance. “You’ve got forty-five thousand dollars,” he told MacGuire, “You’ll have to do it that way,” 70 and left.
Butler, then, was obviously aware of MacGuire’s contacts when he was visited again the following year by MacGuire. He was also aware that at the Legion Convention in October 1933 a gold standard resolution had been passed. But what the General did not know was that MacGuire had been subsequently sent to Europe in the spring of 1934 on “business” which amounted to a survey of the role played by veterans in Mussolini’s Fascisti, in Germany’s Nazi Party, and in France’s fascist Croix de Feu movement. “The Croix de Feu is getting a great number of recruits,” he wrote Clark from Paris, “and I recently attended a meeting of this organization and was quite impressed with the type of men belonging. These fellows are interested only in the salvation of France, and I feel sure that the country could not be in better hands.…” 71
MacGuire’s favorable impressions of European fascism did not exist in a social vacuum, however. Many business leaders, including those in the DuPont camp, and even some liberals for a time, had been infatuated with the fascist movement. General Motors’ William Knudsen, for example, on his return from Europe, described Hitler’s Germany to a reporter as “the miracle of the twentieth century.” Even Alfred I. DuPont’s daughter Madeleine had contracted the fascist epidemic during her stay in Germany, and her third marriage to Friedrich Hermann Ruoff had spawned three young Nazi zealots. In America many openly fascist organizations had sprung up, including the Khaki Shirts, the Blue Shirts, the White Band, the Nationalists, and the Silver Shirts. Lawrence Dennis emerged as the “theoretician” of American fascism, and The American Guard magazine appeared, published by the “Swastika Press.” More home-grown brews also were stirred, including the racist Southern Committee to Uphold the Constitution, the Crusaders, the para-military Minute Men and Women of Today, and the anti-Semitic Sentinels of the Republic, all financed, and some even created, by the DuPont's American Liberty League.
Colorful Smedley Butler, however, was not made of this stuff. Appalled by
MacGuire’s offer, he contacted a crusading reporter for the Philadelphia Record, Paul
Comly French. “The whole affair smacked of treason to me,” Butler remarked, and
French decided to travel to New York. On September 13, 1934, French visited Gerald
MacGuire at the brokerage firm of Grayson M.-P. Murphy Company and, posing as a
sympathizer trusted by Butler, won MacGuire’s confidence.
“The whole movement is patriotic because the Communists will wreck the nation unless the soldiers save it through fascism,” MacGuire reportedly told French. “All General Butler would have to do to get a million men would be to announce the formation of the organization and tell them it would cost a dollar a year to join.” 72
“At first he suggested that the General organize this outfit himself,” French later told the House Investigating Committee, “and ask a dollar a year dues from everybody. We discussed that, and then he came around to the point of getting outside financial funds, and he said it would not be any trouble to raise a million dollars. He said he could go to John W. Davis or Perkins of the National City Bank, and any number of persons and get it.… Later, we discussed the question of arms and equipment, and he suggested that they could be obtained from the Remington Arms Company on credit through the DuPont's. I do not think at that time he mentioned the connections of DuPont's with the American Liberty League, but he skirted all around it. That is, I do not think he mentioned the Liberty League, but he skirted all around the idea that that was the back door. One of the DuPont's is on the board of directors of the American League and they own a controlling interest in the Remington Arms Company.… He said the General would not have any trouble enlisting 500,000 men.”
MacGuire then showed French a letter of support: “It’s from Louis Johnson, the former National Commander of the American Legion.” “He said that he had discussed the matter with him,” French related, “along the lines of what we were now discussing, and I took it to mean that he had discussed this fascist proposition with Johnson, and Johnson was in sympathy with it.”
On November 20, 1934, General Butler revealed the whole ugly scheme by testifying before a private session of the Special House Committee on Un-American Activities. He suggested that if the Committee wanted to get to the bottom of this, they question the biggest interests involved: Grayson M.-P. Murphy, General Douglas MacArthur, Hanford MacNider, ex-National Commander of the American Legion, and leaders of the American Liberty League.
The Committee called none of these, but it did have James Van Zandt, National Commander of the Veterans of Foreign Wars, and Gerald MacGuire testify under oath. Van Zandt corroborated Butler’s testimony and admitted knowing of the plot. MacGuire, on the other hand, would admit only that he had met occasionally with Butler, but claimed that he had been “misunderstood.” French’s testimony, however, corroborated Butler’s and Van Zandt’s. But the Committee, perhaps frightened of the implications, refused to delve further into the conspiracy, suppressing much of the most incriminating testimony in its official report to the House on February 15, 1939. Nevertheless, the report confirmed a plot to overthrow Roosevelt with a fascist coup d’êtat:
“In the last few weeks of the Committee’s official life it received evidence showing that certain persons had made an attempt to establish a fascist organization in this country.… There is no question that these attempts were discussed, were planned, and might have been placed in execution when and if the financial backers deemed expedient.
“This committee received evidence from Major General Smedley D. Butler (retired), twice decorated by the Congress of the United States. He testified before the Committee as to conversations with one Gerald C. MacGuire in which the latter is alleged to have suggested the formation of a fascist army under the leadership of General Butler.
“MacGuire denied these allegations under oath, but your Committee was able to verify all the pertinent statements made by General Butler, with the exception of the direct statement suggesting the creation of the organization. This, however, was corroborated in the correspondence of MacGuire with his principal, Robert Sterling Clark, of New York City, while MacGuire was abroad studying the various forms of veterans’ organizations of fascist character.” 73
Despite the Committee’s report, no indictments were handed down. Corporate leaders who were implicated in the conspiracy by sworn testimony, including the DuPont's, were never even called for questioning. “The Congressional Committee investigating un-American activities has just reported that the Fascist plot to seize the government … was proved,” observed lawyer Roger Baldwin, head of the American Civil Liberties Union, “yet not a single participant will be prosecuted under the perfectly plain language of the federal conspiracy act making this a high crime. Imagine the action if such a plot were discovered among Communists! Which is, of course, only to emphasize the nature of our government as representatives of the interests of the controllers of property. Violence, even to the seizure of the government, is excusable on the part of those whose lofty motive is to preserve the profit system.” 74
Indeed, Butler’s testimony was at first subjected to a shower of ridicule. Even the New York Times, which had described the Liberty League’s founding as having “a real chance to be useful” 75 hurriedly dismissed the “so-called plot of Wall Street interests” as having “failed to emerge in any alarming proportion,” while Time, the leading anti-New Deal publication of J. P. Morgan’s trusted friend and journalist protege, Henry Luce, called it a “plot without plotters … no military officer of the United States since the late tempestuous George Custer has succeeded in publicly floundering in so much hot water as Smedley Darlington Butler.… Thanking their stars for having such sure-fire publicity dropped in their laps, Representatives McCormick and Dickstein began calling witnesses to expose the ‘plot.’ But there did not seem to be any plotters.… Mr. Morgan, just off a boat from Europe, had nothing to say but partner Thomas Lamont did: ‘Perfect moonshine! Too utterably ridiculous to comment upon!’” 76
Significantly, among Time’s leading stockholders at the time was Luce’s college chum, Henry P. Davison, like Lamont, a partner of J. P. Morgan & Company. 77 Morgan’s friend Grayson M.P. Murphy derided Butler’s charges as “a joke—a publicity stunt” and received wider coverage than Butler’s own testimony or Van Zandt’s and French’s corroboration. Then a curtain of silence fell. When the House Committee released its report, there was little comment from the press. Of all the country’s large newspapers, most of which were (and are) controlled by well-financed syndicates, only the liberal New York Post, French’s Philadelphia Record, and two New Jersey papers printed the details of the conspiracy and the corroborating testimonies. Not a word of the plot was printed in Delaware’s DuPont-controlled press, and the “MacGuire Affair” slipped into the fog of unrecorded history.
Beyond the superficial rationale of class allegiance, many reasons have been put forth as to why Roosevelt may have shied away from pressing further into the “MacGuire Affair” investigation. There is little doubt that hearings and indictments against such leaders of finance would have precipitated a national crisis, and probably an international one as well. Economically, such a course of action would only have tottered an already weakened public faith in the prevailing economic system Wall Street represented and Roosevelt was pledged to preserve. Legal proceedings against such powerful interests, also, would have precipitated a political crisis, not only for the Roosevelt administration, but for the private enterprise essence of the state as a whole and its property values of government. Apparently, the initial exposure had also sent the wolves into hiding, so that no more was really needed than the Committee Report’s verbal hand-slapping that “Armed forces for the purpose of establishing a dictatorship by means of Fascism … have no place in this country.” 78
Such gestures seem impotent if viewed in a historical vacuum. But the DicksteinMcCormick Committee was conducting its investigation in the shadow of another, more publicized spectacle which already had the country spellbound and the forces of reaction in full retreat—the Senate munitions hearings.
To Irénée, villainizing munitions makers could only be the seedy work of the Communist Third International, and on July 7, 1934, he said so. But even then Irénée was only continuing the family’s line of personally desiring peace while, in the course of following good business principles, officially promoting war.
Pierre tried to deal with this contradiction as early as 1930. “The popular conception of a munitions maker,” he wrote to Merle Thorpe, editor of Nation’s Business, “is a sinister individual with a deep hatred for peace and a contempt for the pursuits thereof. He is pictured as doing all in his power to fan the flames of distrust between nations and to delight in the conflicts that ensue, since they create enormous and immediate profits for his corporation. I called this the popular conception of the munitions maker; in reality, it is the popular misconception.
“No munitions concern can live by war alone. During the 139 years of the existence of the United States as a nation there were four major conflicts before the World War. They lasted 10 years in all, or about 7% of the time. How could any independent corporation keep itself alive for 139 years by turning out a product that was only wanted 10 years of the time?” 79 Not war preparations, insisted Pierre, but peacetime products, occupied the intervening time and gave DuPont stability.
Pierre’s contentions on their own terms were unquestionable, but they ignored a basic theme throughout the history of his own company: in each period of the company’s expansion, profits from a previous war were the foundation and, in many cases, the crucial determining factor for sustaining that growth. The Napoleonic wars and U. S. government contracts kept DuPont Company alive through its first fledgling years. The War of 1812 provided the funds necessary for the company’s growth in the next two decades, enabling it to survive such disastrous internal setbacks as frequent explosions; the same was true of the roles of the Mexican War and the Crimean War in the 1840’s and 1850’s. The Civil War funded the firm’s trust building after 1865, helped by panics which weakened smaller competitors, underscoring also the importance of capital concentration and its large labor and productive resources to the rise of Henry DuPont’s Powder Trust. And the Spanish-American War was the strongest impetus to DuPont’s building its smokeless powder plants and subsequent monopoly in that field.
There is little doubt that the company’s own efficiency and technological innovation, as well as the powder needs of an expanding young continental power, were stabilizing factors for DuPont. But Pierre totally ignored the crucial role played by war profits throughout his firm’s growth. “In the case of the DuPont Company,” Pierre wrote, “taxes paid to the U.S. government during the recent war not only absorbed the entire profit of the company on powder sold to our government, but in addition, they wiped out all of the profit made on these powders during the preceding 20 years.” 80 Later, the Senate munitions hearings, using DuPont’s own records, proved this allegation false. In fact, World War I generated $250 million in profits for DuPont, more than 126 years’ worth of previous peacetime business, providing the $90 million surplus fund used to expand into the chemical and automobile industries.
These facts were known especially to Pierre, who directed that expansion. Yet the fear of being villainized prompted their suppression, especially as the world’s governments of private enterprise were gathering in another of their many desperate disarmament conferences, trying to serve their own market interests while attempting at the same time to stop their inevitable bloody result. “I consider the calling of the London naval conference a long step in the right direction,” Pierre wrote at the time. “Sentiment against war has always been strong; added to this sentiment now is the crushing burden of taxation, and a disarrangement of all the orderly channels of domestic and international commerce.” 81
There is little evidence that Pierre did not really believe his own words. Yet, even as he wrote them, DuPont’s arms export company was busily fueling the fires of war and corrupting foreign governments in the process.
As early as 1925, DuPont had illegally been smuggling arms to Mukden warlords in Manchuria, who paid well for DuPont’s willingness to violate an imposed embargo. In 1928 a contract with Poland for 300 tons of powder per year for twelve years was landed only through bribes, politely termed “commissions.” “In order to get this,” Colonel Taylor, DuPont’s European salesman, advised the Wilmington headquarters, “we will have to pay 7% commission, of which 2% must be paid in its entirety the day of the signing of the contract.” 82 Two weeks later, on February 3, the home office replied: “You may be sure, in the event that you conclude a deal along the lines indicated in your letter of January 18, that I will promptly remit by cable the amount involved to pay the 2% commission, so that there will be no delay.” 83
Five months later a DuPont agent in Poland by the name of Klawe, landed a $1.8 million sale. DuPont executive O’Gorman ecstatically wrote Taylor from Wilmington: “Mr. Klawe’s commission on the 1,000-ton order contract was 7 percent, or approximately $126,000. Upon signing the contract, even before we received the Polish notes, we made advance payment on commission to Klawe of $30,000.… You are fortunate to have Mr. Klawe as agent, as he is a man who is very well connected and thoroughly understands what must be done in order to secure business.” 84
In China DuPont powder was sold to Chiang Kai-shek’s forces in similarly soiled circumstances. “N. E. Bates would suggest we do not pay any other commission except 7.5%, Preston Wilk, Dyestuffs, Wilmington,” DuPont headquarters cabled Taylor on September 23, 1929. “DuPont dyestuff's office, Shanghai, China, Will advance all prices at plant 5% for distribution as follows: 4%, Chinese Army, Nanking.…” The “commission” was settled at “4% Chinese Army, Nanking; 1% Colonel de Fremery,” a Dutch mercenary. “… We will advise Bates to settle definitely on the basis quoted.” 85 In Shanghai, also, bribes were paid. Dr. Noelting, head of DuPont offices there, cabled: “Anyway, presents will have to be given to various parties in China New Year, and the overprice we get can be used for this purpose.” 86
By 1929 DuPont had full-time powder agents in Estonia, Holland, Latvia, Poland, Sweden, Denmark, and Norway. In 1932 they contracted agents also in Belgium and Lithuania.
During the early Twenties nitrocellulose powder was sold in Spain, Poland, Czechoslovakia, and other parts of Europe. A. Felix DuPont and Harry Haskell rejected Nobel Ltd.’s protests, but Pierre, not wishing to anger his G.M. partners, surrendered the TNT and nitroglycerin market. 87 Thereafter, DuPont, in conjunction with Nobel Ltd. (which merged in 1926 as Imperial Chemicals Industries, Ltd.), had military sales agents sprinkled throughout Latin America, in Argentina, Bolivia, Chile, Brazil, Colombia, Ecuador, Paraguay, Uruguay, and Venezuela. Other agents were located in Europe’s Bulgaria and Romania, and throughout southern Europe. 88
Through their partnership, DuPont-I.C.I. sold nitrocellulose powder to Britain in 1929, 1930, 1931 and 1934; to Belgium in 1931; Estonia in 1929, 1931, and 1934; Greece in 1935; Bulgaria in 1935; Holland in 1929 and 1933; Latvia in 1929 and 1934; Lithuania in 1930, 1932, and 1934; Poland in 1930; Romania in 1934; and Turkey in 1934.
Smokeless powder was sold to Yugoslavia in 1929, 1931, and 1934; Romania in 1929 and 1934; Turkey in 1930 and 1935; Latvia in 1934; Holland in 1934; Belgium in 1934; Estonia from 1930 to 1933; and Finland from 1932 to 1934.
None of these munitions sales were in violation of any American law. In fact, such exports had the full support of Herbert Hoover during his eight-year tenure as Secretary of Commerce and four-year term as President. Hoover, unlike Wilson, placed less emphasis on the political aspects of foreign policy, and great emphasis on developing a system of overseas economic expansion, a system that included government regulation of credit to foreign nations and its relation to exports as “part of our domestic progress, both socially and economically.” 89 This meant not only providing credit to a foreign government so it could purchase American goods as a commodity market, but also investments by American corporations and loans by American banks to develop a capital market. “In stimulating our exports,” Hoover observed in 1923, “we should be mainly interested in development work abroad such as roads and utilities which increase the standards of living of people and thus increase the demand for goods from every nation, for we gain in prosperity by a prosperous world, not by displacing others.” 90 This was the essence of corporate liberalism.
Although this analysis conflicted with the necessity for American corporations to keep wages in their overseas factories low, Hoover was impressed by its sophistication and the long-range need of corporate profit for social stability and order, and thus released his anti-interventionist Memorandum on the Monroe Doctrine in 1928, holding that “confidence in that [non-interventionist] attitude is the only basis upon which the economic cooperation of our citizens can be welcomed abroad.” 91 Throughout his presidency, Hoover rejected the gunboat diplomacy of his predecessors, including Coolidge, and avoided any foreign interventions or any direct government participation in an economic program overseas which could lead to political confrontation with a foreign power. Hoover shared the feeling of most corporate leaders after World War I, that war primed the pump of revolution, especially during a depression. Both as Secretary of Commerce and as President, Hoover encouraged private corporate expansion, consulting with the DuPont's particularly over any disarmament program which threatened embargoes that would restrict their commodity or capital markets, even informing Colt Arms of the latest results in the arms race sweepstakes.
The DuPont's took full advantage of this policy, developing not only an export market, but an overseas capital market as well. In Mexico they invested $312,000 and bought a 50 percent interest in Compañia Mexicana de Explosivos, S.A. In Argentina they invested $788,000 and, with a 51 percent holding, set up the E. I. DuPont de Nemours & Cía Argentina, S.A., which included Industrias Químicas Argentina de Perial, S.A., Industrial y Comercial. They also bought for $313,000 a 35 percent interest in Société Francaise Duco, S.A., and for $789,000 a 42.4 percent interest in Compañía Sud America de Explosivos, S.A.
In close, safe, and stable Canada the Du Ponts made their biggest investment, pouring $10,180,000 into Canadian Industries, Ltd., for a 46.8 percent holding. In mother England, in exchange for “Duco” patents and processes, they acquired 49 percent of Nobel Chemical Finishes, Ltd., and bought a $819,000 interest in Leather Cloth Proprietory, Ltd. In 1930 they made another large sale of processes to Nobel Finishes. England was also the site in 1925 of General Motors’ acquisition of Vauxhall, the auto firm. A year later Pierre expanded General Motors directly overseas, opening an assembly plant in South Africa to slip behind the Commonwealth’s tariff barriers and also exploit the cheap wages enforced by its racist white Afrikaner government. In 1926 the DuPont's also bought a 22.9 percent interest in Société Francaise Fabrikoid, which controlled the Fabrikoid markets in French North African colonies of Algeria, Tunisia, and Morocco.
The rising Axis powers also proved to be good business prospects. Mussolini’s well-ordered Italy looked so attractive to the DuPont's that they invested over a million dollars in its chemical industry, buying 70 percent of Societa Italiana della Celluloide and 90 percent of Societa Amonima Mazzucchelli. Japanese militarists, too, benefited from DuPont’s perfectly normal business ethics. Their invasion of Manchuria in 1931, the actual beginning of World War II, was looked at sympathetically by President Hoover, whose non-interventionist policy never considered a war against Japan, which would create instabilities hindering to business. “There is something on the side of Japan,” he announced. “Ours has been a long and deep-seated friendship with her and we should in friendship consider her side.” 92 U.S. investments were few in the area, and most were unaffected by the Japanese invasion. European interests did not fare as well there, and in 1932 the League of Nations finally proposed sanctions. Hoover, however, dissented. “I have insisted upon the aloofness of the United States from the League of Nations in that the sanctions of the League are those of force either economic or military, whereas the United States could not and would not enter into force sanctions.” 93 Hoover proposed instead a policy of nonrecognition, to buy time in protecting U.S. interests in Asia. “The whole doctrine of nonrecognition,” he explained, “is not alone a method of involving world opinion but it is equally important in the phase that it avoids precipitant action and allows time to work out proper solutions.” 94
With such attitudes emanating from their own government, it was not surprising that the DuPont's entered into a profitable agreement with Japanese interests that year. Shortly after Secretary of State Stimson condemned Japan’s attack on Manchuria, Japanese executives from the Mitzui Chemical combine met with DuPont executives in Wilmington and handed over $900,000 in exchange for DuPont’s ammonia explosive formula, a process for manufacturing cheaper munitions. The State Department, despite Stimson’s public oratory, privately gave the DuPont sale its full approval.
But the most startling overseas business in which the DuPont's were engaged was their role in rearming Germany.
Hamburg was too preoccupied celebrating the New Year to notice that DuPont executives arrived there on January 1, 1926. At this German port, in a secret meeting, DuPont signed a “gentleman’s agreement” with representatives from two of the largest explosives manufacturers in Germany—Dynamit Aktien Gesellschaft (D.A.G.), and Köln Rottweiler, both soon after absorbed into I. G. Farben, German capitalism’s answer to DuPont. By this agreement, each company was to get the first option of any new processes and products developed by the other. This included black powder, disruptive explosives, smokeless propellants for “sporting” purposes, detonation, safety fuses, powder fuses, and “generally all devices for initial detoxification or ignition.” 95
Everything was open to the German militarists, including all patents and secret inventions covering commercial explosives. 96 As to acrylic products, DuPont agreed to sell this plastic to commercial molders for 85 cents per pound, but to dentists for 45 cents an ounce (or $7.20 per pound). In order to circumvent the legal complications involved if dental associations were somehow to discover this ruse, DuPont simply exercised its free enterprise by adding an additional ingredient, usually 1 percent of a dangerous poison such as arsenic, to the product sold to commercial molders, making it unemployable for dentures. 97
The interchangeability between commercial explosives and military explosives was obvious, and later noted by many experts in the Senate munitions hearings. 98 This made DuPont’s agreement, as the Senate Investigating Committee politely put it, “incompatible” with the Versailles Treaty which forbade German rearmament of any kind, or importation of information or arms for such. The DuPont's were well aware of the military danger of such an agreement. A letter found in their files attested that I. G. Farben had an explosives capacity comparable to “a large, rapidly mobilized force, or a large number of guns, or a fleet.” 99
Later that year DuPont and Nobel prevented Köln Rottweiler from assisting the Argentine government in building its own powder plant, setting bids so high that the Argentine government was forced to withdraw. To soothe German nerves, Nobel agreed to “wink” at German contracts with Turkey, and Köln Rottweiler stole Turkish business amounting to 120 tons of rifle powder from DuPont, while Nobel sold TNT to Turkey through Austria’s Philip. The German sales were in open violation of the Versailles Treaty. “I would regret,” wrote a disturbed Taylor to Wilmington on October 27, 1926, “to see the DuPont's winking at German treaty violations. It would be a great shame.” 100
Shame or not, wink they did. Convinced that protest was futile and U.S. intervention in German rearmament “improbable,” Colonel Aiken Simons, head of DuPont’s military sales, wrote DuPont Vice President Casey and gave the State Department’s Allen Dulles as the authority officially confirming the U.S. policy of allowing German arms smuggling to “swell” the reparation fund. Actually, acknowledged the Senate Munitions Committee, Dulles had made this policy clear at the pre-Geneva meetings of 1925. Accordingly, “the DuPont company did not call this to the attention of the United States government.” 101 Such an official protest would have won them no new friends in Washington, which was anxious to keep the lid on.
The DuPont's apparently were so impressed with German expansion recovery and rearmament that they decided to invest in promising German companies themselves, purchasing 49 percent of Duco, A.G., and 3.5 percent of Deutsche Gold and Silber Scheideanstalt. This, with their holdings in I. G. Farben and its subsidiaries, D.A.G. and Koln Rottweiler, gave the DuPont's a $3 million investment in the German arms industry. In 1929 they signed another “agreement” with I. G. Farben, while in the same year G.M. chairman Lammot DuPont made the DuPont stake in Germany even higher by acquiring 80 percent of Adam Opel, A.G., Germany’s biggest auto maker. This $25,957,000 investment was increased by another $7,395,000 in 1931, giving G.M. a 100 percent investment.
Lammot’s decision to endorse a 100 percent investment in Germany’s biggest auto company must be considered in its historical context, for 1931 was a tumultuous year in German history. A rising labor movement, led by mutually hostile (and thus divided) Social Democrats and Communists, was being answered by a rising fascist movement led by Hitler and supported by many of Germany’s largest financial and industrial interests, including Georg von Schnitzler, a leading director of DuPont’s trade partner, I. G. Farben. 102 Lammot DuPont and other DuPont's on G.M.’s finance committee (Henry F. DuPont, Irénée DuPont, Donaldson Brown, and Walter S. Carpenter) showed no particular dissatisfaction over Hitler’s gain in the 1930 elections that might have dissuaded them from deeper commitments in the German economy; their 1931 investment was clearly a display of confidence in its future.
A year later, DuPont’s European sales agent, Colonel William Taylor, again reported to Wilmington of German rearmament, including the smuggling of American arms to Nazis by way of the Dutch rivers that flow into Germany. “There is a certain amount of contraband among the river shippers,” he wrote, “mainly from America. Arms of all kinds.… The principal arms coming from America are Thompson sub-machine guns and revolvers. The number is great.” 103 Significantly, the only American firm licensed to manufacture and sell the Thompson sub-machine gun was Federal Laboratories, with which DuPont shared joint sales agencies. In January 1933 Taylor sent another excited report of Dutch gunrunning to Nazis in the Cologne area 104 Within a month, DuPont made its decision to take a direct plunge into the German munition smuggling.
On February 1, 1933, A. Felix DuPont, Sr., the suave, young-looking head of DuPont’s foreign sales, along with Vice President K. K. V. Casey, secretly met with two Hitler agents, Jungo Giera and Count Westarp. Westarp was the more easily identifiable of the two; he was a representative of the German General Staff. 105 Giera, however, kept his real identity to himself. Actually, he was Peter Brenner, a former German spy in the United States during World War I who had become a counterspy to avoid U.S. prosecution. After the war Brenner continued his sleuthing, selling his talents to at least thirteen different nations.
Although Felix and Casey did not know Giera’s real name, they were familiar with his background. During the Senate munitions investigations a year later, Senator Clark questioned Casey about this knowledge. “Did you know that he was an international spy?” asked the Senator.
“Yes,” replied Casey openly, “I knew that. He told me so himself. I knew him as Jungo Giera, and he told me that he engaged in spy work in thirteen countries.”
“Did he tell you that before we entered the war he was a spy for the Germans in this country, acting under the direction of von Papen and Boy-Ed, the military and naval attaches of the German embassy in Washington?”
“Yes,” answered Casey, “I also received that information.” 106
Despite Giera’s seedy background, or perhaps because of it, Felix signed a contract with him on February 1, 1933, naming him DuPont’s agent “for the Kingdom of Holland and as its exclusive agent for the Republic of Germany, to negotiate the sale of military propellants and military explosives to purchasers (other than the government of Holland and its colonies) located in said territories.” 107 That Holland was the source of much of the smuggling into Germany reported by Colonel Taylor was considered by the Senate Committee a year later to be “most significant,” for the rearming “Republic of Germany” then had as its new chancellor Adolf Hitler. The presence of Count Westarp of the German General Staff left little doubt as to whose hands DuPont munitions were intended for.
Felix’s contract, of course, was an open violation of the arms embargo of the Versailles Treaty and, by reference, the U.S.-German peace treaty, and was noted as such the following day, February 2, 1933, when Lammot convened his Du Pont Executive Committee. The legal problems of the contract were realized immediately, and Lammot nullified it, ordering Felix to draw up another. On February 15 Felix and Giera signed another contract, confirming Giera’s sales to the government of Germany, actually Hitler, with “approval or consent of the United States government.” This provision, the Senate Munitions Committee later implied, was a mere legal technicality to protect the company, as such consent would have been impossible unless the U.S.- German peace treaty was openly scrapped. Yet, the DuPont's were well aware of the State Department’s past “winking” policy, as explained to them by Allen Dulles as far back as 1925, and since the U.S.-German treaty referred only to the Versailles Treaty, they may well have thought a new interpretation of it and such “consent” were a real possibility.
DuPont never got a chance to sell its wares directly to Hitler, however, for it was stopped by its own cartel partner, Imperial Chemicals. Lammot had written Imperial’s Sir Henry McGowan on February 9, informing him of the Giera contract. Lammot’s letter drew a quick reply from McGowan questioning the agreement’s feasibility in light of expected treaty revisions by Hitler that would allow home manufacture and export by revived German militarism. “I think that any future negotiations would tend to become more difficult,” he warned Lammot, “and the Germans would probably consider that as we each reserve to ourselves orders from our respective governments, they should be entitled to do likewise.” 108
Faced with Imperial’s disapproval, and possibly even stronger reaction from its other cartel partner, I. G. Farben, Lammot canceled the Giera contract one month later, on April 14. Giera was angered over this reversal and threatened to sue DuPont publicly for his expenses. Although the company legally owed Giera nothing, DuPont paid $25,000 to keep his favor. As Lammot explained a year later to the Senate Investigating Committee, Giera’s infamous character was no problem as far as the DuPont's were concerned. In fact, they needed him to handle arrangements with another customer— Japan. 109
The Giera affair did not lessen DuPont’s interest in German sales. In January 1934 Taylor reported his attempt to arrange a deal directly with a top smuggler, Beno Spiriro. “The contraband of ammunition is increasing tremendously,” he wrote DuPont headquarters from Paris. “I.C.I. [Imperial Chemicals] have received continuous inquiries for delivery to the free port of Hamburg from Magnus and Beno Spiriro (they are two of the rather shady dealers mentioned in the last letter). We have invited Beno Spiriro to meet us this week in Paris, but he refused to come. We are going further into this matter.” 110
While there is no evidence to suggest that Taylor succeeded in securing the services of Spiriro for DuPont, there is no question that the wily salesman had better results in other areas. In 1934 DuPont had financial and market dealings in war materials or processes with Norway’s Norsk Hydro, Holland’s H.I.H., Switzerland’s C.I.B.A., France’s Rhone Paulene, and Germany’s D.G., S.S.A., and D.A.G. 111 In addition, DuPont had arrangements for interchange or sale of chemical and other patent information on immediate or convertible war materials and processes with both Germany’s Lurgi, A.G., and France’s L’air Liquide. 112 By then, 4 percent of DuPont’s total sales were exports. DuPont had explosives companies in Chile and Mexico and, according to one report, was contemplating still another plant in Czechoslovakia. 113 When business inquiries were made on the arms embargo, DuPont simply referred them to Imperial Chemicals. Together, DuPont and Imperial owned 20 percent of one of Hitler’s largest munitions makers, D.A.G., 114 part of the I. G. Farben combine.
