DuPont Dynasty
Behind the Nylon Curtain
By Gerard Colby
Eleven
THE NEW DEAL GROWS OLD
1.
ROOSEVELT COMES TO TERMS
On a warm, sunny Delaware afternoon in June 1937 hundreds of DuPont's and guests
buzzed with excitement in front of Christ Church. There, on a lush green hill overlooking
the original Brandywine Mills, cameras whirred and bulbs flashed as the formally
dressed crowd began mounting the Church’s old stone steps, recording the innumerable
DuPont cleft chins lifted in anticipation of seeing the wedding of the century. Inside,
filed between polished wooden pews, rows of famous faces watched the tall, thin tuxedo-ed groom anxiously await the arrival of his bride, Ethel DuPont. But the real star
attraction of the day was the groom’s illustrious parents, Mr. and Mrs. Franklin D.
Roosevelt.
Of all possible events, this union of the House of DuPont and the White House was
probably one of the least expected by the public. Only a year before, the DuPont's were
at virtual war with President Roosevelt, both sides firing broadsides of political tirade.
Yet, as the strange scene of Irénée and Lammot DuPont toasting Franklin D. Roosevelt,
Jr., unfolded, it became clear that past DuPont-Roosevelt rivalries were only the
internal feud of a class as to how best to rule.
This is not to imply that the clash between the DuPont's and Roosevelt was not real.
In fact, it had become so bitter that the President abstained from most correspondence
with Delaware’s first family. That was left to his wife, Eleanor, who ably played the
role of diplomatic liaison for this courtship of her son to the house of the enemy.
Franklin, Jr., and Ethel had been seen together since April 1934, when at a
Philadelphia wrestling match Franklin smashed the camera of a hapless reporter who
was too intent on capturing the scene of the President’s son dating the daughter of
Eugene DuPont, Jr. Two months later, while Eleanor mitigated the President’s “refuse”
to a more subtle “regret,” Franklin, Jr., was among the 1,000 who attended Ethel’s debut
at her father’s Greenville estate, Owl’s Nest. Eleanor made up for the occasion,
however, by having Ethel join her on the presidential yacht, Sequoia, to watch Junior
row futilely against Yale’s crew. In December Ethel was a holiday guest at the White
House.
By the following spring Ethel had become a regular companion to the Roosevelt's at
Junior’s crew races, and Eleanor, assuming the chaperone’s responsibility of writing
Ethel’s parents, seemed to have grown genuinely fond of her.
While Franklin, Jr., pursued his amorous campaign, relations between the two
families remained strained. Yet it is interesting that while both sides publicly denounced
each other in the harshest terms—“dictator,” “economic royalists,” etc.—privately they
maintained correspondence on a friendly first-name basis. “Dear Eleanor,” writes Ruth,
wife of Henry F. DuPont, protesting a cartoon against “a blameless citizen,” banker J. P.
Morgan. “I think the matter should be brought to the attention of the President. He may
already have seen these attacks and have taken steps to have them stopped.…
Affectionately yours, Ruth.”
1 Eleanor, who confided to her secretary that she didn’t
agree with the “blameless citizen,” wrote back on November 20, 1934: “Dear Ruth, I
gave the cartoon to the President and he says that people in prominent positions, such as
Mr. Morgan and himself, must expect articles and cartoons of this nature—only that
most of them are ten times worse! Affectionately, Eleanor.”
2
Again, half a year later, when Winterthur informed the White House of its
“unqualified admiration”
3 of the President’s veto of the Bonus Bill for veterans,
“delighted” Roosevelt gave the “usual” first-name reply: “It is indeed pleasing to know
that you and Harry approve.…”
4 To a similar “appreciation” from Pierre DuPont,
however, the President had a terse formal note sent that he was “particularly gratified to
know that you approve the message. It was indeed kind of you to take the trouble to tell
me so.”
5 Obviously, at a certain point, or person, lines were drawn.
Despite this public brawl between their families, the private love affair of Ethel and
Franklin, Jr., went along handsomely, and no sooner had the dust of the 1936 elections
settled, than on November 14 the couple astounded the country by announcing their
engagement.
In feverish expectation, newspapers announced June 30 as the wedding date. To plan
and run the whole affair, the DuPont's hired a social legend of the time, Mrs. Edward J.
MacMullen. “Mrs. Mac” was, in her own words, “the ringmaster of the Philadelphia
social circus,”
6 and the DuPont-Roosevelt wedding was the greatest three-ring circus
yet. Over 1,300 people were invited, too many for even the “chateau country” of two
dozen big DuPont mansions to house. Fortunately, the Vicmead Hunt Club, owned by
Victor and Ellen DuPont Meeds, came to the rescue.
Everything, of course, was fairy-tale perfect, and the press tent, filled to the brim,
recorded every historic moment. The President and Mrs. Roosevelt arrived in Delaware
in the morning, parked their private railroad car at a siding at Montchanin Station, and
guarded by a small army of state troopers, secret servicemen, and soldiers from Fort Du
Pont, entered the church. At the prearranged strike of an organ key, down the aisle came
the bridesmaids, each wearing a star sapphire clip given by the bride. Then, on
Eugene’s arm, floated Ethel, literally wearing a fortune. Her gown was made of
shimmering white tulle, with a tight V-neck bodice trimmed with orange blossoms,
which also circled her tiny waist. The sleeves were puffed and full, and five inches
below the waist the skirt was shirred, flaring widely at the bottom. As she gracefully
approached the altar crowned with a Juliet cap of miniature orange blossoms, a 12-footlong,
three-tiered lace veil followed in her wake. But despite the enormous expenditure
obviously involved, Ethel’s gown, like the waves of her brown hair, spoke of the simple
elegance that comes with established wealth. The ceremony itself reflected this bearing,
with the word “obey” omitted from Ethel’s vows, as was the groom’s usual statement of
endowing the bride with all his worldly goods. Clearly, here also lines were drawn.
When it was over, Franklin, Jr., led his new bride back up the aisle to the reception at
Owl’s Nest and the veritable treasure of gifts, including the eleven dozen sets of silver
from New York’s Woodside Sterling given by the President and stamped with the DuPont crest. The DuPont-Roosevelt union was now a reality. But even as Franklin and
Ethel left Christ Church, dark thunderclouds suddenly rolled over the Delaware sky,
lashing the party with winds and rain. It was an ominous symbolic beginning for a
marriage doomed to failure and divorce.
Despite the marked absence of Pierre from the wedding, Ethel DuPont’s marriage to
FDR, Jr., was a turning point in relations between the two most powerful families in
America. But in itself the marriage, like DuPont Company’s hiring the year before of
Theodore Roosevelt III, grandson of Teddy, was only a personal icebreaker. Greater,
more earth-shaking events propelled the President toward a political truce.
The country’s uneasy “recovery” since 1934 had been, as Lammot DuPont accurately
described it, “artificial,”
7 based on a program of deficit spending that, through the
construction industry, fueled the pumps to keep the ship of state afloat. By 1937
Roosevelt, never a titan in Keynesian economics, began listening closely to suggestions
by Treasury Secretary Henry Morgenthau to give business a chance now that the
emergency was “over.” Business, meanwhile, beset by sit-down strikes for C.I.O
recognition, expressed concern about the political rise of C.I.O head John L. Lewis and
about reports of his intention to form a labor-farmer alliance for a presidential bid in
1940.
In June, the month of his son’s wedding, Roosevelt responded by making two
dramatic steps toward a reconciliation with the business community. The first was his
historic rebuff of Lewis over the South Chicago steel strike, a tense struggle in which
ten workers had already died from unprovoked police attacks recorded in a Paramount
newsreel that was never released to the public. Roosevelt, always a firm believer in the
rights of private property, had never been happy with the militant sit-down tactic and
Lewis had already been disillusioned by Roosevelt’s deceptions over possible National
Guard use during the Flint G.M. strike. The President, having nothing to lose now with
Lewis, put the hapless strikers on the same level as their corporate oppressors with the
pious charge of “a plague on both your houses” during the Chicago massacre. This constituted both a slap in the face to his former supporters, and an attempt to nip both
labor militancy and Lewis’s political ambitions in the bud.
His second move was economic. A student of the classical economic school,
Roosevelt had developed enough concern about mounting inflation to adopt
Morgenthau’s position. Hoping to encourage private business to invest again by easing
their fears of government competition, he slashed federal spending, cutting Harry
Hopkins’ W.P.A budget, and all but ending Ickes’s P.W.A. There was only one problem.
Corporate leaders were still too uncertain about the government’s labor and tax policies
and business conditions in general to risk new investments.
The result came merely two months later: the most brutal drop in industrial stocks in
the country’s history. From August on, Roosevelt began sharing the fate of his
predecessor: the Depression was becoming known as “Roosevelt’s depression.” When
the President called Congress into special session in November, he found opposition
from not only his old CIO allies, but also the middle-class which had backed him as
long as he kept the economy afloat. Congress, in open rebellion, repudiated his “sound”
economic policies and passed legislation authorizing deficit spending. The President’s
own bills failed to pass. By December the crash had wiped out all the stock market’s
gains made since 1935. Two million men had been thrown out of work since Labor Day
and Roosevelt, like Hoover, found himself alone.
But it was an isolation short-lived. For that month Roosevelt found new allies. And it
was one of history’s great ironies that they spoke through the lips of his arch-rival,
Lammot DuPont.
Before 1,000 of the country’s largest employers gathered for a luncheon at the
Waldorf-Astoria as the Congress of American Industry of the National Association of
Manufacturers, a thin, grave Lammot DuPont slowly mounted the podium to give the
keynote address—and shocked the country.
“When the future is uncertain, business is uncertain,” Lammot declared, and with a
calm, deliberate voice he compared industrial leaders to a driver who is blinded by “a
fog of uncertainty” and has to slow down to avoid a crash. The analogy was obvious.
“Uncertainty rules the tax situation, the labor situation, the monetary situation, and
practically every legal condition under which industry must operate. Are taxes to go
higher, lower, or stay where they are? We don’t know. Is labor to be union or nonunion,
is the A.F.L or the C.I.O to dominate it? It is impossible to even guess at the answers. Are
we to have inflation or deflation, more government spending or less? Industry is without
a scrap of knowledge on either subject. Are new restrictions to be placed on capital,
new limits on profits? Industry does not know. The whole future is a gigantic question
mark.”
Lammot was hitting at Roosevelt’s weakest point—his pragmatic flip-flops in policy,
and he was laying corporate hesitancy right on the White House doorsteps.
This was nothing new. But what he said next was.
“I say this in criticism of nobody. Perhaps the uncertainties of the recent past, which
were, in part at least, the outgrowth of world conditions beyond one nation’s control,
justify and excuse the uncertainties of the present. That is for history to decide. What has
been done, wisely or unwisely, is behind us. Let us leave it there. It is no time for postmortems.”
A stir flashed around the hall. This was no usual DuPont tirade, but a new line of
conciliation. This was a Lammot DuPont who offered the olive branch rather than the
usual hatchet.
“Give industry a reasonable degree of certainty upon which it can count in planning
current and future operations,” Lammot continued. “In short, lift the fog and let us see
the road we must travel.”
Then the DuPont chairman made an unprecedented set of concessions to Roosevelt,
but from each dangled its favorite snare.
“At this juncture, the stabilization of tax rates over a definite period, plus a
simplification of the tax structure, may be almost more important than the actual level of
taxes.… The present fear that we face a rapidly ascending tax scale, as well as new
taxes, the nature of which nobody can guess, stands like a wall in the path of industrial
expansion.”
The meaning was obvious. Replace the graduated income taxes and surtaxes on
corporate profits with a “simple” across-the-board rate similar to the single tax
championed by Francis I. DuPont. Stop any further taxes “on corporate profits and
capitalists will stop holding back capital for investment." Then Lammot turned to labor.
“The labor situation should be stabilized … the stabilization of fair conditions over a
definite period may be more important even than the details of wage rates and hours or
the precise form of labor legislation.”
For Lammot, labor stability meant also legal stability, especially with regard to the
sit-down strike’s violation of the laws of private property ownership. “As long as the
lawmaking mills grind, the fog of uncertainty mocks the industrial planner.” The legal
conditions of private industry, he insisted, must be “finally determined.”
Then Lammot made his bid for national headlines, calling for a $25 billion program
for capital investing to employ the 4 million unemployed. How? By “vastly broadening
the market for existing products through lowering their cost and by maintaining a rule of
fair return for all effort, not excepting capital effort.”
8
Of course much of this was old-hat, including Lammot’s free-enterprise belief in the
self-healing properties of the internal market and the glory of chasing the dollar. But his
$25 billion proposal for finding 4 million jobs made the front page of the New York
Times. And of even greater interest to the White House was DuPont’s willingness to
accept unions into Roosevelt’s grand scheme for labor peace. This was a far cry from
the old feudal attitude of refusing to accept labor as a legitimate interest group in its
own right. Lammot’s statement revealed a new maturity in the corporate mentality about
the systematic needs of rationalizing a corporate state through “interest group” politics
that essentially divided the working class against itself.
But even more revealing was Lammot’s recognition of “world conditions beyond one
nation’s control” as being a key factor in creating the Depression. Although Roosevelt
would not accept NAM’s call for “recognition of the open shop as well as collective
bargaining,” he would turn increasingly to world affairs for a market solution to
domestic ills. And key to this shift in policy emphasis was the cultivating of business
cooperation. Significantly, every major point made by Lammot concerning taxation,
labor peace, and legal stability became an integral part of Roosevelt’s policy over the
next four years.
The day after Lammot’s speech, the Brooking's Institution endorsed a modification of
the federal levy on corporate profits, while the New York Times quoted William B.
Warner, president of McCall Corporation: “We as manufacturers are opposed to
communism.… America must ask itself, ‘If not the private enterprise system, what
system?’” Pressure was building on the New Dealers.
Two days later, on December 10, Roosevelt welcomed a guest no New Dealer would
ever have guessed would be seen at the White House—Alf Landon. “I guess you got the
best of it,” admitted the President, and then Roosevelt announced his opposition to
nationalizing the country’s railroads. “A national system of adequate economic and
solvent railroads, privately owned and privately managed,” reported a relieved New
York Times, “was outlined by the President as the goal toward which the transportation
policies of his Administration were directed.” This account by the Times, following a
gleeful description of the disappointment of nationalization “agitators,” was
undoubtedly accurate. Neither Roosevelt’s intentions nor basic policy had moved to the
right; actually, only his rhetoric had ever been on the left, and he now discarded that.
Other New Dealers, however, did not. In two speeches later that month, Secretary of
Interior Harold Ickes charged Lammot du Pont and other corporate leaders with
threatening America with “big business fascism.”
9 Assistant Attorney General Robert
Jackson, who had endorsed Roosevelt’s refusal to nationalize railroads as “frank and
realistic,” was a bit milder, knocking the monopolists for their “strike of capital.” But
the crusading days of the New Deal were over. At a Jackson Day dinner on January 8,
1938, Roosevelt asked for the confidence of the business community, and the next day
endorsed cartels along the line of the original NRA. Corporate leaders such as Myron
Taylor of U.S. Steel began having a series of conferences with the President. “The
President,” Ickes wrote disgustedly in his diary, “after letting Jackson and me stick our
necks out with our anti-monopoly speeches, is pulling petals off the daisy with
representatives of big business.”
10
Lammot DuPont remained cool and calm throughout these attacks, not wishing to force Roosevelt back into a crusade against big business. When called before the Senate Committee on Unemployment in December, he cautiously refused to discuss his views on unemployment insurance or aid to the aged indigent. On the normally explosive issue of taxation of profits, he declared he had “not thought through” the arguments. It was a far cry from the recent past.
“One of the greatest requirements of the present situation is industrial peace,” he explained quietly. “Government and business should take counsel together in a spirit of forbearance and cooperation.” Gone forever was laissez-nous faire!
Some of the senators were not enthused over Lammot’s deliberate diplomacy. “You are unwilling,” thundered Senator Byrnes, “to express an opinion about the business of Congress, but in a speech that you made you did undertake to say some things about taxes. Have you forgotten that?”
“No,” Lammot replied, “but I was not talking to a group of senators then.” 11
The DuPont-Roosevelt rapprochement progressed steadily. In January 1938 Eugene filed a suit contesting over $63,000 in back taxes for 1933 to 1935 on his children’s trusts, claiming the technicality that his income went to them, not him. He won the case two years later. The wait was worth it. He got $20,000 above what he asked.
In September Roosevelt’s probe of Pierre and Raskob’s 1929 tax fraud resulted in a conviction ordering them to pay $2.1 million in back taxes. “One could secure no better illustration of the tyranny which a government bureau can inflict on a citizen,” Raskob had claimed when the charges were first made. Pierre had been no less adamant, claiming the case was “part of a scheme to injure me and to force a compromise of claims in a manner amounting to extortion.” The tax board remained unmoved. In 1938 it ruled: “Men do not conduct themselves and accomplish the end as did these parties toward each other and attain an end so advantageous to their fortunes without a common understanding. The design was too complete to be without a designer. The record before us bares its transparency.” Which, one report commented, was a polite way of saying cheating, lying, and trickery. Yet, there was no DuPont outcry in 1938. And these men would receive no penalty, not even a fine. In fact, they did not even fully pay back what they owed. In December, hidden in the back pages of the New York Times, was an item reporting that Pierre and Raskob struck a deal with the government, agreeing to pay only $586,369 and $1,473,202 respectively.
The Times’s poor coverage was not exceptional. Throughout the trial, the case was ignored by the press. “One astonishing feature of this affair,” the Christian Century observed, “has been the slight attention paid to it by most of the press.” What if it was James Roosevelt or John L. Lewis? the magazine asked. “But when the men involved are outstanding champions of reactionary social and political views, and masters of far reaching industrial enterprises, the press apparently is ready to say as little as possible about the matter, and to forget it as soon as possible.” 12
Meanwhile, in October, Lammot had also sued to recover $5 million paid in federal taxes in 1934. Again the DuPont's won, Lammot awarded a full refund on March 19, 1939. The government had merely made a mistake … a very big mistake.
On May 10, 1939, Irénée, too, got a refund. This one was for $27,999.
In June Lammot had Wilmington Trust sue to recover $223,000 paid in 1935 on thirteen DuPont family trusts. This, too, was honored.
That same month, Pierre admitted “mistakes” in twenty previous stock reports, falsely recording acquisitions outweighing sales. Again, the SEC exonerated him of “any willful wrongdoing.” In 1940 the government again convicted him for $172,000 in taxes owed for 1931.
On November 10, 1939, the Board of Tax Appeals handed Lammot another $222,701 by dropping its claims for back taxes owed for 1935, citing an “agreement by attorneys of DuPont and the government.”
Clearly, a new day had dawned on DuPont-government relations, the Roosevelt administration completely reversing its earlier tax crusades. “It knocks the whole base from under the New Deal structure,” Interior Secretary Ickes commented in 1940 on FDR’s corporate compromises and tax breaks. “We are running up the white flag.” 13
Sometimes the white flag took on a more personal character. On February 8, 1938, FDR’s son and private secretary, James, arrived in Cuba. After visiting the Cuban secretary of state with the U.S. ambassador, he then flew on to the beautiful Varadero Peninsula to see the second most important American on the island, Irénée DuPont. Roosevelt stayed overnight as the honored guest of Xanadu.
On June 26, when the Du Ponts were celebrating the tercentenary of the Swedish landing in America, on hand again was President Roosevelt. Arriving in flag-draped Wilmington by train, the President immediately stepped into an awaiting limousine and headed north toward “chateau country.” With the roar of escort motorcycles breaking the rural quiet of Owl’s Nest, the presidential caravan drove up the tree-lined approaches to Eugene’s mansion, where he was greeted by Mr. du Pont and his wife. The next afternoon, after ceremonies in Wilmington with the Prince of Sweden, the President returned to Owl’s Nest and dropped off his military aide, Colonel Watson, with Mrs. du Pont. Then Eugene climbed into the back seat with FDR. “Serious conversation apparently engrossed the President and his host as the car drove off,” 14 noted the New York Times.
Although knowledge of the exact nature of that “serious conversation” went with Messrs. Roosevelt and DuPont to their graves, there were certainly enough subsequent developments in DuPont Company alone to merit its attention.
The Revenue Act of 1938 repealing the tax on undistributed profits was before Congress. Only a month before, on May 21, before the American section of the International Chamber of Commerce, Lammot had called for a release of venture capital from taxes and regulation. “There is no such thing as an unreasonable profit if the risk is great enough,” Lammot had stated to the press. Roosevelt’s anti-monopoly stance would not allow the President to endorse the new bill, yet he would not oppose it when it was passed by Congress.
Of all the country’s corporations, DuPont had probably suffered least from the profits tax. “Statistically,” commented Fortune reviewers in 1937, “DuPont is not exciting; it is breathtaking.” 15 Profits had climbed from $26 million in 1932 to almost $90 million in 1936, far surpassing the golden $78 million year of 1929. Stockholders earned $7.53 a share, a 16.6 percent return on investment; over $6 of that had been paid out as dividends. Dividends such as these, of course, were DuPont’s big story. Since 1925, DuPont had earned over $627 million and paid out $555,224,000 in dividends. Yet, its capital construction continued mostly unabated, registering $644 million in assets in 1937. Between 1929 and 1939 investment doubled and overall employment rose by 6,500 to 41,000 workers.
There were four basic reasons for this phenomenal success in the midst of depression.
The first reason, of course, was General Motors, which annually provided from 20 percent to 30 percent of DuPont’s income through stock dividends and purchases of DuPont fabrics and finishes. G.M. was DuPont’s largest customer. Through “stock and management interlocks,” a report to the Senate Anti-trust Committee in 1974 asserted, G.M. was able to keep its sales high during the Thirties by engineering conversions in urban mass transit systems from electric to G.M. buses and diesel locomotives.
The second reason was DuPont’s own work force. Through modern machinery and other forms of technology, and forced speedups, the productivity of DuPont workers rose 33 percent in the decade from 1926 to 1936. 16 Discipline was enforced through the absence of independent unions, the presence of company unions, and an elaborate security system which included Pinkerton spies. Certain minor concessions also helped undercut labor militancy, such as the introduction in May 1937 of disability insurance payments, providing full pay for a three-month maximum, and a six-week maximum for pregnancy.
Through Roosevelt’s first term NRA labor policies had little effect on DuPont work conditions or pay. In fact, when the original NRA was declared unconstitutional by the Supreme Court in 1935, DuPont was one of the few companies that could state that it was not affected by the ruling and intended to continue the good relationship that it had always maintained with its employees.
With New Deal retreats accompanying Roosevelt’s second term, DuPont’s labor situation froze. The few labor rebellions that did erupt were easily crushed by management, in some cases with federal assistance. The test case came in 1939, when the C.I.O’s United Mine Workers brought an unfair labor practices charge against DuPont for interfering with its membership drive at the rayon plant at Belle, West Virginia, and for sponsoring activities of a management-controlled “employee association.” The West Virginia A.F.L, notorious for sweetheart contracts, backed DuPont’s claim of “neutrality” before the NLRB trial examiner in Cincinnati. On December 3 the C.I.O’s charges were dismissed.
The third reason was sales. Next to their own efforts through General Motors, no corporation outdid the DuPonts in developing their sales market. The capture of the General Motors market was only part of this campaign. Across the country, from rayon ladies’ apparel to Pyralin radio dials, DuPont’s name was advertised among corporate buyers with unparalleled vigor by one of the most efficient publicity bureaus in the world. Key to this advertising campaign was DuPont’s originating of “impulse buying” surveys in 1935. These studies monitored the buying habits of shoppers across the country for the purpose of discovering methods of psychological manipulation. The color of packages, uses of printing techniques, and see-through cellophane were all studied as a behavioral science to promote consumption and sales, and also to provide a huge market for DuPont’s cellophane. Such workable schemes to increase demand brought a profitable response from market-starved companies during the Depression, and it is no accident that out of these dark years emerged DuPont’s famous slogan, “Better things for better living … through Chemistry.”
DuPont’s promotion was not only economic during the Thirties, but also political, reflecting the conservative values of the family neatly wrapped in the flag. The new mass media was used extensively, and in October 1935 the DuPont's began their famous radio series, “Cavalcade of America.” Once a week, at prime time, 8:00 to 8:30 P.M., DuPont-approved scripts were read over CBS by leading actors.
The broadcast of May 25, 1938, at a time of strikes and mounting political militancy by labor, was typical in its politics, repeating the family’s version of its history. “If they will but listen to reasonable minds here in France, like yours, ‘Sieur DuPont!” 17 Jefferson was quoted saying to King Louis’s Commerce Minister; this was followed by sounds of the “horror” of starving French peasants in revolt. Irénée, with drums beating in the background, clings to his gentle wife from behind barred doors. “Bloodshed is all they think of!” he cries, “Bloodshed! I will hate it all my life! Listen to them. They are like wolves!” Safe and far from the wolves, Irénée pours forth his patriotic fervor for his new American homeland. “I love this new country. I am only waiting for the day when they will grant me citizenship.…” Irénée’s long delay in becoming a citizen is thus dutifully explained: He loved America. He had faith in it, and to prove this he joined the board of the Bank of the United States. “I know what it is to be a debtor,” the aristocrat informs his depression-racked audience. “I have been familiar with poverty, debt, imprisonment.… I can sympathize with you.” Chained like a slave to his profitable gunpowder mill, poor Irénée describes his life as “a prisoner on parole.” “You see, Monsieur,” explains wife Sophie, as she gently tears historical fact to pieces, “it was not only the money for the mills, but he has taken care of all the families of his workmen. He has built them new homes and pensioned them.” And collected rent in a company town. Now here is a liberal company ahead of its time! It is not surprising, then, the narrator asserts, that DuPont workers would not associate regularly with other workers in the area. After all, is the implication, who needs a union anyway when workers have the DuPont's!
Such was one of 141 national broadcasts of DuPont’s “Cavalcade of America.”
The fourth reason for DuPont’s success during the Depression was research. Few companies in the world spent more on research than DuPont. Every day DuPont’s experimental research center near Wilmington buzzed like a beehive as thousands of scientists and assistants busily searched for new products at cheaper costs. From here came “Dulux” enamels, Orion, Dacron, and neoprene, the artificial rubber which revolutionized the tire and hose industries. From here came moisture-proof cellophane, which revolutionized the baked goods market, and Lucite, the symbol of the new age of plastics. And from here came DuPont’s greatest money maker, nylon.
In 1935 Dr. Wallace C. Carothers, a Harvard chemist lured to DuPont by Lammot’s pecuniary bait, developed a man-made fiber which was strong, tough, elastic, water resistant, and capable of withstanding high temperatures. “Here is your synthetic textile fiber,” Carothers said as he walked into the DuPont management office. This “super polymer” was the first truly synthetic fiber, the result of $27 million and seven years of Carothers’ life. Carothers was not through yet, however. He spent the next two years in applied research in Wilmington, trying to adapt his discovery to DuPont’s commercial needs. Finally, on September 21, 1938, DuPont announced the production of a “new silk,” nylon. At Seaford, Delaware, the first (and still largest) nylon yarn plant in the world began turning out the new nylon stocking, and nylon was soon being used in shower curtains, undergarments, hairbrushes, toothbrushes, surgical sutures, musical strings, and even fishing tackle. Carothers, however, saw none of this. A year before, on April 29, 1937, after producing over fifty patents for discoveries under DuPont, he committed suicide.
“Told here is what is right with the country,” Lammot declared at the opening of DuPont’s exhibit at the 1939 New York World’s Fair, “in contrast with the emphasis over the last decade on what is wrong with it.” But even here amid the “Wonder World of Chemistry” some things went wrong. Two experimental “tricks” failed right in front of Lammot, Henry B., and William DuPont’s eyes; a glass rabbit that was supposed to vanish out of a glass top hat remained stubbornly visible, and a soapless soap machine refused to produce soap at all. Through it all, Lammot kept his humor, although the commissioned mural for the exhibit did cause a rise. “That one, where two blue men are diving into a muddy pool,” he remarked, “I couldn’t figure out quite what it meant.” “Neither could I,” confessed another executive, shaking his head. Not all went wrong, though. The World’s Fair debut of the nylon stocking scored a smashing hit. For Lammot, it signified the need for “freer opportunity,” which he defined as “no interference with the free flow of capital.” 18
Yet, as Lammot well knew, “the free flow of capital” required the removal of political obstacles to fertile markets. Roosevelt, considering the New Deal reforms basically completed, had removed most of the domestic obstacles: the undistributed earnings tax, anti-trust prosecutions; even the pump primer, the deficit spending program, was hastily renewed in the spring of 1938. But the economic reverses of 1937 persisted; the economy remained sluggish. In desperation, Roosevelt began to return to the emphasis of his predecessor—foreign markets. And here he found Japan’s growing threat to the Open Door in China, and German corporate infiltration of Latin America.
The DuPont's themselves had tried to meet these threats with cartel agreements. By 1938–1939, however, it was apparent even to Wilmington that more powerful forces than trade pacts were in motion. Franco was crushing the Spanish Republic, Japan’s armies were smashing into China, and Hitler’s panzer divisions were massed on the Czech border. The world was teetering on the brink of a new holocaust. For the DuPont's, political forces were developing that would deliver them to a new golden age.
With the fear of war heavy in the air, Lammot talked directly to what was on people’s minds. A quarter of a century before, he opened, United States industry was near panic when war cut off its supplies. “Today, in sharp contrast, every important American industrial and medicinal need is being filled by American factories on American soil, whatever the emergency stemming from the present European conflict.” 19
Lammot, of course, was implying that Americans should be grateful for DuPont’s capture of German dye formulas after World War I and its demands for the high tariff wall that protected its venture into chemicals. DuPont, he was explaining, was ready for war if it came.
But, contrary to popular polemics, the DuPont's in no way wanted war. They feared it not only as the disrupter of stable market conditions abroad, but also as the midwife of revolution. “The stability of business in this country,” declared Lammot on January 1, 1940, “is dependent in no small degree upon the establishment of a just and permanent peace throughout the world.” 20 Three weeks later, before the Michigan Manufacturers Association, vice-president Henry B. DuPont again warned of the temptation of war profits. Our job is at home, he stated, despite the temporary profits of war. The economic and political aftermath of war “will be a headache.… Merely to regain and maintain the old standard of living reached during the 1920’s, as measured by per capita production and consumption, would necessitate the operation of our factories and mines during the next ten years at an average rate of activity far higher than we have known.” 21
The DuPont's were not alone in this belief. Most of the large manufacturing and financial interests were also opposed to war, as illustrated by NAM’s opposition to entering into the conflict. Most still hoped their needs for foreign markets could be solved short of actual war.
Roosevelt shared this sentiment, endorsing Chamberlain’s Munich appeasement of Hitler’s ambition for Czechoslovakia. But as far back as his tenure as Wilson’s Assistant Secretary of the Navy, Roosevelt had maintained a firm commitment to defend America’s overseas trade routes, fully accepting Wilson’s belief that “our economic frontiers are no longer coextensive with our territorial frontiers.” During his first term in the White House Roosevelt increasingly saw the need of a system of corporate expansion overseas as the basic means of economic recovery. Pressured by business interests and his own sense of reality, he recognized the Soviet Union and helped organize the Export-Import Bank to handle the anticipated trade boom. Encouraged by his own aristocratic sense of noblesse oblige, he announced the Good Neighbor Policy to encourage Latin American resistance to German corporate trade and investment. By imposing economic sanctions and by sending thirty Navy warships around Cuba to harass the nationalist government of President Grau San Martín, however, Roosevelt emphasized that good neighbors do not rock the boat, especially where $3 billion of U.S. corporate investment is concerned. When it came to Bolivia’s and Mexico’s seizure of Standard Oil concessions, again U.S. economic sanctions were imposed, and in 1937 Roosevelt sanctioned the bloody suppression of the Puerto Rican independence movement when 171 people were shot down by police as they peacefully assembled for a pro-independence parade.