Du Pont’s purchase of Remington Arms also brought involvement in German rearmament. Remington had cartel agreements with a number of German munitions companies. In 1929, 1932, and 1933 Remington paid $55,000 in royalties to Rheinisch Westfalische Sprengstoff for use of its patents including those for priming in bullets. In 1931 and 1932 Remington also signed contracts for interchange of chemical information with Hydrierwerke, A.G., and in 1933 and 1934, with Lurgi, A.G. Lammot DuPont later claimed he knew nothing of these contracts, yet it was when Remington was already under DuPont control, in January 1934, that it signed still another military ammunition patents agreement with D.A.G. Under this contract, D.A.G. succeeded to the rights of Rheinisch Westfalische Sprengstoff. Subsequently, Remington paid $16,745 in royalties within the first six months for Remington’s sale of D.A.G. cartridges to the U.S. government. 115 “In other words,” commented the Senate Munitions Committee in its report, “though the German munitions companies cannot sell abroad, American companies can sell for them, and to our own government at that.” 116
With Hitler’s triumph, German munitions companies were flooded with war orders as rearmament began full blast, and any new DuPont chemical discoveries, under its cartel agreements, became immediately available to the Nazi war machine. One DuPont discovery that was particularly priceless was neoprene—synthetic rubber. Under the patent agreement, this 1931 discovery was open to I. G. Farben’s inspection and subsequent use. Not surprisingly, in 1933 I. G. Farben also “discovered” neoprene, and was free to set up manufacturing plants like DuPont’s Deepwater Point plant. “After 1933,” William Shirer reports in The Rise and Fall of the Third Reich, “the Nazi government gave I. G. Farben the go-ahead with orders to raise its synthetic oil production to 300,000 tons a year by 1937. By that time the company had also discovered how to make synthetic rubber from coal and other products of which Germany had a sufficiency, and the first of four plants was set up at Schkopau for large scale production of buna, as the artificial rubber became known. By the beginning of 1934, plans were approved by the Working Committee of the Reich Defense Council for the mobilization of some 240,000 plants for war orders. By the end of the year rearmament, in all its phases, had become so massive it was obvious that it could no longer be concealed from the suspicious and uneasy powers of Versailles.” 117
Such was the tense global atmosphere that brewed the stormy Senate munitions hearings of 1934. Irénée’s denunciation of the investigation as a plot of the Communist Third International appeared in the papers on July 8, but it fell on deaf ears. For that same day, Hitler launched his bloody Brown Shirt purge, an annihilation of his own party zealots, which now made clear to the whole world that it was not some new depression-frenzied movement of the German middle class that was in charge and encouraging rearmament, but actually the same familiar militarists, financiers, and industrialists who had prodded the German people into World War I. Inevitably, it was this war, its causes and aftermath, that became the center of national attention as the Senate Committee called before it the country’s greatest munitions family—the DuPont's —to give them some of the most embarrassing moments in their lives.
Through it all, the DuPont's tried to retain a pose of aristocratic serenity. Pierre, dressed in a medium-colored suit, looked like any stout, balding old grandfather, his kindly blue eyes peering shyly through glasses perched on his nose. Felix, in his flashy light suit, looked the essence of handsome respectability, while Lammot and Irénée, smartly dressed in conservative black suits, calmly puffed on their pipes amid quiet denials of just about every charge that was made against them.
They denied having any foreign cartels. Then evidence was produced, along with Irénée’s admission, of trade pacts with Britain’s Imperial Chemical Industries for dividing the world’s trade and sharing each other’s patents.
They denied profit as their sole motive, claiming their patriotism. “Why,” declared Felix, “if it had not been for the service that the DuPont's performed for the cause of the Allies before and after the United States entered the World War, the United States today would be a German colony.” 119 Despite the obvious sincerity of Felix’s enthusiastic claim to glory, the Committee then produced evidence of not only DuPont refusal to cooperate with the War Department before and during the war, and its price bargaining, but also prewar and postwar cartel agreements with German munitions makers that were now arming Hitler, and in which DuPont held blocks of stock. The Giera contract, signed by Felix himself, was also brought forth, as well as evidence that DuPont’s knowledge of German rearmament extended as far back as 1924.
They denied any control of General Motors. Pierre even denied any substantial personal holdings. “Have you not held considerable private personal interests in General Motors?” asked one Senator. “No,” replied Pierre, “nothing considerable.” 120 Then he was reminded that he had sold $33 million worth of G.M. stock in 1929, and Pierre suddenly found himself with a memory.
They denied any engagement in bribery. Then the Committee produced evidence of the payment of “commissions” to Chinese and Polish officials.
They denied any lobbying, Irénée in particular disputing any influence over the Geneva Disarmament Convention of 1925. Then evidence was produced proving that Du Pont executives K. K. V. Casey, Aiken Simons, and W. J. Kinsman had lobbied in conferences with the State Department’s Allen Dulles, Admiral Andrew Long, and Major General Ruggles, all delegates to the Geneva Convention. A recent letter was also produced containing a suggestion by Walter Carpenter, Jr., that a DuPont sales office in Washington, D.C. should be used for lobbying purposes. “The sales office,” wrote Carpenter, “would be a good hiding place for the legislation if it were necessary to have one.” 121 Irénée and Carpenter, abandoning previous denials of lobbying, quickly explained that the correct word in the letter should have been “hiving,” not “hiding.”
Even more incriminating was evidence proving lobbying attempts by the DuPont's to prevent the Senate Committee’s own investigation. “Had a talk with Colonel Brabson of Military Intelligence,” Casey had written some months before, “and drew attention to the Nye resolution. As Colonel Brabson comes from Tennessee and is very close to Secretary [of State] Hull, he will discuss this matter with him, so that when the matter is referred to the State Department, at least they will be familiar with the situation and the possible disadvantages from the viewpoint of the Army.” 122 The attempt, obviously, had failed. Roosevelt even turned over files to the Senate Committee to help in its investigation, aiming to use its publicity to stir popular anger toward the strongest opponents of his reform program. The DuPont's were aware of this, and the name of Franklin Roosevelt was entered in the social black book of Wilmington.
Of the four DuPont's, Pierre was the only one who succeeded in never once dropping his calm demeanor throughout the hearings. Felix sometimes played an almost comical role. Once, when diplomatically embarrassing cables from a DuPont agent, Antonio Carames, were produced proving that DuPont had blocked Koln-Rottweiler from building a powder plant for the Argentine government, the senators struck the cables from the public record. “I agree,” Lammot hastily added, “that they should not go into the record.” Senator Raushenbush, however, pushed the matter further. “You took out the German competitor for the powder plant,” he summarized, “and Argentina probably didn’t know until the cables today why it never got its powder plant.”
Lammot, refusing to admit anything, took his curved-stemmed pipe from his mouth and calmly waved it in disagreement.
Raushenbush was infuriated. “How can you say that, in view of all the evidence we have introduced?”
Felix interposed. “We’d rather sell powder than build powder plants,” 123 he tactlessly explained. The next day, Argentina’s government was described by news reports as “furious.”
Felix never had been known as the genius of the family. Once, Alfred I. DuPont recalled, “Coleman DuPont said to me one day: ‘Alfred, I think we will have to raise Felix’s salary.’ I naturally inquired, ‘Why?’ ‘Well,’ Coleman answered, ‘this morning he made a bright remark.’ It afterward turned out that the remark was not original so his salary was not raised.” 124 After his performance during the munitions hearing, Felix rose no higher in the company, having to content himself with playing baritone horn for the Wilmington Police Band.
The DuPont munitions revelations triggered a wave of angry protests from around the world. When a Mexican general was mentioned in the hearings, Mexico delivered a strong note of protest to Washington. International spy Giera successfully resisted calls for his appearance, claiming from his Monticello estate that his testimony would start another global war. “The world is going to see the need for curbing these merchants of death and their business,” thundered Senator Nye. “There is a large effort being made to slow up the investigations. There is talk to the effect that the revelations being brought to light are quite apt to start a war. One can guess where this talk and other like it comes from.” 125
Major K. K. V. Casey was another burden for the three brothers. During his testimony on December 5, Senator Vandenberg read a letter written to him by Colonel Taylor, DuPont’s overseas salesman. Dated April 22, 1924, the letter laid the growth of German rearmament to “Jews.” Ignoring the obvious antisemitism, Vandenberg asked Casey for verification: “This would indicate that in 1924 it was apparently known to European governments as well as munitions makers that a substantial German rearming plan was underway.”
“Yes,” replied Casey uneasily, “it would seem to indicate that.”
Alarmed by such an admission, Irénée dropped his calm appearance and, jumping to his feet, shouted that the letter meant nothing of the kind. “You put that in Casey’s mouth!” 126 he charged.
Whereupon, Vandenberg read other letters from Taylor dated 1926, affirming German rearmament violations of the Versailles Treaty.
“Why, in your opinion,” the Senator then asked Casey, “was Nobel reluctant to act?”
“I do not know,” replied Casey.
Again Irénée jumped up, claiming that any assertion that the munitions people could have hindered German rearmament was “rank nonsense.”
“If so,” replied Vandenberg, “it’s Major Casey’s rank nonsense, not mine.” 127 Casey, like Felix, was also to rise no higher in the company hierarchy.
But Irénée was not all fire and brimstone during the hearings. Sometimes he was outrageously amusing. Once, when asked who was the “Fletcher” referred to in Carpenter’s letter as a possible lobbying agent, Irénée replied that he thought he was a former ambassador to Chile.
“What is he doing now?” asked Senator Clark.
“Hasn’t he some sort of position in the Republican organization?” Irénée countered.
The crowd in the hearing room roared with laughter. Harry P. Fletcher was chairman of the Republican National Committee, the recipient of over $55,000 in DuPont family donations that year.
Other times, Irénée was more alarming. When asked what he thought of conscripting wealth as well as manpower, he replied, “We would have a hell of a time.” Then he added his own deep regard for democracy. “To wage a successful war, you need an absolute monarch. I have yet to hear of a democracy or republic waging a successful war.” 128 Irénée, like many others, was apparently not convinced that America was a democracy during its successful engagement in World War I. Lost in the world of the technocrat, Irénée then predicted that fleets of airplanes carrying poison gas and incendiary bombs would wipe out the civilian populations of whole cities. A decade later Irénée’s predictions would come true, with his own company supplying most of those weapons, including the most horrendous of all, the atomic bomb.
“The only way to prepare for war,” Irénée assured the senators, “is to prepare in advance; otherwise, as I have said before, you are going to have a hell of a time. If we are well enough prepared, we will never have another war.”
“Wasn’t Germany prepared for the World War?” asked Senator Nye.
“Yes,” replied Irénée, “that is true, and she was prepared for the purpose of starting war and not for defense. We ought to be prepared for any attacks that could be piled on us. I am talking now about defensive warfare, not world conquest, but if it’s conquest you want, then you will need an absolute monarch.”
“When would you bring in the monarch,” asked Senator Pope, “now or when the war starts?”
“I think we are pretty near that already,” 129 Irénée answered with a smile, and even the committee could not avoid joining in the laughter that followed.
Irénée’s antics betrayed a proud arrogance. Occasionally he would even casually blow smoke rings from his pipe in front of the committee. Caught by photographs and news accounts, such behavior was interpreted by millions as an aristocratic contempt for democracy. Lammot’s statements, like Irénée’s, did little to counteract this belief. “I would rather have a form of democratic government,” he announced during the hearings, “but the way matters now stand I think our Constitution is on the verge of going into the scrap basket, and that’s why I have joined the Liberty League.” 130 Unlike Irénée with his glib manner, however, Lammot spoke always in the gravest tones, leaving little doubt that he meant exactly what he said.
For three months, in September and December 1934 and January 1935, the Senate centered its spotlight on the DuPont's. Yet throughout the hearings it became increasingly clear that the Du Ponts were no devils. In fact, as one writer accurately reported, they looked like men who could pass the plate at Sunday service without incurring a second look. These were not men who sought blood, but successful businessmen who were only practicing accepted business methods. Du Pont’s ammo agreements with German companies were described by them as simply as if they were exchanging facts on a new light bulb. The only way they differed from the average businessman was not in ethics, but in the commodity. And even here, the Du Ponts were not unique. Other American companies had also done business with the Nazi regime. United Aircraft Corporation, for example, sold twenty-nine airplane engines to Hitler in 1933, increasing their German business from $6,000 in 1932 to $272,000; by 1934 the figure was $1,445,000. Curtis Wright, Douglas Aircraft, and Sperry Gyroscope all provided airplane equipment easily adaptable to wartime use. 131 And General Electric, Alcoa, and Standard Oil of New Jersey (now Exxon) all maintained patent agreements with companies of Nazi Germany.
Some of Hitler’s largest suppliers were American, British, and French corporations, all eager, like any private businessman, to land a profitable sale. F. B. Nichols, vice president of Colt Firearms, was not unique when he commented on the flood of Hitler’s war orders. “Man, it makes my mouth water, and here we are, over here, prepared to produce material par excellence and getting nothing.” 132 Indeed, the crimes of the DuPont's could only be described as the crimes of private enterprise itself, and, such being the case, the DuPont's remained immune from federal prosecution, for their ethics presumed certain basic principles of political economy shared by everyone in Washington, including those in the White House.
At the end of the hearings, Pierre emerged unscathed and as polite as ever, even teasing the committee as to its impotent role. “May I add my expression of appreciation for your courtesy,” he told the senators as he prepared to leave, “and wish that instead of waiting for twenty years before we have these reunions, we might have them once or twice a year?”
“Like this?” Senator Nye asked. “Yes, like this,” Pierre replied with a deriding smirk. “Do not let us waste twenty years, but have one every year. We will not need so much time to rehearse.” 133
Irénée offered his own form of charm. On Christmas he sent Nye and the other senators a special gift—a book attacking the Soviet Union.
On Sunday, April 28, 1935, Alfred’s neighbors heard no cannon and suspected something was amiss. Something was—Alfred.
Alfred, now 71 and failing, had suffered a massive heart attack the previous Wednesday, then improved, only to endure another on Sunday evening at 8:00 P.M. Seeing an oxygen tent being rolled in, Alfred murmured, “So it’s come to this. Too late, too late,” and turning to Jessie, “It’s no use, Jessie, it’s no use.” He lost consciousness at 10:00 P.M., but an hour later he opened his eyes. “Thank you, doctors,” he said, “thank you, nurses. I’ll be all right in a few days.” 134 Less than an hour and a half later he was dead.
On May 3 Delaware’s largest clan gathered at Nemours and watched, amid incantations of the Episcopal Bishop of Delaware and songs by the choir of the Cathedral of St. John, as Alfred was buried. A few years later Alfred’s body would be removed from its temporary grave and placed beneath the towering bell tower he had designed before his death. Although neither Pierre nor Bessie, Alfred’s first wife, were there, they would never escape Alfred’s presence, not even after his death. Above his tomb, Alfred’s 210-foot-high clarion had thirty-two bells to remind them daily of the greatest and most persistent rebel in the history of their family.
Pierre refused to attend Alfred’s funeral. The presence of Roosevelt’s Secretary of War, George Dern, signified how deep the breach between Pierre and Roosevelt had become. Dern had been a close friend of Alfred’s, but as a member of Roosevelt’s official family he was not held dearly by Pierre’s wing of the clan. In fact, the rubbing of shoulders at the funeral by Dern and Irénée was one of the great ironies of the decade. Only four days later, Irénée joined Henry Ford in a complete denunciation of Dern’s boss. “The demagogue’s hypocritical cry of ‘divide the wealth,’” Irénée boomed, “if followed would take away incentive not only of future progress but also of further production so that there would be in the future continually less to divide.” 135 That speech, made at a Dearborn, Michigan, dinner of industrialists hosted by the Fords, marks the beginning of the greatest assault ever launched on the New Deal. It was also to be the DuPont's greatest failure.
Although the munitions hearings had failed to return a single indictment against the DuPont's for their many sworn statements subsequently proven false, its spotlight had succeeded in forcing them to withdraw from more ambitious adventures, perhaps more MacGuire affairs. Instead, their political efforts against Roosevelt were channeled into the more legal electoral arena, and particularly into the Republican Party.
The munitions hearings had revealed some of these deepening ties: Harry Fletcher, a contemplated Du Pont lobbying agent, became Republican National Chairman. William J. Donovan, former Assistant Attorney General and the man picked by the Republicans to oppose Herbert Lehman—Roosevelt’s benefactor and political protege—for the New York governorship in 1932, became the DuPont's lawyer during the munitions hearings. The New York Times in 1934 also took note of the visit of A. Felix DuPont and his sister Alice to the Brazilian plantation of Henry Ford, the Republican Party’s strong man. A Nazi sympathizer since 1923, when Hitler personally accorded him special praise, in August 1938 Ford would accept from Hitler the Grand Cross of the German Eagle ever awarded to an American. This was the man to whom the DuPont's were drawn in increasing political ties. The main vehicle the DuPont's used for control over the Republican Party was their American Liberty League. Although its president, Jouett Shouse, had declared at its founding that “as prescribed by its charter, the League is to be absolutely nonpartisan in character. We do not intend to enter the election,” 136 most of the League’s 1935 Congressional program was incorporated into the 1936 Republican platform.
The League undoubtedly owed the first sixteen months of its existence to the DuPont's. Pierre, Irénée, S. Hallock DuPont, Henry B. DuPont, William du Pont, Jr., Charles Copeland, Ruly Carpenter, and Donaldson Brown each gave $5,000. By December 1935 DuPont associates contributed another $152,622, $38,000 donated outright as gifts. The balance, in the form of DuPont loans to the League, amounted to a staggering $114,000, $79,750 from Irénée alone. 137 This included contributions to not only the League, but also its more provocative auxiliaries.
With these funds, full-time organizers established League chapters at twenty-six colleges and universities; 100 pamphlets were written and printed, and several million copies distributed; a speakers’ bureau was established and the League sponsored many nationwide radio addresses, all echoing Lammot’s demand that “all government regulation of business, as such, and as distinguished from other forms of activity, should be abolished.” 138 From its 31-room office manned by a staff of fifty people (larger than the GOP’s seventeen-man staff in a twelve-room headquarters), press releases spewed forth constant attacks on the New Deal, relief, and the proposed thirty-hour week. Payment of war veterans’ adjusted compensation bonus was described as an “extravagance,” as were the Social Security Act and all “burdensome taxes imposed upon industry for unemployment insurance and old age pension.” Most of the major newspapers of the country fell in line, printing releases or carrying favorable news articles on the League’s positions. Even the New York Times gave the League front-page billing thirty-five times between August 1934, and November 1936. 139
Besides press releases, the League also created or subsidized a host of auxiliary antidemocratic organizations:
American Federation of Utility Investors
American Taxpayers League
Crusaders
Farmers Independence Council
League for Industrial Rights
Minute Men and Women of Today
National Economy League
New York State Economic Council
Sentinels of the Republic Southern Committee to Uphold the Constitution
Women Investors in America, Inc. 140
The most important of these organizations was the Southern Committee to Uphold the Constitution, whose chairman was Texas oil magnate and former National Association of Manufacturers president, John H. Kirby. Its goal was the creation of a mass movement of whites in the South, in the hope of robbing Roosevelt of his Dixie vote and also, through stirring up anti-Black racism, attacking the organizing drives of C.I.O unions from the North. As a first step in this direction, in July 1936 the Southern Committee sponsored a “grass roots” convention at Macon, Georgia, to begin Governor Talmadge’s campaign for the Democratic presidential nomination. At this gathering, Vance Muse, editor of The Christian American and right-hand man of John Kirby, circulated what the New York Times described as “a picture of Mrs. Roosevelt going to a Negro meeting with a Negro escort on either side of her.” 141 “From now on,” Muse said of the New Deal’s labor policies, “white women and white men will be forced into organizations with black African apes whom they will have to call ‘brother’ or lose their jobs.” 142
The Macon convention had found its greatest support in Wilmington. Pierre and John Raskob, now fully won over to Lammot’s ultra-conservative position, both donated $5,000 to help defray expenses. Lammot gave $2,500; Henry B., $500, Irénée, $50, and Alfred Sloan, $1,000. 143 Other contributions came from leading executives of some of the country’s largest corporations, including Continental Can and Standard Oil.
The second most important of the League’s auxiliaries was the Sentinels of the Republic, an anti-Semitic organization which constantly warned the country of “the Jewish-Communist” menace. In 1936 the Senate Lobbying Committee released correspondence from the Sentinels’ files that revealed its fascist sympathies. “I think, as you say, that the Jewish threat is a real one,” wrote its president, Boston banker Alexander Lincoln to W. Cleveland Runyon of Plainfield, New Jersey. “My hope is in the election next autumn, and I believe that our real opportunity lies in accomplishing the defeat of Roosevelt.” Runyon replied that the people were crying for leadership. “The Sentinels should really lead on the outstanding issue. The old line Americans of $1,000 a year want a Hitler.” 144
Although the Sentinels got most of their $160,000 treasury from the Pitcairn (Pittsburgh Plate Glass Company) family, Irénée and DuPont vice-president A. B. Ethols found it in their hearts to manage small goodwill contributions. 145
Of all the DuPont's, Irénée was the moving spirit in the Liberty League. In 1935, when 40,000 national guardsmen were called out in nineteen states to put down strikes, he lashed into Roosevelt’s unemployment relief and farm subsidy policies. “Instead of its having its policies on rewarding a man for what he does, the Roosevelt Administration goes in exactly the opposite direction,” he charged in December, “having adopted the policy of rewarding a man for what he does not do. It practices the socialistic maxim ‘work like hell so that the parasites may get the benefit of your labor.’” 146
Even as Irénée spoke, cousin Henry F. DuPont, G.M. director, was preparing for his four-and-a-half-month cruise around the world. Taking along his wife Ruth and daughter Pauline, Henry gaily sailed from New York the following week on the Cunard Line’s Franconia—in a $36,000 suite. Other DuPont's fared as well. DuPont Company enjoyed $55,676,000 in earnings in 1935, a 19 percent increase over 1934, paying the family $7.5 million in dividends just in the first half of the year. Ocean trips like Henry’s, then, were not uncommon. Pierre took a European cruise in 1935, as did Lammot. Lammot’s trip covered a six-week tour of Germany, Belgium, and France; although declining any comment on the growing European arms race, he did say that business prospects looked good.
Lammot’s trip to Germany came just before Hitler’s Italian ally, Mussolini, attacked Ethiopia and a world war looked inevitable. The following January, Roosevelt decided to use the situation of mounting European tensions to not only announce the continuation of Hoover’s nonintervention policy, but also launch his own reelection campaign with a declaration of war on America’s leading munition makers, the DuPont's.
Before an unprecedented joint session of Congress in the House Chamber on January 3, 1936, Roosevelt introduced his “Neutrality Act,” establishing an arms and ammunition embargo, as well as an embargo on the export of all commodities that might be used for war purposes. Then, abandoning his previous underplaying of their significance, the President attacked his critics in the Liberty League. “They steal the livery of great national ideals to serve discredited special interests,” he charged. “This minority in business and industry … engage in vast propaganda to spread fear and discord among the people. They would gang up against the people’s liberties.” He leveled a broadside attack on the League’s anti-labor policies. “They seek the restoration of their selfish power. They offer to lead us back round the same old corner into the same old dreary street.”
Before the astonished minority of Republican Congressmen, Roosevelt attacked the League for trying to “hide their dissent in a cowardly cloak of generality.”
“Our resplendent economic aristocracy does not want to return to that individualism of which they prate, even though the advantages under that system went to the ruthless and the strong.
“They realize that in thirty-four months we have built up new instruments of public power. In the hands of a people’s government this power is wholesome and proper. But in the hands of political puppets of an economic aristocracy such power would provide shackles for the liberties of the people.
“Give them their way and they will take the course of every aristocracy of the past— power for themselves, enslavement for the public … their weapon is the weapon of fear.” 147
The shock of Roosevelt’s dramatic counter-offensive made the entire country reel. Democrats applauded it, Republicans condemned it. “It was a great bid for reelection,” derided Delaware’s Senator Townsend. The League was more clangorous, charging the President with “fermenting class hatred,” and in a real way they were right. Roosevelt was quite willing to use the popular anger against the League’s wealthy strikebreakers in order to beat back their challenge and continue the program of reform he believed necessary if American capitalism were to endure.
In this crusade, he had the continued support of light manufacturing enterprises and business dependent upon the retail market. These included Joseph E. Davies of General Foods, Henry Doherty of Cities Service, C. E. McCann of Woolworth, the Straus family of R. H. Macy, R. J. Reynolds and Mrs. Doris Duke Cromwell of the tobacco industry, Pabst, Ruppert, Busch, and Feigenspan of the brewing industry, Harold McCormick of International Harvester, Vincent Bendix (aviation), Herbert Swope of R.K.O., and Sosthenes Behn of I. T. & T. Financial interests were also represented by Cornelius Vanderbilt Whitney of New York, Mary and Margaret Biddle of Philadelphia, William Harriman, Joseph Kennedy of Boston, Floyd Odium, Texas’s Jesse Jones, and California’s A. P. Giannini. These individuals personally provided over $220,000 for Roosevelt’s war treasury. Labor unions donated another $770,000, and Chase National, Manufacturer’s Trust, and the United Mine Workers together loaned over $250,000. Lammot even suffered some desertions in G.M. ranks: James Mooney, president of G.M.’s Export Corporation donated $5,000, while the DuPont's old enemy, Fred Fisher, gave $10,000. 148
One of Roosevelt’s greatest allies, however, was Roy Howard, head of the largest
newspaper chain in the country and the United Press International Wire Service. As
early as January 9, 1935, UPI ran an article by Herbert Harris charging that “… the only
liberty the League fosters is the liberty to water stock, rig the market, manipulate paper,
and pyramid holding companies to the stratosphere.… It is the liberty to pay starvation
wages and break strikes with hired thugs.… It is the liberty to warp the minds and
bodies of children in textile mills and on sharecropping farms. It is the liberty to buy
opinions of the pulpit and the press. It is the liberty which leads to death.”
149
When the Senate Lobby Investigating Committee released a list of the Liberty League’s leading corporate contributors in January 1936, the United Press headlines screamed, “Liberty League Controlled by Owners of $37,000,000,000.” Again, when the Treasury Department, on January 9, charged Pierre and Raskob with tax evasion for their fraudulent 1929 exchange of $4.5 million worth of stocks, the UPI gave the news top billing.
These charges brought before the Board of Tax Appeals were of enormous value to Roosevelt’s campaign. The New York Times on January 12 revealed that Roosevelt had personally planned the Treasury’s “John Doe” probe of the Raskob-DuPont 1929 tax returns, keeping the Treasury Department in the dark on the famous names involved. When the Treasury discovered the fraud and laid its evidence before the President, Roosevelt carefully outlined an anonymous “John Doe” approach so that it would not appear to have political motivations. Pierre’s tax machinations might well have gone undetected except that he chose to contest the additional $600,000 tax assessment. It was a foolish mistake. By doing so, Pierre handed Roosevelt a loaded gun. Now Roosevelt could choose the time to fire. In January, with his attack on the “economic Royalists” just underway, the time seemed ripe.
“Tyranny!” retorted Raskob on January 12, two days after the Treasury filed its suit. “Fortunately, even the government, let alone a few administration heads politically interested, is not strong enough to destroy by slander or otherwise the reputation of Mr. DuPont—a really great and fine character and a citizen whose integrity, honor, and love of country have become firmly established in the hearts and minds of his fellow citizens through nearly fifty years of active life in industry, philanthropies, and political and social welfare of his state and country.” 150
Such verbal cheer leading did not faze Washington. The next day, Secretary Morgenthau countered that it was not the government, but Pierre who entered the public eye by contesting what was owed. Raskob’s charges of “cheap politics,” Morgenthau claimed, simply did not stand up to the fact that the first Treasury notice on the fraud came on December 8, 1932, when Hoover was still President, and that there had been many continuances since, all of them ignored. Morgenthau did not explain, however, why the suit was suddenly now being pressed.
Roosevelt had them running and he knew it. When it was announced that Al Smith might appear at an upcoming Liberty League dinner, Democratic Senator Schwellenbach, the Democratic Senator from Washington who had become the administration’s “hatchet-man,” made a stirring appeal to Smith on the Senate floor not “to give way to the temptation of following the advice of J. Pierpont Morgan, John J. Raskob, and Pierre DuPont and all the rest of these rascals and crooks who control the American Liberty League. I say that Governor Smith ought first to remember that no man can successfully turn his back upon a friend,” meaning Roosevelt. Pierre and Raskob, the Senator warned, should share the fate of “racketeers in our great cities who were finally put in the penitentiary because of the fact that they evaded their income taxes.” 151
The League dinner turned out to be the most famous political gathering of American industrialists and financiers in the twentieth century. It was the type of affair, held in Washington and dangling the lure of limelight, that Al Smith, now an embittered enemy of Roosevelt, could not ignore. On January 25, 1,500 dinner-jacketed businessmen from most of the country’s largest banks and corporations crowded into the Mayflower Hotel’s flag-draped main ballroom and applauded the appearance of their guest of honor, the man who only two years before had condemned legislation against child labor: Alfred E. Smith. And salty Al gave them what they wanted to hear.
“There can be only one capital, Washington or Moscow,” the crusty banker rasped. “There can be only the clear, pure, fresh air of a free America, or the foul breath of communistic Russia. There can be only one flag, the Stars and Stripes, or the flag of the godless union of Soviets. There can be only one national anthem, the Star Spangled Banner, or the International.” To Smith, the American way of life was private enterprise, Americanism was capitalism, and he expressed no “possible faith in the capacity of political management to provide either stability or progress, if it should set out to operate the agencies of wealth creation, particularly industry.” 152 Roosevelt, claimed Smith, was marching Marx and Lenin under the guise of Jefferson and Jackson.
Particularly pleased were the DuPont's. Over a dozen members of the family were on hand to lead the standing ovation: A. Felix, Jr., Alfred V. and his young wife, Marcella, Emile F., Eugene E., Octavia, Henry B. and his wife Emily, Irénée and his wife Irene, and Pierre and Alice. “It was perfect,” Pierre told reporters. “He gave a splendid definition of democracy,” added Raskob.
Across the country the opposite sentiment prevailed. The Dallas Morning News’s editorial, “They will get little by standing on a platform that demands a return to the old order,” probably spoke for most of the country’s voting population. Yet there was little doubt that many of the public attacks on the League’s dinner were directed by the Democratic camp. Secretary of State Cordell Hull, for example, drew up notes, approved by the President, for an attack on the dinner by Democratic Senator Robinson. 153 Robinson made his attack in Congress, although Hull’s notes came too late to be used.
But in the closed circle of DuPont social life, none of this dissent was taken seriously. Raskob’s enthusiasm could not be dampened by so minor a factor as public opinion, and he publicly resumed his political career, on January 30 releasing an appeal, on his private stationery, to corporate leaders on behalf of the League. “As a property owner, stockholder and director in several corporations, I hope you will not think me presumptuous in calling on you and your friends to unite with others in issuing a clarion call to join the American Liberty League … which is doing everything possible to root out the vicious radical element that threatens the destruction of our government.” 154
While Raskob and Irénée appealed for money, Roosevelt’s forces vied for public support. UPI kept up its favorable articles, and other newspapers, including the New York Post and the Baltimore Sun, joined in the attack on the League. “The brood of anti-New Deal organizations spawned by the Liberty League,” wrote the Post, “are in turn sponsoring fascism.” 155 The Southern Committee to Uphold the Constitution also came under fire. “This is a hybrid organization financed by northern money,” charged the Baltimore Sun, “but playing on the Ku Klux Klan prejudices of the South. When Raskob, a Roman Catholic, contributed $5,000, he was told his money would be used to stir up the KKK and also to finance a venomous attack on Mrs. Roosevelt.” The Post article disclosed that at the Macon “grass roots” convention it was the Southern Committee that circulated the picture of Mrs. Roosevelt being escorted by Blacks to a meeting, and that the leaflet read, “President Roosevelt has … permitted Negroes to come to the White House banquet table and sleep in the White House beds.” The exposure of such ugly racism lowered the DuPont family’s image to its worst depths, especially when the Southern Committee’s Vance Muse stated that the DuPont's never showed disapproval of publication of the picture. Later it was revealed by the press that following the Macon convention and the publication of Muse’s leaflet, Henry B. DuPont and Alfred Sloan still made donations of $500 and $1,000 respectively. 156 Then, on July 18 the committee investigating the munitions industry released its damaging report.