In 1935, two years before the “recession,” Roosevelt explained his foreign policy: “The full measure of America’s high productive capacity is only gained when our businessmen and farmers can sell their surpluses abroad.… Foreign markets must be regained if America’s producers are to rebuild a full and enduring domestic prosperity for our people. There is no other way if we would avoid painful economic dislocation, social readjustment, and unemployment.” 22 That this was nothing but a continuation of American policy since the Spanish-American War was underscored by Assistant Secretary of State Francis B. Sayre’s reflection on the market crisis of the 1890’s and his quote of President McKinley: “The expansion of our trade and commerce is the pressing problem.” 23
With the economic collapse of 1937, Roosevelt returned increasingly to Hoover’s emphasis on foreign markets as the solution to domestic stagnation. Roosevelt had already considered the New Deal’s domestic program completed, and always dismissed any consideration of abandoning private corporate ownership in favor of nationalization and a self-contained economy. Committed to the rule of private interests, and concerned with its reform only for the sake of efficiency, he was bound to their needs for profitable foreign markets. Throughout the Thirties this position led to increasing antagonisms with the expanding Axis powers. “We’re just going to wake up and find inside of a year,” declared Treasury Secretary Morgenthau in December 1937, “that Italy, Germany, and Japan have taken over Mexico.” The State Department’s Adolph Berle was already involved in economic warfare with German airlines in Mexico, explaining that, “We initiated a campaign to clear these lines out.” 24
Through this entire debate, the DuPont's remained publicly indifferent to the rise of fascism. Franco’s attack on the Spanish Republic may have divided the country, but not the House of DuPont (with the sole exception of Zara DuPont, Coleman’s sister). So glaring was the DuPont position on Spain that it was even used by Republicans during the 1936 election. Colonel Latham Reed, Republican leader of Suffolk County in New York, drew the line in attacking David Dubinsky, head of the Ladies’ Garment Union who had abandoned the Socialist Party to campaign for Roosevelt. “The question is whether you are for Dubinsky or DuPont. While the DuPont's have been furnishing labor more jobs … Dubinsky has been soliciting funds to finance the Communist's in Spain.” 25
That same day Toledo fell to Franco’s fascist armies. Although DuPont had earlier violated arms embargoes on Germany and China, through the entire Spanish Civil War, it refused to honor any powder order from the besieged Republic. But DuPont’s position was only consistent with Roosevelt’s own policies, drafted in fear of conflict with both Hitler and the vote-controlling hierarchy of the Catholic Church which supported Franco.
Japan’s renewed attack on China in July 1937, however, was another matter entirely. Here the entire Open Door policy was at stake. China was already buying more and more goods and services from American corporations, and future prospects, according to financier W. Cameron Forbes, were “considered especially bright. Never before has China offered greater promise for its future trade, industry, and general economic progress than … just prior to the outbreak of the present hostility.” 26 By 1935 American corporations had outscored Japanese companies by $25 million in trade with China. The Japanese attack of 1937, then, threatened not only the last great market frontier, China, but also the whole of Asia, the source of 51.5 percent of the U.S.’s raw and crude material imports, 85 percent of its tungsten, 99 percent of its jute, and 98 percent of its shellac—all essential to American industry.
At the same time, the deepening Rome-Berlin ties were seriously alarming Washington. In October 1937 Roosevelt took the first step toward war with his “Quarantine the Aggressor” speech, and two months later he began his rapprochement with NAM, then led by the largest munitions makers, the DuPont's. In January 1938 he submitted a $7 billion budget with a $1 billion deficit for a bigger Navy to protect trade routes. “There can be no military disarmament without economic appeasement,” explained Secretary of State Hull. “Only healthy international trade will make possible a full and stable domestic economy.” 27
Hull’s economic rationale was too obvious. “The reason for all this battleship and war frenzy is coming out,” declared Democratic Representative Maurey Maverick on March 6. “The Democratic administration is getting down to the condition that Mr. Hoover found himself. We have pulled all the rabbits out of the hat and there are no more rabbits.” 28
On October 11, 1938, Congress appropriated $300 million more for armaments. In December the United States loaned China $25 million. By then, Britain, America’s largest trade partner, had already been granted “most favored nation” status, marking the first U.S. policy change with Britain since 1812.
When Hitler launched a pogrom of German Jews so vicious that it forced such luminaries as Albert Einstein, Thomas Mann, and Kurt Weill to flee to America, popular sympathy was so strong that Pierre DuPont had to deny any connection with the antisemitic off springs of his American Liberty League—“I have never entertained any prejudice that would mark me with disfavor to any race or people. I have one-eighth Jewish blood in my veins that I am not ashamed of”—and promised to publicly withdraw support from the League if there was “one trace” of race-hate propaganda.There were many “traces,” some even led to the doorstep of his brother Irénée, who contributed to the anti-Semitic Sentinels, but Pierre did not withdraw.
Still, despite its horror of Hitler, the American population wanted peace, and it was a strange alliance of fears that moved John L. Lewis and the DuPont's to support the same candidate in 1940. Labor justifiably feared the war preparation, primarily because Roosevelt and his new corporate allies could control the labor market and its conditions through the draft and defense contracts. “Unless substantial economic offsets are provided to prevent this nation from being wholly dependent upon the war expenditures,” warned Lewis, “we will sooner or later come to the dilemma which requires war or depression.” 29
Most of the DuPont's, on the other hand, agreed with Bernard Baruch’s fear that war would mean “the institutions of government, as we have known them, would fall down … and that the whole moral attitude of the world would change.” 30
Enjoying their new detente with Roosevelt, the DuPont's denied making any contribution to the Republican ticket in 1940. “A spokesman for the DuPonts,” reported the New York Times in 1939, “said today the company is not taking an active part in politics. The making of contributions is a thing of the past, he said.” 31 Again, in a letter to the Senate Campaign Expenditures Committee, Lammot disavowed making any contributions. “Please be advised that since the Hatch Act [which forbade large corporate donations] last July 1, I have made no contributions.…” 32 But the Gillette Senate Investigating Committee did produce records that $68,350 was donated by the DuPont's to Willkie’s campaign, $40,000 alone from Lammot. When the grand total was finally released in Congress in 1944, the DuPont figure had jumped to $186,780. 33
Although the DuPont contribution was the largest in the Republican treasury, it was a long way from their $855,000 investment of four years earlier. It represented a more realistic analysis in Wilmington of both Roosevelt’s policies and Willkie’s chances.
“I have said this before, but I shall say it again,” Roosevelt assured the country during the campaign. “Your boys are not going to be sent into any foreign wars.” What Roosevelt did not mention, however, was that as far back as 1937, the same year the Neutrality Act was passed, he had unveiled to his cabinet the secret Industrial Mobilization Plan, contemplating that “no less than 20,000 factories [including DuPont’s] should be earmarked for production of war materials,” 34 laying the germ of the future military-industrial complex that emerged from World War II.
By January 1939, French pilots were being trained in California, in July Secretary Hull notified Japan of possible tariff warfare, and in September Roosevelt asked for and received a repeal of the arms embargo. In June 1940, frightened by Hitler’s blitzkrieg, Congress voted a $17 billion arms program while Roosevelt, speaking at Charlottesville, publicly pledged support to Britain; in September fifty U.S. destroyers were given to Britain in exchange for naval and air bases in the Caribbean.
“I am fighting to keep our people out of foreign wars,” Roosevelt pledged, “and I will keep on fighting.” Undoubtedly he meant it. But Roosevelt also knew that if overseas corporate markets were to be protected and developed, the chances for peace on his terms were slim indeed. If American corporations were ever to employ 10 million jobless Americans, if economic recovery was ever to be achieved, those markets, he was convinced, must be held, protected, and expanded. But the country was not privy to Roosevelt’s cabinet meetings, nor privy to his beliefs. Accepting his word as fact, they elected him to an unprecedented third term.
By the 1940 election, the DuPont's, like Roosevelt, had accepted the inevitable. Nylon was already seen by Japan as a direct threat to her chief source of export income, the silk industry. “It was said to be even possible,” reported the New York Times Tokyo correspondent, “that the introduction of the new yarns may be so great as to result in further depression of the value of the yen.” 35 In their desperation, Japanese industrialists even toyed with the idea of better breeding of cocoons for improving the quality of silk. But the most significant decision was to use the coal of conquered Manchuria to go into nylon itself in order to combat DuPont. Japan had already done this with rayon in 1936, rising to become DuPont’s leading competitor. Soon it was also to do the same with nylon, sparking propaganda attacks from Wilmington.
Toward Nazi Germany, the DuPont's took a more friendly position. As late as 1938, G.M.’s vice-president, J. D. Mooney, had accepted a medal from Hitler, and G.M. president William Knudsen, greeted by Goering, returned with glowing reports of Nazi Germany as the “miracle of the twentieth century.” DuPont troubles with German competition dated back to the late 1890’s, but most of these had been successfully mitigated through mutually profitable cartel agreements. With war approaching in 1939, DuPont signed its last price-fixing and trade pact with I. G. Farben, known then to be Hitler’s largest financial backer, while reports were sweeping across continents of I.G.’s complicity in Hitler’s “final solution to the Jewish problem.”
In 1940 I.G. set up a synthetic alcohol and neoprene plant near the infamous Auschwitz concentration camp. There, Hitler’s SS provided Polish slave labor who were worked to exhaustion before meeting their “final solution” at the nearby ovens of extermination plants. I.G. made the poison gas for this and other death camps. When the gas ran out, children were hurled alive into Auschwitz’s furnaces. Children were tortured in front of their mothers, wives in front of their husbands, while I.G. conducted drug experiments on women, most of whom died. [Now I have a problem with this paragraph,as it sounds like Zionist bullshit to me,this book has not been lacking for links,and it troubles me that there are that many accusations in this paragraph,and no collaboration to any of it. DC]
That same year Du Pont officials were still negotiating secret trade pacts with I.G. Du Pont’s foreign relations department reported to the executive committee on February 9, 1940: “The Du Pont Company informed I.G. that they intend to use their good offices after the war to have the I.G. participation restored.” 36 Later that year a Du Pont official wrote Britain’s Imperial Chemical Industries: “I think we have all agreed that there is a moral commitment, if and when circumstances permit, for these former shareholders to become shareholders again but the basis on which this may be done will have to be discussed at that time.” 37 Some of I.G.’s Nazi directors couldn’t participate after the war, however. They were put on trial as war criminals.
While German bombers screamed over London, DuPont refused to turn over I.G. secrets to Imperial Chemicals. 38 This was not primarily a matter of personal sympathies, but merely good business. The DuPont's wanted to protect their status as neutrals, and for very good reasons. G.M. still owned Opel, A.G., Germany’s largest car manufacturer, which was now doing a thriving business mobilizing Hitler’s Wehrmacht. And although they hurriedly sold their remaining I.G. Farben and D.A.G. stock in 1940, they still considered I.G. a business partner for the future.
In April 1941, with war looming over America, the DuPont's passed a resolution declaring that patent exchanges with I.G. “remain suspended until the termination of the present international emergency.… Nevertheless, both parties agree to reassign all assigned patents and patent applications at any time.” 39
Other obligations, such as market areas, however, remained in force. With its cartel complications cleared away, the DuPont's now readied themselves for their greatest, and most profitable, venture yet—World War II.
“No,” she replied, “I don’t think so, because they are making plenty of money now. Of course one can’t be sure about any corporation if a huge sum of money should be placed before it.” 40
Such words accurately reflected the anti-corporate sentiments of the time, but the First Lady was quite correct: the Du Ponts did not want American entry into the war. Yet, almost two years before Pearl Harbor, they were already in it.
Seeing that “huge sum of money,” the Du Ponts had submitted estimates for a smokeless powder plant to Britain and France as early as January 1940. On June 4 the Allies approved the estimate and signed a contract, agreeing to finance the entire project through the Tennessee Powder Company.
A month later Roosevelt followed suit, ordering $20 million worth of smokeless powder from DuPont. To produce it, DuPont was commissioned with $25 million to build and run a plant at Louisville, Kentucky, which would triple the country’s powder output. Signing the contract as Secretary of War was an old friend of Wilmington, Henry L. Stimson, who had been Secretary of War under Taft and Secretary of State under Hoover.
It took another year, however, before war came. In April 1941 Roosevelt allowed Navy warships patrolling the Atlantic to pass on the whereabouts of German submarines to the British Royal Navy. In July U.S. troops occupied Iceland. All Japanese assets in the United States were frozen. On September 11 Roosevelt ordered U.S. warships to fire on German submarines on sight. Through all these provocations, Roosevelt insisted to his cabinet that the American people would support a war only if the other side fired “the first shot.” 41 In November he forced Japan’s hand by having Secretary of State Hull deliver an ultimatum to Tokyo calling for complete Japanese withdrawal from Indochina and China to preserve the Open Door. The first offer for negotiation by the Japanese Prime Minister was rebuffed by the President, and even before Japanese negotiators arrived in Washington, on December 3, 1941, the U.S. Navy had decoded the Japanese “winds” message calling for “war with the United States, war with Britain.” 42 Four days later came the Pearl Harbor attack.
Armed with a core of 300 powder experts it had kept on the payroll since the last war, Du Pont swung into war production, ready and willing. Lammot had anticipated the conversion as early as 1935. “Plants which are engaged in the peacetime activity of manufacturing chemicals,” he had stated on April 24, 1935, “could be converted quickly into the manufacture of materials used for explosives, poison gases, and other materials of importance in war.” Now Lammot had his reins on the greatest munitions industry in the world, and he was more than willing to help the war effort—for a price.
“Deal with the government and the rest of the squawkers the way you deal with a buyer in a seller’s market!” he explained at NAM’s resolutions committee meeting in New York in 1942. “If the buyer wants to buy he has to meet your price. 1929–1942 was the buyer’s market—we had to sell on their terms. When the war is over, it will be a buyer’s market again. But this is a seller’s market.” 43
This was in September 1942, while American marines were fighting back Japanese onslaughts against Guadalcanal, and Stalingrad was being besieged by Hitler’s 6th Army. Lammot, however, had more important concerns. “They want what we’ve got. Good. Make them pay the right price for it.”
They did.
Fifty-four new plants at thirty-two locations around the country were built by Du Pont with $1 billion of taxpayers’ money, the company investing only 5 percent. 44 “Today,” wrote President Walter Carpenter in the 1942 Annual Report, “the company has performed for the government in two years nearly twice as much engineering design and construction work as it did for itself and its clients on all commercial projects between the close of the first world war and the outbreak of this one.” For one plant, the $350 million Hanford Engineer Works near Pasco, Washington, DuPont’s construction fee was only $1, a feat of generosity which it heralds to this day. What DuPont rarely mentions is that from the other plants it reaped over $680,000 in construction fees alone, and operation fees ran into the millions.
The real money, of course, was not in the construction of plants, but in the powder sales they generated, and here DuPont had more than adequate compensation for its troubles. The company produced 4.5 billion pounds of explosives, about 70 percent of the entire country’s total output during the war and three times DuPont’s World War I output. More TNT was produced than ever before anywhere, totaling 1.5 billion pounds. Smokeless powder, DuPont’s old money maker, was another 2.5-billion-pound gold mine, production volume rising to a ton a minute. One plant in Indiana alone produced over one billion pounds, almost as much as DuPont’s total output during the golden days of World War I. By June 1943 Lammot was able to boast that DuPont was producing more explosives than were being made in the entire country at World War I’s peak of production in 1918. In one day, every day, DuPont produced more explosives than it made for the Union throughout the four years of the Civil War.
In non-explosives DuPont production and operating profits were even larger. Throughout the war Wilmington proudly claimed that DuPont’s production of explosives was a smaller percentage (25 percent) of its total output than in the last world war (80 percent). But much of its nonexplosive production also went to feed the face of the god Mars. DuPont nylon replaced Japanese silk in parachutes, took the place of Chinese pig bristles in paint brushes, and was used in everything from glider tow ropes to tropical mosquito screens. DuPont paints coated the hulls of whole naval fleets, DuPont dyes were used in uniforms, DuPont antifreeze kept army trucks going in winter, and DuPont cellophane wrapped rations, drugs, and supplies. A single DuPont factory turned out eighty-six products that went into the Superfortress bomber alone. The war economy consumed 50,929 miles of DuPont 35mm film, 38 million miles of nylon parachute yarn, 92.9 million pounds of cellophane, and 11 million pounds of DDT, DuPont’s insecticide wonder that has since been linked to cancerous tumors.
For four hectic years DuPont’s nylon plants, given over exclusively to military purposes for government contracts, produced at full capacity. Artificial rubber also enjoyed a boost: by May 1941 DuPont was producing 6,000 tons of neoprene each year; 168 million pounds of “Cordura” rayon found a new market in tires for bombers and heavy trucks. Whole new series of products were made after Pearl Harbor: insecticides; food preservatives; fire extinguishing fluids; transparent plastic hoses for aircraft; camouflage paints that could not be detected by infrared photography; explosive rivets for aircraft to speed up production; cellophane wrapping for dehydrated foods; smoke screens; adhesives to replace rubber cement; preservatives for wood, textiles, and metal; even cold and heat resistant clothing that would keep a heavy man afloat in water.
In the boom year of 1941 DuPont cleared $77 million in profits. The 1942 Annual Report announced the largest sales volume in the company’s 140-year history, $498 million, generating a profit of $55 million. Then, as now, friends in Washington helped. Former G.M. vice-president Edward R. Stettinius was federal Commissioner for Industrial Materials, while Alfred V. DuPont was consultant to the Joint Chiefs of Staff. James V. Forrestal, Navy Undersecretary, testified before the House Naval Affairs Committee in June 1943 that DuPont had one Army contract that guaranteed a net profit of 16 percent. When the committee voiced objections, he offered that the figure might seem smaller if compared with DuPont’s capital and prewar rate of profit.
Again, Wilmington was the happy recipient of $5.3 million in returned federal taxes. Individual Du Ponts, meanwhile, continued their honeymoon with the Treasury. In May 1942 the Treasury Department acknowledged a $137,258 tax refund for Ruth, wife of Henry F. du Pont. A month later Eugene also received his $86,223 refund.
But the real bonanza was netted by General Motors. G.M. grossed $14 billion in contracts from the War Production Board, which was chaired by none other than G.M.’s own president, William Knudsen, and had DuPont in-law George P. Edmonds as adviser. The board awarded G.M. one-twelfth of all its contracted funds, and much of this found its way to Wilmington. In 1941 alone DuPont raked in $37 million in G.M. dividends and millions more in sales to its favorite market. Despite Donaldson Brown’s flag-waving, all was not so patriotic with G.M. For months in the crucial year of 1942 G.M. refused to convert to tanks and planes, the DuPont's blocking the standardization of tank engines. “To our own cartels,” reported Assistant Attorney General Thurman Arnold, “we owe the failure to expand American industry prior to Pearl Harbor. To the interests of these cartels in stabilizing prices and restricting production we owe our present scarcity in all basic materials.” 45
Arnold’s accusation came in the heat of a federal anti-trust case against DuPont. On recommendation of the War Department, Roosevelt had the case stayed because of the war effort. Another trust suit, however, resulted in the conviction of DuPont, Atlas, and Hercules, and cost the DuPont's a minor $40,000 fine. No injunction was issued against the price fixing because it was ostensibly a criminal case. Yet no restraint was put on the trust practices of the directors. The suit generated sufficient propaganda to force the DuPont's into line, but Lammot didn’t serve a day.
There were other incidents. On July 29, 1943, federal investigators charged DuPont with overpricing by charging a company $111,186 for film processing. Again, on July 16, 1945, the DuPont's were fined $122,500 for anti-trust violations on acid sales during the war effort. As Lammot put it in 1941, “The modern idea is that competition should not only be recognized but welcomed—if it is fair.” 46 And during a war only the DuPont's would decide what was fair.
Lammot’s only defeat during the war came not from government prosecutors, but from Rockefeller interests. Promoted by Winthrop Aldrich, chairman of Chase National Bank, and Nelson Rockefeller, the Trade Agreements Act had been introduced in Congress to grant broad treaty-making powers to the President. After the war the private corporate system “will be definitely on the spot again,” Senator Walter George, chairman of the Senate Finance Committee and the special postwar planning committee, warned the U.S. Chamber of Commerce. Jobs for 55 million workers must be provided, requiring a $155 billion Gross National Product, which in turn requires consumer spending ability. Unemployment that would turn millions of people to the government again for action “must be forestalled.” Senator George predicted that “the government will become a continuous borrower of the savings of the people and will use these savings on various kinds of projects for the purpose of creating employment and continuous national income.” 47 And domestic industry required a system of foreign markets secured by quick presidential action.
Lammot took no issue with George’s thesis; his only concern was the method—the “New Deal” White House. Speaking for the Manufacturing Chemists Association, Lammot opposed a Rockefeller resolution calling for support of the Act on the ground it would create a “rubber-stamp Congress.” Finishing his statement, Lammot asked for a voice vote, which was uncertain. Then he asked for a show of hands. The Resolution Committee held its breath, but Aldrich’s forces held the day, winning 34 to 11. This was an important sign of how powerful the Rockefellers had become in financial circles since Roosevelt’s SEC restrictions on Morgan’s monopoly of Wall Street.
In 1913 the Federal Reserve System, promoted by Senator Nelson Aldrich, a Rockefeller relation, replaced Morgan as the banker’s banker with the government. In 1934 the Banking Act, promoted by Winthrop Aldrich, forced the split-up of Morgan interests into commercial and savings banks. In 1940 another law, backed by Roosevelt, established competitive bids by investment banks for clients, undercutting control by the Morgan Stanley Investment Bank. In all cases, the Rockefellers and their allies were the major beneficiaries.
Concerned over possible regulatory encroachment and even further “munitions” charges by New Dealers after the war was over, Lammot saw the need for a tremendous publicity campaign to improve DuPont’s image. “It took the country twelve years to throw out prohibition,” he declared on May 9, 1943. “It took eight years for a reaction by vote to set in against the New Deal, but national polls show that now is a favorable time to begin educating the public in the need for free enterprise.” 48
DuPont’s propaganda program intensified during the war. In 1942 William Dutton, a DuPont public relations executive, published his DuPont—One Hundred and Forty Years through Charles Scribner’s Sons in New York. Billing his biography as “an effort toward a better understanding of one American corporation,” Dutton drew almost totally from “the patient assistance that has been given me by my numerous collaborators in the DuPont Company. More than fifty executives of the company, including members of the DuPont family, have contributed in the form of suggestions. The result is the DuPont Company as seen by DuPont men.” 49 So much for history.
Lammot himself took to the airwaves to speak by WBOS shortwave to American forces abroad. “Better yet cheaper homes,” he promised, “finer and less costly automobiles, radios, and refrigerators; more nourishing food, superior medicines—a greater abundance of almost everything that adds to the comfort and satisfaction of living—all of these will be awaiting the homecoming soldier when the war is won.” 50 To those sons of the Depression, it sounded like heaven on earth. Lammot even played candid tribute to the war. “Spurred to extraordinary efforts by the extraordinary needs of the past two years, we have gone ahead thirty or forty years as measured by the old rate of development in many fields.” Significantly, Lammot was the fourth of a series of NAM speakers arranged through NBC to address the fighting GI’s.
That year DuPont also produced its first film drama, “Soldiers of the Soil.” Prepared with Hollywood slickness, the forty-minute film was designed “to help the war effort with emphasis upon food production, and to aid the farmer by outlining the abundance of scientific methods and equipment made during the past ten or fifteen years,” 51 especially DuPont accomplishments, and particularly Du Pont fertilizers.
For some younger DuPont's, the war was not just good business; it was their lives. Lammot DuPont, Jr., Ernest T. DuPont, Jr., C. Douglas Buck, Jr. (Coleman DuPont’s grandson), and Reynolds DuPont (who was wounded) joined the Navy, while A. Felix DuPont, Jr., pursued his aerial passions by flying combat missions in the Air Corps as did Hugh R. Sharp, Jr., son of Isabella DuPont. J. Simpson Dean, husband of Polly DuPont, sleuthed in the OSS, forerunner of the CIA. All were officers, befitting their class backgrounds, and all returned to their Delaware mansions after the war, safe and proud heroes of the family.
But the clan did suffer one casualty—Richard C. DuPont, son of A. Felix, Sr. Richard had been one of the world’s top fliers. He was the national glider champion in three separate years during the Thirties, sweeping through the sky like a great silent eagle, hopping from one fleecy cloud to the next, sometimes for over 150 miles, breaking world distance records in 1935, 1936, 1937, and 1938. In 1939, as head of All American Aviation Co., he landed a government contract to begin air mail service and air express to 155 cities and towns in six eastern states, using pickup systems similar to those of trains, without alighting.
When the war broke out, Richard was appointed special assistant to General Henry Arnold, Chief of the U.S. air forces. In Sicily he proclaimed “great possibilities for airborne operations in combat areas. Gliders are being used to land large numbers of troops and equipment in enemy territory where power planes cannot get, as they do not depend on an airport. For a glider, there is no such thing as a restricted area.” 52
On September 12, 1943, at March Field, California, Richard took his last flight. A new glider he was testing with five other pilots suddenly wavered as it attempted to land. Two of the men immediately jumped out of the plane and parachuted to safety. Richard tried this also, but after jumping out, he found his chute wouldn’t open, and he plunged to his death below. Some days later the family bore its greatest aviator to Sand Hole Woods. There, to the sobs of his wife Allaire and relatives, Richard finally met his “restricted area.”
Despite this loss, the family survived the war handsomely. Richard’s widow and Walter Carpenter watched over the growth of All-American Aviation, which increased its net profit from $27,000 in 1943 to over $188,000 the following year. Henry B. DuPont’s North American Aviation grossed millions in government contracts, while paying employees the minimum 40 cents per hour wage, 10 cents less than an unskilled laborer’s relief wage through the WPA. His Inglewood, California, plant paid less than the average of all Southern California’s aircraft plants. In June 1941 its workers peacefully picketed the plant, asking for 75 cents per hour minimum and a 10-cent increase for all. Henry’s answer, with Roosevelt’s concurrence, was the tip of federal bayonets.
With the protection of Roosevelt’s “stay at work” and wage-freeze policies, corporate prices rose 45 percent during the war, while wages remained frozen at 15 percent above the 1941 level. In DuPont, “no-strike” pledges policed the factory. Although it did not have an independent union to worry about, DuPont backed up its no strike policy by fingerprinting some 800,000 applicants, screening out union organizers, labor militants, and other “undesirables.” Accordingly, DuPont suffered no major strike or act of sabotage and reaped a 60 percent increase in operating profits, from $100 million in 1940 to $160 million in 1944. 53
The war resulted in a further concentration of capital holdings, and the DuPont's were primary examples. In 1941 A. Felix DuPont, Jr., became vice-president and director of the Ballanca Aircraft Corporation before entering the service. In 1942 George T. Weymouth, a DuPont in-law, became vice-president of General Analine and Dye, the American subsidiary of I.G. Farben, a position which fit well into his duties as chief of the Industrial Salvage Section of Knudsen’s War Production Board. In 1943 DuPont Company acquired the Patterson Screen Company, producer of X-ray and fluoroscope screens. Edmond, son of the decreased Francis I. DuPont, expanded his Wilmington Chemical Company to enable it to make synthetic rubber. About that time, the family began buying into Boeing Corporation, one of the largest war contractors, and the next year Alfred I. DuPont’s estate in Florida bought its fifteenth bank, the American National Bank, bringing its total resources up to $259 million.
Remington Arms, staffed by some 450 DuPont supervisors and technicians, also thrived off the war, expanding production to a peak 25 million cartridges a day, while operating five other small arms ammunition plants for the government. Remington turned out over a million rifles for the Army, and to this DuPont darling can be attributed the introduction of one of the most deadly weapons in history: incendiary ammunition.
With Henry B.’s North American Aviation, perhaps the family’s most spectacular gains were scored. North American’s net sales increased from $36 million in 1940 to $718 million in 1944. Operating profits rose from $10 million to $87 million, total assets climbing from $54 million to $203 million. 54
U.S. Rubber, too, made a fortune, occasionally allowing its own directors to purchase special stock options, such as the $150,000 bonanza of President Francis Davis. Finally, with stockholders pressing suit against DuPont domination, in December 1944 a federal court had to set ceilings on annual bonuses U.S. Rubber’s officers could award themselves. By then, U.S. Rubber’s net sales had doubled since 1940 to $450 million, boosting net profits from operations from $19 million to $52 million.
While the family’s holdings chalked up new profit records, DuPont Company’s own international holdings also returned yields, even in Nazi-occupied Europe. After the war DuPont received $520,000 in wartime dividends on their investments in French industries and patent royalties. It seems the Nazis had been considerate enough to deposit these profits in two French banks. For the DuPont's, business friends endured even in war.
Racing to fill the mounting war demands, DuPont’s own operating profits jumped from $100 million in 1940 to $158 million in 1941, a startling 58 percent increase in profits in one year. During the four years of war production, from 1941 to 1945, Du Pont cleared $741 million in operating profits, three times greater than the World War I figure which won the family its “merchants of death” title. In addition, DuPont Company collected $137.5 million in dividends from General Motors, and the family reaped millions more from personal holdings. DuPont paid out over $288 million in dividends to its stockholders, much of that again going to the family. Dividends were reduced from an average $7 per share in 1939–1941 to 44.25 in 1942–1943 and $5.25 in 1944–1945 to allow a doubling of the company’s net current assets from 194l’s $149 million to $284 million by 1945, and a 40 percent rise in earned surplus from 1942’s $235 million to 1945’s $365 million. Surprisingly enough, although these figures are from DuPont’s own records published in Moody’s Industrial Manuals (1945–1946), they previously have gone either unnoticed or ignored.
The demands of running such a gargantuan enterprise took its toll of older DuPont executives during the war, making room for the next generation. In 1940 Lammot handed the presidency over to 52-year-old Walter S. Carpenter, Jr., head of the finance committee, and assumed Pierre’s chairmanship. Two years later Charles Copeland and Francis B. Davis, Jr., resigned from the DuPont board and were replaced by Charles’s son, Lammot du Pont Copeland, destined for business tragedy, and Crawford Greenewalt, Irénée’s son-in-law. In 1944, the same year Pierre left General Motors, A. Felix DuPont, Sr., was succeeded by Francis I. DuPont’s second son, Emile, whose management fortunes had risen with nylon.
Of all these new stars in the DuPont galaxy, the brightest was young Crawford Greenewalt. An M.I.T. graduate who began his successful career as a DuPont chemist, Crawford had made technological contributions over the years that earned him the notice of DuPont directors and introduction into the family’s social life. But it was his easy way and disarming charm that in 1926 won for this slim, handsome chemist the greatest boost to his career, the boss’s daughter. He married Margaretta, Irénée DuPont’s offspring, and from then on he could only go up.
Through these years, Crawford’s outstanding attribute, besides his personal charm and technical skills, was his devotion to the study and photography of hummingbirds. Crawford would travel anywhere, California, Cuba, even the jungles of Ecuador and Brazil, to capture the image of his many feathered friends. Once an associate mentioned seeing a nest of scarlet tanagers on his estate in Greenville. A week later the same friend found Crawford perched on an elaborate 20-foot-high tree platform, zeroing in on the tiny family, happily snapping up the milestones of tanager history.
For all his technical talents, however, Crawford’s sense of practicality sometimes fell amiss. Once, in the workroom of his rambling mansion, he and his son David built a boat and its engine. Unfortunately, Crawford forgot one thing—room for pilot or passengers. To run it, he had to hang alongside in a canoe.