Against this mountain of public opinion, the Republican standard-bearer, Kansas Governor Alfred Landon, rode on a wave of DuPont cash. By September Lammot had contributed $105,000; Irénée, $95,000; Pierre, $84,000; A. Felix, $15,000; Henry B., $17,000. Additional donations of up to $1,500 each were made by Pierre, Pierre S. III (Lammot’s son), William Kemble DuPont, William, Jr., H. Fletcher Brown, Ruly Carpenter, Charles Copeland, his son Lammot DuPont Copeland, M. W. Carpenter, Walter S. Carpenter, Jr., and DuPont executives Harry Haskell, W. F. Harrington, and T. S. Grasselli. In the $1,000 bracket were DuPont directors Jasper Crane and C. R. Mudge.
The Republican ticket also received the general support of most of the heavy manufacturing and financial interests.
Ohio and Maine received special attention from the DuPont's. Irénée, Lammot, and Pierre each gave $5,000 to the unsuccessful Ohio Republican machine. In Maine, holder of the slogan “as Maine goes, so goes the country,” Irénée had donated $5,000, helping the Republicans win the governorship and three congressional seats in the December 1935 elections. Now Landon was calling it a “victory parade” that would move on to sweep out the New Deal in the national elections in November. In Delaware’s “chateau country,” DuPont's toasted the name of Landon—and a few, a very few, even expected him to win.
He didn’t. Against so popular a President and dynamic a campaigner as Roosevelt, he never even stood a chance. Wherever Roosevelt went during the campaign, cheering thousands lined the streets to pay homage to the man they credited with returning jobs and incomes. On November 2 Roosevelt was reelected on the largest landslide in history, carrying every state but Maine and Vermont. Again, as in 1932, the millions in the cities endorsed the Roosevelt ticket, including for the first time wholesale desertions of the GOP by Black wards. Of the cities with a population over 100,000, Roosevelt captured 104, Landon 2. New York City alone gave him a 1.3 million plurality. Listening to returns at Roosevelt’s Hyde Park estate, campaign manager Jim Farley aptly summed up the Republican disaster: “As Maine goes, so goes Vermont.”
It was the greatest political defeat ever suffered by the DuPont's. As even Delaware delivered most of its votes to Roosevelt, a pall of gloom descended over the mansions along the Brandywine. Over $855,520 donated by some eighteen DuPont's to the Republican banner had been lost, a total of $116,100 from Irénée alone. 157 Another $500,000 raised through the Liberty League had also been to no avail.
The League had been a total failure. When it was founded in 1934, a membership of 4 million had been projected. By the time of the Mayflower dinner in January 1936, 70,000 members were claimed. Yet in March the League filed with the House Committee a list of only 22,433 “contributing members.” The summer of 1936 brought a maximum of 124,856 members, whose only criterion for membership was sending in their name and address for the League’s mailing list. As it spoke only to the interests of businessmen and bar associations, the League never became a mass organization. “Liberty League speakers sought to appeal to audiences which were largely composed of college educated people, businessmen, and professional people,” wrote George Ziegelmueller. “At no time did one League speaker ever address a local audience which consisted primarily of working class people.” 158 The League became a hated name throughout America. Even the defeated Landon bitterly described the League’s support as a “kiss of death.”
The League’s subsidiaries suffered a similar fate. The Farmers Independence Council, for example, had been a total failure: no real farmers joined. Again, over $350,000 in donations to these right-wing subsidiaries had been rendered futile. This was a crushing blow to the family’s morale, for support of these fascist tendencies was quite widespread throughout the family. This assertion can probably be more accurately documented if individual DuPont donations to each organization are reviewed, as filed with the Senate Lobby Investigating Committee: 159
R. R. M. Carpenter—$20,000
Walter Carpenter, Jr.—$4,834
Charles Copeland—$15,000
A. M. L. DuPont—$5,000
Henry B. DuPont—$20,000
Irénée DuPont—$86,750
Lammot DuPont—$15,000
Pierre S. DuPont—$5,300
Sam Hallock DuPont—$20,000
William DuPont, Jr.—$20,000
A. B. Ethols, DuPont V.P.—$575
William Knudsen, G.M. V.P.—$10,000
Alfred Sloan, G.M. Pres—$20,000
John J. Raskob—$20,000
Alfred Sloan—$1,000
P. S. DuPont—$5,000
Lammot DuPont—$3,000
Irénée DuPont—$100
Henry B. DuPont—$500
Lammot DuPont—$1,000
Lammot DuPont—$1,000
Alfred Sloan—$10,000
A. B. Ethols—$75
Alfred Sloan—$1,000
A. B. Ethols—$25
In addition, the Delaware branch of the Liberty League received $10,357 from Ernest, Eugene, Eugene E., Irénée, and Alice (Mrs. P. S.) DuPont, and Ernest May, Mrs. Ernest DuPont May, Crawford Greenewalt, and Marianna DuPont Silliman. Lammot also contributed to Repeal Associates, another child of the Liberty League.
Never before had one family so singly dominated a political campaign. Hence, the crushing defeat of the Republican ticket in 1936 was also a crushing rejection of the DuPont's. Symbolized by Taylor Caldwell’s Dynasty of Death and The Eagles Gather, DuPont was probably the most hated name in America. Pierre and Irénée DuPont and John Raskob all gave up politics, never again to mount a national platform. The League and most of its subsidiaries were abandoned, although Lammot continued to support the League until 1938, when the United Press reported that “the American Liberty League today listed contributions of $13,332 during the last two months, including $5,000 from Lammot DuPont of Wilmington, Delaware.” 160 It was Lammot’s last recorded donation to the League, which soon after dissolved.
The 1936 election marked the end of the political careers of a whole generation of the DuPont's, but it was not the end of their struggle against the New Deal. Thereafter, with Lammot assuming the family’s active leadership, the DuPont's concentrated their effort against the tide of unionization that was sweeping the country and threatening even their own General Motors. Working through the National Association of Manufacturers and other, less respectable organizations, the DuPont's now engaged in a futile but bloody attempt to stop history.
Even if some crusading reporter had caught rumors of its existence, he would have had a hard time tracing them to this office: the Special Conference Committee had no telephone listing; it had no letterheads, and all its records were marked STRICTLY CONFIDENTIAL. His only lead might have been if he had learned that Mr. Cowdrick was the S.S.C’s secretary.
Yet once every year, behind that door gathered some of the leading industrialists in America, secretly meeting to discuss ways to crush what one member, J. M. Larkin, vice-president of Bethlehem Steel, described as “a drive against the open shop.”
DuPont interests were well represented on the Committee: Lammot DuPont, DuPont president and chairman of General Motors; Donaldson Brown of DuPont and G.M.; Willis R. Harrington, DuPont vice-president; Alfred Sloan, president of G.M.; Harry W. Anderson, G.M.’s labor relations director; and Cyrus S. Ching, U.S. Rubber’s industrial and public relations director.
Founded in 1919 in the heat of postwar strikes, the Special Conference Committee was revived in 1933 when Gerard Swope, as Chairman of the Commerce Department’s Business and Advisory Council, appointed some of the S.S.C’s members to the Council’s Industrial Relations Committee and made Cowdrick its secretary. By the time of the 1936 elections, many of the Committee’s members had withdrawn from activity in the Roosevelt administration, backing the DuPont-sponsored Landon candidacy and being particularly alarmed by “continued governmental legislation and the aggressive pressure of union leaders.” 161 In preparing a line of action, the Committee, described by Senator Elbert Thomas of Utah as “the secret General Staff of big business,” studied various fascist organizations, including the anti-Semitic Sentinels of the Republic, for possible use in breaking strikes. One prominent member, A. H. Young, vice-president of U.S. Steel, even proposed to the Committee a piece of legislation obtained, as Young explained it to Cowdrick, “from an officer of the German government.” Young’s legislation was almost a duplicate model of Hitler’s Act for the Organization of National Labor, which had destroyed Germany’s trade unions.
But the most immediate concern of the Committee was a new labor tactic to win union recognition—the sit-down strike. When rubber workers successfully used the sit down for the first time in Akron, Ohio, a wave of fear swept corporate board rooms across the country. In a Committee memorandum, part of the “informational service” encouraged by U.S. Rubber’s Cyrus Ching, Cowdrick described and praised the attempt by Goodyear to end the plant occupation by inspiring vigilante groups to back the company’s open-shop policy. That scheme had failed to break the Akron strike, and workers around the country saw a potent tactic to use against speedup and the open shop.
But corporate executives did not give up the tactic of vigilante groups, and on June 1, 1936, Cowdrick wrote Harry Anderson, G.M.’s labor relations director, to ask his opinion of the Sentinels of the Republic. Anderson was apparently unaware of Irénée DuPont’s support of this organization, but offered his own home-brew alternative. “With reference to your letter of June 1 regarding the Sentinels of the Republic,” he replied a few days later, “I have never heard of the organization. Maybe you could use a little Black Legion down in your country. It might help.” 162
The “Black Legion” Anderson referred to was indeed a great help to General Motors in its struggle to prevent auto workers from unionizing. With members wearing black robes and slitted hoods adorned with white skull and crossbones, the Black Legion was the terror of Michigan and Ohio auto fields, riding like Klansmen through the night in car caravans, bombing union halls, burning down homes of labor militants, and flogging and murdering union organizers. The organization was divided into arson squads, bombing squads, execution squads, and anti-communist squads, and membership discipline on pain of torture or death was strictly enforced. Legion cells filled G.M. factories, terrorizing workers and recruiting Ku Klux Klansmen.
Since 1933 the Black Legion’s power had permeated police departments and high places in city, county, and state governments. They were intimately connected with G.M. company unions and the Republican Party. G.M. foremen were actually seen donning black robes inside a G.M. plant in Flint, Michigan, in preparation for a raid. 163 One of these raids resulted in the death of a Detroit W.P.A worker named Charles Poole. Later, Poole’s sixteen murderers were brought to trial—all were Black Legion members, five of them leading members of Detroit’s powerful Wolverine Republican League. Defending them was Wolverine director Harry Z. Marx, head of the American Legion’s Americanization Committee, counsel for Detroit’s notorious anti-labor chief of police, Heinrich Pickert, and a supporter of Michigan’s ex-governor, Wilbur M. Bruckner. In fact, only two days before Poole’s murder, Bruckner had announced his candidacy for the U.S. Senate at a meeting sponsored by the Wolverine Republican League.
“A reputable national organization,” wrote Lou Wedemar of Hearst’s Universal Service, “numbering among its members some of America’s most distinguished statesmen and financiers, was regarded by the Black Legion, terrorist cult, as an ally in its plots of wholesale murder.… It was established further that several members of the Legion murder party which recently shot to death a doomed victim were also members of this same highly regarded organization, and that certain Black Legionnaires believed their memberships in the two bodies overlapped.” 164
The Poole murder trial blew the lid off the Black Legion’s backers. “An important
section of the membership consisted of substantial citizens,” reported Will Lissner of
the New York Times. Captain Ira H. Marmon of the Michigan State Police testified that
at least fifty unexplained “suicides” from 1933 to 1936 were probably the work of the
Black Legion. One murder was described as a “thrill” by a former Black Legion
member, Dayton Dean. It seems Colonel Harvey Davis, after a drinking bout with
several Legionnaires, “wanted to know what it felt like to shoot a Negro.” The result
was the sadistic murder of one Silas Coleman. Such violent racism was openly admitted
by the Black Legion’s national commander, Virgil R. Effinger. “I belong to the K.K.K,” he was reported saying, “am proud of it and don’t care who knows it.”
165
In
disgust, New Republic’s Forrest Davis described the Black Legion as a “depraved K.K.K.”
166
But Black Legionnaires were no mere “depraved” racists. The list of murder victims charged to their hands reveals an anti-U.A.W motive of cruel, deliberate reasoning. John Bielak, U.A.W organizer in the Hudson plant, was given “warnings” by a Black Legionnaire, Isaac White; on March 15, 1934, Bielak’s body was found riddled with bullets beside a lonely country road near Monroe, Michigan. Only three months earlier, on December 22, 1933, another auto union organizer, George Marchuk, was also found dead with a bullet through his head. Marchuk, like many U.A.W organizers in its early struggling days, was a communist, and it was no surprise three years later to discover it was the Legion that was responsible for the bombing of the Communist Party’s Detroit offices. Indeed, among the Legion’s own principles revealed to new members at initiation was: “We regard as enemies of ourselves and our country all aliens, Negroes, Jews and cults and creeds believing in racial equality and owing allegiance to any foreign potentate.”
By the fall of 1935, with the bombing of strike headquarters and workers’ homes during the Motor Products strike, a public outcry had arisen in Michigan. Charles Poole’s murder in 1936 raised the outcry to a veritable roar, spurring the arrest of some fifty Black Legionnaires. Michigan requested the extradition of Virgil Effinger, but Ohio officials allowed his disappearance before he could be brought across state lines. Then the Detroit News discovered that Detroit’s Wayne County prosecutor, Duncan McCrea, was himself an admitted member of the Black Legion, and his chief investigator, Charles Spare, was a founder of the Michigan branch of the Ku Klux Klan. Desperate, some Michigan citizens, pointing out that the Legion had crossed state lines, requested a federal probe. In response, Minnesota’s Senator Elmer A. Benson introduced a resolution calling for a federal investigation of the Black Legion, which the anxious Senate quickly buried in committee. On May 28, 1936, Roosevelt’s Attorney General, Homer S. Cummings, admitted that the Justice Department had “known of the Black Legion for about a year,” but that a federal probe was impossible since “no federal law had been violated.”
Pennsylvania’s Governor George H. Earle was one of the enraged many who saw the long arm of DuPont working behind the scenes. “I charge that this organization,” he stated on June 8, 1936, “is the direct result of the subversive propaganda subsidized by the Grand Dukes of the Duchy of Delaware, the DuPont's, and the munition princes of the American Liberty League.
“I was United States Minister to Austria in 1933–34. I saw for myself how fascism and Nazism are born furtively, in the dark; how they develop through just such organizations as the Black Legion, distorting prejudices, rousing passions, making a mockery of the truth, finally bursting forth into violence and bloodshed.… The Black Legion is the first fruit of their campaign for fascism.” 167
The DuPont's never answered Earle’s charges, which went ignored by most of the press. The New York World-Telegram, however, did offer its own condemnation of the Legion two months later. “The Black Legion’s crimes are part of a larger picture of intolerance in America,” read its editorial. “They are cut from the same piece of teachers’ oaths, anti-red forays into campuses, vigilante and lynching mobs, anti-labor terrorism and the other manifestations of special-interest racketeering wrapped in the garb of patriotism.” 168
The Black Legion reputedly had a membership of some 40,000 in Michigan and 75,000 nationally. It was never successfully rooted out, posing under a variety of names in General Motors company towns throughout Michigan, Indiana, and Ohio. As late as March 2, 1938, the New York World-Telegram reported that the Black Legion was operating in Macomb County, Michigan, under the name of the Patriotic Legion of America. But by then the Black Legion had lost its momentum. Although the Klan still did, and does, thrive in Michigan, the Black Legion’s effectiveness ended with the defeat of its main objective—the crushing of the United Auto Workers. That objective failed with the victory of the Great Flint Strike of 1936–1937.
By 1936 General Motors was the country’s largest manufacturer and the world’s largest corporation, with a net annual profit of $225 million. Lammot DuPont’s own salary that year was over $100,000; 169 President Alfred Sloan and vice-president “Speedup King” William Knudsen received $375,000 each in 1935. In 1936, 350 of G.M.’s officers and directors were paid $10 million in salaries and bonuses. G.M. officials lounged on twenty-four privately owned yachts and were provided with their own railroad cars for traveling in privacy and luxury.
In contrast, the lives of G.M. workers were miserable. In 1935, when the federal government declared $1,600 as a minimum income possible for a family of four to live decently, the average G.M. worker took home $900. Style changes resulted in layoffs for three to four months out of every year, with no unemployment insurance provided. Company speedups to increase productivity were appalling, forcing the men to work like fiends. One worker told the Atlantic Monthly that the constant deafening noise of the factory had once made him so dizzy he couldn’t recall where his car was when he left the plant. Men became sick, vomiting their lunches, their skin described as having a “jaundiced color” like tuberculers, and when temperatures soared above the hundreds in July 1936, workers died in G.M. plants by the scores. Yet the speedups continued, enforced by foremen who could fire at will. The terrible threat of being unemployed during a depression had succeeded in intimidating the men for years. “The fear of layoff is always in their minds,” reported a federal NRA investigation in 1935, “even if not definitely brought there by the foremen. The speedup is thus inherent in the … lack of steady work and an army of unemployed waiting outside … insecurity, low annual earnings, inequitable hiring and rehiring methods, espionage, speedup, and displacement of workers at an extremely early age.… Unless something is done soon, they intend to take things into their own hands to get results.” 170
Such seething sentiments were well known to the DuPont's. In 1934, when the United Auto Workers demanded negotiations according to the NRA law, Lammot refused. Roosevelt, fearing that DuPont intransigence would lead to a conflict, offered a “compromise” which included proportional representation for the company union, the Works Council, and provided for an Auto Labor Board that would decide which union would represent the workers. Later, the UAW discovered that labor’s representative on this board was a member of the Black Legion.
This G.M. policy was not due simply to Lammot’s principled obstinacy. Rather, General Motors was too important a keystone in the whole DuPont empire to be placed in the hands of an independent trade union with any power at all. By 1935 G.M. had surrendered $250 million in dividends to DuPont since its original investment. That year alone, G.M.’s dividends represented 30 percent of DuPont’s income, another 13 percent coming from other corporate investments. In that very real sense, G.M. represented not only DuPont’s largest investment and greatest customer, but also the very symbol of the future of DuPont investments in many other industries as well. This, in effect, meant the future of DuPont itself. DuPont’s 19 percent increase in earnings over 1934, for example, was partly a result of the profits generated by G.M.’s hapless workers. “A factor contributing importantly to the increase,” stated the 1935 Annual Report, “was the action of the automotive industry, which consumed directly and indirectly the company’s products, in advancing the fall of 1935 the introduction of new models.…” Although average prices had fallen 36 percent since the Depression began, G.M.’s dividends, $22.4 million in 1935 alone, kept up DuPont’s profit margin.
To keep this empire intact, Lammot spent $994,855 between 1934 and 1936 for “detective work” in G.M. plants, including arms and gas; $419,850 went to the infamous Pinkerton Agency. 171 This spy system was, as the La Follette Committee explained, “a gigantic commercial enterprise in which employers collaborate with professional spies in assaulting citizens because they exert their lawful right to organize for collective bargaining.” 172 Even government officials were not immune to Pinkerton harassment from G.M. Sent to Toledo in 1935 to act as conciliator during a strike at the Chevrolet plant there, Assistant Secretary of Labor Edward F. McGrady was constantly shadowed by G.M. agents. That September, in anticipation of a strike, Chevrolet bought $1,000 worth of tear gas for the police department of Flint, Michigan, site of G.M.’s biggest plants. A year later, that gas was used in the greatest battle of organized labor.
The United Auto Workers finally won its autonomy inside the conservative American Federation of Labor in May 1936, and the following month it sent one of its crack organizers, Vice-President Wyndham Mortimer, into the G.M. heartland. Arriving in Flint, a total company town, Mortimer secretly visited homes of workers, signed people up, sent records to the UAW national headquarters, and soon was publishing a weekly newsletter to 7,000 workers. In a short while he had organized a core of workers in Fisher Body No. 1 plant, knowing that the Fisher and Chevrolet plants were the crucial links in G.M.’s chain of production. Mortimer was then recalled by the A.F.L leadership, which was frightened by his success; but he arranged for Robert Travis, an experienced organizer, to take his place, and the union continued to grow.
The defeat of the DuPont-sponsored Republican ticket in November played a catalyst role in encouraging labor militancy at Flint. G.M. had openly endorsed Landon, but the workers had voted Roosevelt back into office. The week following the election, the emboldened auto workers in Fisher No. 1 fought another speedup and wage cut with seven work stoppages. On November 9 Travis met with forty union members, key men in each department, to plan a sit-down. Three days later striking workers forced the rehiring of two men, and the union grew further. On December 30, G.M.’s attempt to shift dies by rail from Flint to another plant where the union was weak finally touched off the beginning of the greatest strike in labor history. “Shut her down!” came the cry through the plant, and the occupation of G.M. was underway. By January 7, 100,000 G.M. workers were idle across the country.
G.M.’s management made every attempt to break the strike. First it tried to demoralize the workers by directing attacks through the press, charging “ultimatums” and “dictatorship,” and by organizing its own vigilante Flint Alliance. The strikers ignored the slurs and organized themselves in the plant to handle everything from sanitation to security, labor classes to sports and theater, all governed by two daily meetings of 1,200 workers. The strike captured the imagination of the country, and financial and cultural help poured in. Charlie Chaplin donated his current movie, Modern Times. Dramatic groups put on plays. All the while, Lammot DuPont fumed.
The DuPont's tried to stamp out this rising national support for the Flint strikers through another one of their arms, the National Association of Manufacturers. “The refusal to abide by the will of Congress on the part of leading members of the National Association of Manufacturers,” reported the Senate Civil Liberties Committee three years later, “spurred by the legal opinion distributed by the Association, was one of the principal reasons for the inability of the NLRB to establish peaceful collective bargaining in situations such as the General Motors strike in January and February, 1937.” 173 NAM waged a nationwide propaganda war against unions and the Flint strikers and secured court injunctions against the NLRB that was designed, according to the Senate committee, to “nullify the administration of the National Labor Relations Act, impairing the successful operation of the law.” Significantly, the committee noted that “the largest contributor during this period (1932–1937) was E. I. DuPont de Nemours & Co. with $118,600, most of which was donated in 1936 and 1937. The rising interest of this company in the Association’s activities is indicated by the increase in its contributions from $725 in 1933 to $55,000 in 1937.” General Motors, at $66,250, was NAM’s second largest contributor.
On January 11, G.M. called in the Flint police to evict the strikers. The police launched repeated assaults, firing shotguns and revolvers. Although fourteen workers were wounded, the strikers beat back the attack with bottles and water hoses.
Then G.M. pressured Michigan’s Governor Frank Murphy, a long-time correspondent of John J. Raskob, to intervene with the National Guard, but Murphy hesitated. The contingent of 3,000 troops sent were filled with workers who wore their own union buttons, and their reliability was in question. Besides, Murphy did not want the reputation of his office or the Democratic Party damaged by a bloodbath. On January 13 he called G.M. and the UAW together and succeeded in hammering out a compromise that called for evacuation in exchange for recognition of the UAW as the sole bargaining agent.
In the midst of evacuations, however, UAW officials were handed a prepared G.M. press release by UP reporter Bill Lawrence, announcing the scheduling of a meeting with the Flint Alliance after the evacuations were completed to discuss “representation.” What was the union’s reaction? the reporter asked.
The evacuations immediately stopped. But the nonstriking plants had already been reopened, and the union’s position would be further weakened each day. Something had to be done. On February 1 the auto workers seized Chevy No. 4, G.M.’s largest plant.
Murphy responded angrily by ordering 4,000 troops with fixed bayonets, machine guns, and 37-mm. howitzers to surround Chevy 4. An injunction was served, and tensions rose. Thousands of workers poured in from around Michigan, some armed. Plans were formulated by veterans to seize Flint’s city hall and free the strikers if they were arrested. Roosevelt, who had been secretly encouraging Murphy to intervene if necessary (while lying reassurances to a worried John L. Lewis), 174 then reversed his position and backed off, fearing a widened class conflict, and perhaps aware that Mortimer had already defined the struggle in class terms. “This thing is deeper than most people realize,” the UAW vice-president had told the Flint strikers. “Behind G.M. is the Steel Institute. Behind the Steel Institute are the DuPont's. It is a fight between the American working class and the tap root of American capitalism.” 175 Mortimer later stated that Roosevelt constantly pressured the negotiating committee to settle on G.M.’s terms. 176
When Roosevelt’s efforts were resisted by the strikers’ determination, pressure shifted onto Alfred Sloan and G.M. vice-president, William Knudsen, one of Pierre DuPont’s G.M. proteges who was directly handling the renewed negotiations. Lacking the active support of federal and state troops, fearing the damage to machinery, production, and retention of markets, fearing a possible widened class conflict and the ugly name G.M. would be given by bloodshed, General Motors surrendered on Thursday, February 11, 1937. The workers marched out of the plants in triumph, and Knudsen retired from the scene to sulk (despite smiles for cameramen) over G.M.’s first labor defeat.
The historic UAW-G.M. agreement was signed not by the chairman, Lammot DuPont, but by DuPont in-law Donaldson Brown, G.M. vice-president. Brown was chairman of G.M.’s finance committee and also served on DuPont’s finance committee. As such, he was the living symbol of the marriage between DuPont and General Motors. Within three months, however, this marriage lost its management dynamic, such was the impact of the Flint defeat. Lammot resigned the chair, giving it to Sloan who, in turn, passed the presidency on to Knudsen in reward for his Flint negotiations. Donaldson Brown was the only DuPont who remained in management, becoming vice-chairman.
The G.M. cabinet shake-up represented a general withdrawal by DuPont and Morgan interests from G.M.’s active management. Pierre’s old order, the executive and finance committees, was abolished and replaced by a policy committee (which included Lammot and Walter S. Carpenter, Jr.) and an administration committee of G.M. executives. In the process, leading DuPont's (Henry F., Pierre, Irénée, and John Raskob) and Morgans (Junius S. Morgan, George F. Baker) were dropped.
The Great Flint Strike stands as a turning point in DuPont history, for the brave determination of the auto workers convinced many of the family that a new age had dawned on the American political economy, an age when the rigid habits of laissez faire could no longer meet the needs of corporate capitalism. Along the corridors of DuPont headquarters, through the mansions along the Brandywine, a new awareness was gradually seeping into the DuPont mentality that ownership per se did not guarantee claims for control, but that in the era of strong industrial unions, control must be made an area of its own political concern; government regulation, and through it, the union leadership, must be used in a policing role to maintain labor peace and submission. But few Du Ponts agreed with New Dealers that militant unions such as the UAW could eventually be used for this purpose. This is probably because their shortsightedness on profits prevented them from foreseeing the enormous mellowing influence on union leadership that legal recognition, the binding contract, the narrow “interest-group” mentality, and legally established channels sanctioned by a flattering government could have.
Be that as it may, another dynamic was already developing that would forge a Du Pont-Roosevelt truce. For as the Flint Strike forced the Du Ponts to move, reluctantly but necessarily, closer to New Deal labor policies, so also the 1937 economic collapse and growing fears of foreign market losses to Axis aggression were forcing Roosevelt to move closer to the Du Ponts. Since the President’s commitment to private enterprise ruled out wholesale nationalization of any major industry, including the arms industry, the approach of possible war made the Du Ponts no family to ignore. In fact, it necessitated a shocking alliance.
NEXT
THE NEW DEAL GROWS OLD
notes
Chapter 10
1. Marquis James, Alfred I. du Pont—Family Rebel (Indianapolis: Bobbs-Merrill Company, Inc., 1941), p. 473.
2. Ibid.
3. Irving Bernstein, The Lean Years (Baltimore: Penguin Books, Inc., 1966), p. 77.
4. Ibid., p. 252.
5. James, Alfred I. du Pont, p. 474.
6. Ibid., p. 478. 7. Murray N. Rothbound, “The Hoover Myth,” For a New America (New York: Random House, 1970), p. 178.
8. James, Alfred I. du Pont, p. 479.
9. New York World-Telegram, October 17, 1931. 10. New York Times, April 14, 1930, p. 2. 11. Ibid.
12. Literary Digest, April 26, 1930, p. 7.
13. Ibid.
14. Robert Cruise McManus, North American Review, January 1931, p. 14.
15. Literary Digest, March 21, 1931, p. 8.
16. Ibid., April 25, 1931.
17. Outlook, April 15, 1931, p. 517.
18. Literary Digest, December 12, 1931.
19. Ibid.
20. New Republic, March 2, 1932.
21. Ibid.
22. Ibid. 23. Ibid.
24. Ferdinand Lundberg, America’s Sixty Families (New York: Vanguard Press, 1937), p. 454.
25. Ibid., p. 455; also Report of the Special Senate Committee to Investigate the Munitions Industry, 1936, p. 1403.
26. William Leuchtenburg, Franklin D. Roosevelt and the New Deal (New York: Harper & Row, Publishers, 1963), p. 39.
27. Richard O. Boyer and Herbert M. Morais, Labor’s Untold Story (New York: United Electrical, Radio and Machine Workers of America, 1970), p. 271.
28. Washington Star, July 29, 1932.
29. New York Times, November 10, 1931, p. 8.
30. Munitions Hearings; Report, pp. 1403–8.
31. Leuchtenburg, Franklin D. Roosevelt, p. 13.
32. “The Man Who Saved Democracy,” Commonweal, January 18, 1933, p. 315.
33. New York Times, January 17, 1953, p. 25.
34. Ibid., January 14, 1953, p. 39.
35. F. I. du Pont Co., “The Chemical Industry” (New York: E. I. du Pont Co., 1935), p. 14.
36. New York Times, September 1, 1963, Sec. III, p. 3.
37. Ibid., January 26, 1934, p. 6.
38. Ibid.
39. Ibid., August 27, 1933, Sec. IV, p. 5.
40. Ibid., March 12, 1933, p. 4.
41. Munitions Hearings; Report, p. 1406.
42. New York Times, November 24, 1933, p. 1.
43. B. C. Forbes, “The Salaries that Are Paid in Various Lines,” American Magazine, Vol. 89, January 1920.
44. F. I. du Pont, Inc., “The Chemical Industry.”
45. Ibid.
46. Ibid.
47. New York Times, January 26, 1934, p. 6.
48. Albert E. Kahn, High Treason (New York: Lear Publishers, 1950), p. 129.
49. New York Times, January 31, 1934, p. 25.
50. Business Week, September 15, 1934, p. 20.
51. Frederick Rudolph, “The American Liberty League, 1934–40,” American Historical Review, LVI (1950), 19–33; also New York Times, December 21, 1934.