Late in 1942 Crawford got his big break. General Leslie Groves, head of the top secret Manhattan Project, asked DuPont to build and operate a plant to mass-produce material for a mysterious new weapon. The government specified only two conditions: (1) no direct DuPont profits could be accrued, and (2) all patent rights were to go to Washington. Sensing the potential of a new atomic industry, the DuPont's accepted, assigning E. B. Yancy of the Explosives Department and Roger Williams to head the venture. Crawford was made a member of the board of directors and assigned to personally represent the DuPont leadership as head of the Development Department.
Some weeks later, Enrico Fermi removed the cadmium control rods from a radioactive pile under the University of Chicago’s Staff Field Stadium. There, worriedly looking on, was Crawford Greenewalt. At 3:20 P.M. the chain reaction began. Years later Crawford admitted doubting that he or the city of Chicago would ever survive that day. But as the radioactivity built up, Fermi shut down the pile, his case for atomic power proven beyond doubt. The date, December 2, 1942, marks the beginning of the Atomic Age. It also marks the beginning of Crawford’s meteoric rise to the presidency. From that day on, the job of actually building the world’s first atomic bomb became mostly the responsibility of DuPont. The Manhattan Project, in effect, became the DuPont project.
According to Henry D. Smyth’s official report on the atom bomb, Atomic Energy for Military Purposes, the Du Ponts generally ran the show. They built all the facilities for the bomb’s production, designing and constructing a small-scale plant at Oak Ridge, Tennessee, and a big plutonium plant at Hanford, Washington, which they also operated. DuPont scientists and engineers became members of the project’s research and engineering staffs. The Metallurgical Lab in Chicago was stocked with key DuPont men “on loan.” All significant research data on plutonium, the fissional matter, was reported to Wilmington. Labs were instructed to provide any additional information DuPont wanted. DuPont men were not only involved in plant research and production, but also in producing pure uranium from the oxide and in the development of catalysts and new coolants and lubricants needed for the chain-reacting pile where fission of the atom is induced and controlled.
Behind barbed wires, the production plants were secretly constructed and the bomb put together. DuPont executives enjoyed top clearance, while investigating U.S. senators were barred. Once, a story goes, one Senator demanded of a guard, “What are they making in there?” The guard answered with a deadpan face: “Bubble gum.”
For DuPont, the Manhattan Project provided priceless information and, later, good publicity. Although the patents went to the government, the know-how went to the DuPont's, and as their experience with German dyes had taught them, patents without knowhow are worthless. In the most costly phase of experimentation and production, DuPont Company acquired priceless knowledge at no expense. Knowledge, it has been said, is power, and for the DuPont's, atomic knowledge could be the basis of extending personal wealth through control over a new, powerful technology. As the new atomic industry grew over the postwar decades, these assumptions turned into operating profits.
Two and a half years after Crawford Greenewalt anxiously witnessed the first controlled atomic reaction in history, DuPont’s efforts finally bore their deadly fruit. In two blinding flashes through the skies of Japan, the cities of Hiroshima and Nagasaki and 70,000 people disappeared in rising mushrooms of ugly black smoke.
The bomb and the coinciding Soviet attack on Japan ended the Second World War. But for two long years Roosevelt had delayed in relieving the besieged Soviets with an attack on Hitler’s western European front. Many in the administration were openly worried about the possible loss of European markets to a postwar social revolution backed by a strong Soviet army, and some agreed with Harry Truman’s earlier proposal to let Nazi Germany and the Soviet Union fight it out. “We cannot go through ten years like the ten years at the end of the Twenties and the beginning of the Thirties,” Assistant Secretary of State Dean Acheson asserted to Congressmen in 1944, “without having the most far-reaching consequences upon our economic and social systems.… We have got to see that what the country produces is used and sold under financial arrangements [profits] which make its production possible.… My contention is that we cannot have full employment and prosperity in the United States without the foreign markets.” 55
It was a sentiment with which most DuPont's heartily concurred. With the Wehrmacht crumbling before Soviet forces, German corporate and military leaders, more frightened of socialism than American or British occupation, threw the bulk of their forces, averaging 180 German divisions, on the eastern front to try to hold back the Soviet advance of 225 infantry divisions and 22 armored corps on Berlin, while only 37 Anglo-American divisions advanced steadily from the west. 56
Roosevelt, fearing a separate German-Soviet peace and needing the Soviets to help clear Japan from Asia, made concessions to the Soviet concern for an East European buffer zone as a defense against possibly revived German militarism in the future. As the Soviets had already endured 20 million deaths and the complete destruction of a land area comparable in the United States to an expanse from New York to Chicago, the Soviet concern carried a strong logic. Since eastern Europe was also the conduit for supplies for the Soviet troops advancing on eastern Germany, and the political contours of the area reflected the imposing reality of Soviet armed presence, both Roosevelt and Churchill felt their position weak and reluctantly acquiesced at Yalta.
The War Department and corporate leaders like the DuPont's were dismayed over these developments, and probably with small justification. For Roosevelt had avoided any commitment to withdraw U.S. troops in eastern Germany or to offer reconstruction aid to the Soviets, seeing both moves as possible diplomatic levers against the Russians in the future. Germany’s surrender, coupled with the successful Los Alamos testing of the atom bomb, removed the key obstacles to corporate desires to hold onto East European and Asian markets. And Roosevelt’s untimely death removed what personal hesitations may have previously plagued the White House in considering a break with the Russian allies.
In July, President Harry Truman, guided by State Department policymakers like Dean Acheson and W. A. Harriman, met Stalin and other Soviet leaders at Potsdam and demanded a reversal of the Yalta agreements in Poland, threatening to exclude the Soviet Union from any reconstruction aid such as later developed under the Marshall Plan. American market concern for Asia, particularly China and Indochina, made them even more adamant the following month. Ignoring Japanese peace approaches, as well as requests by Fermi that the potency of the atom bomb be first demonstrated openly to give Japan a chance knowledgeably to surrender, Truman ordered the dropping of the atom bomb. “Our dropping of the atomic bomb on Japan,” the President later observed, “had forced Russia to reconsider her position in the Far East.” 57
Indeed it had. The Soviet Union—fearing the return of colonialist and conservative regimes hostile to its social system, as had already been allowed by the U.S. in Italy (and later in Indochina, India, and Western Germany), and already concerned about American corporate expansion in the Middle East—entered the war against Japan, attacking occupied Manchuria and joining the Korean guerrilla forces led by Kim Il Sung in their assault on Japanese occupation forces. While the Soviets carefully avoided any conflict with the atomic-armed United States, their presence in Eastern Europe and Asia encouraged the forming of communist governments which were understood per se by Washington as detrimental to the Open Door policy of corporate expansion abroad. “Democracy” had little meaning beyond propaganda for the State Department, as anti-communist dictatorships were embraced in Asia, the Middle East, and Europe. Talk of a crusading war for “free enterprise” democracy was widespread in the highest government circles. By then Truman had summed up America’s posture toward her former Soviet ally in one startling statement: “They could go to hell.” 58
One “hot” world war for America’s economic frontiers had come to an end, only to have another “cold” world war begin. And out of it all, the DuPonts would build an even larger empire. For these were the historical forces that propelled Wilmington to extend its own frontiers abroad, until the “DuPont” brand name was stamped on every continent on earth.
next
COLD WARRIORS FROM WILMINGTON
notes
Chapter 11
1. Ruth du Pont to Eleanor Roosevelt, November 12, 1934, FDR Memorial Library, Papers of Eleanor Roosevelt, File 100.
2. Eleanor Roosevelt to Ruth du Pont, November 20, 1934. Papers of Eleanor Roosevelt, File 100.
3. Ruth du Pont to FDR, May 24, 1935. FDR Memorial Library, Papers of Franklin D. Roosevelt, Box 348, D-Folder 2.
4. FDR to Ruth du Pont, May 24, 1935, Ibid.
5. FDR to P. S. du Pont, May 27, 1935, Ibid.
6. Stephen Birmingham, The Right People—A Portrait of the American Social Establishment (Boston: Little, Brown & Co., 1958), p. 70.
7. New York Times, January 31, 1934, p. 25.
8. Ibid., December 8, 1937, p. 1.
9. Ibid., December 31, 1937.
10. Harold Ickes, Secret Diary, II (New York: Simon & Schuster, 1953), p. 326.
11. New York Times, December 28, 1937, p. 4.
12. Ibid., June 27, 1938, p. 2.
13. Christian Century, July 27, 1938, p. 910.
14. Robert Engler, The Politics of Oil (Chicago: University of Chicago Press, 1961), p. 175.
15. Fortune, December 1937, p. 85.
16. Ibid.
17. “Du Pont,” Script of “The Cavalcade of America,” May 25, 1938, Eleutherian-Mills Library.
18. William S. Dutton, Du Pont—One Hundred and Forty Years (New York: Charles Scribner’s Sons, 1942), p. 377.
19. William H. Carr, The du Ponts of Delaware (New York: Dodd, Mead & Co., 1964), p. 317.
20. Associated Press, March 24, 1938.
21. New York Times, January 25, 1940, p. 28.
22. William A. Williams, The Tragedy of American Diplomacy (New York: Dell Publishing Co., Inc., 1962), p. 170.
23. Ibid.
24. Ibid., p. 178.
25. New York Times, September 28, 1936, p. 8.
26. Williams, Tragedy, pp. 191–192.
27. Ibid., p. 193.
28. Time, March 7, 1938; also Williams, Tragedy, pp. 160–61.
29. Williams, Tragedy, p. 195.
30. Ibid.
31. New York Times, July 21, 1939, p. 2. 32. Ibid., October 31, p. 16.
33. Congressional Record, June 21, 1944, p. 6480.
34. See Frederic R. Sanborn, “Design for War: A Study of Secret Power Politics, 1937– 41,” in William A. Williams, ed., The Shaping of American Diplomacy (Chicago: Rand McNally & Co., 1960).
35. New York Times, October 30, 1938, Sec. 111, p. 9.
36. Testimony of Assistant Attorney General Wendell Berge, September 7, 1944, Kilgore Senate Committee.
37. Ibid.
38. Senate Committee on Military Affairs (1944), “Economic and Political Aspects of International Cartels,” Monograph 1, pp. 62–64.
39: Ibid.
40. New York Times, February 12, 1940, p. 11.
41. See Admiral Robert Theobold, The Secret of Pearl Harbor: The Washington Contribution to the Japanese Attack, With Corroborative Forewords by Fleet Admiral William F. Halsey and Rear Admiral Husband E. Kimmel (New York: Devine-Adair Company, 1954).
42. New York Times, December 12, 1946, p. 1.
43. Speech by Lammot du Pont at Resolutions Committee, National Association of Manufacturers, Hotel Pennsylvania, New York, New York, September 1942.
44. Special Committee on Post-War Economic Policy and Planning, U.S. Senate, 1943, Report, pp. 16–17.
45. Carr, The DuPonts of Delaware, p. 330.
46. Dutton, Du Pont, p. 374.
47. New York Times, May 9, 1943, p. 9.
48. Ibid.
49. Dutton, Du Pont, p. vii.
50. New York Times, May 9, 1943, p. 9; June 4, p. 29.
51. Ibid., September 23, 1943, p. 27.
52. Ibid., September 13, 1943, p. 21.
53. Moody’s Industrials, 1945 (Du Pont Company).
54. Ibid. (N.A. Aviation).
55. Williams, Tragedy, p. 203.
56. See John Bagguley, “The World War and the Cold War,” Containment and Revolution (Boston: Beacon Press, 1967), pp. 76–124.
57. Williams, The Shaping of American Diplomacy, p. 946.
58. Williams, Tragedy, p. 203.
Lammot DuPont remained cool and calm throughout these attacks, not wishing to force Roosevelt back into a crusade against big business. When called before the Senate Committee on Unemployment in December, he cautiously refused to discuss his views on unemployment insurance or aid to the aged indigent. On the normally explosive issue of taxation of profits, he declared he had “not thought through” the arguments. It was a far cry from the recent past.
“One of the greatest requirements of the present situation is industrial peace,” he explained quietly. “Government and business should take counsel together in a spirit of forbearance and cooperation.” Gone forever was laissez-nous faire!
Some of the senators were not enthused over Lammot’s deliberate diplomacy. “You are unwilling,” thundered Senator Byrnes, “to express an opinion about the business of Congress, but in a speech that you made you did undertake to say some things about taxes. Have you forgotten that?”
“No,” Lammot replied, “but I was not talking to a group of senators then.” 11
The DuPont-Roosevelt rapprochement progressed steadily. In January 1938 Eugene filed a suit contesting over $63,000 in back taxes for 1933 to 1935 on his children’s trusts, claiming the technicality that his income went to them, not him. He won the case two years later. The wait was worth it. He got $20,000 above what he asked.
In September Roosevelt’s probe of Pierre and Raskob’s 1929 tax fraud resulted in a conviction ordering them to pay $2.1 million in back taxes. “One could secure no better illustration of the tyranny which a government bureau can inflict on a citizen,” Raskob had claimed when the charges were first made. Pierre had been no less adamant, claiming the case was “part of a scheme to injure me and to force a compromise of claims in a manner amounting to extortion.” The tax board remained unmoved. In 1938 it ruled: “Men do not conduct themselves and accomplish the end as did these parties toward each other and attain an end so advantageous to their fortunes without a common understanding. The design was too complete to be without a designer. The record before us bares its transparency.” Which, one report commented, was a polite way of saying cheating, lying, and trickery. Yet, there was no DuPont outcry in 1938. And these men would receive no penalty, not even a fine. In fact, they did not even fully pay back what they owed. In December, hidden in the back pages of the New York Times, was an item reporting that Pierre and Raskob struck a deal with the government, agreeing to pay only $586,369 and $1,473,202 respectively.
The Times’s poor coverage was not exceptional. Throughout the trial, the case was ignored by the press. “One astonishing feature of this affair,” the Christian Century observed, “has been the slight attention paid to it by most of the press.” What if it was James Roosevelt or John L. Lewis? the magazine asked. “But when the men involved are outstanding champions of reactionary social and political views, and masters of far reaching industrial enterprises, the press apparently is ready to say as little as possible about the matter, and to forget it as soon as possible.” 12
Meanwhile, in October, Lammot had also sued to recover $5 million paid in federal taxes in 1934. Again the DuPont's won, Lammot awarded a full refund on March 19, 1939. The government had merely made a mistake … a very big mistake.
On May 10, 1939, Irénée, too, got a refund. This one was for $27,999.
In June Lammot had Wilmington Trust sue to recover $223,000 paid in 1935 on thirteen DuPont family trusts. This, too, was honored.
That same month, Pierre admitted “mistakes” in twenty previous stock reports, falsely recording acquisitions outweighing sales. Again, the SEC exonerated him of “any willful wrongdoing.” In 1940 the government again convicted him for $172,000 in taxes owed for 1931.
On November 10, 1939, the Board of Tax Appeals handed Lammot another $222,701 by dropping its claims for back taxes owed for 1935, citing an “agreement by attorneys of DuPont and the government.”
Clearly, a new day had dawned on DuPont-government relations, the Roosevelt administration completely reversing its earlier tax crusades. “It knocks the whole base from under the New Deal structure,” Interior Secretary Ickes commented in 1940 on FDR’s corporate compromises and tax breaks. “We are running up the white flag.” 13
Sometimes the white flag took on a more personal character. On February 8, 1938, FDR’s son and private secretary, James, arrived in Cuba. After visiting the Cuban secretary of state with the U.S. ambassador, he then flew on to the beautiful Varadero Peninsula to see the second most important American on the island, Irénée DuPont. Roosevelt stayed overnight as the honored guest of Xanadu.
On June 26, when the Du Ponts were celebrating the tercentenary of the Swedish landing in America, on hand again was President Roosevelt. Arriving in flag-draped Wilmington by train, the President immediately stepped into an awaiting limousine and headed north toward “chateau country.” With the roar of escort motorcycles breaking the rural quiet of Owl’s Nest, the presidential caravan drove up the tree-lined approaches to Eugene’s mansion, where he was greeted by Mr. du Pont and his wife. The next afternoon, after ceremonies in Wilmington with the Prince of Sweden, the President returned to Owl’s Nest and dropped off his military aide, Colonel Watson, with Mrs. du Pont. Then Eugene climbed into the back seat with FDR. “Serious conversation apparently engrossed the President and his host as the car drove off,” 14 noted the New York Times.
Although knowledge of the exact nature of that “serious conversation” went with Messrs. Roosevelt and DuPont to their graves, there were certainly enough subsequent developments in DuPont Company alone to merit its attention.
The Revenue Act of 1938 repealing the tax on undistributed profits was before Congress. Only a month before, on May 21, before the American section of the International Chamber of Commerce, Lammot had called for a release of venture capital from taxes and regulation. “There is no such thing as an unreasonable profit if the risk is great enough,” Lammot had stated to the press. Roosevelt’s anti-monopoly stance would not allow the President to endorse the new bill, yet he would not oppose it when it was passed by Congress.
Of all the country’s corporations, DuPont had probably suffered least from the profits tax. “Statistically,” commented Fortune reviewers in 1937, “DuPont is not exciting; it is breathtaking.” 15 Profits had climbed from $26 million in 1932 to almost $90 million in 1936, far surpassing the golden $78 million year of 1929. Stockholders earned $7.53 a share, a 16.6 percent return on investment; over $6 of that had been paid out as dividends. Dividends such as these, of course, were DuPont’s big story. Since 1925, DuPont had earned over $627 million and paid out $555,224,000 in dividends. Yet, its capital construction continued mostly unabated, registering $644 million in assets in 1937. Between 1929 and 1939 investment doubled and overall employment rose by 6,500 to 41,000 workers.
There were four basic reasons for this phenomenal success in the midst of depression.
The first reason, of course, was General Motors, which annually provided from 20 percent to 30 percent of DuPont’s income through stock dividends and purchases of DuPont fabrics and finishes. G.M. was DuPont’s largest customer. Through “stock and management interlocks,” a report to the Senate Anti-trust Committee in 1974 asserted, G.M. was able to keep its sales high during the Thirties by engineering conversions in urban mass transit systems from electric to G.M. buses and diesel locomotives.
The second reason was DuPont’s own work force. Through modern machinery and other forms of technology, and forced speedups, the productivity of DuPont workers rose 33 percent in the decade from 1926 to 1936. 16 Discipline was enforced through the absence of independent unions, the presence of company unions, and an elaborate security system which included Pinkerton spies. Certain minor concessions also helped undercut labor militancy, such as the introduction in May 1937 of disability insurance payments, providing full pay for a three-month maximum, and a six-week maximum for pregnancy.
Through Roosevelt’s first term NRA labor policies had little effect on DuPont work conditions or pay. In fact, when the original NRA was declared unconstitutional by the Supreme Court in 1935, DuPont was one of the few companies that could state that it was not affected by the ruling and intended to continue the good relationship that it had always maintained with its employees.
With New Deal retreats accompanying Roosevelt’s second term, DuPont’s labor situation froze. The few labor rebellions that did erupt were easily crushed by management, in some cases with federal assistance. The test case came in 1939, when the C.I.O’s United Mine Workers brought an unfair labor practices charge against DuPont for interfering with its membership drive at the rayon plant at Belle, West Virginia, and for sponsoring activities of a management-controlled “employee association.” The West Virginia A.F.L, notorious for sweetheart contracts, backed DuPont’s claim of “neutrality” before the NLRB trial examiner in Cincinnati. On December 3 the C.I.O’s charges were dismissed.
The third reason was sales. Next to their own efforts through General Motors, no corporation outdid the DuPonts in developing their sales market. The capture of the General Motors market was only part of this campaign. Across the country, from rayon ladies’ apparel to Pyralin radio dials, DuPont’s name was advertised among corporate buyers with unparalleled vigor by one of the most efficient publicity bureaus in the world. Key to this advertising campaign was DuPont’s originating of “impulse buying” surveys in 1935. These studies monitored the buying habits of shoppers across the country for the purpose of discovering methods of psychological manipulation. The color of packages, uses of printing techniques, and see-through cellophane were all studied as a behavioral science to promote consumption and sales, and also to provide a huge market for DuPont’s cellophane. Such workable schemes to increase demand brought a profitable response from market-starved companies during the Depression, and it is no accident that out of these dark years emerged DuPont’s famous slogan, “Better things for better living … through Chemistry.”
DuPont’s promotion was not only economic during the Thirties, but also political, reflecting the conservative values of the family neatly wrapped in the flag. The new mass media was used extensively, and in October 1935 the DuPont's began their famous radio series, “Cavalcade of America.” Once a week, at prime time, 8:00 to 8:30 P.M., DuPont-approved scripts were read over CBS by leading actors.
The broadcast of May 25, 1938, at a time of strikes and mounting political militancy by labor, was typical in its politics, repeating the family’s version of its history. “If they will but listen to reasonable minds here in France, like yours, ‘Sieur DuPont!” 17 Jefferson was quoted saying to King Louis’s Commerce Minister; this was followed by sounds of the “horror” of starving French peasants in revolt. Irénée, with drums beating in the background, clings to his gentle wife from behind barred doors. “Bloodshed is all they think of!” he cries, “Bloodshed! I will hate it all my life! Listen to them. They are like wolves!” Safe and far from the wolves, Irénée pours forth his patriotic fervor for his new American homeland. “I love this new country. I am only waiting for the day when they will grant me citizenship.…” Irénée’s long delay in becoming a citizen is thus dutifully explained: He loved America. He had faith in it, and to prove this he joined the board of the Bank of the United States. “I know what it is to be a debtor,” the aristocrat informs his depression-racked audience. “I have been familiar with poverty, debt, imprisonment.… I can sympathize with you.” Chained like a slave to his profitable gunpowder mill, poor Irénée describes his life as “a prisoner on parole.” “You see, Monsieur,” explains wife Sophie, as she gently tears historical fact to pieces, “it was not only the money for the mills, but he has taken care of all the families of his workmen. He has built them new homes and pensioned them.” And collected rent in a company town. Now here is a liberal company ahead of its time! It is not surprising, then, the narrator asserts, that DuPont workers would not associate regularly with other workers in the area. After all, is the implication, who needs a union anyway when workers have the DuPont's!
Such was one of 141 national broadcasts of DuPont’s “Cavalcade of America.”
The fourth reason for DuPont’s success during the Depression was research. Few companies in the world spent more on research than DuPont. Every day DuPont’s experimental research center near Wilmington buzzed like a beehive as thousands of scientists and assistants busily searched for new products at cheaper costs. From here came “Dulux” enamels, Orion, Dacron, and neoprene, the artificial rubber which revolutionized the tire and hose industries. From here came moisture-proof cellophane, which revolutionized the baked goods market, and Lucite, the symbol of the new age of plastics. And from here came DuPont’s greatest money maker, nylon.
In 1935 Dr. Wallace C. Carothers, a Harvard chemist lured to DuPont by Lammot’s pecuniary bait, developed a man-made fiber which was strong, tough, elastic, water resistant, and capable of withstanding high temperatures. “Here is your synthetic textile fiber,” Carothers said as he walked into the DuPont management office. This “super polymer” was the first truly synthetic fiber, the result of $27 million and seven years of Carothers’ life. Carothers was not through yet, however. He spent the next two years in applied research in Wilmington, trying to adapt his discovery to DuPont’s commercial needs. Finally, on September 21, 1938, DuPont announced the production of a “new silk,” nylon. At Seaford, Delaware, the first (and still largest) nylon yarn plant in the world began turning out the new nylon stocking, and nylon was soon being used in shower curtains, undergarments, hairbrushes, toothbrushes, surgical sutures, musical strings, and even fishing tackle. Carothers, however, saw none of this. A year before, on April 29, 1937, after producing over fifty patents for discoveries under DuPont, he committed suicide.
“Told here is what is right with the country,” Lammot declared at the opening of DuPont’s exhibit at the 1939 New York World’s Fair, “in contrast with the emphasis over the last decade on what is wrong with it.” But even here amid the “Wonder World of Chemistry” some things went wrong. Two experimental “tricks” failed right in front of Lammot, Henry B., and William DuPont’s eyes; a glass rabbit that was supposed to vanish out of a glass top hat remained stubbornly visible, and a soapless soap machine refused to produce soap at all. Through it all, Lammot kept his humor, although the commissioned mural for the exhibit did cause a rise. “That one, where two blue men are diving into a muddy pool,” he remarked, “I couldn’t figure out quite what it meant.” “Neither could I,” confessed another executive, shaking his head. Not all went wrong, though. The World’s Fair debut of the nylon stocking scored a smashing hit. For Lammot, it signified the need for “freer opportunity,” which he defined as “no interference with the free flow of capital.” 18
Yet, as Lammot well knew, “the free flow of capital” required the removal of political obstacles to fertile markets. Roosevelt, considering the New Deal reforms basically completed, had removed most of the domestic obstacles: the undistributed earnings tax, anti-trust prosecutions; even the pump primer, the deficit spending program, was hastily renewed in the spring of 1938. But the economic reverses of 1937 persisted; the economy remained sluggish. In desperation, Roosevelt began to return to the emphasis of his predecessor—foreign markets. And here he found Japan’s growing threat to the Open Door in China, and German corporate infiltration of Latin America.
The DuPont's themselves had tried to meet these threats with cartel agreements. By 1938–1939, however, it was apparent even to Wilmington that more powerful forces than trade pacts were in motion. Franco was crushing the Spanish Republic, Japan’s armies were smashing into China, and Hitler’s panzer divisions were massed on the Czech border. The world was teetering on the brink of a new holocaust. For the DuPont's, political forces were developing that would deliver them to a new golden age.
2. DEFENDING THE
ECONOMIC FRONTIERS
On September 12, 1939, three days after Hitler’s blitzkrieg of Poland began World
War II, two special trains arrived at the New York World’s Fair from Wilmington. From
the station, 1,200 well-dressed Delawareans, led by Lammot DuPont, Mrs. Alfred V. DuPont, and Governor Richard C. McMullen, marched to the Delaware State exhibit to
celebrate Delaware Day. And no reporter was surprised when the day’s keynote
address was delivered not by the state’s governor, but by Lammot DuPont. With the fear of war heavy in the air, Lammot talked directly to what was on people’s minds. A quarter of a century before, he opened, United States industry was near panic when war cut off its supplies. “Today, in sharp contrast, every important American industrial and medicinal need is being filled by American factories on American soil, whatever the emergency stemming from the present European conflict.” 19
Lammot, of course, was implying that Americans should be grateful for DuPont’s capture of German dye formulas after World War I and its demands for the high tariff wall that protected its venture into chemicals. DuPont, he was explaining, was ready for war if it came.
But, contrary to popular polemics, the DuPont's in no way wanted war. They feared it not only as the disrupter of stable market conditions abroad, but also as the midwife of revolution. “The stability of business in this country,” declared Lammot on January 1, 1940, “is dependent in no small degree upon the establishment of a just and permanent peace throughout the world.” 20 Three weeks later, before the Michigan Manufacturers Association, vice-president Henry B. DuPont again warned of the temptation of war profits. Our job is at home, he stated, despite the temporary profits of war. The economic and political aftermath of war “will be a headache.… Merely to regain and maintain the old standard of living reached during the 1920’s, as measured by per capita production and consumption, would necessitate the operation of our factories and mines during the next ten years at an average rate of activity far higher than we have known.” 21
The DuPont's were not alone in this belief. Most of the large manufacturing and financial interests were also opposed to war, as illustrated by NAM’s opposition to entering into the conflict. Most still hoped their needs for foreign markets could be solved short of actual war.
Roosevelt shared this sentiment, endorsing Chamberlain’s Munich appeasement of Hitler’s ambition for Czechoslovakia. But as far back as his tenure as Wilson’s Assistant Secretary of the Navy, Roosevelt had maintained a firm commitment to defend America’s overseas trade routes, fully accepting Wilson’s belief that “our economic frontiers are no longer coextensive with our territorial frontiers.” During his first term in the White House Roosevelt increasingly saw the need of a system of corporate expansion overseas as the basic means of economic recovery. Pressured by business interests and his own sense of reality, he recognized the Soviet Union and helped organize the Export-Import Bank to handle the anticipated trade boom. Encouraged by his own aristocratic sense of noblesse oblige, he announced the Good Neighbor Policy to encourage Latin American resistance to German corporate trade and investment. By imposing economic sanctions and by sending thirty Navy warships around Cuba to harass the nationalist government of President Grau San Martín, however, Roosevelt emphasized that good neighbors do not rock the boat, especially where $3 billion of U.S. corporate investment is concerned. When it came to Bolivia’s and Mexico’s seizure of Standard Oil concessions, again U.S. economic sanctions were imposed, and in 1937 Roosevelt sanctioned the bloody suppression of the Puerto Rican independence movement when 171 people were shot down by police as they peacefully assembled for a pro-independence parade.
In 1935, two years before the “recession,” Roosevelt explained his foreign policy: “The full measure of America’s high productive capacity is only gained when our businessmen and farmers can sell their surpluses abroad.… Foreign markets must be regained if America’s producers are to rebuild a full and enduring domestic prosperity for our people. There is no other way if we would avoid painful economic dislocation, social readjustment, and unemployment.” 22 That this was nothing but a continuation of American policy since the Spanish-American War was underscored by Assistant Secretary of State Francis B. Sayre’s reflection on the market crisis of the 1890’s and his quote of President McKinley: “The expansion of our trade and commerce is the pressing problem.” 23
With the economic collapse of 1937, Roosevelt returned increasingly to Hoover’s emphasis on foreign markets as the solution to domestic stagnation. Roosevelt had already considered the New Deal’s domestic program completed, and always dismissed any consideration of abandoning private corporate ownership in favor of nationalization and a self-contained economy. Committed to the rule of private interests, and concerned with its reform only for the sake of efficiency, he was bound to their needs for profitable foreign markets. Throughout the Thirties this position led to increasing antagonisms with the expanding Axis powers. “We’re just going to wake up and find inside of a year,” declared Treasury Secretary Morgenthau in December 1937, “that Italy, Germany, and Japan have taken over Mexico.” The State Department’s Adolph Berle was already involved in economic warfare with German airlines in Mexico, explaining that, “We initiated a campaign to clear these lines out.” 24
Through this entire debate, the DuPont's remained publicly indifferent to the rise of fascism. Franco’s attack on the Spanish Republic may have divided the country, but not the House of DuPont (with the sole exception of Zara DuPont, Coleman’s sister). So glaring was the DuPont position on Spain that it was even used by Republicans during the 1936 election. Colonel Latham Reed, Republican leader of Suffolk County in New York, drew the line in attacking David Dubinsky, head of the Ladies’ Garment Union who had abandoned the Socialist Party to campaign for Roosevelt. “The question is whether you are for Dubinsky or DuPont. While the DuPont's have been furnishing labor more jobs … Dubinsky has been soliciting funds to finance the Communist's in Spain.” 25
That same day Toledo fell to Franco’s fascist armies. Although DuPont had earlier violated arms embargoes on Germany and China, through the entire Spanish Civil War, it refused to honor any powder order from the besieged Republic. But DuPont’s position was only consistent with Roosevelt’s own policies, drafted in fear of conflict with both Hitler and the vote-controlling hierarchy of the Catholic Church which supported Franco.
Japan’s renewed attack on China in July 1937, however, was another matter entirely. Here the entire Open Door policy was at stake. China was already buying more and more goods and services from American corporations, and future prospects, according to financier W. Cameron Forbes, were “considered especially bright. Never before has China offered greater promise for its future trade, industry, and general economic progress than … just prior to the outbreak of the present hostility.” 26 By 1935 American corporations had outscored Japanese companies by $25 million in trade with China. The Japanese attack of 1937, then, threatened not only the last great market frontier, China, but also the whole of Asia, the source of 51.5 percent of the U.S.’s raw and crude material imports, 85 percent of its tungsten, 99 percent of its jute, and 98 percent of its shellac—all essential to American industry.