52. Ibid.
53. Raskob to Shouse, Shouse Manuscripts; quoted also in Leuchtenburg, Franklin D. Roosevelt, p. 92.
54. Congressional Record, Senate, January 15, 1935, p. 450.
55. New York Times, December 20, 1963, p. 1.
56. Ibid.
57. La Follette Senate Investigating Committee, Report, February 8, 1937.
58. New York Times, March 10, 1937.
59. Munitions Hearings; Report, 1937, Schedule B and p. 1400.
60. Ibid.
61. Dickstein-McCormick Special Committee on Un-American Activities, House of Representatives, 73rd Congress, 2nd Session, Testimony of Major General Smedley D. Butler, November 20, 1934, pp. 8–114, DC 6 II..
62. Ibid.
63. Ibid.
64. Ibid.
65. Ibid.
66. Ibid.
67. Ibid.
68. Lundberg, America’s Sixty Families, p. 179.
69. Dickstein-McCormick Committee, loc. cit.
70. Ibid.
71. Ibid., III, Report (No. 153), Union Calendar No. 44, 74th Congress, 1st Session, House of Representatives, “Investigation of Nazi And Other Propaganda,” p. 111, DC 6 II in testimony).
72. Ibid., Testimony of Paul Comly French.
73. Ibid., Report.
74. Kahn, High Treason, p. 204.
75. New York Times, August 25, 1934, p. 12.
76. Time, December 3, 1934, pp. 1–2.
77. Time, Statement of Ownership, October 1, 1935.
78. Dickstein-McCormick Committee, Report, 1935.
79. New York Times, February 2, 1930, p. 21.
80. Ibid.
81. Ibid.
82. Congressional Record, Senate, January 15, 1935, p. 457.
83. Ibid.
84. Ibid. 85. Ibid.
86. Ibid.
87. Alfred D. Chandler and Stephen Salsbury, Pierre S. du Pont and the Making of the Modern Corporation (New York: Harper & Row, Publishers, 1971), pp. 570 and 703. 88. Munitions Hearings, Exhibit No. 483.
89. William A. Williams, The Tragedy of American Diplomacy (New York: Dell Publishing Co., Inc., 1962), p. 133.
90. Ibid., p. 154.
91. Ibid.
92. William A. Williams, ed., The Shaping of American Diplomacy (Chicago: Rand McNally & Co., 1960), p. 723. (Remarks to cabinet.)
93. For a treatment of Hoover’s interpretation of his nonrecognition policy see Professor Richard N. Current’s article in the American Historical Review, LIX, No. 3 (April 1954), pp. 513–42.
94. Williams, Shaping, p. 706. (Memorandum to Secretary of State Simpson.)
95. Munitions Hearings, Part 5, p. 1368, Exhibit 512.
96. Ibid., Report, p. 253.
97. See U.S. Senate, Committee on Military Affairs, Monograph 1, “Economic and Political Aspects of International Cartels,” 1944, p. 6; also Munitions Hearings, 1934, Exhibit 512.
98. Munitions Hearings, pp. 1208–15.
99. Ibid., Part II, p. 2561, Exhibit 911.
100. New York Times, September 15,1934, p. 1.
101. Nye Committee, Report, 1936, p. 249.
102. William L. Shirer, The Rise and Fall of the Third Reich (New York: Simon and Schuster, Inc., 1960), p. 203.
103. Munitions Hearings, Part 5, p. 1197, Exhibit 506.
104. Ibid., pp. 1197–98, Exhibit 507.
105. Ibid., Report of the Special Senate Committee, Munitions Hearings, p. 261.
106. New York Times, September 15, 1934.
107. Munitions Hearings, Exhibits 519 and 520, Part V, pp. 1236, 1377, and 1379.
108. Munitions Hearings, Part 5, pp. 1243–44.
109. Ibid., pp. 1246–47.
110. Ibid., p. 1199, Exhibit 508.
111. Ibid., Exhibit 1103, Chart A: “International Relations War Materials or Processes.”
112. Ibid.
113. New York Times, August 31, 1933.
114. See Report.
115. Ibid.
116. New York Times, September 18, 1936, p. 26.
117. Shirer, Third Reich, p. 389.
118. Congressional Record, Senate, January 15, 1935, p. 456.
119. Ibid., p. 448.
120. Ibid.
121. See New York Times, December 5, 1934.
122. Congressional Record, Senate, January 15, 1935, p. 457.
123. New York Times, September 15, 1934.
124. John K. Winkler, The Du Pont Dynasty (Baltimore: Reynal & Hitchcock, Inc., 1935), p. 330.
125. New York Times, September 16, 1934, p. 30.
126. Ibid., December 6, 1934, p. 4.
127. Ibid.
128. Munitions Hearings, Testimony of Irénée du Pont.
129. Ibid.
130. New York Times, September 15, 1934.
131. Munitions Hearings; Report, p. 256.
132. Ibid.
133. Munitions Hearings, Part V, pp. 1266–67.
134. James, Alfred I. du Pont, pp. 541–42.
135. New York Times, December 7, 1935, p. 19.
136. New York Times, August 23, 1934, p. 4.
137. Special Committee to Investigate Lobbying Activities, U.S. Senate, 74th Congress, 2nd Session, Report, 1936, and Digest of Data.
138. Winkler, The Du Pont Dynasty, p. 321.
139. Martin Lipset, The Politics of Unreason (New York: Harper & Row, Publishers, 1970), p. 201. 140. Senate Lobbying Committee, Report, 1936.
141. New York Times, April 16, 1936, p. 2.
142. Kahn, High Treason, p. 195.
143. New York Times, April 16, 1936, p. 2.
144. Senate Lobbying Committee, Report, also Digest of Data, 1936.
145. Ibid.
146. New York Times, December 7, 1935, p. 19.
147. Ibid., January 4, 1936, p. 1.
148. Lundberg, America’s Sixty Families, pp. 480–83.
149. UPI dispatch, January 9, 1935.
150. New York Times, January 13, 1936, p. 4.
151. Ibid., January 14, 1936, p. 15.
152. Ibid., January 26, 1936, p. 1.
153. Cordell Hull to FDR, January 22, 1938, PPF 473, FDR Memorial Library.
154. New York Times, January 31, 1936.
155. New York Post, April 18, 1936.
156. New York Post, April 18, 1936.
157. Lundberg, America’s Sixty Families, p. 484.
158. George W. Ziegelmueller, “A Study of the Speaking of Conservatives in Opposition to the New Deal” (Doctoral thesis, Department of Speech, Northwestern University, 1962), p. 64.
159. New Republic, September 2, 1936; also Senate Lobbying Committee, 74th Congress, 2nd Session, Digest of Data.
160. New York World-Telegram, March 10, 1938.
161. Special Conference Committee, Annual Report, 1936.
162. Kahn, High Treason, p. 166.
163. Henry Kraus, The Many and the Few (Los Angeles: The Plantin Press, 1947), p. 9.
164. New York American, May 30, 1936.
165. New York Times, May 26, 1936.
166. Forrest Davis, “Labor Spies and the Black Legion,” New Republic, June 17, 1936.
167. Kahn, High Treason, pp. 210–11.
168. New York World-Telegram, August 8, 1936.
169. New Republic, January 20, 1937, p. 340.
170. Henderson Report for the National Recovery Administration, January 23, 1935.
171. Congressional Record, February 8, 1937, Preliminary Report, La Follette Committee.
172. Ibid.
173. New York Times, August 15, 1939, p. 5.
174. Saul Alinsky, John L. Lewis, An Unauthorized Biography (New York: G. P. Putnam’s Sons, 1949), p. 130.
175. Daily Worker, January 21, 1937.
176. Wyndham Mortimer, “History of the UAW,” March of Labor, March 1951, p. 29.
Raskob backed Swope’s protege, U.S. Steel president Owen D. Young, in his presidential ambitions. But like Hoover, he also stepped back from endorsing the Swope Plan’s call for a formal move toward a centralized state capitalism. Government should stay out of business, Raskob felt, “except to safeguard the public by regulation against monopoly and unfair trade practices.” Beyond this tongue-in-cheek concession by a DuPont G.M. director to political expediency, Raskob’s corporate intentions were clarified by a proposal “that citizens contemplating a business merger may beforehand obtain by the decision of a federal commission an assurance not only that their labor shall not have been in vain, but also that they will not be subject to criminal prosecution under the terms of the Sherman Law. Businessmen, we believe, will favor these suggestions as being helpful and fair.”
Many did. But some, like Swope and Baruch, felt Raskob’s suggestions were also inadequate. Already, John Garner, Speaker of the House, was proposing that Congress give the President almost dictatorial powers, while Roosevelt, who had enjoyed backing in 1930 from Baruch and Young, expressed interest in Swope’s proposals. Subsequently, Young endorsed Roosevelt.
Then Raskob made one fatal mistake. His personal crusades, whether in the form of prohibition or his friendship with Al Smith, prompted him to launch a prohibition poll of 90,000 contributors to the 1928 war chest, most of whom were wets. As this put Roosevelt in an awkward position as a “moderate wet” between anti-prohibitionists and the southern support he had won by his non-committal stand at the Republican National Committee meeting, the poll would definitely hinder Roosevelt’s nomination chances.
“It is unfair,” Raskob answered, “to suggest that I am using my position as National Chairman to help or hinder any candidate.” 19 Yet it was clear that Roosevelt opposed any plank which would read out of the party anyone who wished to be prohibitionist in his local election. Raskob’s credibility as National Chairman began to slacken among his former northern liberal supporters. When Raskob joined Garner in supporting the Republican proposal for a federal sales tax, the battle lines were drawn. Roosevelt made his appeal for the “forgotten man,” and Al Smith came back fighting. “I will take off my coat and fight to the end,” retorted the crusty little banker, “against any candidate who persists in any demagogic appeal to the masses of the working people of this country to destroy themselves by setting class against class and rich against poor.” 20 Raskob announced his support of Smith and the battle was on.
Actually, it had already begun. In January 1932, soon after Raskob’s prohibition poll, ugly reports began appearing in the national press connecting the party’s debts to Raskob’s control. The influential New York Times charged that the National Chairman “has soaring ideas about the tariff and prohibition, which, through merit acquired by his generosity, and a steadfastness in bleak Democratic weather, he hopes to get into the party platform.” 21 In response, Raskob could only hurl charges of religious bias at those who raised the issue of the party’s debts.
Yet the attacks continued; the liberal New Republic called for an end to his “one-man control” of a national political party by the whip hand of money and credit: “He, on his part, tempted by the prospect of dictating a platform, naming a candidate, and perhaps running an administration, has connived rather than protested at the rising debt obligation.
“The Democratic Party’s debt to Mr. Raskob is now the largest known political commitment in our history. It is nearly three times as large as the Republican ‘debt of gratitude’ that gave us Teapot Dome. Nor is it an outright gift, one that might, for theory’s sake, leave the party free. Mr. Raskob has given his party some money, but this is a living loan, an indeterminate mortgage—the sort of debt that reeks of obligation.… The debts that Chairman Raskob was influential in incurring, Banker Raskob has taken up.” 22 [Now that is interesting because Teapot Dome was something the other side would not let go,and is taught as part of 'official' history today in 2018 DC]
So stinging an attack would normally draw a heated response. But there was none.Nor could there be, since Chairman Raskob was indeed Banker Raskob. After the 1928 disaster a $400,000 note in the party’s name was left in the hands of the County Trust Company of New York. The late James J. Riordan, Al Smith, W. F. Kenney, and Raskob himself had all contributed to Smith’s campaign and were also all directors of County Trust. Curiously enough, the Democratic note was underwritten by Democratic officials Riordan, Kenney, and Raskob. By March of 1932, when the New Republic article appeared, $33,766 had been added by the bank to the debt as accrued interest.
Raskob’s new Washington headquarters, likewise, had cost $10,000 a month to operate. By January 1, 1932, the party owed Raskob $354,250 for this alone, raising the grand total of notes held by Raskob to $779,106. 23 Although Pierre’s $5000 in 1930 and $12,500 and other contributions in 1931, and Raskob’s own $125,000 donation in 1932 (accompanied again by a check from Pierre for $27,000), helped eliminate much of this debt, 24 the publicity damage had already been done.
The publication of these facts did not enhance Raskob’s image among the party’s new urban rank and file, nor did his endorsement of Al Smith, who had lost most of his New York power base to his successor, Governor Franklin Roosevelt, the creator of the country’s first comprehensive system of unemployment relief and a strong proponent of public power works. By the time of the convening of the National Convention in Chicago late in June 1932, it was apparent Smith could not win. Pierre, Raskob, and Baruch then convinced Smith to throw his support over to former Secretary of War Newton Baker in an effort to block Roosevelt’s nomination. “I was four years ahead of my party,” a dejected Al Smith told the convention, “and look what happened to me.”
Between the candidacy of Baker and that of Texas’s John Garner (who was backed by newspaper magnate William Randolph Hearst, William McAdoo, and the Ku Klux Klan), Raskob had succeeded in preventing Roosevelt from gathering the two-thirds vote necessary for nomination. By the fourth ballot, only pressure from Louisiana’s Huey Long prevented the Mississippi delegation from beginning a desertion from the Roosevelt camp that might have turned into a disastrous rout.
A master compromiser, Roosevelt selected Garner as his running mate while also moving quickly to placate the DuPont forces. A. Mitchell Palmer, the Attorney General under Wilson who had secured German dye patents for the DuPont's, was asked to draft the nominee’s platform. A conservative document, Palmer’s platform ignored unemployment and Roosevelt’s “forgotten man.” In their stead, prohibition was raised as the main issue of the campaign. Raskob continued as National Chairman, and his labor lieutenant, Irish Catholic Dan Tobin, head of the Teamsters, was named head of the Democratic Labor Committee.
Roosevelt received substantial aid from Pierre and Raskob. Pierre donated $15,000 and Raskob $23,000. 25 But the greatest boon for Roosevelt was Raskob’s national party machine, based in Washington with political strings to every American city. Without it, campaign manager Jim Farley would have been hard put to wage an effective unified campaign capable of turning out the vote in such large numbers as was done.
Roosevelt’s was a low-keyed campaign, completely avoiding any statement on collective bargaining (despite a plea by John L. Lewis), deficit spending, the NRA, federal housing, or increased income taxes on the wealthy, and in fact it was often contradictory. Roosevelt contented himself with attacks on Hoover’s expenditures, while he advanced unemployment-aid and public works that would require huge sums of government spending. He called for an end to growing centralization of power in Washington, yet proposed planning and federal regulation of utilities and the stock market. In all this, his tone was low and even at times discordant, allowing public animosity toward Herbert Hoover to win his vague case for him.
Hoover’s image had already suffered a crushing blow by the Depression. Industrial production was down 50 percent, according to the Federal Reserve Board; iron and steel, 85 percent; lumber, 77 percent; cement, 65 percent. Factory payrolls had been slashed 65 percent, employment 44 percent. Over 13 million workers were jobless and over 4,000 banks had failed.
But the coup de grâce to Hoover’s career was delivered in June 1932, by his own hand. A “bonus army” of thousands of tired, unemployed veterans and their families arrived that month in Washington demanding a federal bonus promised them by law, but not payable until the 1940’s. They had traveled thousands of miles in battered jalopies, trucks, and wagons; many had even walked. And when Hoover wouldn’t even receive them, they pitched tents, erected shacks, and slept in the capital’s parks to petition Congress. As soon as Congress adjourned after refusing to grant the marchers any relief, Hoover made a show of force. On July 28 a police attempt to evict some of the squatters resulted in the killing of two veterans. Hoover then called in the Army. Army Chief of Staff General Douglas MacArthur, who described the marchers as “a mob … animated by the essence of revolution,” 26 delayed the use of troops only long enough to have his swagger stick and medal-covered uniform arrive from a nearby fort.
Aided by Colonel Dwight D. Eisenhower and Major George Patton, MacArthur ordered tanks, four troops of cavalry with drawn sabers, and a column of steel-helmeted infantry with fixed bayonets to enter downtown Washington and advance on the unarmed veterans. From Pennsylvania Avenue, MacArthur’s proud army marched across the Anacostia Bridge, thousands of veterans and their wives and children fleeing before them, and advanced on their shanty village, lobbing tear gas bombs and setting its shacks and tents afire. An infant died from the tear gas, an 11-year-old boy was blinded for life, and many veterans were wounded. MacArthur, responding to a reporter’s claim of having seen a cavalryman use his saber to slash off a veteran’s ear, explained, somewhat amused, that that was quite impossible. “You don’t slash with a saber,” he told the press, “you lunge,” 27 and, striking the correct pose for photographers, he demonstrated the proper thrust.
That night, from the windows of the White House’s Lincoln Room, Hoover watched the red glow from the burning camps in the southeast and retired. The next day the press was informed that “the President was pleased.” 28
Such crude brutality only spurred desertions already underway in Hoover’s ranks, even among some leading Republicans. After Roosevelt privately expressed interest in the Swope Plan, corporate desertions mounted. Finally, Henry Harriman, president of the U.S. Chamber of Commerce, confronted Hoover with the fact that FDR had agreed to the Swope Plan’s enactment. If the President persisted in his opposition, he warned, he would lose the support of many leaders in big business.
Hoover persisted, and many of the most “enlightened” corporate leaders, particularly in the light-goods industries who suffered most immediately from the loss of retail sales, decided to throw their full weight behind Roosevelt. Among Roosevelt’s top supporters were W. N. Reynolds (R. J. Reynolds Tobacco), William K. Vanderbilt, Cyrus McCormick, Edward Harkness, Edward Guggenheim, Jesse Straus (R. H. Macy Co.), Harry Warner (motion pictures), and Mrs. Harry Payne Whitney. Many were registered Democrats; others, including Republican senators Robert La Follette, Jr., Hiram Johnson, George Norris, Smith Wildman Brookhart, and Bronson Cutting, were not. Additionally, rumors persisted of secret Rockefeller contributions despite their public donations to the Republican ticket, their traditional stronghold.
The White House, sensing the inevitable, was a palace of gloom. “If you put a rose in Hoover’s hand it would wilt,” 31 remarked sculptor Gutzon Borglum. “Down with Hoover, slayer of veterans!” was Hoover’s only greeting on a campaign visit to Detroit. Thousands of auto workers lined the streets of that city as he passed by, but they remained sullen and silent. When the President finally arrived at the speaker’s platform, his face was ashen, his hands trembling. Hoover looked a pathetic, beaten man. A “hero” only four years before, Hoover was now the national villain.
Election day came almost as an anticlimax, Roosevelt’s 22.8 million votes totally overriding Hoover’s 15.75 million. Roosevelt’s victory was clearly a city return based on the vote of labor and the rural disinherited. Roosevelt swept thirty-two of the thirty six largest cities. For the first time since before World War I, a Democratic candidate had won majorities in Cincinnati, Indianapolis, Cleveland, Chicago, Detroit, Pittsburgh, Baltimore, Minneapolis, Kansas City, Salt Lake City, Denver, Seattle, Portland, Oakland, and Los Angeles. Two hundred and eighty-two counties were won that had never before gone Democratic. The South, based on the returns in its cities, had again become reliably “solid.” Miners of the six Appalachia states also joined the Democratic landslide, giving Roosevelt 39 of 45 counties. Many Blacks abandoned their traditional loyalty to the party of Lincoln, a desertion no doubt aided by their increasing migration from rural Dixie to the industrial cities of the North.
It was the most dramatic electoral reversal in American history, and Roosevelt owed much of it to the Democratic National Chairman’s four-year effort to build an urban based party. It was Raskob who had financed the party through its difficult transition years. It was Raskob who had formulated the grand urban strategy and forged a coherent, centralized organization. And it was Raskob who had grasped the lightning of the urban revolt and put it in the Democratic machine to power it to victory. As Charles Michelson, Democratic Party publicity director, put it two months after the election, Raskob was “the man who saved the Democratic Party.” 32
3. THE HONEYMOON
On a particularly hot New England day in the summer of 1931 a flashy new
automobile was speeding along the Osterville-Hyannis road, when, rounding a curve, it
sideswiped a car operated by Miss Ethel Howard, forcing her to crash head-on into
another, oncoming car. Screeching to a halt, the driver, Henry B. DuPont, surveyed the accident he had caused and found a young teacher, Miss Julia Avila, badly hurt. Three
days later Julia died in Cape Cod Hospital. Whatever pangs of conscience Henry may have had privately, he showed none in public. When Julia’s father, Manuel Avila, sued for the loss of his daughter, Henry, true to family tradition, claimed innocence and for six months fought the suit in court. The jury, however, was not convinced and finally ordered him to pay Julia’s family $11,168.
Such a sum was a small fortune in those grim days of the Depression, when children went to school in shoes soled with cardboard and some witnessed their unpaid teachers passing out in the classroom from lack of food. Yet for the DuPont's, $11,000 was an expendable pittance from a financial reservoir grown even larger since 1929. For, despite its bitter bequest to most Americans, the Depression had been kind to the DuPont's. In fact, in terms of the competition it destroyed and the avenues for cheap investments it provided, the Great Depression had been very kind, indeed.
Likewise, William DuPont, Jr., began designing the Delaware Race Track, the first of twenty-five such ventures around the world, while directing the $50 million investment of the American Horse Shows. Meanwhile, Anthony Drexel, the husband of Francis G. DuPont’s granddaughter, rode the green as a leading player of that most aristocratic of sports, polo.
Henry F. DuPont pursued his epic wanderings through the country’s shops and auctions in search of antiques for his Winterthur mansion, now expanded to 180 rooms. In 1930 he lent his art experts to police to track down fraudulent dealers who had undermined the market. Ernest DuPont, whose home was robbed of $50,000 to $75,000 worth of jewelry in 1931, engaged in a similar hunt, only to be shocked with the revelation that the thief was his own maid.
The Depression, like previous panics, also provided the bankruptcies and credit shortage of which empires are made, and the DuPont's used the crisis to expand their holdings into many new fields of investment.
With land prices plummeting, Maurice DuPont became president, treasurer, and director of Realty Accumulating (sic!) Company and the Great Hills Improvement Company. Francis I. DuPont joined the New York Cotton Exchange and became a director of the Missouri-Kansas Pipeline Company. Raskob increased his financial holdings, adding American Surety Company, Emigrant Industrial Savings Bank, and American International Corporation to his DuPont, G.M., Missouri Pacific Railroad, and County Trust directorships. Donaldson Brown, DuPont in-law and G.M. director,also became a director of the St. Louis-San Francisco Railway. Walter Carpenter, Jr., joined the board of Bell Telephone of Pennsylvania.
DuPont executives also followed DuPont investments. Vice President Jasper Crane joined the board of D. Van Nostrand Company; Harry Haskell, Sr., the boards of Noranda Mines, Ltd., International Mining Corporation, Triplex Safety Glass Company, and Equitable Trust of New York; Leonard Yerkes, the board of Seabord Air Line, a firm many naive stock investors had mistaken during the Twenties for an airline with growth prospects. William P. Allen became chairman of Childs (Restaurants) Company of New York, and Francis B. Davis, settling into his new post as head of U.S. Rubber, also served as the president of Sampson Corporation and director of New York Trust Company, Malayan-American Plantations, Ltd., Meyer Rubber Company, Nangatuck Chemical Company, Dominion Rubber, Ltd., Rubber Plantations, Ltd., Columbus Rubber Company, Ltd., and U.S. Rubber Plantation Products.
Besides that unhappy experience, the DuPont's ran a streak of luck in the early Thirties. Alfred, on a trip to Cairo, stopped in a curio shop and bought for $17.50 a vase in which he found a strange mineral formation. Later his chemists uncovered a fortune in gold and silver coins dating back to Ptolemy, 300 B. C. His cousin and fellow exile, William, Jr., received a boon of a more traditional nature. Wilmington’s federal judge ruled that four transfers of his father’s amounting to $6,433,000, which had been made to old Willie’s children two years before his death, were not made “in contemplation of death,” and ordered the Internal Revenue Service to begin repaying Junior the taxes paid on his father’s estate.
A more personal treasure came to Richard C. DuPont in 1932—his life. While he was cruising in the West Indies with his cousin Victor DuPont and friends Thomas Laffey and Scott Townsend, Richard’s sloop, the Nahma, disappeared. Frantic, the DuPont's made a special appeal to the U.S. Coast Guard to spare no expense in a search. A. Felix, Sr., was already in Norfolk organizing an expedition to save his son when an Army transport reported finding the sloop foundered off the Carolina coast, all hands alive and well. The ship carried the young men to Panama where, like proper DuPont's, they refused the pauper’s aid of the Salvation Army and headed for home assuring all they could care for themselves. They did.
This harrowing experience did not diminish Richard’s flare for danger one bit. He continued his glider flying, which won him world distance records and the National Soaring Championship in 1934, 1935, and 1937. In that last year he also won the $1,500 Silver Evans Trophy for flying his glider into two thunderheads and riding them successfully for the first time in history. His father, A. Felix DuPont, Sr., and brother, A. Felix, Jr., were also airplane buffs. Felix DuPont, Jr., even built a cradle in his plane for his 4-month-old son Felix III. All these DuPont's managed to crash occasionally, but always without serious injury. A. Felix, Jr.’s 19-year-old wife, the former Eleanor Hoyt (who was Lindbergh’s 16-year-old pilot after his triumphant return from Paris), also skimmed the brink of aerial disaster. Flying home to Wilmington in her familiar scarlet monoplane, she encountered a blinding fog over Staten Island and dropped down, trying to fly beneath the clouds. The mist was so bad she was barely able to sight an open field, and she decided to try to land. As she approached the ground, the plane suddenly hit a high wire fence and crashed. Fortunately, she was neither far from Seaview Hospital nor seriously hurt, and later was whisked away by private ambulance to her mother’s luxurious home in Manhattan.
None of these incidents dimmed the DuPont craze for airplanes, Henry B. DuPont increasing his holdings in Trans World Airlines (over which he reigned as chairman), Bendix Aviation, and North American Aviation (which also owned Eastern Airlines until 1938, when it was sold to Kuhn, Loeb, & Co. and Smith Barney & Co., Wall Street brokers). Apparently, the only serious aerial casualty the family suffered during the Thirties was a year-old heifer. Peacefully grazing on Coleman DuPont’s Irvington on the Hudson estate, the heifer dropped dead from fright as a roaring U.S. Army air armada swooped overhead toward New York City.
Coleman’s son Frank had less aerial ambitions. Francis V. DuPont succeeded his father as president of the Equitable Trust Company of Wilmington and managed Coleman’s substantial investments in McHenry Coal Company, Jellico Mountain Coal Company, Louis Sherry, Inc., and Savarin Restaurants. By 1937, while others had gone bankrupt, Frank had expanded into Empire Trust Company, Continental American Life Insurance Company, and Prudential Investors.
Pierre DuPont’s holdings also increased. He became a director of the Pennsylvania Railroad, largest railroad in the country, and joined Raskob in building the Empire State Building, tallest building in the world—all this while retaining directorships in DuPont, Wilmington Trust, and General Motors.
DuPont control of General Motors was further intensified in 1931 when their arch foes, the Fishers, were bought out. Subsequently, the Fisher Body Division bought increasing amounts of paint, varnish, and imitation leather from DuPont. In addition, that same year G.M. signed a contract with the DuPont's U.S. Rubber Company,agreeing to buy one-half of its tires from U.S. Rubber at market value in exchange for rebates. By 1934 these rebates amounted to $1,437,087 to the Chevrolet Division alone. The following year showed a $1,044,516 rebate, all in violation of anti-trust laws. 33 DuPont had other areas of G.M. locked up as well, as General Robert E. Wood, president of Sears, Roebuck and Company, discovered when he wrote DuPont Vice President W. F. Harrington in 1938 for permission to use Freon gas. “Very much to our surprise, we find that the [G.M.] Frigidaire Company has an exclusive arrangement for the use of this gas from [DuPont] Kinetic Chemicals, Inc. We know this has always been contrary to the policy of the DuPont Company—as a matter of fact, it is contrary to government policy.”
“I am appealing to you,” wrote Wood, reminding DuPont that Sears “has been a very large customer of the DuPont Company for many years and has maintained the most friendly relation with the DuPont Company.” 34 To no avail.
While other companies foundered, DuPont, with as much as 30 percent of its income coming from G.M. dividends, grew stronger during the Thirties, no doubt helped by its lack of outside funded debt, a trait characteristic of the chemical industry in general. In 1929, when the national average of eighteen of the largest companies earned 15.1 percent on their investments of capital, DuPont earned 17.3 percent. In 1930 the national average of 10.3 percent was still below DuPont’s 10.6 percent. By 1931 the national average had slipped to 7.8 percent, DuPont, still 10 percent; in 1932, 4.6 percent, DuPont 5.2 percent; in 1933, 7 percent against DuPont’s 7.8 percent; in 1934, 9.1 percent, DuPont 9.4 percent. From 1929 to 1931, in the depths of the Depression, Lammot still paid handsome dividends of at least $4.00 a share. Only in 1932 and 1933, when earnings slipped as low as $1.81, did he cut dividends to $2.75, only to raise them again in 1934 to $3.10, leaving over $115 million in working capital. 35 Key to this success, of course, was labor peace, which the vast reserve of unemployed in the labor market helped to enforce.
In 1931—the year the family installed the world’s largest oval table (30’ by 72’ of solid Brazilian mahogany) in their DuPont board meeting room—another “DuPont” company of national impact appeared on the scene: F. I. DuPont & Co. No sooner had the pillars of Wall Street stopped shaking from the Crash, than Francis I. DuPont jumped into the frozen investment waters, gambling that its low quotes would soon heat up again. Opening a brokerage house on Wall Street when the Dow-Jones Industrial Average was stagnating below 42 was a big risk. “I remember one day in 1934,” his son Edmond recalled years later, “when total volume on the New York Stock Exchange came to only 274,000 shares. My father tore off a section of the stock tape with that figure and handed it to me. But he was a scientist. He wasn’t downhearted by the Stock Market. He felt that corrective forces already were at work then at a time when the future looked black.” 36
Francis was not alone in this belief in “corrective forces.” Pierre, looking beyond the tired Hoover excuses that the market was only “shaking out” its overvaluation, had developed an enthusiasm for the Swope Plan and its dramatic enactment through Roosevelt’s NRA. The National Industrial Recovery Act, drafted mainly by Swope and Henry Harriman as a quick response to Senator Black’s thirty-hour-week bill, was one of the milestone laws that came out of Roosevelt’s 100-day “honeymoon” with Congress. It was also the hallmark of Roosevelt’s short-lived honeymoon with the DuPont's. Black’s thirty-hour week bill had been endorsed by AFL’s William Green as one that struck “at the root of the problem—technological unemployment,” and had been passed by the Senate. Swope, meanwhile, had already been working on a scheme of trade associations based on his experience with industrial mobilization and the War Industries Board during World War I. Presented as a compromise, and endorsed by labor legislator Senator Robert Wagner as “the first step toward a nationally planned economy,” the bill became law.
Pierre joined Swope on the NRA’s Industrial Advisory Board, and in December was elected chairman. “I feel that the result of the National Labor Board’s efforts will do away with strikes,” 37 he enthusiastically told the American Arbitration Association a month later. The N.L.B was Pierre’s darling, a way by which huge corporations like DuPont could enforce labor peace through arbitration, while at the same time burdening their smaller rivals with enforceable codes. Small industries correctly recognized this legalized discrimination of capabilities to meet organized labor’s needs as a further step by monopoly capital toward consolidation of power. As chairman of the Industrial Advisory Board, Pierre responded to their complaints by admonishing them: when they’ve “learned to settle their grievances in the proper way,” he explained, “and not by strikes and refusing to abide by their codes, there would cease to be these talks about hardships.” 38 This was not only corporate power speaking; it was the tone of history, of increasing and inevitable economic concentration.
For the first year of the New Deal, Roosevelt received general support from DuPont's. His public works program for the Tennessee Valley, the TVA, was fully endorsed by E. Paul DuPont: “Nothing, I believe, could be a better plan for recovery.” 39 Pierre, in addition to joining the N.R.A and its National Labor Board, also accepted appointment to the Business Advisory and Planning Council of the Department of Commerce. Irénée, despite his Supreme Court conviction for trying to evade taxes on $150,000 for 1924– 1926 through trust funds for his wife and children, also gave Roosevelt his endorsement and a check for $5,000. When FDR, responding to the domestic rush of bank deposits and the international rush on gold, ordered a Bank Holiday and called for private hoarders to turn over their gold to government reserves, Irénée cheerfully surrendered the many gold pieces he had accumulated as director fees over the past twenty years—to his own Wilmington Trust. “On my return from Cuba yesterday,” he announced to the press, “Mrs. DuPont asked me to deposit them in your institution. She feels it is her duty to get them into the government’s gold reserve, which I understand will be accomplished by this deposit.” 40 That year he donated $5,000 to the Democratic Party. 41 When FDR finally had to depreciate the dollar, even Lammot announced his approval, claiming that “Nothing can be more important to business than absolute certainty as to the basis of money, which is the medium of exchange in all commercial transactions.” 42 Roosevelt was balancing the budget, and the DuPont's were ecstatic.
What in Italy and Germany required violent coups and fascist parties to achieve, Roosevelt accomplished bloodlessly in his first 100 days, pushing through the new Democratic Congress an enormous federal, and particularly executive, centralization and regulation for the country’s political economy: The NRA, a $500 million unemployment relief bill, a farm subsidy bill (he would later restrict farm production), a railroad regulation bill, a Federal Deposit Insurance Corporation to shore up failing private banks, a public power bill (TVA), a Home Owners Loan Act, and the beer bill.
In December 1933 the twenty-first Amendment was ratified and prohibition ended. Pierre became Delaware’s first Liquor Commissioner, happily collecting the revenues he thought would soon replace the income tax. But in some ways it was a bitter victory. The man most responsible for giving the American people the chance for voting on prohibition and its repeal, John J. Raskob, the man who had built the Democratic Party into an urban power, had been summarily deposed by Roosevelt right after his election. From that day on, Raskob’s suspicion of “radical” Roosevelt grew. Throughout 1933 he watched the presidential drama with cautious support, waiting to judge the results and how they would affect the DuPont-Roosevelt honeymoon. His wait was not long.
4. DESERTING THE SHIP OF STATE
When the DuPont's arrived in this country in 1800, they brought not only their wealth,
but also their European customs and attitudes. Most of these faded away over
succeeding generations, but one remained, nourished by the spring of ongoing private
enterprise. This was their patriarchal relationship with their employees, a relationship
which, through the hierarchical journeyman structure of powder-making in those early
days, closely resembled the master-apprentice traditions of the European guild. For over 100 years this patriarchal relationship was the labor foundation of the company’s stability and growth. It was a hierarchical tradition which the DuPont's strove to maintain, not only because it represented what they considered the best and only way to make powder, but also because it gave them a double social power: on the one hand, it gave them influence over the entire life of their workers from their religion to the way they dressed; and on the other, because the male DuPont's were physically on the job with their employees and were familiar to them, a real bond held these workers together and separated them from workers of other companies. This, and the fact that DuPont workers were bound to the existing order by their simple interest in becoming managers or lower-echelon bosses themselves, effectively diminished their capabilities of self-realization as members of a working class, thereby retarding the development of their class consciousness.
It was this patriarchal attitude that guided DuPont’s labor policies throughout the reigns of E. I. DuPont, Alfred DuPont, “Boss” Henry DuPont, Eugene DuPont, and T. Coleman DuPont. As late as 1920, Coleman, an advocate of piecework, could maintain that an employee who needed a raise should put his trust in his boss’s good judgment. “If he has the right stuff in him,” he said, “and if he isn’t afraid to expend plenty of body or brain sweat to make himself a bigger and broader man, the matter of salary will work itself out quite satisfactorily in the end. As I said, I never asked for a salary raise in my life.” 43 Few believe Coleman DuPont ever needed to.
There had begun to be changes by then, however, symbolized by the closing of the old Brandywine powder works. Now DuPont's no longer worked with their men, but exchanged their blue overalls for a white shirt and tie. Mechanization and the assembly line was revolutionizing manufacturing, and the economic base for the hierarchical journeyman structure had been eliminated with the flood of unskilled labor into new DuPont plants during the war.
In the chemical industry, as in most other industries, mechanization enabled the unskilled worker to produce as much and more than the skilled journeyman. Whereas a skilled worker was capable of annually producing $3,239 worth of products in 1899, by 1929 an unskilled worker was able to produce $11,850 worth of products. 44 In 1931 the chemical worker’s output was 40 percent higher than in 1929, a mere two years earlier. This increase lowered the cost of labor, in chemical products, and while wages were increased to $23.40 a week in 1933 (higher than the $17.60 average for eighty-nine manufacturing industries), these wage increases barely kept up with the increase of chemical workers’ productivity. In fact, as its output increased, labor was getting a smaller and smaller piece of the pie. In 1919 wage costs amounted to 17.1 percent of the value of products; by 1933 they were only 12.4 percent. 45 The difference between the 17 percent and 12 percent was lost to the worker and went to the stock owners of the chemical corporations, the biggest of which was DuPont.
Such facts were proudly made known to DuPont stockholders but never released to DuPont workers, and they were the kind of facts a union would have brought to them. DuPont management knew this and enforced a strict anti-union policy.
The foundation of this policy was the preservation of the hierarchical work situation that separated their employees from each other. Although the economic rationale for the skilled journeyman had been generally eroded by mechanization, DuPont kept the hierarchical workplace structure for its social control benefits. Journeymen became integrated into the management ranks as foremen. On these men the DuPont's built the Works Council, a company union composed of management and workers, as a buttress against any organizing drive by independent outside unions. In an attempt to maintain the personal patriarchal relationship between management and worker, the DuPont's encouraged identification with the firm: a proud “You are a DuPont man” approach, reinforced by a stock investment plan. DuPont was the first company to develop a course on HOBSO (How Our Business System Operates) to inoculate blue-collar workers against creeping socialism. Capitalism, to the DuPont's, was civilization itself, and as such, had to be defended at all costs. Otherwise, as Irénée warned in the early Twenties, “a dark age” would befall mankind.
Pierre DuPont at first was confident that the NRA would not disturb an organization of labor so fundamental to the profit-generating efficiency of the entire chemical industry, and particularly DuPont. The NRA’s chemical industry codes, after all, had been drafted by DuPont and other manufacturers. Minimum wages were set in 1933 at 35 to 40 cents per hour, and that year the industry was already paying 56½ cents, and 61.9 cents in 1934. Hours also should have required no further adjustments in Pierre’s mind; a 40-hour week was set in 1933, when the industry’s average was already down to a 41-hour week, and the week was further reduced to 38½ hours early in 1934. Neither wages nor hours, Pierre believed, were issues that outside unions could use for an organizing drive. But to further protect DuPont, Hercules, Atlas, and other chemical manufacturers from such a possibility, they installed in the collective bargaining codes for the industry a provision giving management the right “to engage, promote, or release employees.” 46 Pierre was confident that everything was under control. “The Recovery Act,” he said in January 1934, “has provided an opportunity to deal with strikes in the way labor wants to deal with them, so eventually I think strikes will disappear.” 47 Pierre had reason to feel that way. Already, in September 1933, the National Labor Board had broken strikes at Weirton Steel Company and Ford Motor’s Edgewater, New Jersey, plant, leaving grievances unresolved.
On March 2, 1934, Pierre filed the N.L.B’s first dissenting opinion. It was over the right of majority rule in deciding a plant’s unionization. Pierre opposed this interpretation of Section 7A of the National Industrial Recovery Act (which had guaranteed collective bargaining), insisting on the right of minorities and individuals to negotiate separately with the company, a position which would have effectively made unions impotent. The specific case involved a company which refused to deal with a railway union after it had been elected into the plant. Instead, it “bargained” with its own “employees committee,” a company union. The analogy to DuPont’s own Works Council was obvious. In fact, soon after, in order to preserve the “legality” of the Works Council, the DuPont's had to permit the withdrawal of management’s 50 percent participation. Company control, however, remained firm, although in other DuPont controlled companies, which yielded DuPont over 40 percent of its income in 1933, company unions were not as strong and were soon challenged by rank-and-file labor. With these challenges, the anxiety of the DuPont's grew.
March 2, 1934, marked the end of the DuPont-Roosevelt honeymoon. Within a short period, Pierre resigned from both the N.L.B and the NRA’s Industrial Advisory Board.
Actually, by then Pierre was the only DuPont who hadn’t already abandoned the Roosevelt ship of state. Three months earlier, in January, Lammot had blasted Roosevelt for going too far in his reforms. “The year 1933,” he stated, “has witnessed an adventurous attack by the administration upon the political, social, and economic ills of the country.” 48 Lammot announced he was being forced to discontinue DuPont’s stock investment plan for its employees because the burden of restrictions of the Securities Act of 1933 was “so onerous.” 49 This “onerous” law, drafted by Sam Rayburn and future Supreme Court Justice Felix Frankfurter, had required each new stock issue to be accompanied by a statement fully disclosing relevant financial information for public inspection, and held corporate directors like Lammot criminally and civilly liable in case of any misrepresentation.
Roosevelt passed other bills in 1934 that prodded increasing corporate desertions:
Stock manipulators like Raskob and Pierre were disturbed by the Securities Exchange Act, which created the Securities and Exchange Commission (SEC) to regulate the securities market.
The Air Mail Act, which stipulated rigid controls in awarding federal contracts, forced the dissolution of Henry B. DuPont’s General Aviation Corporation, 48.5 percent of whose stock was held by General Motors. General Aviation had owned 300,311 shares of Henry’s North American Aviation, and Lammot had invested G.M. funds also in North American, buying over one million shares, a 30 percent interest, and another 13 percent interest in Transcontinental and Western Air, Inc. The passage of the act caused losses and General Aviation’s distribution of its North American holdups, followed by dissolution.
The Communications Act, which created the Federal Communication Commission (FCC), was an attempt to regulate the airwaves and stabilize and cartelize the radio, telegraph, and cable industries, but was looked at suspiciously in Wilmington as a step toward “radical” government control.
The Railroad Retirement Act, which required pensions for railway workers, also did not warm the hearts of railroad directors like Pierre, Irénée, Donaldson Brown, and Raskob. Moreover, FDR’s abandonment of a balanced budget in favor of huge government spending projects marked a new step toward making deficit spending a permanent feature of federal financial policy. Lammot had opposed such tendencies during the Hoover administration, even though Hoover’s $6 billion deficit had been incurred in salvaging banks, railroads, and insurance companies through his Reconstruction Finance Corporation. Now, with most of these funds going for public relief, mostly to dispossessed farmers and unemployed workers, Lammot was fuming with anger.
Lammot simply did not understand the economic realities of his age. Technology, by increasing productivity, was altering the entire social fabric of the United States. For, while the absolute numbers of industrial workers had increased due to industrial development, the number of workers it took to produce a given volume of products decreased. The rate of increase of employment relative to production volume was decreasing. For the first time in history, mechanization was reversing the time-old pattern of accumulating living labor power in order to increase production and meet needs; now, a pattern of dis-accumulation—and with it, mounting technological unemployment—was developing. Roosevelt’s economic advisers understood this as a key factor in the unusual severity and length of this Depression. This was no usual cyclical bust, but a different kind of depression, with a whole new, complicating factor of technological unemployment, requiring the intervention of the government to provide income and consumer ability—through publicly financed work projects such as the W.P.A or post office expansion, even at the cost of bureaucratic waste.
The DuPont's prepared for civil war, convinced that a major socialist upheaval was imminent. This delusion was enhanced by the stormy atmosphere in which they were trying to maintain old values and older profits: strikes were sweeping across the country from southern textile mills to the northeast to San Francisco, where a general strike, led by Communists, strove to right economic injustices but actually had little political intent or consequence. Self-proclaimed “radical” mayors and a governor, responding to the desperation of the times, were threatening “big business” with taxes and controls. The membership of the A.F.L, enjoying a revival protected by the NRA’s collective bargaining clause, jumped from 2.2 million in 1933 to over 4 million in 1934, and Lewis, breaking with the A.F.L’s “skilled labor” prejudices, led an organizing drive among the unskilled millions of industrial workers which was soon to develop into the Congress of Industrial Organizations.
“Many people,” Ruly Carpenter wrote Raskob in March 1934, were confused as to why Roosevelt was “doing many things.” People were unaware of “much of the truth” of Roosevelt’s aims, and unaware that the President was strangling free press and speech. “Thousands of men,” he claimed, were leaving jobs for better pay with the government. “Five Negroes on my place in South Carolina refused work this spring … saying they had easy jobs with the government.… A cook on my houseboat at Fort Myers [Florida] quit because the government was paying him a dollar an hour as a painter.…” 51 Perhaps Raskob could go to Washington for an explanation?
Raskob rejected Carpenter’s proposal, replying on March 20 that he was “entirely out of politics since July 1932, and I am anxious to keep out.” 52 Raskob withdrew from personal activity shortly after the Democratic Convention nominated Roosevelt, performing only his functional duties as National Chairman. During that period, he wrote Democratic official Jouett Shouse that “when one thinks of the Democratic Party being headed by such radicals as Roosevelt, Huey Long, Hearst, McAdoo, and Senators Wheeler and Dill, as against the fine, conservative talent in the party as represented by such men as you, Governor Byrd, Governor Smith, Carter Glass, John W. Davis, Governor Cox, Pierre S. du Pont, Governor Ely, and others too numerous to mention, it takes all one’s courage and faith not to lose hope completely.” 53 Apparently, by the time of Ruly’s letter in 1934, the Twenty-first Amendment had severed the last anti prohibition ties to Roosevelt. In 1934, $400 million in liquor taxes went into the Treasury, yet the cut in income taxes the DuPont's had expected never materialized. By March 1934 Raskob had lost all hope in the New Deal Democrats, and suggested to Ruly an alternative—an independent political organization “encouraging people to work, encouraging people to get rich, showing the fallacy of communism in its efforts to tear down our capital structure, etc.”
Raskob encouraged Carpenter, who had organized the DuPont spy system during the war, to head the new organization. “You haven’t much to do,” he wrote, “and I know of no one that could take the lead in trying to induce the Du Pont and General Motors groups, followed by other big industries, to definitely organize to protect society from the suffering which it is bound to endure if we allow communistic elements to lead the people to believe that all businessmen are crooks, not to be trusted, and that no one should be allowed to get rich.” Then Raskob became more specific about power. “The reason I say that you are in a peculiarly good position to do this is that you are young enough to undertake the work, you have the time, you are wealthy enough to not have to depend upon a job or salary for a living, and are in a position to talk directly with a group that controls a larger share of industry through common-stock holdings than any other group in the United States. When I say this I mean that I believe there is no group, including the Rockefeller's, the Morgan's, the Mellon's, or anyone else that begins to control and be responsible for as much industrially as is the DuPont Company.” 54
Five months later, on August 15, 1934, the District of Columbia issued a charter to a new organization pledged to “combat radicalism”—The American Liberty League. Founded to “uphold the Constitution” and “to preserve the ownership and lawful use of property when acquired,” with a greater emphasis on property rights than civil rights, Irénée, Raskob, Al Smith, and Shouse made up four of its six officers.
The League’s Advisory Council completed the sketch of total DuPont defection from the Roosevelt camp: there, prominently displayed, appeared the name of Pierre S. DuPont and his wife Alice. But it was Irénée who was now the voice of DuPont, denouncing Roosevelt for “doling out other people’s money for relief.” 55
The legitimacy of the new government system itself was called to question as “unconstitutional.” The federal government, Irénée said, “apparently believes it can tax those who have and hand it to those who have not, but that act is clearly unconstitutional.” 56
Roosevelt chided the League as an organization formed to uphold two of the Ten Commandments. Apparently, he didn’t take the League seriously. He was soon to learn how much he was mistaken.
DuPont reaction to the administration was not limited to the Liberty League. In the same month that the League’s founding was announced, Pierre also used his membership on the Department of Commerce’s Business Advisory and Planning Council. Joining William Harriman, chairman of Union Pacific, and Walter Gifford, president of A.T. & T., on August 20 he denounced the protection of small investors in legally requiring uniform accounting and reporting in corporate financial reports. The following year he resigned also from this agency.
The DuPont's did more than protest. They also took direct and forceful measures, hiring an army of Pinkerton's and other private detectives to infiltrate the labor ranks of DuPont and General Motors as company spies. 57 In May 1934 the Wilmington headquarters of the Delaware State Police sent fifty revolvers to company gun men at the DuPont Hopewell plant for possible use in a textile strike. 58 Federal Laboratories, with which DuPont shared a joint agency and in which Atlas Chemical Company had a substantial holding (with Lammot and Pierre DuPont as large shareholders),59 sold various vomiting and tear gases to corporations and police departments throughout the country. Among its corporate clients were General Motors and Pacific R & H Chemical, a DuPont-owned corporation.
The tense year of 1934 was also when the DuPont's suddenly bought a 56 percent interest in Remington Arms, the manufacturer of small arms and one-third of the country’s “sporting” ammunition. This investment secured a market for DuPont gunpowder, as well as Remington’s additional asset as the largest producer of steel knives in the country. Soon afterward, DuPont also acquired the Charles Packer Company, one of the country’s largest makers of shotguns, the Peters Cartridge Company, and the King Powder Company of Ohio. 60 These were all market-related acquisitions, but, according to charges before a Senate committee later that year, may also have been marked for more illegal purposes.
For in these same summer months of 1934, Remington Arms, the treasurer of the American Liberty League, and the name “DuPont” were all implicated in one of the most bizarre plots in American history, a plot confirmed by the Dickstein-McCormick House Investigating Committee, to forcibly overthrow the Roosevelt administration and with it, the government of the United States.
5. THE MACGUIRE AFFAIR
America, MacGuire told Butler, was in great danger from a “communist menace,” and needed a complete change of government. Then MacGuire made his pitch. A “militantly patriotic” veterans’ organization, like the fascist Croix de Feu operating in France, was the only kind of organization that could force a change in Washington; he suggested Butler lead such an organization in “a march on Washington.” “We have three million dollars to start with on the line,” he told Butler, “and we can get three million more if we need it.” 61
“To be perfectly fair to Mr. MacGuire,” Butler testified some months later, “he didn’t seem bloodthirsty. He felt such a show of force in Washington would probably result in a peaceful overthrow of the government. He suggested that ‘we might even go along with Roosevelt and do with him what Mussolini did with the King of Italy.’ … Mr. MacGuire proposed that the Secretary of State and Vice President would be made to resign, by force, if necessary, and that President Roosevelt would probably allow MacGuire’s group to appoint a Secretary of State. Then, if President Roosevelt was ‘willing to go along,’ he could remain as President. But if he were not in sympathy with the fascist movement, he would be forced to resign, whereupon, under the Constitution, the Presidential succession would place the Secretary of State in the White House.… He told me he believed that at least half of the American Legion and Veterans of Foreign Wars would follow me.” 62
Butler was amazed at MacGuire’s plan but played along to uncover details. “Is there anything stirring yet?” he asked MacGuire.
“Yes, you watch,” the broker replied. “In two or three weeks, you will see it come out in the papers. There will be big fellows in it. This is to be the background of it.” 63
Exactly two weeks later, on August 23, the American Liberty League publicly announced its existence, with MacGuire’s employer, Grayson M. P. Murphy, as its treasurer.
Butler knew MacGuire spoke for certain financial interests, mostly those of J. P. Morgan & Company. A year before, in July 1933, MacGuire and another Legion official, William Doyle, had payed him a similar visit to ask him to lead a well financed “rank-and-file” movement to oust the Legion’s autocratic leadership at the Chicago convention that autumn. To assure Butler of backing, MacGuire showed him two entries in a bank deposit book, for $42,000 and $64,000. Butler’s suspicions grew —“Soldiers don’t have that kind of money,” he said later—but he suggested he be given some time to think it over. “I wanted to get to the bottom of this thing and not scare them off.” 64
MacGuire took the bait and at a second meeting presented information that nine very wealthy men were doing the financial backing, one being Grayson M.P. Murphy. “I work for him,” MacGuire assured the General, “I’m in his office.” 65
“What has Murphy got to do with this?”
“Well,” answered MacGuire, “he’s the man who underwrote the formation of the American Legion for $125,000. He paid for the field work for organizing it and has not gotten all of it back yet.”
“That is the reason he makes kings, is it?” remarked Butler. “He has still got a club over their heads.”
“He’s on our side,” insisted MacGuire. “He wants to see the soldiers cared for.” 66
What Murphy really wanted, as did most of Morgan’s “sound money” circle, was a reversal of Roosevelt’s abandonment of the gold standard. Only on the solid arbiter of gold, reasoned Morgan, could the economy recover. Butler suspected this when MacGuire handed him a drafted speech to be read at the convention, calling for a resolution urging that the United States return to the gold standard. MacGuire tried to mask the request in terms of the veterans’ interests. “We want to see the soldiers’ bonus paid in gold. We don’t want the soldiers to have rubber money or paper money.” 67
Clark’s answer was calm but blunt. “I’ve got thirty million dollars,” he explained. “I don’t want to lose it. I am willing to spend half of the thirty million to save the other half. If you get out and make that speech in Chicago, I am sure that they will adopt the resolution and that will be one step toward the return to gold, to have the soldiers stand up for it.”
At that, the General dropped his pretense and flatly refused. Undismayed, Clark asked to use the phone and called MacGuire long distance. “You’ve got forty-five thousand dollars,” he told MacGuire, “You’ll have to do it that way,” 70 and left.
Butler, then, was obviously aware of MacGuire’s contacts when he was visited again the following year by MacGuire. He was also aware that at the Legion Convention in October 1933 a gold standard resolution had been passed. But what the General did not know was that MacGuire had been subsequently sent to Europe in the spring of 1934 on “business” which amounted to a survey of the role played by veterans in Mussolini’s Fascisti, in Germany’s Nazi Party, and in France’s fascist Croix de Feu movement. “The Croix de Feu is getting a great number of recruits,” he wrote Clark from Paris, “and I recently attended a meeting of this organization and was quite impressed with the type of men belonging. These fellows are interested only in the salvation of France, and I feel sure that the country could not be in better hands.…” 71
MacGuire’s favorable impressions of European fascism did not exist in a social vacuum, however. Many business leaders, including those in the DuPont camp, and even some liberals for a time, had been infatuated with the fascist movement. General Motors’ William Knudsen, for example, on his return from Europe, described Hitler’s Germany to a reporter as “the miracle of the twentieth century.” Even Alfred I. DuPont’s daughter Madeleine had contracted the fascist epidemic during her stay in Germany, and her third marriage to Friedrich Hermann Ruoff had spawned three young Nazi zealots. In America many openly fascist organizations had sprung up, including the Khaki Shirts, the Blue Shirts, the White Band, the Nationalists, and the Silver Shirts. Lawrence Dennis emerged as the “theoretician” of American fascism, and The American Guard magazine appeared, published by the “Swastika Press.” More home-grown brews also were stirred, including the racist Southern Committee to Uphold the Constitution, the Crusaders, the para-military Minute Men and Women of Today, and the anti-Semitic Sentinels of the Republic, all financed, and some even created, by the DuPont's American Liberty League.
“The whole movement is patriotic because the Communists will wreck the nation unless the soldiers save it through fascism,” MacGuire reportedly told French. “All General Butler would have to do to get a million men would be to announce the formation of the organization and tell them it would cost a dollar a year to join.” 72
“At first he suggested that the General organize this outfit himself,” French later told the House Investigating Committee, “and ask a dollar a year dues from everybody. We discussed that, and then he came around to the point of getting outside financial funds, and he said it would not be any trouble to raise a million dollars. He said he could go to John W. Davis or Perkins of the National City Bank, and any number of persons and get it.… Later, we discussed the question of arms and equipment, and he suggested that they could be obtained from the Remington Arms Company on credit through the DuPont's. I do not think at that time he mentioned the connections of DuPont's with the American Liberty League, but he skirted all around it. That is, I do not think he mentioned the Liberty League, but he skirted all around the idea that that was the back door. One of the DuPont's is on the board of directors of the American League and they own a controlling interest in the Remington Arms Company.… He said the General would not have any trouble enlisting 500,000 men.”
MacGuire then showed French a letter of support: “It’s from Louis Johnson, the former National Commander of the American Legion.” “He said that he had discussed the matter with him,” French related, “along the lines of what we were now discussing, and I took it to mean that he had discussed this fascist proposition with Johnson, and Johnson was in sympathy with it.”
On November 20, 1934, General Butler revealed the whole ugly scheme by testifying before a private session of the Special House Committee on Un-American Activities. He suggested that if the Committee wanted to get to the bottom of this, they question the biggest interests involved: Grayson M.-P. Murphy, General Douglas MacArthur, Hanford MacNider, ex-National Commander of the American Legion, and leaders of the American Liberty League.
The Committee called none of these, but it did have James Van Zandt, National Commander of the Veterans of Foreign Wars, and Gerald MacGuire testify under oath. Van Zandt corroborated Butler’s testimony and admitted knowing of the plot. MacGuire, on the other hand, would admit only that he had met occasionally with Butler, but claimed that he had been “misunderstood.” French’s testimony, however, corroborated Butler’s and Van Zandt’s. But the Committee, perhaps frightened of the implications, refused to delve further into the conspiracy, suppressing much of the most incriminating testimony in its official report to the House on February 15, 1939. Nevertheless, the report confirmed a plot to overthrow Roosevelt with a fascist coup d’êtat:
“In the last few weeks of the Committee’s official life it received evidence showing that certain persons had made an attempt to establish a fascist organization in this country.… There is no question that these attempts were discussed, were planned, and might have been placed in execution when and if the financial backers deemed expedient.
“This committee received evidence from Major General Smedley D. Butler (retired), twice decorated by the Congress of the United States. He testified before the Committee as to conversations with one Gerald C. MacGuire in which the latter is alleged to have suggested the formation of a fascist army under the leadership of General Butler.
“MacGuire denied these allegations under oath, but your Committee was able to verify all the pertinent statements made by General Butler, with the exception of the direct statement suggesting the creation of the organization. This, however, was corroborated in the correspondence of MacGuire with his principal, Robert Sterling Clark, of New York City, while MacGuire was abroad studying the various forms of veterans’ organizations of fascist character.” 73
Despite the Committee’s report, no indictments were handed down. Corporate leaders who were implicated in the conspiracy by sworn testimony, including the DuPont's, were never even called for questioning. “The Congressional Committee investigating un-American activities has just reported that the Fascist plot to seize the government … was proved,” observed lawyer Roger Baldwin, head of the American Civil Liberties Union, “yet not a single participant will be prosecuted under the perfectly plain language of the federal conspiracy act making this a high crime. Imagine the action if such a plot were discovered among Communists! Which is, of course, only to emphasize the nature of our government as representatives of the interests of the controllers of property. Violence, even to the seizure of the government, is excusable on the part of those whose lofty motive is to preserve the profit system.” 74
Indeed, Butler’s testimony was at first subjected to a shower of ridicule. Even the New York Times, which had described the Liberty League’s founding as having “a real chance to be useful” 75 hurriedly dismissed the “so-called plot of Wall Street interests” as having “failed to emerge in any alarming proportion,” while Time, the leading anti-New Deal publication of J. P. Morgan’s trusted friend and journalist protege, Henry Luce, called it a “plot without plotters … no military officer of the United States since the late tempestuous George Custer has succeeded in publicly floundering in so much hot water as Smedley Darlington Butler.… Thanking their stars for having such sure-fire publicity dropped in their laps, Representatives McCormick and Dickstein began calling witnesses to expose the ‘plot.’ But there did not seem to be any plotters.… Mr. Morgan, just off a boat from Europe, had nothing to say but partner Thomas Lamont did: ‘Perfect moonshine! Too utterably ridiculous to comment upon!’” 76
Significantly, among Time’s leading stockholders at the time was Luce’s college chum, Henry P. Davison, like Lamont, a partner of J. P. Morgan & Company. 77 Morgan’s friend Grayson M.P. Murphy derided Butler’s charges as “a joke—a publicity stunt” and received wider coverage than Butler’s own testimony or Van Zandt’s and French’s corroboration. Then a curtain of silence fell. When the House Committee released its report, there was little comment from the press. Of all the country’s large newspapers, most of which were (and are) controlled by well-financed syndicates, only the liberal New York Post, French’s Philadelphia Record, and two New Jersey papers printed the details of the conspiracy and the corroborating testimonies. Not a word of the plot was printed in Delaware’s DuPont-controlled press, and the “MacGuire Affair” slipped into the fog of unrecorded history.
Beyond the superficial rationale of class allegiance, many reasons have been put forth as to why Roosevelt may have shied away from pressing further into the “MacGuire Affair” investigation. There is little doubt that hearings and indictments against such leaders of finance would have precipitated a national crisis, and probably an international one as well. Economically, such a course of action would only have tottered an already weakened public faith in the prevailing economic system Wall Street represented and Roosevelt was pledged to preserve. Legal proceedings against such powerful interests, also, would have precipitated a political crisis, not only for the Roosevelt administration, but for the private enterprise essence of the state as a whole and its property values of government. Apparently, the initial exposure had also sent the wolves into hiding, so that no more was really needed than the Committee Report’s verbal hand-slapping that “Armed forces for the purpose of establishing a dictatorship by means of Fascism … have no place in this country.” 78
Such gestures seem impotent if viewed in a historical vacuum. But the DicksteinMcCormick Committee was conducting its investigation in the shadow of another, more publicized spectacle which already had the country spellbound and the forces of reaction in full retreat—the Senate munitions hearings.
6. REARMING THE WEHRMACHT
The invasion of Japanese armies into Manchuria and the reemergence of bellicosity
among the European powers boded no good tidings for international peace, and the
American people felt the chill of war approaching from both sides of the continent Their immediate reaction was a healthy revulsion, and in their traditional pragmatism,
they chose the most visible manifestation of war, munitions, rather than its most basic
cause, economic markets, as an immediate target. It was a pragmatism shared by all,
including New Dealers like Senator Gerald Nye, which allowed an ignoring of the
question of system while searching for suitable personal villains. This pragmatic
attitude, as old as the Pilgrims, had been the basic theme of American social thought
since the early colonial days, and had guided free enterpriser's like the DuPont's in
disjointedly building American capitalism. Yet, neither Irénée du Pont nor Gerald Nye
ever perceived its functioning in unfolding events and historical decisions, nor even
within the workings of their own minds. To Irénée, villainizing munitions makers could only be the seedy work of the Communist Third International, and on July 7, 1934, he said so. But even then Irénée was only continuing the family’s line of personally desiring peace while, in the course of following good business principles, officially promoting war.