At the same time, the deepening Rome-Berlin ties were seriously alarming Washington. In October 1937 Roosevelt took the first step toward war with his “Quarantine the Aggressor” speech, and two months later he began his rapprochement with NAM, then led by the largest munitions makers, the DuPont's. In January 1938 he submitted a $7 billion budget with a $1 billion deficit for a bigger Navy to protect trade routes. “There can be no military disarmament without economic appeasement,” explained Secretary of State Hull. “Only healthy international trade will make possible a full and stable domestic economy.” 27
Hull’s economic rationale was too obvious. “The reason for all this battleship and war frenzy is coming out,” declared Democratic Representative Maurey Maverick on March 6. “The Democratic administration is getting down to the condition that Mr. Hoover found himself. We have pulled all the rabbits out of the hat and there are no more rabbits.” 28
On October 11, 1938, Congress appropriated $300 million more for armaments. In December the United States loaned China $25 million. By then, Britain, America’s largest trade partner, had already been granted “most favored nation” status, marking the first U.S. policy change with Britain since 1812.
When Hitler launched a pogrom of German Jews so vicious that it forced such luminaries as Albert Einstein, Thomas Mann, and Kurt Weill to flee to America, popular sympathy was so strong that Pierre DuPont had to deny any connection with the antisemitic off springs of his American Liberty League—“I have never entertained any prejudice that would mark me with disfavor to any race or people. I have one-eighth Jewish blood in my veins that I am not ashamed of”—and promised to publicly withdraw support from the League if there was “one trace” of race-hate propaganda.There were many “traces,” some even led to the doorstep of his brother Irénée, who contributed to the anti-Semitic Sentinels, but Pierre did not withdraw.
Still, despite its horror of Hitler, the American population wanted peace, and it was a strange alliance of fears that moved John L. Lewis and the DuPont's to support the same candidate in 1940. Labor justifiably feared the war preparation, primarily because Roosevelt and his new corporate allies could control the labor market and its conditions through the draft and defense contracts. “Unless substantial economic offsets are provided to prevent this nation from being wholly dependent upon the war expenditures,” warned Lewis, “we will sooner or later come to the dilemma which requires war or depression.” 29
Most of the DuPont's, on the other hand, agreed with Bernard Baruch’s fear that war would mean “the institutions of government, as we have known them, would fall down … and that the whole moral attitude of the world would change.” 30
Enjoying their new detente with Roosevelt, the DuPont's denied making any contribution to the Republican ticket in 1940. “A spokesman for the DuPonts,” reported the New York Times in 1939, “said today the company is not taking an active part in politics. The making of contributions is a thing of the past, he said.” 31 Again, in a letter to the Senate Campaign Expenditures Committee, Lammot disavowed making any contributions. “Please be advised that since the Hatch Act [which forbade large corporate donations] last July 1, I have made no contributions.…” 32 But the Gillette Senate Investigating Committee did produce records that $68,350 was donated by the DuPont's to Willkie’s campaign, $40,000 alone from Lammot. When the grand total was finally released in Congress in 1944, the DuPont figure had jumped to $186,780. 33
Although the DuPont contribution was the largest in the Republican treasury, it was a long way from their $855,000 investment of four years earlier. It represented a more realistic analysis in Wilmington of both Roosevelt’s policies and Willkie’s chances.
“I have said this before, but I shall say it again,” Roosevelt assured the country during the campaign. “Your boys are not going to be sent into any foreign wars.” What Roosevelt did not mention, however, was that as far back as 1937, the same year the Neutrality Act was passed, he had unveiled to his cabinet the secret Industrial Mobilization Plan, contemplating that “no less than 20,000 factories [including DuPont’s] should be earmarked for production of war materials,” 34 laying the germ of the future military-industrial complex that emerged from World War II.
By January 1939, French pilots were being trained in California, in July Secretary Hull notified Japan of possible tariff warfare, and in September Roosevelt asked for and received a repeal of the arms embargo. In June 1940, frightened by Hitler’s blitzkrieg, Congress voted a $17 billion arms program while Roosevelt, speaking at Charlottesville, publicly pledged support to Britain; in September fifty U.S. destroyers were given to Britain in exchange for naval and air bases in the Caribbean.
“I am fighting to keep our people out of foreign wars,” Roosevelt pledged, “and I will keep on fighting.” Undoubtedly he meant it. But Roosevelt also knew that if overseas corporate markets were to be protected and developed, the chances for peace on his terms were slim indeed. If American corporations were ever to employ 10 million jobless Americans, if economic recovery was ever to be achieved, those markets, he was convinced, must be held, protected, and expanded. But the country was not privy to Roosevelt’s cabinet meetings, nor privy to his beliefs. Accepting his word as fact, they elected him to an unprecedented third term.
By the 1940 election, the DuPont's, like Roosevelt, had accepted the inevitable. Nylon was already seen by Japan as a direct threat to her chief source of export income, the silk industry. “It was said to be even possible,” reported the New York Times Tokyo correspondent, “that the introduction of the new yarns may be so great as to result in further depression of the value of the yen.” 35 In their desperation, Japanese industrialists even toyed with the idea of better breeding of cocoons for improving the quality of silk. But the most significant decision was to use the coal of conquered Manchuria to go into nylon itself in order to combat DuPont. Japan had already done this with rayon in 1936, rising to become DuPont’s leading competitor. Soon it was also to do the same with nylon, sparking propaganda attacks from Wilmington.
Toward Nazi Germany, the DuPont's took a more friendly position. As late as 1938, G.M.’s vice-president, J. D. Mooney, had accepted a medal from Hitler, and G.M. president William Knudsen, greeted by Goering, returned with glowing reports of Nazi Germany as the “miracle of the twentieth century.” DuPont troubles with German competition dated back to the late 1890’s, but most of these had been successfully mitigated through mutually profitable cartel agreements. With war approaching in 1939, DuPont signed its last price-fixing and trade pact with I. G. Farben, known then to be Hitler’s largest financial backer, while reports were sweeping across continents of I.G.’s complicity in Hitler’s “final solution to the Jewish problem.”
In 1940 I.G. set up a synthetic alcohol and neoprene plant near the infamous Auschwitz concentration camp. There, Hitler’s SS provided Polish slave labor who were worked to exhaustion before meeting their “final solution” at the nearby ovens of extermination plants. I.G. made the poison gas for this and other death camps. When the gas ran out, children were hurled alive into Auschwitz’s furnaces. Children were tortured in front of their mothers, wives in front of their husbands, while I.G. conducted drug experiments on women, most of whom died. [Now I have a problem with this paragraph,as it sounds like Zionist bullshit to me,this book has not been lacking for links,and it troubles me that there are that many accusations in this paragraph,and no collaboration to any of it. DC]
That same year Du Pont officials were still negotiating secret trade pacts with I.G. Du Pont’s foreign relations department reported to the executive committee on February 9, 1940: “The Du Pont Company informed I.G. that they intend to use their good offices after the war to have the I.G. participation restored.” 36 Later that year a Du Pont official wrote Britain’s Imperial Chemical Industries: “I think we have all agreed that there is a moral commitment, if and when circumstances permit, for these former shareholders to become shareholders again but the basis on which this may be done will have to be discussed at that time.” 37 Some of I.G.’s Nazi directors couldn’t participate after the war, however. They were put on trial as war criminals.
While German bombers screamed over London, DuPont refused to turn over I.G. secrets to Imperial Chemicals. 38 This was not primarily a matter of personal sympathies, but merely good business. The DuPont's wanted to protect their status as neutrals, and for very good reasons. G.M. still owned Opel, A.G., Germany’s largest car manufacturer, which was now doing a thriving business mobilizing Hitler’s Wehrmacht. And although they hurriedly sold their remaining I.G. Farben and D.A.G. stock in 1940, they still considered I.G. a business partner for the future.
In April 1941, with war looming over America, the DuPont's passed a resolution declaring that patent exchanges with I.G. “remain suspended until the termination of the present international emergency.… Nevertheless, both parties agree to reassign all assigned patents and patent applications at any time.” 39
Other obligations, such as market areas, however, remained in force. With its cartel complications cleared away, the DuPont's now readied themselves for their greatest, and most profitable, venture yet—World War II.
3
THE WAR OF WARS
At the annual convention of the Youth Congress on February 11, 1940, its star
lecturer, Mrs. Eleanor Roosevelt, was asked by one youth if DuPont Company, “which
had made huge profits out of the last war,” wanted the United States to enter the war. “No,” she replied, “I don’t think so, because they are making plenty of money now. Of course one can’t be sure about any corporation if a huge sum of money should be placed before it.” 40
Such words accurately reflected the anti-corporate sentiments of the time, but the First Lady was quite correct: the Du Ponts did not want American entry into the war. Yet, almost two years before Pearl Harbor, they were already in it.
Seeing that “huge sum of money,” the Du Ponts had submitted estimates for a smokeless powder plant to Britain and France as early as January 1940. On June 4 the Allies approved the estimate and signed a contract, agreeing to finance the entire project through the Tennessee Powder Company.
A month later Roosevelt followed suit, ordering $20 million worth of smokeless powder from DuPont. To produce it, DuPont was commissioned with $25 million to build and run a plant at Louisville, Kentucky, which would triple the country’s powder output. Signing the contract as Secretary of War was an old friend of Wilmington, Henry L. Stimson, who had been Secretary of War under Taft and Secretary of State under Hoover.
It took another year, however, before war came. In April 1941 Roosevelt allowed Navy warships patrolling the Atlantic to pass on the whereabouts of German submarines to the British Royal Navy. In July U.S. troops occupied Iceland. All Japanese assets in the United States were frozen. On September 11 Roosevelt ordered U.S. warships to fire on German submarines on sight. Through all these provocations, Roosevelt insisted to his cabinet that the American people would support a war only if the other side fired “the first shot.” 41 In November he forced Japan’s hand by having Secretary of State Hull deliver an ultimatum to Tokyo calling for complete Japanese withdrawal from Indochina and China to preserve the Open Door. The first offer for negotiation by the Japanese Prime Minister was rebuffed by the President, and even before Japanese negotiators arrived in Washington, on December 3, 1941, the U.S. Navy had decoded the Japanese “winds” message calling for “war with the United States, war with Britain.” 42 Four days later came the Pearl Harbor attack.
Armed with a core of 300 powder experts it had kept on the payroll since the last war, Du Pont swung into war production, ready and willing. Lammot had anticipated the conversion as early as 1935. “Plants which are engaged in the peacetime activity of manufacturing chemicals,” he had stated on April 24, 1935, “could be converted quickly into the manufacture of materials used for explosives, poison gases, and other materials of importance in war.” Now Lammot had his reins on the greatest munitions industry in the world, and he was more than willing to help the war effort—for a price.
“Deal with the government and the rest of the squawkers the way you deal with a buyer in a seller’s market!” he explained at NAM’s resolutions committee meeting in New York in 1942. “If the buyer wants to buy he has to meet your price. 1929–1942 was the buyer’s market—we had to sell on their terms. When the war is over, it will be a buyer’s market again. But this is a seller’s market.” 43
This was in September 1942, while American marines were fighting back Japanese onslaughts against Guadalcanal, and Stalingrad was being besieged by Hitler’s 6th Army. Lammot, however, had more important concerns. “They want what we’ve got. Good. Make them pay the right price for it.”
They did.
Fifty-four new plants at thirty-two locations around the country were built by Du Pont with $1 billion of taxpayers’ money, the company investing only 5 percent. 44 “Today,” wrote President Walter Carpenter in the 1942 Annual Report, “the company has performed for the government in two years nearly twice as much engineering design and construction work as it did for itself and its clients on all commercial projects between the close of the first world war and the outbreak of this one.” For one plant, the $350 million Hanford Engineer Works near Pasco, Washington, DuPont’s construction fee was only $1, a feat of generosity which it heralds to this day. What DuPont rarely mentions is that from the other plants it reaped over $680,000 in construction fees alone, and operation fees ran into the millions.
The real money, of course, was not in the construction of plants, but in the powder sales they generated, and here DuPont had more than adequate compensation for its troubles. The company produced 4.5 billion pounds of explosives, about 70 percent of the entire country’s total output during the war and three times DuPont’s World War I output. More TNT was produced than ever before anywhere, totaling 1.5 billion pounds. Smokeless powder, DuPont’s old money maker, was another 2.5-billion-pound gold mine, production volume rising to a ton a minute. One plant in Indiana alone produced over one billion pounds, almost as much as DuPont’s total output during the golden days of World War I. By June 1943 Lammot was able to boast that DuPont was producing more explosives than were being made in the entire country at World War I’s peak of production in 1918. In one day, every day, DuPont produced more explosives than it made for the Union throughout the four years of the Civil War.
In non-explosives DuPont production and operating profits were even larger. Throughout the war Wilmington proudly claimed that DuPont’s production of explosives was a smaller percentage (25 percent) of its total output than in the last world war (80 percent). But much of its nonexplosive production also went to feed the face of the god Mars. DuPont nylon replaced Japanese silk in parachutes, took the place of Chinese pig bristles in paint brushes, and was used in everything from glider tow ropes to tropical mosquito screens. DuPont paints coated the hulls of whole naval fleets, DuPont dyes were used in uniforms, DuPont antifreeze kept army trucks going in winter, and DuPont cellophane wrapped rations, drugs, and supplies. A single DuPont factory turned out eighty-six products that went into the Superfortress bomber alone. The war economy consumed 50,929 miles of DuPont 35mm film, 38 million miles of nylon parachute yarn, 92.9 million pounds of cellophane, and 11 million pounds of DDT, DuPont’s insecticide wonder that has since been linked to cancerous tumors.
For four hectic years DuPont’s nylon plants, given over exclusively to military purposes for government contracts, produced at full capacity. Artificial rubber also enjoyed a boost: by May 1941 DuPont was producing 6,000 tons of neoprene each year; 168 million pounds of “Cordura” rayon found a new market in tires for bombers and heavy trucks. Whole new series of products were made after Pearl Harbor: insecticides; food preservatives; fire extinguishing fluids; transparent plastic hoses for aircraft; camouflage paints that could not be detected by infrared photography; explosive rivets for aircraft to speed up production; cellophane wrapping for dehydrated foods; smoke screens; adhesives to replace rubber cement; preservatives for wood, textiles, and metal; even cold and heat resistant clothing that would keep a heavy man afloat in water.
In the boom year of 1941 DuPont cleared $77 million in profits. The 1942 Annual Report announced the largest sales volume in the company’s 140-year history, $498 million, generating a profit of $55 million. Then, as now, friends in Washington helped. Former G.M. vice-president Edward R. Stettinius was federal Commissioner for Industrial Materials, while Alfred V. DuPont was consultant to the Joint Chiefs of Staff. James V. Forrestal, Navy Undersecretary, testified before the House Naval Affairs Committee in June 1943 that DuPont had one Army contract that guaranteed a net profit of 16 percent. When the committee voiced objections, he offered that the figure might seem smaller if compared with DuPont’s capital and prewar rate of profit.
Again, Wilmington was the happy recipient of $5.3 million in returned federal taxes. Individual Du Ponts, meanwhile, continued their honeymoon with the Treasury. In May 1942 the Treasury Department acknowledged a $137,258 tax refund for Ruth, wife of Henry F. du Pont. A month later Eugene also received his $86,223 refund.