Pierre tried to deal with this contradiction as early as 1930. “The popular conception of a munitions maker,” he wrote to Merle Thorpe, editor of Nation’s Business, “is a sinister individual with a deep hatred for peace and a contempt for the pursuits thereof. He is pictured as doing all in his power to fan the flames of distrust between nations and to delight in the conflicts that ensue, since they create enormous and immediate profits for his corporation. I called this the popular conception of the munitions maker; in reality, it is the popular misconception.
“No munitions concern can live by war alone. During the 139 years of the existence of the United States as a nation there were four major conflicts before the World War. They lasted 10 years in all, or about 7% of the time. How could any independent corporation keep itself alive for 139 years by turning out a product that was only wanted 10 years of the time?” 79 Not war preparations, insisted Pierre, but peacetime products, occupied the intervening time and gave DuPont stability.
Pierre’s contentions on their own terms were unquestionable, but they ignored a basic theme throughout the history of his own company: in each period of the company’s expansion, profits from a previous war were the foundation and, in many cases, the crucial determining factor for sustaining that growth. The Napoleonic wars and U. S. government contracts kept DuPont Company alive through its first fledgling years. The War of 1812 provided the funds necessary for the company’s growth in the next two decades, enabling it to survive such disastrous internal setbacks as frequent explosions; the same was true of the roles of the Mexican War and the Crimean War in the 1840’s and 1850’s. The Civil War funded the firm’s trust building after 1865, helped by panics which weakened smaller competitors, underscoring also the importance of capital concentration and its large labor and productive resources to the rise of Henry DuPont’s Powder Trust. And the Spanish-American War was the strongest impetus to DuPont’s building its smokeless powder plants and subsequent monopoly in that field.
There is little doubt that the company’s own efficiency and technological innovation, as well as the powder needs of an expanding young continental power, were stabilizing factors for DuPont. But Pierre totally ignored the crucial role played by war profits throughout his firm’s growth. “In the case of the DuPont Company,” Pierre wrote, “taxes paid to the U.S. government during the recent war not only absorbed the entire profit of the company on powder sold to our government, but in addition, they wiped out all of the profit made on these powders during the preceding 20 years.” 80 Later, the Senate munitions hearings, using DuPont’s own records, proved this allegation false. In fact, World War I generated $250 million in profits for DuPont, more than 126 years’ worth of previous peacetime business, providing the $90 million surplus fund used to expand into the chemical and automobile industries.
These facts were known especially to Pierre, who directed that expansion. Yet the fear of being villainized prompted their suppression, especially as the world’s governments of private enterprise were gathering in another of their many desperate disarmament conferences, trying to serve their own market interests while attempting at the same time to stop their inevitable bloody result. “I consider the calling of the London naval conference a long step in the right direction,” Pierre wrote at the time. “Sentiment against war has always been strong; added to this sentiment now is the crushing burden of taxation, and a disarrangement of all the orderly channels of domestic and international commerce.” 81
There is little evidence that Pierre did not really believe his own words. Yet, even as he wrote them, DuPont’s arms export company was busily fueling the fires of war and corrupting foreign governments in the process.
As early as 1925, DuPont had illegally been smuggling arms to Mukden warlords in Manchuria, who paid well for DuPont’s willingness to violate an imposed embargo. In 1928 a contract with Poland for 300 tons of powder per year for twelve years was landed only through bribes, politely termed “commissions.” “In order to get this,” Colonel Taylor, DuPont’s European salesman, advised the Wilmington headquarters, “we will have to pay 7% commission, of which 2% must be paid in its entirety the day of the signing of the contract.” 82 Two weeks later, on February 3, the home office replied: “You may be sure, in the event that you conclude a deal along the lines indicated in your letter of January 18, that I will promptly remit by cable the amount involved to pay the 2% commission, so that there will be no delay.” 83
Five months later a DuPont agent in Poland by the name of Klawe, landed a $1.8 million sale. DuPont executive O’Gorman ecstatically wrote Taylor from Wilmington: “Mr. Klawe’s commission on the 1,000-ton order contract was 7 percent, or approximately $126,000. Upon signing the contract, even before we received the Polish notes, we made advance payment on commission to Klawe of $30,000.… You are fortunate to have Mr. Klawe as agent, as he is a man who is very well connected and thoroughly understands what must be done in order to secure business.” 84
In China DuPont powder was sold to Chiang Kai-shek’s forces in similarly soiled circumstances. “N. E. Bates would suggest we do not pay any other commission except 7.5%, Preston Wilk, Dyestuffs, Wilmington,” DuPont headquarters cabled Taylor on September 23, 1929. “DuPont dyestuff's office, Shanghai, China, Will advance all prices at plant 5% for distribution as follows: 4%, Chinese Army, Nanking.…” The “commission” was settled at “4% Chinese Army, Nanking; 1% Colonel de Fremery,” a Dutch mercenary. “… We will advise Bates to settle definitely on the basis quoted.” 85 In Shanghai, also, bribes were paid. Dr. Noelting, head of DuPont offices there, cabled: “Anyway, presents will have to be given to various parties in China New Year, and the overprice we get can be used for this purpose.” 86
By 1929 DuPont had full-time powder agents in Estonia, Holland, Latvia, Poland, Sweden, Denmark, and Norway. In 1932 they contracted agents also in Belgium and Lithuania.
During the early Twenties nitrocellulose powder was sold in Spain, Poland, Czechoslovakia, and other parts of Europe. A. Felix DuPont and Harry Haskell rejected Nobel Ltd.’s protests, but Pierre, not wishing to anger his G.M. partners, surrendered the TNT and nitroglycerin market. 87 Thereafter, DuPont, in conjunction with Nobel Ltd. (which merged in 1926 as Imperial Chemicals Industries, Ltd.), had military sales agents sprinkled throughout Latin America, in Argentina, Bolivia, Chile, Brazil, Colombia, Ecuador, Paraguay, Uruguay, and Venezuela. Other agents were located in Europe’s Bulgaria and Romania, and throughout southern Europe. 88
Through their partnership, DuPont-I.C.I. sold nitrocellulose powder to Britain in 1929, 1930, 1931 and 1934; to Belgium in 1931; Estonia in 1929, 1931, and 1934; Greece in 1935; Bulgaria in 1935; Holland in 1929 and 1933; Latvia in 1929 and 1934; Lithuania in 1930, 1932, and 1934; Poland in 1930; Romania in 1934; and Turkey in 1934.
Smokeless powder was sold to Yugoslavia in 1929, 1931, and 1934; Romania in 1929 and 1934; Turkey in 1930 and 1935; Latvia in 1934; Holland in 1934; Belgium in 1934; Estonia from 1930 to 1933; and Finland from 1932 to 1934.
None of these munitions sales were in violation of any American law. In fact, such exports had the full support of Herbert Hoover during his eight-year tenure as Secretary of Commerce and four-year term as President. Hoover, unlike Wilson, placed less emphasis on the political aspects of foreign policy, and great emphasis on developing a system of overseas economic expansion, a system that included government regulation of credit to foreign nations and its relation to exports as “part of our domestic progress, both socially and economically.” 89 This meant not only providing credit to a foreign government so it could purchase American goods as a commodity market, but also investments by American corporations and loans by American banks to develop a capital market. “In stimulating our exports,” Hoover observed in 1923, “we should be mainly interested in development work abroad such as roads and utilities which increase the standards of living of people and thus increase the demand for goods from every nation, for we gain in prosperity by a prosperous world, not by displacing others.” 90 This was the essence of corporate liberalism.
Although this analysis conflicted with the necessity for American corporations to keep wages in their overseas factories low, Hoover was impressed by its sophistication and the long-range need of corporate profit for social stability and order, and thus released his anti-interventionist Memorandum on the Monroe Doctrine in 1928, holding that “confidence in that [non-interventionist] attitude is the only basis upon which the economic cooperation of our citizens can be welcomed abroad.” 91 Throughout his presidency, Hoover rejected the gunboat diplomacy of his predecessors, including Coolidge, and avoided any foreign interventions or any direct government participation in an economic program overseas which could lead to political confrontation with a foreign power. Hoover shared the feeling of most corporate leaders after World War I, that war primed the pump of revolution, especially during a depression. Both as Secretary of Commerce and as President, Hoover encouraged private corporate expansion, consulting with the DuPont's particularly over any disarmament program which threatened embargoes that would restrict their commodity or capital markets, even informing Colt Arms of the latest results in the arms race sweepstakes.
The DuPont's took full advantage of this policy, developing not only an export market, but an overseas capital market as well. In Mexico they invested $312,000 and bought a 50 percent interest in Compañia Mexicana de Explosivos, S.A. In Argentina they invested $788,000 and, with a 51 percent holding, set up the E. I. DuPont de Nemours & Cía Argentina, S.A., which included Industrias Químicas Argentina de Perial, S.A., Industrial y Comercial. They also bought for $313,000 a 35 percent interest in Société Francaise Duco, S.A., and for $789,000 a 42.4 percent interest in Compañía Sud America de Explosivos, S.A.
In close, safe, and stable Canada the Du Ponts made their biggest investment, pouring $10,180,000 into Canadian Industries, Ltd., for a 46.8 percent holding. In mother England, in exchange for “Duco” patents and processes, they acquired 49 percent of Nobel Chemical Finishes, Ltd., and bought a $819,000 interest in Leather Cloth Proprietory, Ltd. In 1930 they made another large sale of processes to Nobel Finishes. England was also the site in 1925 of General Motors’ acquisition of Vauxhall, the auto firm. A year later Pierre expanded General Motors directly overseas, opening an assembly plant in South Africa to slip behind the Commonwealth’s tariff barriers and also exploit the cheap wages enforced by its racist white Afrikaner government. In 1926 the DuPont's also bought a 22.9 percent interest in Société Francaise Fabrikoid, which controlled the Fabrikoid markets in French North African colonies of Algeria, Tunisia, and Morocco.
The rising Axis powers also proved to be good business prospects. Mussolini’s well-ordered Italy looked so attractive to the DuPont's that they invested over a million dollars in its chemical industry, buying 70 percent of Societa Italiana della Celluloide and 90 percent of Societa Amonima Mazzucchelli. Japanese militarists, too, benefited from DuPont’s perfectly normal business ethics. Their invasion of Manchuria in 1931, the actual beginning of World War II, was looked at sympathetically by President Hoover, whose non-interventionist policy never considered a war against Japan, which would create instabilities hindering to business. “There is something on the side of Japan,” he announced. “Ours has been a long and deep-seated friendship with her and we should in friendship consider her side.” 92 U.S. investments were few in the area, and most were unaffected by the Japanese invasion. European interests did not fare as well there, and in 1932 the League of Nations finally proposed sanctions. Hoover, however, dissented. “I have insisted upon the aloofness of the United States from the League of Nations in that the sanctions of the League are those of force either economic or military, whereas the United States could not and would not enter into force sanctions.” 93 Hoover proposed instead a policy of nonrecognition, to buy time in protecting U.S. interests in Asia. “The whole doctrine of nonrecognition,” he explained, “is not alone a method of involving world opinion but it is equally important in the phase that it avoids precipitant action and allows time to work out proper solutions.” 94
With such attitudes emanating from their own government, it was not surprising that the DuPont's entered into a profitable agreement with Japanese interests that year. Shortly after Secretary of State Stimson condemned Japan’s attack on Manchuria, Japanese executives from the Mitzui Chemical combine met with DuPont executives in Wilmington and handed over $900,000 in exchange for DuPont’s ammonia explosive formula, a process for manufacturing cheaper munitions. The State Department, despite Stimson’s public oratory, privately gave the DuPont sale its full approval.
But the most startling overseas business in which the DuPont's were engaged was their role in rearming Germany.
Hamburg was too preoccupied celebrating the New Year to notice that DuPont executives arrived there on January 1, 1926. At this German port, in a secret meeting, DuPont signed a “gentleman’s agreement” with representatives from two of the largest explosives manufacturers in Germany—Dynamit Aktien Gesellschaft (D.A.G.), and Köln Rottweiler, both soon after absorbed into I. G. Farben, German capitalism’s answer to DuPont. By this agreement, each company was to get the first option of any new processes and products developed by the other. This included black powder, disruptive explosives, smokeless propellants for “sporting” purposes, detonation, safety fuses, powder fuses, and “generally all devices for initial detoxification or ignition.” 95
Everything was open to the German militarists, including all patents and secret inventions covering commercial explosives. 96 As to acrylic products, DuPont agreed to sell this plastic to commercial molders for 85 cents per pound, but to dentists for 45 cents an ounce (or $7.20 per pound). In order to circumvent the legal complications involved if dental associations were somehow to discover this ruse, DuPont simply exercised its free enterprise by adding an additional ingredient, usually 1 percent of a dangerous poison such as arsenic, to the product sold to commercial molders, making it unemployable for dentures. 97
The interchangeability between commercial explosives and military explosives was obvious, and later noted by many experts in the Senate munitions hearings. 98 This made DuPont’s agreement, as the Senate Investigating Committee politely put it, “incompatible” with the Versailles Treaty which forbade German rearmament of any kind, or importation of information or arms for such. The DuPont's were well aware of the military danger of such an agreement. A letter found in their files attested that I. G. Farben had an explosives capacity comparable to “a large, rapidly mobilized force, or a large number of guns, or a fleet.” 99
Later that year DuPont and Nobel prevented Köln Rottweiler from assisting the Argentine government in building its own powder plant, setting bids so high that the Argentine government was forced to withdraw. To soothe German nerves, Nobel agreed to “wink” at German contracts with Turkey, and Köln Rottweiler stole Turkish business amounting to 120 tons of rifle powder from DuPont, while Nobel sold TNT to Turkey through Austria’s Philip. The German sales were in open violation of the Versailles Treaty. “I would regret,” wrote a disturbed Taylor to Wilmington on October 27, 1926, “to see the DuPont's winking at German treaty violations. It would be a great shame.” 100
Shame or not, wink they did. Convinced that protest was futile and U.S. intervention in German rearmament “improbable,” Colonel Aiken Simons, head of DuPont’s military sales, wrote DuPont Vice President Casey and gave the State Department’s Allen Dulles as the authority officially confirming the U.S. policy of allowing German arms smuggling to “swell” the reparation fund. Actually, acknowledged the Senate Munitions Committee, Dulles had made this policy clear at the pre-Geneva meetings of 1925. Accordingly, “the DuPont company did not call this to the attention of the United States government.” 101 Such an official protest would have won them no new friends in Washington, which was anxious to keep the lid on.
The DuPont's apparently were so impressed with German expansion recovery and rearmament that they decided to invest in promising German companies themselves, purchasing 49 percent of Duco, A.G., and 3.5 percent of Deutsche Gold and Silber Scheideanstalt. This, with their holdings in I. G. Farben and its subsidiaries, D.A.G. and Koln Rottweiler, gave the DuPont's a $3 million investment in the German arms industry. In 1929 they signed another “agreement” with I. G. Farben, while in the same year G.M. chairman Lammot DuPont made the DuPont stake in Germany even higher by acquiring 80 percent of Adam Opel, A.G., Germany’s biggest auto maker. This $25,957,000 investment was increased by another $7,395,000 in 1931, giving G.M. a 100 percent investment.
Lammot’s decision to endorse a 100 percent investment in Germany’s biggest auto company must be considered in its historical context, for 1931 was a tumultuous year in German history. A rising labor movement, led by mutually hostile (and thus divided) Social Democrats and Communists, was being answered by a rising fascist movement led by Hitler and supported by many of Germany’s largest financial and industrial interests, including Georg von Schnitzler, a leading director of DuPont’s trade partner, I. G. Farben. 102 Lammot DuPont and other DuPont's on G.M.’s finance committee (Henry F. DuPont, Irénée DuPont, Donaldson Brown, and Walter S. Carpenter) showed no particular dissatisfaction over Hitler’s gain in the 1930 elections that might have dissuaded them from deeper commitments in the German economy; their 1931 investment was clearly a display of confidence in its future.
A year later, DuPont’s European sales agent, Colonel William Taylor, again reported to Wilmington of German rearmament, including the smuggling of American arms to Nazis by way of the Dutch rivers that flow into Germany. “There is a certain amount of contraband among the river shippers,” he wrote, “mainly from America. Arms of all kinds.… The principal arms coming from America are Thompson sub-machine guns and revolvers. The number is great.” 103 Significantly, the only American firm licensed to manufacture and sell the Thompson sub-machine gun was Federal Laboratories, with which DuPont shared joint sales agencies. In January 1933 Taylor sent another excited report of Dutch gunrunning to Nazis in the Cologne area 104 Within a month, DuPont made its decision to take a direct plunge into the German munition smuggling.
On February 1, 1933, A. Felix DuPont, Sr., the suave, young-looking head of DuPont’s foreign sales, along with Vice President K. K. V. Casey, secretly met with two Hitler agents, Jungo Giera and Count Westarp. Westarp was the more easily identifiable of the two; he was a representative of the German General Staff. 105 Giera, however, kept his real identity to himself. Actually, he was Peter Brenner, a former German spy in the United States during World War I who had become a counterspy to avoid U.S. prosecution. After the war Brenner continued his sleuthing, selling his talents to at least thirteen different nations.
Although Felix and Casey did not know Giera’s real name, they were familiar with his background. During the Senate munitions investigations a year later, Senator Clark questioned Casey about this knowledge. “Did you know that he was an international spy?” asked the Senator.
“Yes,” replied Casey openly, “I knew that. He told me so himself. I knew him as Jungo Giera, and he told me that he engaged in spy work in thirteen countries.”
“Did he tell you that before we entered the war he was a spy for the Germans in this country, acting under the direction of von Papen and Boy-Ed, the military and naval attaches of the German embassy in Washington?”
“Yes,” answered Casey, “I also received that information.” 106
Despite Giera’s seedy background, or perhaps because of it, Felix signed a contract with him on February 1, 1933, naming him DuPont’s agent “for the Kingdom of Holland and as its exclusive agent for the Republic of Germany, to negotiate the sale of military propellants and military explosives to purchasers (other than the government of Holland and its colonies) located in said territories.” 107 That Holland was the source of much of the smuggling into Germany reported by Colonel Taylor was considered by the Senate Committee a year later to be “most significant,” for the rearming “Republic of Germany” then had as its new chancellor Adolf Hitler. The presence of Count Westarp of the German General Staff left little doubt as to whose hands DuPont munitions were intended for.
Felix’s contract, of course, was an open violation of the arms embargo of the Versailles Treaty and, by reference, the U.S.-German peace treaty, and was noted as such the following day, February 2, 1933, when Lammot convened his Du Pont Executive Committee. The legal problems of the contract were realized immediately, and Lammot nullified it, ordering Felix to draw up another. On February 15 Felix and Giera signed another contract, confirming Giera’s sales to the government of Germany, actually Hitler, with “approval or consent of the United States government.” This provision, the Senate Munitions Committee later implied, was a mere legal technicality to protect the company, as such consent would have been impossible unless the U.S.- German peace treaty was openly scrapped. Yet, the DuPont's were well aware of the State Department’s past “winking” policy, as explained to them by Allen Dulles as far back as 1925, and since the U.S.-German treaty referred only to the Versailles Treaty, they may well have thought a new interpretation of it and such “consent” were a real possibility.
DuPont never got a chance to sell its wares directly to Hitler, however, for it was stopped by its own cartel partner, Imperial Chemicals. Lammot had written Imperial’s Sir Henry McGowan on February 9, informing him of the Giera contract. Lammot’s letter drew a quick reply from McGowan questioning the agreement’s feasibility in light of expected treaty revisions by Hitler that would allow home manufacture and export by revived German militarism. “I think that any future negotiations would tend to become more difficult,” he warned Lammot, “and the Germans would probably consider that as we each reserve to ourselves orders from our respective governments, they should be entitled to do likewise.” 108
Faced with Imperial’s disapproval, and possibly even stronger reaction from its other cartel partner, I. G. Farben, Lammot canceled the Giera contract one month later, on April 14. Giera was angered over this reversal and threatened to sue DuPont publicly for his expenses. Although the company legally owed Giera nothing, DuPont paid $25,000 to keep his favor. As Lammot explained a year later to the Senate Investigating Committee, Giera’s infamous character was no problem as far as the DuPont's were concerned. In fact, they needed him to handle arrangements with another customer— Japan. 109
The Giera affair did not lessen DuPont’s interest in German sales. In January 1934 Taylor reported his attempt to arrange a deal directly with a top smuggler, Beno Spiriro. “The contraband of ammunition is increasing tremendously,” he wrote DuPont headquarters from Paris. “I.C.I. [Imperial Chemicals] have received continuous inquiries for delivery to the free port of Hamburg from Magnus and Beno Spiriro (they are two of the rather shady dealers mentioned in the last letter). We have invited Beno Spiriro to meet us this week in Paris, but he refused to come. We are going further into this matter.” 110
While there is no evidence to suggest that Taylor succeeded in securing the services of Spiriro for DuPont, there is no question that the wily salesman had better results in other areas. In 1934 DuPont had financial and market dealings in war materials or processes with Norway’s Norsk Hydro, Holland’s H.I.H., Switzerland’s C.I.B.A., France’s Rhone Paulene, and Germany’s D.G., S.S.A., and D.A.G. 111 In addition, DuPont had arrangements for interchange or sale of chemical and other patent information on immediate or convertible war materials and processes with both Germany’s Lurgi, A.G., and France’s L’air Liquide. 112 By then, 4 percent of DuPont’s total sales were exports. DuPont had explosives companies in Chile and Mexico and, according to one report, was contemplating still another plant in Czechoslovakia. 113 When business inquiries were made on the arms embargo, DuPont simply referred them to Imperial Chemicals. Together, DuPont and Imperial owned 20 percent of one of Hitler’s largest munitions makers, D.A.G., 114 part of the I. G. Farben combine.
Du Pont’s purchase of Remington Arms also brought involvement in German rearmament. Remington had cartel agreements with a number of German munitions companies. In 1929, 1932, and 1933 Remington paid $55,000 in royalties to Rheinisch Westfalische Sprengstoff for use of its patents including those for priming in bullets. In 1931 and 1932 Remington also signed contracts for interchange of chemical information with Hydrierwerke, A.G., and in 1933 and 1934, with Lurgi, A.G. Lammot DuPont later claimed he knew nothing of these contracts, yet it was when Remington was already under DuPont control, in January 1934, that it signed still another military ammunition patents agreement with D.A.G. Under this contract, D.A.G. succeeded to the rights of Rheinisch Westfalische Sprengstoff. Subsequently, Remington paid $16,745 in royalties within the first six months for Remington’s sale of D.A.G. cartridges to the U.S. government. 115 “In other words,” commented the Senate Munitions Committee in its report, “though the German munitions companies cannot sell abroad, American companies can sell for them, and to our own government at that.” 116
With Hitler’s triumph, German munitions companies were flooded with war orders as rearmament began full blast, and any new DuPont chemical discoveries, under its cartel agreements, became immediately available to the Nazi war machine. One DuPont discovery that was particularly priceless was neoprene—synthetic rubber. Under the patent agreement, this 1931 discovery was open to I. G. Farben’s inspection and subsequent use. Not surprisingly, in 1933 I. G. Farben also “discovered” neoprene, and was free to set up manufacturing plants like DuPont’s Deepwater Point plant. “After 1933,” William Shirer reports in The Rise and Fall of the Third Reich, “the Nazi government gave I. G. Farben the go-ahead with orders to raise its synthetic oil production to 300,000 tons a year by 1937. By that time the company had also discovered how to make synthetic rubber from coal and other products of which Germany had a sufficiency, and the first of four plants was set up at Schkopau for large scale production of buna, as the artificial rubber became known. By the beginning of 1934, plans were approved by the Working Committee of the Reich Defense Council for the mobilization of some 240,000 plants for war orders. By the end of the year rearmament, in all its phases, had become so massive it was obvious that it could no longer be concealed from the suspicious and uneasy powers of Versailles.” 117
Such was the tense global atmosphere that brewed the stormy Senate munitions hearings of 1934. Irénée’s denunciation of the investigation as a plot of the Communist Third International appeared in the papers on July 8, but it fell on deaf ears. For that same day, Hitler launched his bloody Brown Shirt purge, an annihilation of his own party zealots, which now made clear to the whole world that it was not some new depression-frenzied movement of the German middle class that was in charge and encouraging rearmament, but actually the same familiar militarists, financiers, and industrialists who had prodded the German people into World War I. Inevitably, it was this war, its causes and aftermath, that became the center of national attention as the Senate Committee called before it the country’s greatest munitions family—the DuPont's —to give them some of the most embarrassing moments in their lives.
7
THE MUNITIONS HEARINGS
Almost from the very first day of their appearance on September 10, 1934, a little more than two weeks after the founding of the Liberty League, the DuPont's captured the
imagination of the country. The swift series of exposes that emerged from the hearings—
billed by the press as an investigation of “the Krupps of America”—seemed indeed to
verify the “devil theory” about war and its origins. Evidence was provided from DuPont’s own files, which had been seized by the Senate Committee, that World War I
represented a business gain for the family of 1130 percent over pre-war years and “that
one member of the War Industries Board signed for the government contracts totaling
more than $49 million with the DuPont Corporation, in which he was a stockholder.”
118
DuPont’s $100 million contracts with Britain, which were financed by loans from J. P.
Morgan & Company, were also exposed, as was the fact that DuPont, claiming losses
for a shift to peacetime production, had paid absolutely no taxes in 1919 and 1920, the
period of their G.M. acquisition. Through it all, the DuPont's tried to retain a pose of aristocratic serenity. Pierre, dressed in a medium-colored suit, looked like any stout, balding old grandfather, his kindly blue eyes peering shyly through glasses perched on his nose. Felix, in his flashy light suit, looked the essence of handsome respectability, while Lammot and Irénée, smartly dressed in conservative black suits, calmly puffed on their pipes amid quiet denials of just about every charge that was made against them.
They denied having any foreign cartels. Then evidence was produced, along with Irénée’s admission, of trade pacts with Britain’s Imperial Chemical Industries for dividing the world’s trade and sharing each other’s patents.
They denied profit as their sole motive, claiming their patriotism. “Why,” declared Felix, “if it had not been for the service that the DuPont's performed for the cause of the Allies before and after the United States entered the World War, the United States today would be a German colony.” 119 Despite the obvious sincerity of Felix’s enthusiastic claim to glory, the Committee then produced evidence of not only DuPont refusal to cooperate with the War Department before and during the war, and its price bargaining, but also prewar and postwar cartel agreements with German munitions makers that were now arming Hitler, and in which DuPont held blocks of stock. The Giera contract, signed by Felix himself, was also brought forth, as well as evidence that DuPont’s knowledge of German rearmament extended as far back as 1924.
They denied any control of General Motors. Pierre even denied any substantial personal holdings. “Have you not held considerable private personal interests in General Motors?” asked one Senator. “No,” replied Pierre, “nothing considerable.” 120 Then he was reminded that he had sold $33 million worth of G.M. stock in 1929, and Pierre suddenly found himself with a memory.
They denied any engagement in bribery. Then the Committee produced evidence of the payment of “commissions” to Chinese and Polish officials.
They denied any lobbying, Irénée in particular disputing any influence over the Geneva Disarmament Convention of 1925. Then evidence was produced proving that Du Pont executives K. K. V. Casey, Aiken Simons, and W. J. Kinsman had lobbied in conferences with the State Department’s Allen Dulles, Admiral Andrew Long, and Major General Ruggles, all delegates to the Geneva Convention. A recent letter was also produced containing a suggestion by Walter Carpenter, Jr., that a DuPont sales office in Washington, D.C. should be used for lobbying purposes. “The sales office,” wrote Carpenter, “would be a good hiding place for the legislation if it were necessary to have one.” 121 Irénée and Carpenter, abandoning previous denials of lobbying, quickly explained that the correct word in the letter should have been “hiving,” not “hiding.”
Even more incriminating was evidence proving lobbying attempts by the DuPont's to prevent the Senate Committee’s own investigation. “Had a talk with Colonel Brabson of Military Intelligence,” Casey had written some months before, “and drew attention to the Nye resolution. As Colonel Brabson comes from Tennessee and is very close to Secretary [of State] Hull, he will discuss this matter with him, so that when the matter is referred to the State Department, at least they will be familiar with the situation and the possible disadvantages from the viewpoint of the Army.” 122 The attempt, obviously, had failed. Roosevelt even turned over files to the Senate Committee to help in its investigation, aiming to use its publicity to stir popular anger toward the strongest opponents of his reform program. The DuPont's were aware of this, and the name of Franklin Roosevelt was entered in the social black book of Wilmington.
Of the four DuPont's, Pierre was the only one who succeeded in never once dropping his calm demeanor throughout the hearings. Felix sometimes played an almost comical role. Once, when diplomatically embarrassing cables from a DuPont agent, Antonio Carames, were produced proving that DuPont had blocked Koln-Rottweiler from building a powder plant for the Argentine government, the senators struck the cables from the public record. “I agree,” Lammot hastily added, “that they should not go into the record.” Senator Raushenbush, however, pushed the matter further. “You took out the German competitor for the powder plant,” he summarized, “and Argentina probably didn’t know until the cables today why it never got its powder plant.”
Lammot, refusing to admit anything, took his curved-stemmed pipe from his mouth and calmly waved it in disagreement.
Raushenbush was infuriated. “How can you say that, in view of all the evidence we have introduced?”
Felix interposed. “We’d rather sell powder than build powder plants,” 123 he tactlessly explained. The next day, Argentina’s government was described by news reports as “furious.”
Felix never had been known as the genius of the family. Once, Alfred I. DuPont recalled, “Coleman DuPont said to me one day: ‘Alfred, I think we will have to raise Felix’s salary.’ I naturally inquired, ‘Why?’ ‘Well,’ Coleman answered, ‘this morning he made a bright remark.’ It afterward turned out that the remark was not original so his salary was not raised.” 124 After his performance during the munitions hearing, Felix rose no higher in the company, having to content himself with playing baritone horn for the Wilmington Police Band.
The DuPont munitions revelations triggered a wave of angry protests from around the world. When a Mexican general was mentioned in the hearings, Mexico delivered a strong note of protest to Washington. International spy Giera successfully resisted calls for his appearance, claiming from his Monticello estate that his testimony would start another global war. “The world is going to see the need for curbing these merchants of death and their business,” thundered Senator Nye. “There is a large effort being made to slow up the investigations. There is talk to the effect that the revelations being brought to light are quite apt to start a war. One can guess where this talk and other like it comes from.” 125
Major K. K. V. Casey was another burden for the three brothers. During his testimony on December 5, Senator Vandenberg read a letter written to him by Colonel Taylor, DuPont’s overseas salesman. Dated April 22, 1924, the letter laid the growth of German rearmament to “Jews.” Ignoring the obvious antisemitism, Vandenberg asked Casey for verification: “This would indicate that in 1924 it was apparently known to European governments as well as munitions makers that a substantial German rearming plan was underway.”
“Yes,” replied Casey uneasily, “it would seem to indicate that.”
Alarmed by such an admission, Irénée dropped his calm appearance and, jumping to his feet, shouted that the letter meant nothing of the kind. “You put that in Casey’s mouth!” 126 he charged.
Whereupon, Vandenberg read other letters from Taylor dated 1926, affirming German rearmament violations of the Versailles Treaty.
“Why, in your opinion,” the Senator then asked Casey, “was Nobel reluctant to act?”
“I do not know,” replied Casey.
Again Irénée jumped up, claiming that any assertion that the munitions people could have hindered German rearmament was “rank nonsense.”
“If so,” replied Vandenberg, “it’s Major Casey’s rank nonsense, not mine.” 127 Casey, like Felix, was also to rise no higher in the company hierarchy.
But Irénée was not all fire and brimstone during the hearings. Sometimes he was outrageously amusing. Once, when asked who was the “Fletcher” referred to in Carpenter’s letter as a possible lobbying agent, Irénée replied that he thought he was a former ambassador to Chile.
“What is he doing now?” asked Senator Clark.
“Hasn’t he some sort of position in the Republican organization?” Irénée countered.
The crowd in the hearing room roared with laughter. Harry P. Fletcher was chairman of the Republican National Committee, the recipient of over $55,000 in DuPont family donations that year.
Other times, Irénée was more alarming. When asked what he thought of conscripting wealth as well as manpower, he replied, “We would have a hell of a time.” Then he added his own deep regard for democracy. “To wage a successful war, you need an absolute monarch. I have yet to hear of a democracy or republic waging a successful war.” 128 Irénée, like many others, was apparently not convinced that America was a democracy during its successful engagement in World War I. Lost in the world of the technocrat, Irénée then predicted that fleets of airplanes carrying poison gas and incendiary bombs would wipe out the civilian populations of whole cities. A decade later Irénée’s predictions would come true, with his own company supplying most of those weapons, including the most horrendous of all, the atomic bomb.
“The only way to prepare for war,” Irénée assured the senators, “is to prepare in advance; otherwise, as I have said before, you are going to have a hell of a time. If we are well enough prepared, we will never have another war.”
“Wasn’t Germany prepared for the World War?” asked Senator Nye.
“Yes,” replied Irénée, “that is true, and she was prepared for the purpose of starting war and not for defense. We ought to be prepared for any attacks that could be piled on us. I am talking now about defensive warfare, not world conquest, but if it’s conquest you want, then you will need an absolute monarch.”
“When would you bring in the monarch,” asked Senator Pope, “now or when the war starts?”
“I think we are pretty near that already,” 129 Irénée answered with a smile, and even the committee could not avoid joining in the laughter that followed.
Irénée’s antics betrayed a proud arrogance. Occasionally he would even casually blow smoke rings from his pipe in front of the committee. Caught by photographs and news accounts, such behavior was interpreted by millions as an aristocratic contempt for democracy. Lammot’s statements, like Irénée’s, did little to counteract this belief. “I would rather have a form of democratic government,” he announced during the hearings, “but the way matters now stand I think our Constitution is on the verge of going into the scrap basket, and that’s why I have joined the Liberty League.” 130 Unlike Irénée with his glib manner, however, Lammot spoke always in the gravest tones, leaving little doubt that he meant exactly what he said.
For three months, in September and December 1934 and January 1935, the Senate centered its spotlight on the DuPont's. Yet throughout the hearings it became increasingly clear that the Du Ponts were no devils. In fact, as one writer accurately reported, they looked like men who could pass the plate at Sunday service without incurring a second look. These were not men who sought blood, but successful businessmen who were only practicing accepted business methods. Du Pont’s ammo agreements with German companies were described by them as simply as if they were exchanging facts on a new light bulb. The only way they differed from the average businessman was not in ethics, but in the commodity. And even here, the Du Ponts were not unique. Other American companies had also done business with the Nazi regime. United Aircraft Corporation, for example, sold twenty-nine airplane engines to Hitler in 1933, increasing their German business from $6,000 in 1932 to $272,000; by 1934 the figure was $1,445,000. Curtis Wright, Douglas Aircraft, and Sperry Gyroscope all provided airplane equipment easily adaptable to wartime use. 131 And General Electric, Alcoa, and Standard Oil of New Jersey (now Exxon) all maintained patent agreements with companies of Nazi Germany.
Some of Hitler’s largest suppliers were American, British, and French corporations, all eager, like any private businessman, to land a profitable sale. F. B. Nichols, vice president of Colt Firearms, was not unique when he commented on the flood of Hitler’s war orders. “Man, it makes my mouth water, and here we are, over here, prepared to produce material par excellence and getting nothing.” 132 Indeed, the crimes of the DuPont's could only be described as the crimes of private enterprise itself, and, such being the case, the DuPont's remained immune from federal prosecution, for their ethics presumed certain basic principles of political economy shared by everyone in Washington, including those in the White House.
At the end of the hearings, Pierre emerged unscathed and as polite as ever, even teasing the committee as to its impotent role. “May I add my expression of appreciation for your courtesy,” he told the senators as he prepared to leave, “and wish that instead of waiting for twenty years before we have these reunions, we might have them once or twice a year?”
“Like this?” Senator Nye asked. “Yes, like this,” Pierre replied with a deriding smirk. “Do not let us waste twenty years, but have one every year. We will not need so much time to rehearse.” 133
Irénée offered his own form of charm. On Christmas he sent Nye and the other senators a special gift—a book attacking the Soviet Union.
8
A CLIMACTIC DEFEAT
Since the arrival of Alfred I. DuPont in Florida, residents along the St. John’s River
had learned that the state’s sunsets not only could be beautiful, but also could roar.
Every evening the six-pound cannon mounted outside Alfred’s mansion would boom
across the river, and with all proper pomp and ceremony, the Stars and Stripes would
be lowered from a nearby pole. On Sunday, April 28, 1935, Alfred’s neighbors heard no cannon and suspected something was amiss. Something was—Alfred.
Alfred, now 71 and failing, had suffered a massive heart attack the previous Wednesday, then improved, only to endure another on Sunday evening at 8:00 P.M. Seeing an oxygen tent being rolled in, Alfred murmured, “So it’s come to this. Too late, too late,” and turning to Jessie, “It’s no use, Jessie, it’s no use.” He lost consciousness at 10:00 P.M., but an hour later he opened his eyes. “Thank you, doctors,” he said, “thank you, nurses. I’ll be all right in a few days.” 134 Less than an hour and a half later he was dead.
On May 3 Delaware’s largest clan gathered at Nemours and watched, amid incantations of the Episcopal Bishop of Delaware and songs by the choir of the Cathedral of St. John, as Alfred was buried. A few years later Alfred’s body would be removed from its temporary grave and placed beneath the towering bell tower he had designed before his death. Although neither Pierre nor Bessie, Alfred’s first wife, were there, they would never escape Alfred’s presence, not even after his death. Above his tomb, Alfred’s 210-foot-high clarion had thirty-two bells to remind them daily of the greatest and most persistent rebel in the history of their family.
Pierre refused to attend Alfred’s funeral. The presence of Roosevelt’s Secretary of War, George Dern, signified how deep the breach between Pierre and Roosevelt had become. Dern had been a close friend of Alfred’s, but as a member of Roosevelt’s official family he was not held dearly by Pierre’s wing of the clan. In fact, the rubbing of shoulders at the funeral by Dern and Irénée was one of the great ironies of the decade. Only four days later, Irénée joined Henry Ford in a complete denunciation of Dern’s boss. “The demagogue’s hypocritical cry of ‘divide the wealth,’” Irénée boomed, “if followed would take away incentive not only of future progress but also of further production so that there would be in the future continually less to divide.” 135 That speech, made at a Dearborn, Michigan, dinner of industrialists hosted by the Fords, marks the beginning of the greatest assault ever launched on the New Deal. It was also to be the DuPont's greatest failure.
Although the munitions hearings had failed to return a single indictment against the DuPont's for their many sworn statements subsequently proven false, its spotlight had succeeded in forcing them to withdraw from more ambitious adventures, perhaps more MacGuire affairs. Instead, their political efforts against Roosevelt were channeled into the more legal electoral arena, and particularly into the Republican Party.
The munitions hearings had revealed some of these deepening ties: Harry Fletcher, a contemplated Du Pont lobbying agent, became Republican National Chairman. William J. Donovan, former Assistant Attorney General and the man picked by the Republicans to oppose Herbert Lehman—Roosevelt’s benefactor and political protege—for the New York governorship in 1932, became the DuPont's lawyer during the munitions hearings. The New York Times in 1934 also took note of the visit of A. Felix DuPont and his sister Alice to the Brazilian plantation of Henry Ford, the Republican Party’s strong man. A Nazi sympathizer since 1923, when Hitler personally accorded him special praise, in August 1938 Ford would accept from Hitler the Grand Cross of the German Eagle ever awarded to an American. This was the man to whom the DuPont's were drawn in increasing political ties. The main vehicle the DuPont's used for control over the Republican Party was their American Liberty League. Although its president, Jouett Shouse, had declared at its founding that “as prescribed by its charter, the League is to be absolutely nonpartisan in character. We do not intend to enter the election,” 136 most of the League’s 1935 Congressional program was incorporated into the 1936 Republican platform.
The League undoubtedly owed the first sixteen months of its existence to the DuPont's. Pierre, Irénée, S. Hallock DuPont, Henry B. DuPont, William du Pont, Jr., Charles Copeland, Ruly Carpenter, and Donaldson Brown each gave $5,000. By December 1935 DuPont associates contributed another $152,622, $38,000 donated outright as gifts. The balance, in the form of DuPont loans to the League, amounted to a staggering $114,000, $79,750 from Irénée alone. 137 This included contributions to not only the League, but also its more provocative auxiliaries.
With these funds, full-time organizers established League chapters at twenty-six colleges and universities; 100 pamphlets were written and printed, and several million copies distributed; a speakers’ bureau was established and the League sponsored many nationwide radio addresses, all echoing Lammot’s demand that “all government regulation of business, as such, and as distinguished from other forms of activity, should be abolished.” 138 From its 31-room office manned by a staff of fifty people (larger than the GOP’s seventeen-man staff in a twelve-room headquarters), press releases spewed forth constant attacks on the New Deal, relief, and the proposed thirty-hour week. Payment of war veterans’ adjusted compensation bonus was described as an “extravagance,” as were the Social Security Act and all “burdensome taxes imposed upon industry for unemployment insurance and old age pension.” Most of the major newspapers of the country fell in line, printing releases or carrying favorable news articles on the League’s positions. Even the New York Times gave the League front-page billing thirty-five times between August 1934, and November 1936. 139
Besides press releases, the League also created or subsidized a host of auxiliary antidemocratic organizations:
American Federation of Utility Investors
American Taxpayers League
Crusaders
Farmers Independence Council
League for Industrial Rights
Minute Men and Women of Today
National Economy League
New York State Economic Council
Sentinels of the Republic Southern Committee to Uphold the Constitution
Women Investors in America, Inc. 140
The most important of these organizations was the Southern Committee to Uphold the Constitution, whose chairman was Texas oil magnate and former National Association of Manufacturers president, John H. Kirby. Its goal was the creation of a mass movement of whites in the South, in the hope of robbing Roosevelt of his Dixie vote and also, through stirring up anti-Black racism, attacking the organizing drives of C.I.O unions from the North. As a first step in this direction, in July 1936 the Southern Committee sponsored a “grass roots” convention at Macon, Georgia, to begin Governor Talmadge’s campaign for the Democratic presidential nomination. At this gathering, Vance Muse, editor of The Christian American and right-hand man of John Kirby, circulated what the New York Times described as “a picture of Mrs. Roosevelt going to a Negro meeting with a Negro escort on either side of her.” 141 “From now on,” Muse said of the New Deal’s labor policies, “white women and white men will be forced into organizations with black African apes whom they will have to call ‘brother’ or lose their jobs.” 142
The Macon convention had found its greatest support in Wilmington. Pierre and John Raskob, now fully won over to Lammot’s ultra-conservative position, both donated $5,000 to help defray expenses. Lammot gave $2,500; Henry B., $500, Irénée, $50, and Alfred Sloan, $1,000. 143 Other contributions came from leading executives of some of the country’s largest corporations, including Continental Can and Standard Oil.
The second most important of the League’s auxiliaries was the Sentinels of the Republic, an anti-Semitic organization which constantly warned the country of “the Jewish-Communist” menace. In 1936 the Senate Lobbying Committee released correspondence from the Sentinels’ files that revealed its fascist sympathies. “I think, as you say, that the Jewish threat is a real one,” wrote its president, Boston banker Alexander Lincoln to W. Cleveland Runyon of Plainfield, New Jersey. “My hope is in the election next autumn, and I believe that our real opportunity lies in accomplishing the defeat of Roosevelt.” Runyon replied that the people were crying for leadership. “The Sentinels should really lead on the outstanding issue. The old line Americans of $1,000 a year want a Hitler.” 144
Although the Sentinels got most of their $160,000 treasury from the Pitcairn (Pittsburgh Plate Glass Company) family, Irénée and DuPont vice-president A. B. Ethols found it in their hearts to manage small goodwill contributions. 145
Of all the DuPont's, Irénée was the moving spirit in the Liberty League. In 1935, when 40,000 national guardsmen were called out in nineteen states to put down strikes, he lashed into Roosevelt’s unemployment relief and farm subsidy policies. “Instead of its having its policies on rewarding a man for what he does, the Roosevelt Administration goes in exactly the opposite direction,” he charged in December, “having adopted the policy of rewarding a man for what he does not do. It practices the socialistic maxim ‘work like hell so that the parasites may get the benefit of your labor.’” 146
Even as Irénée spoke, cousin Henry F. DuPont, G.M. director, was preparing for his four-and-a-half-month cruise around the world. Taking along his wife Ruth and daughter Pauline, Henry gaily sailed from New York the following week on the Cunard Line’s Franconia—in a $36,000 suite. Other DuPont's fared as well. DuPont Company enjoyed $55,676,000 in earnings in 1935, a 19 percent increase over 1934, paying the family $7.5 million in dividends just in the first half of the year. Ocean trips like Henry’s, then, were not uncommon. Pierre took a European cruise in 1935, as did Lammot. Lammot’s trip covered a six-week tour of Germany, Belgium, and France; although declining any comment on the growing European arms race, he did say that business prospects looked good.
Lammot’s trip to Germany came just before Hitler’s Italian ally, Mussolini, attacked Ethiopia and a world war looked inevitable. The following January, Roosevelt decided to use the situation of mounting European tensions to not only announce the continuation of Hoover’s nonintervention policy, but also launch his own reelection campaign with a declaration of war on America’s leading munition makers, the DuPont's.
Before an unprecedented joint session of Congress in the House Chamber on January 3, 1936, Roosevelt introduced his “Neutrality Act,” establishing an arms and ammunition embargo, as well as an embargo on the export of all commodities that might be used for war purposes. Then, abandoning his previous underplaying of their significance, the President attacked his critics in the Liberty League. “They steal the livery of great national ideals to serve discredited special interests,” he charged. “This minority in business and industry … engage in vast propaganda to spread fear and discord among the people. They would gang up against the people’s liberties.” He leveled a broadside attack on the League’s anti-labor policies. “They seek the restoration of their selfish power. They offer to lead us back round the same old corner into the same old dreary street.”
Before the astonished minority of Republican Congressmen, Roosevelt attacked the League for trying to “hide their dissent in a cowardly cloak of generality.”
“Our resplendent economic aristocracy does not want to return to that individualism of which they prate, even though the advantages under that system went to the ruthless and the strong.
“They realize that in thirty-four months we have built up new instruments of public power. In the hands of a people’s government this power is wholesome and proper. But in the hands of political puppets of an economic aristocracy such power would provide shackles for the liberties of the people.
“Give them their way and they will take the course of every aristocracy of the past— power for themselves, enslavement for the public … their weapon is the weapon of fear.” 147
The shock of Roosevelt’s dramatic counter-offensive made the entire country reel. Democrats applauded it, Republicans condemned it. “It was a great bid for reelection,” derided Delaware’s Senator Townsend. The League was more clangorous, charging the President with “fermenting class hatred,” and in a real way they were right. Roosevelt was quite willing to use the popular anger against the League’s wealthy strikebreakers in order to beat back their challenge and continue the program of reform he believed necessary if American capitalism were to endure.
In this crusade, he had the continued support of light manufacturing enterprises and business dependent upon the retail market. These included Joseph E. Davies of General Foods, Henry Doherty of Cities Service, C. E. McCann of Woolworth, the Straus family of R. H. Macy, R. J. Reynolds and Mrs. Doris Duke Cromwell of the tobacco industry, Pabst, Ruppert, Busch, and Feigenspan of the brewing industry, Harold McCormick of International Harvester, Vincent Bendix (aviation), Herbert Swope of R.K.O., and Sosthenes Behn of I. T. & T. Financial interests were also represented by Cornelius Vanderbilt Whitney of New York, Mary and Margaret Biddle of Philadelphia, William Harriman, Joseph Kennedy of Boston, Floyd Odium, Texas’s Jesse Jones, and California’s A. P. Giannini. These individuals personally provided over $220,000 for Roosevelt’s war treasury. Labor unions donated another $770,000, and Chase National, Manufacturer’s Trust, and the United Mine Workers together loaned over $250,000. Lammot even suffered some desertions in G.M. ranks: James Mooney, president of G.M.’s Export Corporation donated $5,000, while the DuPont's old enemy, Fred Fisher, gave $10,000. 148
When the Senate Lobby Investigating Committee released a list of the Liberty League’s leading corporate contributors in January 1936, the United Press headlines screamed, “Liberty League Controlled by Owners of $37,000,000,000.” Again, when the Treasury Department, on January 9, charged Pierre and Raskob with tax evasion for their fraudulent 1929 exchange of $4.5 million worth of stocks, the UPI gave the news top billing.
These charges brought before the Board of Tax Appeals were of enormous value to Roosevelt’s campaign. The New York Times on January 12 revealed that Roosevelt had personally planned the Treasury’s “John Doe” probe of the Raskob-DuPont 1929 tax returns, keeping the Treasury Department in the dark on the famous names involved. When the Treasury discovered the fraud and laid its evidence before the President, Roosevelt carefully outlined an anonymous “John Doe” approach so that it would not appear to have political motivations. Pierre’s tax machinations might well have gone undetected except that he chose to contest the additional $600,000 tax assessment. It was a foolish mistake. By doing so, Pierre handed Roosevelt a loaded gun. Now Roosevelt could choose the time to fire. In January, with his attack on the “economic Royalists” just underway, the time seemed ripe.
“Tyranny!” retorted Raskob on January 12, two days after the Treasury filed its suit. “Fortunately, even the government, let alone a few administration heads politically interested, is not strong enough to destroy by slander or otherwise the reputation of Mr. DuPont—a really great and fine character and a citizen whose integrity, honor, and love of country have become firmly established in the hearts and minds of his fellow citizens through nearly fifty years of active life in industry, philanthropies, and political and social welfare of his state and country.” 150
Such verbal cheer leading did not faze Washington. The next day, Secretary Morgenthau countered that it was not the government, but Pierre who entered the public eye by contesting what was owed. Raskob’s charges of “cheap politics,” Morgenthau claimed, simply did not stand up to the fact that the first Treasury notice on the fraud came on December 8, 1932, when Hoover was still President, and that there had been many continuances since, all of them ignored. Morgenthau did not explain, however, why the suit was suddenly now being pressed.
Roosevelt had them running and he knew it. When it was announced that Al Smith might appear at an upcoming Liberty League dinner, Democratic Senator Schwellenbach, the Democratic Senator from Washington who had become the administration’s “hatchet-man,” made a stirring appeal to Smith on the Senate floor not “to give way to the temptation of following the advice of J. Pierpont Morgan, John J. Raskob, and Pierre DuPont and all the rest of these rascals and crooks who control the American Liberty League. I say that Governor Smith ought first to remember that no man can successfully turn his back upon a friend,” meaning Roosevelt. Pierre and Raskob, the Senator warned, should share the fate of “racketeers in our great cities who were finally put in the penitentiary because of the fact that they evaded their income taxes.” 151
The League dinner turned out to be the most famous political gathering of American industrialists and financiers in the twentieth century. It was the type of affair, held in Washington and dangling the lure of limelight, that Al Smith, now an embittered enemy of Roosevelt, could not ignore. On January 25, 1,500 dinner-jacketed businessmen from most of the country’s largest banks and corporations crowded into the Mayflower Hotel’s flag-draped main ballroom and applauded the appearance of their guest of honor, the man who only two years before had condemned legislation against child labor: Alfred E. Smith. And salty Al gave them what they wanted to hear.
“There can be only one capital, Washington or Moscow,” the crusty banker rasped. “There can be only the clear, pure, fresh air of a free America, or the foul breath of communistic Russia. There can be only one flag, the Stars and Stripes, or the flag of the godless union of Soviets. There can be only one national anthem, the Star Spangled Banner, or the International.” To Smith, the American way of life was private enterprise, Americanism was capitalism, and he expressed no “possible faith in the capacity of political management to provide either stability or progress, if it should set out to operate the agencies of wealth creation, particularly industry.” 152 Roosevelt, claimed Smith, was marching Marx and Lenin under the guise of Jefferson and Jackson.
Particularly pleased were the DuPont's. Over a dozen members of the family were on hand to lead the standing ovation: A. Felix, Jr., Alfred V. and his young wife, Marcella, Emile F., Eugene E., Octavia, Henry B. and his wife Emily, Irénée and his wife Irene, and Pierre and Alice. “It was perfect,” Pierre told reporters. “He gave a splendid definition of democracy,” added Raskob.
Across the country the opposite sentiment prevailed. The Dallas Morning News’s editorial, “They will get little by standing on a platform that demands a return to the old order,” probably spoke for most of the country’s voting population. Yet there was little doubt that many of the public attacks on the League’s dinner were directed by the Democratic camp. Secretary of State Cordell Hull, for example, drew up notes, approved by the President, for an attack on the dinner by Democratic Senator Robinson. 153 Robinson made his attack in Congress, although Hull’s notes came too late to be used.
But in the closed circle of DuPont social life, none of this dissent was taken seriously. Raskob’s enthusiasm could not be dampened by so minor a factor as public opinion, and he publicly resumed his political career, on January 30 releasing an appeal, on his private stationery, to corporate leaders on behalf of the League. “As a property owner, stockholder and director in several corporations, I hope you will not think me presumptuous in calling on you and your friends to unite with others in issuing a clarion call to join the American Liberty League … which is doing everything possible to root out the vicious radical element that threatens the destruction of our government.” 154
While Raskob and Irénée appealed for money, Roosevelt’s forces vied for public support. UPI kept up its favorable articles, and other newspapers, including the New York Post and the Baltimore Sun, joined in the attack on the League. “The brood of anti-New Deal organizations spawned by the Liberty League,” wrote the Post, “are in turn sponsoring fascism.” 155 The Southern Committee to Uphold the Constitution also came under fire. “This is a hybrid organization financed by northern money,” charged the Baltimore Sun, “but playing on the Ku Klux Klan prejudices of the South. When Raskob, a Roman Catholic, contributed $5,000, he was told his money would be used to stir up the KKK and also to finance a venomous attack on Mrs. Roosevelt.” The Post article disclosed that at the Macon “grass roots” convention it was the Southern Committee that circulated the picture of Mrs. Roosevelt being escorted by Blacks to a meeting, and that the leaflet read, “President Roosevelt has … permitted Negroes to come to the White House banquet table and sleep in the White House beds.” The exposure of such ugly racism lowered the DuPont family’s image to its worst depths, especially when the Southern Committee’s Vance Muse stated that the DuPont's never showed disapproval of publication of the picture. Later it was revealed by the press that following the Macon convention and the publication of Muse’s leaflet, Henry B. DuPont and Alfred Sloan still made donations of $500 and $1,000 respectively. 156 Then, on July 18 the committee investigating the munitions industry released its damaging report.
Against this mountain of public opinion, the Republican standard-bearer, Kansas Governor Alfred Landon, rode on a wave of DuPont cash. By September Lammot had contributed $105,000; Irénée, $95,000; Pierre, $84,000; A. Felix, $15,000; Henry B., $17,000. Additional donations of up to $1,500 each were made by Pierre, Pierre S. III (Lammot’s son), William Kemble DuPont, William, Jr., H. Fletcher Brown, Ruly Carpenter, Charles Copeland, his son Lammot DuPont Copeland, M. W. Carpenter, Walter S. Carpenter, Jr., and DuPont executives Harry Haskell, W. F. Harrington, and T. S. Grasselli. In the $1,000 bracket were DuPont directors Jasper Crane and C. R. Mudge.
The Republican ticket also received the general support of most of the heavy manufacturing and financial interests.
Ohio and Maine received special attention from the DuPont's. Irénée, Lammot, and Pierre each gave $5,000 to the unsuccessful Ohio Republican machine. In Maine, holder of the slogan “as Maine goes, so goes the country,” Irénée had donated $5,000, helping the Republicans win the governorship and three congressional seats in the December 1935 elections. Now Landon was calling it a “victory parade” that would move on to sweep out the New Deal in the national elections in November. In Delaware’s “chateau country,” DuPont's toasted the name of Landon—and a few, a very few, even expected him to win.
He didn’t. Against so popular a President and dynamic a campaigner as Roosevelt, he never even stood a chance. Wherever Roosevelt went during the campaign, cheering thousands lined the streets to pay homage to the man they credited with returning jobs and incomes. On November 2 Roosevelt was reelected on the largest landslide in history, carrying every state but Maine and Vermont. Again, as in 1932, the millions in the cities endorsed the Roosevelt ticket, including for the first time wholesale desertions of the GOP by Black wards. Of the cities with a population over 100,000, Roosevelt captured 104, Landon 2. New York City alone gave him a 1.3 million plurality. Listening to returns at Roosevelt’s Hyde Park estate, campaign manager Jim Farley aptly summed up the Republican disaster: “As Maine goes, so goes Vermont.”
It was the greatest political defeat ever suffered by the DuPont's. As even Delaware delivered most of its votes to Roosevelt, a pall of gloom descended over the mansions along the Brandywine. Over $855,520 donated by some eighteen DuPont's to the Republican banner had been lost, a total of $116,100 from Irénée alone. 157 Another $500,000 raised through the Liberty League had also been to no avail.
The League had been a total failure. When it was founded in 1934, a membership of 4 million had been projected. By the time of the Mayflower dinner in January 1936, 70,000 members were claimed. Yet in March the League filed with the House Committee a list of only 22,433 “contributing members.” The summer of 1936 brought a maximum of 124,856 members, whose only criterion for membership was sending in their name and address for the League’s mailing list. As it spoke only to the interests of businessmen and bar associations, the League never became a mass organization. “Liberty League speakers sought to appeal to audiences which were largely composed of college educated people, businessmen, and professional people,” wrote George Ziegelmueller. “At no time did one League speaker ever address a local audience which consisted primarily of working class people.” 158 The League became a hated name throughout America. Even the defeated Landon bitterly described the League’s support as a “kiss of death.”
The League’s subsidiaries suffered a similar fate. The Farmers Independence Council, for example, had been a total failure: no real farmers joined. Again, over $350,000 in donations to these right-wing subsidiaries had been rendered futile. This was a crushing blow to the family’s morale, for support of these fascist tendencies was quite widespread throughout the family. This assertion can probably be more accurately documented if individual DuPont donations to each organization are reviewed, as filed with the Senate Lobby Investigating Committee: 159
American Liberty League
Donaldson Brown—$20,000 R. R. M. Carpenter—$20,000
Walter Carpenter, Jr.—$4,834
Charles Copeland—$15,000
A. M. L. DuPont—$5,000
Henry B. DuPont—$20,000
Irénée DuPont—$86,750
Lammot DuPont—$15,000
Pierre S. DuPont—$5,300
Sam Hallock DuPont—$20,000
William DuPont, Jr.—$20,000
A. B. Ethols, DuPont V.P.—$575
William Knudsen, G.M. V.P.—$10,000
Alfred Sloan, G.M. Pres—$20,000
John J. Raskob—$20,000
Southern Committee to
Uphold the Constitution
John Raskob—$5,000 Alfred Sloan—$1,000
P. S. DuPont—$5,000
Lammot DuPont—$3,000
Irénée DuPont—$100
Henry B. DuPont—$500
Economists National Committee
Walter Carpenter, Jr.—$100 Lammot DuPont—$1,000
Crusaders
Irénée DuPont—$10,000Lammot DuPont—$1,000
Alfred Sloan—$10,000
A. B. Ethols—$75
Farmers Independence Council
Lammot DuPont—$5,000 Alfred Sloan—$1,000
Sentinels of the Republic
Irénée DuPont—$100 A. B. Ethols—$25
American Federation of Utility Investors
A. B. Ethols—$250
New York State Economic Council
Lammot DuPont—$1,000
Minute Men and Women of Today
Irénée DuPont—$1,400 In addition, the Delaware branch of the Liberty League received $10,357 from Ernest, Eugene, Eugene E., Irénée, and Alice (Mrs. P. S.) DuPont, and Ernest May, Mrs. Ernest DuPont May, Crawford Greenewalt, and Marianna DuPont Silliman. Lammot also contributed to Repeal Associates, another child of the Liberty League.
Never before had one family so singly dominated a political campaign. Hence, the crushing defeat of the Republican ticket in 1936 was also a crushing rejection of the DuPont's. Symbolized by Taylor Caldwell’s Dynasty of Death and The Eagles Gather, DuPont was probably the most hated name in America. Pierre and Irénée DuPont and John Raskob all gave up politics, never again to mount a national platform. The League and most of its subsidiaries were abandoned, although Lammot continued to support the League until 1938, when the United Press reported that “the American Liberty League today listed contributions of $13,332 during the last two months, including $5,000 from Lammot DuPont of Wilmington, Delaware.” 160 It was Lammot’s last recorded donation to the League, which soon after dissolved.
The 1936 election marked the end of the political careers of a whole generation of the DuPont's, but it was not the end of their struggle against the New Deal. Thereafter, with Lammot assuming the family’s active leadership, the DuPont's concentrated their effort against the tide of unionization that was sweeping the country and threatening even their own General Motors. Working through the National Association of Manufacturers and other, less respectable organizations, the DuPont's now engaged in a futile but bloody attempt to stop history.
9.
THE FINAL BATTLE
Room 3115 at 30 Rockefeller Plaza in New York City looked like any business office
during the Thirties. On the door was inscribed a perfectly respectable title: “Edward S.
Cowdrick, Consultant in Industrial Relations.” From all its modest appearance, no
stranger would have ever guessed that here was the national headquarters of one of the
most powerful secret organizations in the United States, the Special Conference
Committee. Even if some crusading reporter had caught rumors of its existence, he would have had a hard time tracing them to this office: the Special Conference Committee had no telephone listing; it had no letterheads, and all its records were marked STRICTLY CONFIDENTIAL. His only lead might have been if he had learned that Mr. Cowdrick was the S.S.C’s secretary.
Yet once every year, behind that door gathered some of the leading industrialists in America, secretly meeting to discuss ways to crush what one member, J. M. Larkin, vice-president of Bethlehem Steel, described as “a drive against the open shop.”
DuPont interests were well represented on the Committee: Lammot DuPont, DuPont president and chairman of General Motors; Donaldson Brown of DuPont and G.M.; Willis R. Harrington, DuPont vice-president; Alfred Sloan, president of G.M.; Harry W. Anderson, G.M.’s labor relations director; and Cyrus S. Ching, U.S. Rubber’s industrial and public relations director.
Founded in 1919 in the heat of postwar strikes, the Special Conference Committee was revived in 1933 when Gerard Swope, as Chairman of the Commerce Department’s Business and Advisory Council, appointed some of the S.S.C’s members to the Council’s Industrial Relations Committee and made Cowdrick its secretary. By the time of the 1936 elections, many of the Committee’s members had withdrawn from activity in the Roosevelt administration, backing the DuPont-sponsored Landon candidacy and being particularly alarmed by “continued governmental legislation and the aggressive pressure of union leaders.” 161 In preparing a line of action, the Committee, described by Senator Elbert Thomas of Utah as “the secret General Staff of big business,” studied various fascist organizations, including the anti-Semitic Sentinels of the Republic, for possible use in breaking strikes. One prominent member, A. H. Young, vice-president of U.S. Steel, even proposed to the Committee a piece of legislation obtained, as Young explained it to Cowdrick, “from an officer of the German government.” Young’s legislation was almost a duplicate model of Hitler’s Act for the Organization of National Labor, which had destroyed Germany’s trade unions.
But the most immediate concern of the Committee was a new labor tactic to win union recognition—the sit-down strike. When rubber workers successfully used the sit down for the first time in Akron, Ohio, a wave of fear swept corporate board rooms across the country. In a Committee memorandum, part of the “informational service” encouraged by U.S. Rubber’s Cyrus Ching, Cowdrick described and praised the attempt by Goodyear to end the plant occupation by inspiring vigilante groups to back the company’s open-shop policy. That scheme had failed to break the Akron strike, and workers around the country saw a potent tactic to use against speedup and the open shop.
But corporate executives did not give up the tactic of vigilante groups, and on June 1, 1936, Cowdrick wrote Harry Anderson, G.M.’s labor relations director, to ask his opinion of the Sentinels of the Republic. Anderson was apparently unaware of Irénée DuPont’s support of this organization, but offered his own home-brew alternative. “With reference to your letter of June 1 regarding the Sentinels of the Republic,” he replied a few days later, “I have never heard of the organization. Maybe you could use a little Black Legion down in your country. It might help.” 162
The “Black Legion” Anderson referred to was indeed a great help to General Motors in its struggle to prevent auto workers from unionizing. With members wearing black robes and slitted hoods adorned with white skull and crossbones, the Black Legion was the terror of Michigan and Ohio auto fields, riding like Klansmen through the night in car caravans, bombing union halls, burning down homes of labor militants, and flogging and murdering union organizers. The organization was divided into arson squads, bombing squads, execution squads, and anti-communist squads, and membership discipline on pain of torture or death was strictly enforced. Legion cells filled G.M. factories, terrorizing workers and recruiting Ku Klux Klansmen.
Since 1933 the Black Legion’s power had permeated police departments and high places in city, county, and state governments. They were intimately connected with G.M. company unions and the Republican Party. G.M. foremen were actually seen donning black robes inside a G.M. plant in Flint, Michigan, in preparation for a raid. 163 One of these raids resulted in the death of a Detroit W.P.A worker named Charles Poole. Later, Poole’s sixteen murderers were brought to trial—all were Black Legion members, five of them leading members of Detroit’s powerful Wolverine Republican League. Defending them was Wolverine director Harry Z. Marx, head of the American Legion’s Americanization Committee, counsel for Detroit’s notorious anti-labor chief of police, Heinrich Pickert, and a supporter of Michigan’s ex-governor, Wilbur M. Bruckner. In fact, only two days before Poole’s murder, Bruckner had announced his candidacy for the U.S. Senate at a meeting sponsored by the Wolverine Republican League.
“A reputable national organization,” wrote Lou Wedemar of Hearst’s Universal Service, “numbering among its members some of America’s most distinguished statesmen and financiers, was regarded by the Black Legion, terrorist cult, as an ally in its plots of wholesale murder.… It was established further that several members of the Legion murder party which recently shot to death a doomed victim were also members of this same highly regarded organization, and that certain Black Legionnaires believed their memberships in the two bodies overlapped.” 164
But Black Legionnaires were no mere “depraved” racists. The list of murder victims charged to their hands reveals an anti-U.A.W motive of cruel, deliberate reasoning. John Bielak, U.A.W organizer in the Hudson plant, was given “warnings” by a Black Legionnaire, Isaac White; on March 15, 1934, Bielak’s body was found riddled with bullets beside a lonely country road near Monroe, Michigan. Only three months earlier, on December 22, 1933, another auto union organizer, George Marchuk, was also found dead with a bullet through his head. Marchuk, like many U.A.W organizers in its early struggling days, was a communist, and it was no surprise three years later to discover it was the Legion that was responsible for the bombing of the Communist Party’s Detroit offices. Indeed, among the Legion’s own principles revealed to new members at initiation was: “We regard as enemies of ourselves and our country all aliens, Negroes, Jews and cults and creeds believing in racial equality and owing allegiance to any foreign potentate.”
By the fall of 1935, with the bombing of strike headquarters and workers’ homes during the Motor Products strike, a public outcry had arisen in Michigan. Charles Poole’s murder in 1936 raised the outcry to a veritable roar, spurring the arrest of some fifty Black Legionnaires. Michigan requested the extradition of Virgil Effinger, but Ohio officials allowed his disappearance before he could be brought across state lines. Then the Detroit News discovered that Detroit’s Wayne County prosecutor, Duncan McCrea, was himself an admitted member of the Black Legion, and his chief investigator, Charles Spare, was a founder of the Michigan branch of the Ku Klux Klan. Desperate, some Michigan citizens, pointing out that the Legion had crossed state lines, requested a federal probe. In response, Minnesota’s Senator Elmer A. Benson introduced a resolution calling for a federal investigation of the Black Legion, which the anxious Senate quickly buried in committee. On May 28, 1936, Roosevelt’s Attorney General, Homer S. Cummings, admitted that the Justice Department had “known of the Black Legion for about a year,” but that a federal probe was impossible since “no federal law had been violated.”
Pennsylvania’s Governor George H. Earle was one of the enraged many who saw the long arm of DuPont working behind the scenes. “I charge that this organization,” he stated on June 8, 1936, “is the direct result of the subversive propaganda subsidized by the Grand Dukes of the Duchy of Delaware, the DuPont's, and the munition princes of the American Liberty League.
“I was United States Minister to Austria in 1933–34. I saw for myself how fascism and Nazism are born furtively, in the dark; how they develop through just such organizations as the Black Legion, distorting prejudices, rousing passions, making a mockery of the truth, finally bursting forth into violence and bloodshed.… The Black Legion is the first fruit of their campaign for fascism.” 167
The DuPont's never answered Earle’s charges, which went ignored by most of the press. The New York World-Telegram, however, did offer its own condemnation of the Legion two months later. “The Black Legion’s crimes are part of a larger picture of intolerance in America,” read its editorial. “They are cut from the same piece of teachers’ oaths, anti-red forays into campuses, vigilante and lynching mobs, anti-labor terrorism and the other manifestations of special-interest racketeering wrapped in the garb of patriotism.” 168
The Black Legion reputedly had a membership of some 40,000 in Michigan and 75,000 nationally. It was never successfully rooted out, posing under a variety of names in General Motors company towns throughout Michigan, Indiana, and Ohio. As late as March 2, 1938, the New York World-Telegram reported that the Black Legion was operating in Macomb County, Michigan, under the name of the Patriotic Legion of America. But by then the Black Legion had lost its momentum. Although the Klan still did, and does, thrive in Michigan, the Black Legion’s effectiveness ended with the defeat of its main objective—the crushing of the United Auto Workers. That objective failed with the victory of the Great Flint Strike of 1936–1937.
The Great General Motors
Sit-Down Strike
The Flint Strike brought to General Motors what the Special Conference Committee
had feared most, the sit-down strike. And yet it was Lammot DuPont and Alfred Sloan’s
own policies that brought it on. By 1936 General Motors was the country’s largest manufacturer and the world’s largest corporation, with a net annual profit of $225 million. Lammot DuPont’s own salary that year was over $100,000; 169 President Alfred Sloan and vice-president “Speedup King” William Knudsen received $375,000 each in 1935. In 1936, 350 of G.M.’s officers and directors were paid $10 million in salaries and bonuses. G.M. officials lounged on twenty-four privately owned yachts and were provided with their own railroad cars for traveling in privacy and luxury.
In contrast, the lives of G.M. workers were miserable. In 1935, when the federal government declared $1,600 as a minimum income possible for a family of four to live decently, the average G.M. worker took home $900. Style changes resulted in layoffs for three to four months out of every year, with no unemployment insurance provided. Company speedups to increase productivity were appalling, forcing the men to work like fiends. One worker told the Atlantic Monthly that the constant deafening noise of the factory had once made him so dizzy he couldn’t recall where his car was when he left the plant. Men became sick, vomiting their lunches, their skin described as having a “jaundiced color” like tuberculers, and when temperatures soared above the hundreds in July 1936, workers died in G.M. plants by the scores. Yet the speedups continued, enforced by foremen who could fire at will. The terrible threat of being unemployed during a depression had succeeded in intimidating the men for years. “The fear of layoff is always in their minds,” reported a federal NRA investigation in 1935, “even if not definitely brought there by the foremen. The speedup is thus inherent in the … lack of steady work and an army of unemployed waiting outside … insecurity, low annual earnings, inequitable hiring and rehiring methods, espionage, speedup, and displacement of workers at an extremely early age.… Unless something is done soon, they intend to take things into their own hands to get results.” 170
Such seething sentiments were well known to the DuPont's. In 1934, when the United Auto Workers demanded negotiations according to the NRA law, Lammot refused. Roosevelt, fearing that DuPont intransigence would lead to a conflict, offered a “compromise” which included proportional representation for the company union, the Works Council, and provided for an Auto Labor Board that would decide which union would represent the workers. Later, the UAW discovered that labor’s representative on this board was a member of the Black Legion.
This G.M. policy was not due simply to Lammot’s principled obstinacy. Rather, General Motors was too important a keystone in the whole DuPont empire to be placed in the hands of an independent trade union with any power at all. By 1935 G.M. had surrendered $250 million in dividends to DuPont since its original investment. That year alone, G.M.’s dividends represented 30 percent of DuPont’s income, another 13 percent coming from other corporate investments. In that very real sense, G.M. represented not only DuPont’s largest investment and greatest customer, but also the very symbol of the future of DuPont investments in many other industries as well. This, in effect, meant the future of DuPont itself. DuPont’s 19 percent increase in earnings over 1934, for example, was partly a result of the profits generated by G.M.’s hapless workers. “A factor contributing importantly to the increase,” stated the 1935 Annual Report, “was the action of the automotive industry, which consumed directly and indirectly the company’s products, in advancing the fall of 1935 the introduction of new models.…” Although average prices had fallen 36 percent since the Depression began, G.M.’s dividends, $22.4 million in 1935 alone, kept up DuPont’s profit margin.
To keep this empire intact, Lammot spent $994,855 between 1934 and 1936 for “detective work” in G.M. plants, including arms and gas; $419,850 went to the infamous Pinkerton Agency. 171 This spy system was, as the La Follette Committee explained, “a gigantic commercial enterprise in which employers collaborate with professional spies in assaulting citizens because they exert their lawful right to organize for collective bargaining.” 172 Even government officials were not immune to Pinkerton harassment from G.M. Sent to Toledo in 1935 to act as conciliator during a strike at the Chevrolet plant there, Assistant Secretary of Labor Edward F. McGrady was constantly shadowed by G.M. agents. That September, in anticipation of a strike, Chevrolet bought $1,000 worth of tear gas for the police department of Flint, Michigan, site of G.M.’s biggest plants. A year later, that gas was used in the greatest battle of organized labor.
The United Auto Workers finally won its autonomy inside the conservative American Federation of Labor in May 1936, and the following month it sent one of its crack organizers, Vice-President Wyndham Mortimer, into the G.M. heartland. Arriving in Flint, a total company town, Mortimer secretly visited homes of workers, signed people up, sent records to the UAW national headquarters, and soon was publishing a weekly newsletter to 7,000 workers. In a short while he had organized a core of workers in Fisher Body No. 1 plant, knowing that the Fisher and Chevrolet plants were the crucial links in G.M.’s chain of production. Mortimer was then recalled by the A.F.L leadership, which was frightened by his success; but he arranged for Robert Travis, an experienced organizer, to take his place, and the union continued to grow.
The defeat of the DuPont-sponsored Republican ticket in November played a catalyst role in encouraging labor militancy at Flint. G.M. had openly endorsed Landon, but the workers had voted Roosevelt back into office. The week following the election, the emboldened auto workers in Fisher No. 1 fought another speedup and wage cut with seven work stoppages. On November 9 Travis met with forty union members, key men in each department, to plan a sit-down. Three days later striking workers forced the rehiring of two men, and the union grew further. On December 30, G.M.’s attempt to shift dies by rail from Flint to another plant where the union was weak finally touched off the beginning of the greatest strike in labor history. “Shut her down!” came the cry through the plant, and the occupation of G.M. was underway. By January 7, 100,000 G.M. workers were idle across the country.
G.M.’s management made every attempt to break the strike. First it tried to demoralize the workers by directing attacks through the press, charging “ultimatums” and “dictatorship,” and by organizing its own vigilante Flint Alliance. The strikers ignored the slurs and organized themselves in the plant to handle everything from sanitation to security, labor classes to sports and theater, all governed by two daily meetings of 1,200 workers. The strike captured the imagination of the country, and financial and cultural help poured in. Charlie Chaplin donated his current movie, Modern Times. Dramatic groups put on plays. All the while, Lammot DuPont fumed.
The DuPont's tried to stamp out this rising national support for the Flint strikers through another one of their arms, the National Association of Manufacturers. “The refusal to abide by the will of Congress on the part of leading members of the National Association of Manufacturers,” reported the Senate Civil Liberties Committee three years later, “spurred by the legal opinion distributed by the Association, was one of the principal reasons for the inability of the NLRB to establish peaceful collective bargaining in situations such as the General Motors strike in January and February, 1937.” 173 NAM waged a nationwide propaganda war against unions and the Flint strikers and secured court injunctions against the NLRB that was designed, according to the Senate committee, to “nullify the administration of the National Labor Relations Act, impairing the successful operation of the law.” Significantly, the committee noted that “the largest contributor during this period (1932–1937) was E. I. DuPont de Nemours & Co. with $118,600, most of which was donated in 1936 and 1937. The rising interest of this company in the Association’s activities is indicated by the increase in its contributions from $725 in 1933 to $55,000 in 1937.” General Motors, at $66,250, was NAM’s second largest contributor.
On January 11, G.M. called in the Flint police to evict the strikers. The police launched repeated assaults, firing shotguns and revolvers. Although fourteen workers were wounded, the strikers beat back the attack with bottles and water hoses.
Then G.M. pressured Michigan’s Governor Frank Murphy, a long-time correspondent of John J. Raskob, to intervene with the National Guard, but Murphy hesitated. The contingent of 3,000 troops sent were filled with workers who wore their own union buttons, and their reliability was in question. Besides, Murphy did not want the reputation of his office or the Democratic Party damaged by a bloodbath. On January 13 he called G.M. and the UAW together and succeeded in hammering out a compromise that called for evacuation in exchange for recognition of the UAW as the sole bargaining agent.
In the midst of evacuations, however, UAW officials were handed a prepared G.M. press release by UP reporter Bill Lawrence, announcing the scheduling of a meeting with the Flint Alliance after the evacuations were completed to discuss “representation.” What was the union’s reaction? the reporter asked.
The evacuations immediately stopped. But the nonstriking plants had already been reopened, and the union’s position would be further weakened each day. Something had to be done. On February 1 the auto workers seized Chevy No. 4, G.M.’s largest plant.
Murphy responded angrily by ordering 4,000 troops with fixed bayonets, machine guns, and 37-mm. howitzers to surround Chevy 4. An injunction was served, and tensions rose. Thousands of workers poured in from around Michigan, some armed. Plans were formulated by veterans to seize Flint’s city hall and free the strikers if they were arrested. Roosevelt, who had been secretly encouraging Murphy to intervene if necessary (while lying reassurances to a worried John L. Lewis), 174 then reversed his position and backed off, fearing a widened class conflict, and perhaps aware that Mortimer had already defined the struggle in class terms. “This thing is deeper than most people realize,” the UAW vice-president had told the Flint strikers. “Behind G.M. is the Steel Institute. Behind the Steel Institute are the DuPont's. It is a fight between the American working class and the tap root of American capitalism.” 175 Mortimer later stated that Roosevelt constantly pressured the negotiating committee to settle on G.M.’s terms. 176
When Roosevelt’s efforts were resisted by the strikers’ determination, pressure shifted onto Alfred Sloan and G.M. vice-president, William Knudsen, one of Pierre DuPont’s G.M. proteges who was directly handling the renewed negotiations. Lacking the active support of federal and state troops, fearing the damage to machinery, production, and retention of markets, fearing a possible widened class conflict and the ugly name G.M. would be given by bloodshed, General Motors surrendered on Thursday, February 11, 1937. The workers marched out of the plants in triumph, and Knudsen retired from the scene to sulk (despite smiles for cameramen) over G.M.’s first labor defeat.
The historic UAW-G.M. agreement was signed not by the chairman, Lammot DuPont, but by DuPont in-law Donaldson Brown, G.M. vice-president. Brown was chairman of G.M.’s finance committee and also served on DuPont’s finance committee. As such, he was the living symbol of the marriage between DuPont and General Motors. Within three months, however, this marriage lost its management dynamic, such was the impact of the Flint defeat. Lammot resigned the chair, giving it to Sloan who, in turn, passed the presidency on to Knudsen in reward for his Flint negotiations. Donaldson Brown was the only DuPont who remained in management, becoming vice-chairman.
The G.M. cabinet shake-up represented a general withdrawal by DuPont and Morgan interests from G.M.’s active management. Pierre’s old order, the executive and finance committees, was abolished and replaced by a policy committee (which included Lammot and Walter S. Carpenter, Jr.) and an administration committee of G.M. executives. In the process, leading DuPont's (Henry F., Pierre, Irénée, and John Raskob) and Morgans (Junius S. Morgan, George F. Baker) were dropped.
The Great Flint Strike stands as a turning point in DuPont history, for the brave determination of the auto workers convinced many of the family that a new age had dawned on the American political economy, an age when the rigid habits of laissez faire could no longer meet the needs of corporate capitalism. Along the corridors of DuPont headquarters, through the mansions along the Brandywine, a new awareness was gradually seeping into the DuPont mentality that ownership per se did not guarantee claims for control, but that in the era of strong industrial unions, control must be made an area of its own political concern; government regulation, and through it, the union leadership, must be used in a policing role to maintain labor peace and submission. But few Du Ponts agreed with New Dealers that militant unions such as the UAW could eventually be used for this purpose. This is probably because their shortsightedness on profits prevented them from foreseeing the enormous mellowing influence on union leadership that legal recognition, the binding contract, the narrow “interest-group” mentality, and legally established channels sanctioned by a flattering government could have.
Be that as it may, another dynamic was already developing that would forge a Du Pont-Roosevelt truce. For as the Flint Strike forced the Du Ponts to move, reluctantly but necessarily, closer to New Deal labor policies, so also the 1937 economic collapse and growing fears of foreign market losses to Axis aggression were forcing Roosevelt to move closer to the Du Ponts. Since the President’s commitment to private enterprise ruled out wholesale nationalization of any major industry, including the arms industry, the approach of possible war made the Du Ponts no family to ignore. In fact, it necessitated a shocking alliance.
NEXT
THE NEW DEAL GROWS OLD
notes
Chapter 10
1. Marquis James, Alfred I. du Pont—Family Rebel (Indianapolis: Bobbs-Merrill Company, Inc., 1941), p. 473.
2. Ibid.
3. Irving Bernstein, The Lean Years (Baltimore: Penguin Books, Inc., 1966), p. 77.
4. Ibid., p. 252.
5. James, Alfred I. du Pont, p. 474.
6. Ibid., p. 478. 7. Murray N. Rothbound, “The Hoover Myth,” For a New America (New York: Random House, 1970), p. 178.
8. James, Alfred I. du Pont, p. 479.
9. New York World-Telegram, October 17, 1931. 10. New York Times, April 14, 1930, p. 2. 11. Ibid.
12. Literary Digest, April 26, 1930, p. 7.
13. Ibid.
14. Robert Cruise McManus, North American Review, January 1931, p. 14.
15. Literary Digest, March 21, 1931, p. 8.
16. Ibid., April 25, 1931.
17. Outlook, April 15, 1931, p. 517.
18. Literary Digest, December 12, 1931.
19. Ibid.
20. New Republic, March 2, 1932.
21. Ibid.
22. Ibid. 23. Ibid.
24. Ferdinand Lundberg, America’s Sixty Families (New York: Vanguard Press, 1937), p. 454.
25. Ibid., p. 455; also Report of the Special Senate Committee to Investigate the Munitions Industry, 1936, p. 1403.
26. William Leuchtenburg, Franklin D. Roosevelt and the New Deal (New York: Harper & Row, Publishers, 1963), p. 39.
27. Richard O. Boyer and Herbert M. Morais, Labor’s Untold Story (New York: United Electrical, Radio and Machine Workers of America, 1970), p. 271.
28. Washington Star, July 29, 1932.
29. New York Times, November 10, 1931, p. 8.
30. Munitions Hearings; Report, pp. 1403–8.
31. Leuchtenburg, Franklin D. Roosevelt, p. 13.
32. “The Man Who Saved Democracy,” Commonweal, January 18, 1933, p. 315.
33. New York Times, January 17, 1953, p. 25.
34. Ibid., January 14, 1953, p. 39.
35. F. I. du Pont Co., “The Chemical Industry” (New York: E. I. du Pont Co., 1935), p. 14.
36. New York Times, September 1, 1963, Sec. III, p. 3.
37. Ibid., January 26, 1934, p. 6.
38. Ibid.
39. Ibid., August 27, 1933, Sec. IV, p. 5.
40. Ibid., March 12, 1933, p. 4.
41. Munitions Hearings; Report, p. 1406.
42. New York Times, November 24, 1933, p. 1.
43. B. C. Forbes, “The Salaries that Are Paid in Various Lines,” American Magazine, Vol. 89, January 1920.
44. F. I. du Pont, Inc., “The Chemical Industry.”
45. Ibid.
46. Ibid.
47. New York Times, January 26, 1934, p. 6.
48. Albert E. Kahn, High Treason (New York: Lear Publishers, 1950), p. 129.
49. New York Times, January 31, 1934, p. 25.
50. Business Week, September 15, 1934, p. 20.
51. Frederick Rudolph, “The American Liberty League, 1934–40,” American Historical Review, LVI (1950), 19–33; also New York Times, December 21, 1934.
52. Ibid.
53. Raskob to Shouse, Shouse Manuscripts; quoted also in Leuchtenburg, Franklin D. Roosevelt, p. 92.
54. Congressional Record, Senate, January 15, 1935, p. 450.
55. New York Times, December 20, 1963, p. 1.
56. Ibid.
57. La Follette Senate Investigating Committee, Report, February 8, 1937.
58. New York Times, March 10, 1937.
59. Munitions Hearings; Report, 1937, Schedule B and p. 1400.
60. Ibid.
61. Dickstein-McCormick Special Committee on Un-American Activities, House of Representatives, 73rd Congress, 2nd Session, Testimony of Major General Smedley D. Butler, November 20, 1934, pp. 8–114, DC 6 II..
62. Ibid.
63. Ibid.
64. Ibid.
65. Ibid.
66. Ibid.
67. Ibid.
68. Lundberg, America’s Sixty Families, p. 179.
69. Dickstein-McCormick Committee, loc. cit.
70. Ibid.
71. Ibid., III, Report (No. 153), Union Calendar No. 44, 74th Congress, 1st Session, House of Representatives, “Investigation of Nazi And Other Propaganda,” p. 111, DC 6 II in testimony).
72. Ibid., Testimony of Paul Comly French.
73. Ibid., Report.
74. Kahn, High Treason, p. 204.
75. New York Times, August 25, 1934, p. 12.
76. Time, December 3, 1934, pp. 1–2.
77. Time, Statement of Ownership, October 1, 1935.
78. Dickstein-McCormick Committee, Report, 1935.
79. New York Times, February 2, 1930, p. 21.
80. Ibid.
81. Ibid.
82. Congressional Record, Senate, January 15, 1935, p. 457.
83. Ibid.
84. Ibid. 85. Ibid.
86. Ibid.
87. Alfred D. Chandler and Stephen Salsbury, Pierre S. du Pont and the Making of the Modern Corporation (New York: Harper & Row, Publishers, 1971), pp. 570 and 703. 88. Munitions Hearings, Exhibit No. 483.
89. William A. Williams, The Tragedy of American Diplomacy (New York: Dell Publishing Co., Inc., 1962), p. 133.
90. Ibid., p. 154.
91. Ibid.
92. William A. Williams, ed., The Shaping of American Diplomacy (Chicago: Rand McNally & Co., 1960), p. 723. (Remarks to cabinet.)
93. For a treatment of Hoover’s interpretation of his nonrecognition policy see Professor Richard N. Current’s article in the American Historical Review, LIX, No. 3 (April 1954), pp. 513–42.
94. Williams, Shaping, p. 706. (Memorandum to Secretary of State Simpson.)
95. Munitions Hearings, Part 5, p. 1368, Exhibit 512.
96. Ibid., Report, p. 253.
97. See U.S. Senate, Committee on Military Affairs, Monograph 1, “Economic and Political Aspects of International Cartels,” 1944, p. 6; also Munitions Hearings, 1934, Exhibit 512.
98. Munitions Hearings, pp. 1208–15.
99. Ibid., Part II, p. 2561, Exhibit 911.
100. New York Times, September 15,1934, p. 1.
101. Nye Committee, Report, 1936, p. 249.
102. William L. Shirer, The Rise and Fall of the Third Reich (New York: Simon and Schuster, Inc., 1960), p. 203.
103. Munitions Hearings, Part 5, p. 1197, Exhibit 506.
104. Ibid., pp. 1197–98, Exhibit 507.
105. Ibid., Report of the Special Senate Committee, Munitions Hearings, p. 261.
106. New York Times, September 15, 1934.
107. Munitions Hearings, Exhibits 519 and 520, Part V, pp. 1236, 1377, and 1379.
108. Munitions Hearings, Part 5, pp. 1243–44.
109. Ibid., pp. 1246–47.
110. Ibid., p. 1199, Exhibit 508.
111. Ibid., Exhibit 1103, Chart A: “International Relations War Materials or Processes.”
112. Ibid.
113. New York Times, August 31, 1933.
114. See Report.
115. Ibid.
116. New York Times, September 18, 1936, p. 26.
117. Shirer, Third Reich, p. 389.
118. Congressional Record, Senate, January 15, 1935, p. 456.
119. Ibid., p. 448.
120. Ibid.
121. See New York Times, December 5, 1934.
122. Congressional Record, Senate, January 15, 1935, p. 457.
123. New York Times, September 15, 1934.
124. John K. Winkler, The Du Pont Dynasty (Baltimore: Reynal & Hitchcock, Inc., 1935), p. 330.
125. New York Times, September 16, 1934, p. 30.
126. Ibid., December 6, 1934, p. 4.
127. Ibid.
128. Munitions Hearings, Testimony of Irénée du Pont.
129. Ibid.
130. New York Times, September 15, 1934.
131. Munitions Hearings; Report, p. 256.
132. Ibid.
133. Munitions Hearings, Part V, pp. 1266–67.
134. James, Alfred I. du Pont, pp. 541–42.
135. New York Times, December 7, 1935, p. 19.
136. New York Times, August 23, 1934, p. 4.
137. Special Committee to Investigate Lobbying Activities, U.S. Senate, 74th Congress, 2nd Session, Report, 1936, and Digest of Data.
138. Winkler, The Du Pont Dynasty, p. 321.
139. Martin Lipset, The Politics of Unreason (New York: Harper & Row, Publishers, 1970), p. 201. 140. Senate Lobbying Committee, Report, 1936.
141. New York Times, April 16, 1936, p. 2.
142. Kahn, High Treason, p. 195.
143. New York Times, April 16, 1936, p. 2.
144. Senate Lobbying Committee, Report, also Digest of Data, 1936.
145. Ibid.
146. New York Times, December 7, 1935, p. 19.
147. Ibid., January 4, 1936, p. 1.
148. Lundberg, America’s Sixty Families, pp. 480–83.
149. UPI dispatch, January 9, 1935.
150. New York Times, January 13, 1936, p. 4.
151. Ibid., January 14, 1936, p. 15.
152. Ibid., January 26, 1936, p. 1.
153. Cordell Hull to FDR, January 22, 1938, PPF 473, FDR Memorial Library.
154. New York Times, January 31, 1936.
155. New York Post, April 18, 1936.
156. New York Post, April 18, 1936.
157. Lundberg, America’s Sixty Families, p. 484.
158. George W. Ziegelmueller, “A Study of the Speaking of Conservatives in Opposition to the New Deal” (Doctoral thesis, Department of Speech, Northwestern University, 1962), p. 64.
159. New Republic, September 2, 1936; also Senate Lobbying Committee, 74th Congress, 2nd Session, Digest of Data.
160. New York World-Telegram, March 10, 1938.
161. Special Conference Committee, Annual Report, 1936.
162. Kahn, High Treason, p. 166.
163. Henry Kraus, The Many and the Few (Los Angeles: The Plantin Press, 1947), p. 9.
164. New York American, May 30, 1936.
165. New York Times, May 26, 1936.
166. Forrest Davis, “Labor Spies and the Black Legion,” New Republic, June 17, 1936.
167. Kahn, High Treason, pp. 210–11.
168. New York World-Telegram, August 8, 1936.
169. New Republic, January 20, 1937, p. 340.
170. Henderson Report for the National Recovery Administration, January 23, 1935.
171. Congressional Record, February 8, 1937, Preliminary Report, La Follette Committee.
172. Ibid.
173. New York Times, August 15, 1939, p. 5.
174. Saul Alinsky, John L. Lewis, An Unauthorized Biography (New York: G. P. Putnam’s Sons, 1949), p. 130.
175. Daily Worker, January 21, 1937.
176. Wyndham Mortimer, “History of the UAW,” March of Labor, March 1951, p. 29.
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