But the real bonanza was netted by General Motors. G.M. grossed $14 billion in contracts from the War Production Board, which was chaired by none other than G.M.’s own president, William Knudsen, and had DuPont in-law George P. Edmonds as adviser. The board awarded G.M. one-twelfth of all its contracted funds, and much of this found its way to Wilmington. In 1941 alone DuPont raked in $37 million in G.M. dividends and millions more in sales to its favorite market. Despite Donaldson Brown’s flag-waving, all was not so patriotic with G.M. For months in the crucial year of 1942 G.M. refused to convert to tanks and planes, the DuPont's blocking the standardization of tank engines. “To our own cartels,” reported Assistant Attorney General Thurman Arnold, “we owe the failure to expand American industry prior to Pearl Harbor. To the interests of these cartels in stabilizing prices and restricting production we owe our present scarcity in all basic materials.” 45
Arnold’s accusation came in the heat of a federal anti-trust case against DuPont. On recommendation of the War Department, Roosevelt had the case stayed because of the war effort. Another trust suit, however, resulted in the conviction of DuPont, Atlas, and Hercules, and cost the DuPont's a minor $40,000 fine. No injunction was issued against the price fixing because it was ostensibly a criminal case. Yet no restraint was put on the trust practices of the directors. The suit generated sufficient propaganda to force the DuPont's into line, but Lammot didn’t serve a day.
There were other incidents. On July 29, 1943, federal investigators charged DuPont with overpricing by charging a company $111,186 for film processing. Again, on July 16, 1945, the DuPont's were fined $122,500 for anti-trust violations on acid sales during the war effort. As Lammot put it in 1941, “The modern idea is that competition should not only be recognized but welcomed—if it is fair.” 46 And during a war only the DuPont's would decide what was fair.
Lammot’s only defeat during the war came not from government prosecutors, but from Rockefeller interests. Promoted by Winthrop Aldrich, chairman of Chase National Bank, and Nelson Rockefeller, the Trade Agreements Act had been introduced in Congress to grant broad treaty-making powers to the President. After the war the private corporate system “will be definitely on the spot again,” Senator Walter George, chairman of the Senate Finance Committee and the special postwar planning committee, warned the U.S. Chamber of Commerce. Jobs for 55 million workers must be provided, requiring a $155 billion Gross National Product, which in turn requires consumer spending ability. Unemployment that would turn millions of people to the government again for action “must be forestalled.” Senator George predicted that “the government will become a continuous borrower of the savings of the people and will use these savings on various kinds of projects for the purpose of creating employment and continuous national income.” 47 And domestic industry required a system of foreign markets secured by quick presidential action.
Lammot took no issue with George’s thesis; his only concern was the method—the “New Deal” White House. Speaking for the Manufacturing Chemists Association, Lammot opposed a Rockefeller resolution calling for support of the Act on the ground it would create a “rubber-stamp Congress.” Finishing his statement, Lammot asked for a voice vote, which was uncertain. Then he asked for a show of hands. The Resolution Committee held its breath, but Aldrich’s forces held the day, winning 34 to 11. This was an important sign of how powerful the Rockefellers had become in financial circles since Roosevelt’s SEC restrictions on Morgan’s monopoly of Wall Street.
In 1913 the Federal Reserve System, promoted by Senator Nelson Aldrich, a Rockefeller relation, replaced Morgan as the banker’s banker with the government. In 1934 the Banking Act, promoted by Winthrop Aldrich, forced the split-up of Morgan interests into commercial and savings banks. In 1940 another law, backed by Roosevelt, established competitive bids by investment banks for clients, undercutting control by the Morgan Stanley Investment Bank. In all cases, the Rockefellers and their allies were the major beneficiaries.
Concerned over possible regulatory encroachment and even further “munitions” charges by New Dealers after the war was over, Lammot saw the need for a tremendous publicity campaign to improve DuPont’s image. “It took the country twelve years to throw out prohibition,” he declared on May 9, 1943. “It took eight years for a reaction by vote to set in against the New Deal, but national polls show that now is a favorable time to begin educating the public in the need for free enterprise.” 48
DuPont’s propaganda program intensified during the war. In 1942 William Dutton, a DuPont public relations executive, published his DuPont—One Hundred and Forty Years through Charles Scribner’s Sons in New York. Billing his biography as “an effort toward a better understanding of one American corporation,” Dutton drew almost totally from “the patient assistance that has been given me by my numerous collaborators in the DuPont Company. More than fifty executives of the company, including members of the DuPont family, have contributed in the form of suggestions. The result is the DuPont Company as seen by DuPont men.” 49 So much for history.
Lammot himself took to the airwaves to speak by WBOS shortwave to American forces abroad. “Better yet cheaper homes,” he promised, “finer and less costly automobiles, radios, and refrigerators; more nourishing food, superior medicines—a greater abundance of almost everything that adds to the comfort and satisfaction of living—all of these will be awaiting the homecoming soldier when the war is won.” 50 To those sons of the Depression, it sounded like heaven on earth. Lammot even played candid tribute to the war. “Spurred to extraordinary efforts by the extraordinary needs of the past two years, we have gone ahead thirty or forty years as measured by the old rate of development in many fields.” Significantly, Lammot was the fourth of a series of NAM speakers arranged through NBC to address the fighting GI’s.
That year DuPont also produced its first film drama, “Soldiers of the Soil.” Prepared with Hollywood slickness, the forty-minute film was designed “to help the war effort with emphasis upon food production, and to aid the farmer by outlining the abundance of scientific methods and equipment made during the past ten or fifteen years,” 51 especially DuPont accomplishments, and particularly Du Pont fertilizers.
For some younger DuPont's, the war was not just good business; it was their lives. Lammot DuPont, Jr., Ernest T. DuPont, Jr., C. Douglas Buck, Jr. (Coleman DuPont’s grandson), and Reynolds DuPont (who was wounded) joined the Navy, while A. Felix DuPont, Jr., pursued his aerial passions by flying combat missions in the Air Corps as did Hugh R. Sharp, Jr., son of Isabella DuPont. J. Simpson Dean, husband of Polly DuPont, sleuthed in the OSS, forerunner of the CIA. All were officers, befitting their class backgrounds, and all returned to their Delaware mansions after the war, safe and proud heroes of the family.
But the clan did suffer one casualty—Richard C. DuPont, son of A. Felix, Sr. Richard had been one of the world’s top fliers. He was the national glider champion in three separate years during the Thirties, sweeping through the sky like a great silent eagle, hopping from one fleecy cloud to the next, sometimes for over 150 miles, breaking world distance records in 1935, 1936, 1937, and 1938. In 1939, as head of All American Aviation Co., he landed a government contract to begin air mail service and air express to 155 cities and towns in six eastern states, using pickup systems similar to those of trains, without alighting.
When the war broke out, Richard was appointed special assistant to General Henry Arnold, Chief of the U.S. air forces. In Sicily he proclaimed “great possibilities for airborne operations in combat areas. Gliders are being used to land large numbers of troops and equipment in enemy territory where power planes cannot get, as they do not depend on an airport. For a glider, there is no such thing as a restricted area.” 52
On September 12, 1943, at March Field, California, Richard took his last flight. A new glider he was testing with five other pilots suddenly wavered as it attempted to land. Two of the men immediately jumped out of the plane and parachuted to safety. Richard tried this also, but after jumping out, he found his chute wouldn’t open, and he plunged to his death below. Some days later the family bore its greatest aviator to Sand Hole Woods. There, to the sobs of his wife Allaire and relatives, Richard finally met his “restricted area.”
Despite this loss, the family survived the war handsomely. Richard’s widow and Walter Carpenter watched over the growth of All-American Aviation, which increased its net profit from $27,000 in 1943 to over $188,000 the following year. Henry B. DuPont’s North American Aviation grossed millions in government contracts, while paying employees the minimum 40 cents per hour wage, 10 cents less than an unskilled laborer’s relief wage through the WPA. His Inglewood, California, plant paid less than the average of all Southern California’s aircraft plants. In June 1941 its workers peacefully picketed the plant, asking for 75 cents per hour minimum and a 10-cent increase for all. Henry’s answer, with Roosevelt’s concurrence, was the tip of federal bayonets.
With the protection of Roosevelt’s “stay at work” and wage-freeze policies, corporate prices rose 45 percent during the war, while wages remained frozen at 15 percent above the 1941 level. In DuPont, “no-strike” pledges policed the factory. Although it did not have an independent union to worry about, DuPont backed up its no strike policy by fingerprinting some 800,000 applicants, screening out union organizers, labor militants, and other “undesirables.” Accordingly, DuPont suffered no major strike or act of sabotage and reaped a 60 percent increase in operating profits, from $100 million in 1940 to $160 million in 1944. 53
The war resulted in a further concentration of capital holdings, and the DuPont's were primary examples. In 1941 A. Felix DuPont, Jr., became vice-president and director of the Ballanca Aircraft Corporation before entering the service. In 1942 George T. Weymouth, a DuPont in-law, became vice-president of General Analine and Dye, the American subsidiary of I.G. Farben, a position which fit well into his duties as chief of the Industrial Salvage Section of Knudsen’s War Production Board. In 1943 DuPont Company acquired the Patterson Screen Company, producer of X-ray and fluoroscope screens. Edmond, son of the decreased Francis I. DuPont, expanded his Wilmington Chemical Company to enable it to make synthetic rubber. About that time, the family began buying into Boeing Corporation, one of the largest war contractors, and the next year Alfred I. DuPont’s estate in Florida bought its fifteenth bank, the American National Bank, bringing its total resources up to $259 million.
Remington Arms, staffed by some 450 DuPont supervisors and technicians, also thrived off the war, expanding production to a peak 25 million cartridges a day, while operating five other small arms ammunition plants for the government. Remington turned out over a million rifles for the Army, and to this DuPont darling can be attributed the introduction of one of the most deadly weapons in history: incendiary ammunition.
With Henry B.’s North American Aviation, perhaps the family’s most spectacular gains were scored. North American’s net sales increased from $36 million in 1940 to $718 million in 1944. Operating profits rose from $10 million to $87 million, total assets climbing from $54 million to $203 million. 54
U.S. Rubber, too, made a fortune, occasionally allowing its own directors to purchase special stock options, such as the $150,000 bonanza of President Francis Davis. Finally, with stockholders pressing suit against DuPont domination, in December 1944 a federal court had to set ceilings on annual bonuses U.S. Rubber’s officers could award themselves. By then, U.S. Rubber’s net sales had doubled since 1940 to $450 million, boosting net profits from operations from $19 million to $52 million.
While the family’s holdings chalked up new profit records, DuPont Company’s own international holdings also returned yields, even in Nazi-occupied Europe. After the war DuPont received $520,000 in wartime dividends on their investments in French industries and patent royalties. It seems the Nazis had been considerate enough to deposit these profits in two French banks. For the DuPont's, business friends endured even in war.
Racing to fill the mounting war demands, DuPont’s own operating profits jumped from $100 million in 1940 to $158 million in 1941, a startling 58 percent increase in profits in one year. During the four years of war production, from 1941 to 1945, Du Pont cleared $741 million in operating profits, three times greater than the World War I figure which won the family its “merchants of death” title. In addition, DuPont Company collected $137.5 million in dividends from General Motors, and the family reaped millions more from personal holdings. DuPont paid out over $288 million in dividends to its stockholders, much of that again going to the family. Dividends were reduced from an average $7 per share in 1939–1941 to 44.25 in 1942–1943 and $5.25 in 1944–1945 to allow a doubling of the company’s net current assets from 194l’s $149 million to $284 million by 1945, and a 40 percent rise in earned surplus from 1942’s $235 million to 1945’s $365 million. Surprisingly enough, although these figures are from DuPont’s own records published in Moody’s Industrial Manuals (1945–1946), they previously have gone either unnoticed or ignored.
The demands of running such a gargantuan enterprise took its toll of older DuPont executives during the war, making room for the next generation. In 1940 Lammot handed the presidency over to 52-year-old Walter S. Carpenter, Jr., head of the finance committee, and assumed Pierre’s chairmanship. Two years later Charles Copeland and Francis B. Davis, Jr., resigned from the DuPont board and were replaced by Charles’s son, Lammot du Pont Copeland, destined for business tragedy, and Crawford Greenewalt, Irénée’s son-in-law. In 1944, the same year Pierre left General Motors, A. Felix DuPont, Sr., was succeeded by Francis I. DuPont’s second son, Emile, whose management fortunes had risen with nylon.
Of all these new stars in the DuPont galaxy, the brightest was young Crawford Greenewalt. An M.I.T. graduate who began his successful career as a DuPont chemist, Crawford had made technological contributions over the years that earned him the notice of DuPont directors and introduction into the family’s social life. But it was his easy way and disarming charm that in 1926 won for this slim, handsome chemist the greatest boost to his career, the boss’s daughter. He married Margaretta, Irénée DuPont’s offspring, and from then on he could only go up.
Through these years, Crawford’s outstanding attribute, besides his personal charm and technical skills, was his devotion to the study and photography of hummingbirds. Crawford would travel anywhere, California, Cuba, even the jungles of Ecuador and Brazil, to capture the image of his many feathered friends. Once an associate mentioned seeing a nest of scarlet tanagers on his estate in Greenville. A week later the same friend found Crawford perched on an elaborate 20-foot-high tree platform, zeroing in on the tiny family, happily snapping up the milestones of tanager history.
For all his technical talents, however, Crawford’s sense of practicality sometimes fell amiss. Once, in the workroom of his rambling mansion, he and his son David built a boat and its engine. Unfortunately, Crawford forgot one thing—room for pilot or passengers. To run it, he had to hang alongside in a canoe.
Late in 1942 Crawford got his big break. General Leslie Groves, head of the top secret Manhattan Project, asked DuPont to build and operate a plant to mass-produce material for a mysterious new weapon. The government specified only two conditions: (1) no direct DuPont profits could be accrued, and (2) all patent rights were to go to Washington. Sensing the potential of a new atomic industry, the DuPont's accepted, assigning E. B. Yancy of the Explosives Department and Roger Williams to head the venture. Crawford was made a member of the board of directors and assigned to personally represent the DuPont leadership as head of the Development Department.
Some weeks later, Enrico Fermi removed the cadmium control rods from a radioactive pile under the University of Chicago’s Staff Field Stadium. There, worriedly looking on, was Crawford Greenewalt. At 3:20 P.M. the chain reaction began. Years later Crawford admitted doubting that he or the city of Chicago would ever survive that day. But as the radioactivity built up, Fermi shut down the pile, his case for atomic power proven beyond doubt. The date, December 2, 1942, marks the beginning of the Atomic Age. It also marks the beginning of Crawford’s meteoric rise to the presidency. From that day on, the job of actually building the world’s first atomic bomb became mostly the responsibility of DuPont. The Manhattan Project, in effect, became the DuPont project.
According to Henry D. Smyth’s official report on the atom bomb, Atomic Energy for Military Purposes, the Du Ponts generally ran the show. They built all the facilities for the bomb’s production, designing and constructing a small-scale plant at Oak Ridge, Tennessee, and a big plutonium plant at Hanford, Washington, which they also operated. DuPont scientists and engineers became members of the project’s research and engineering staffs. The Metallurgical Lab in Chicago was stocked with key DuPont men “on loan.” All significant research data on plutonium, the fissional matter, was reported to Wilmington. Labs were instructed to provide any additional information DuPont wanted. DuPont men were not only involved in plant research and production, but also in producing pure uranium from the oxide and in the development of catalysts and new coolants and lubricants needed for the chain-reacting pile where fission of the atom is induced and controlled.
Behind barbed wires, the production plants were secretly constructed and the bomb put together. DuPont executives enjoyed top clearance, while investigating U.S. senators were barred. Once, a story goes, one Senator demanded of a guard, “What are they making in there?” The guard answered with a deadpan face: “Bubble gum.”
For DuPont, the Manhattan Project provided priceless information and, later, good publicity. Although the patents went to the government, the know-how went to the DuPont's, and as their experience with German dyes had taught them, patents without knowhow are worthless. In the most costly phase of experimentation and production, DuPont Company acquired priceless knowledge at no expense. Knowledge, it has been said, is power, and for the DuPont's, atomic knowledge could be the basis of extending personal wealth through control over a new, powerful technology. As the new atomic industry grew over the postwar decades, these assumptions turned into operating profits.
Two and a half years after Crawford Greenewalt anxiously witnessed the first controlled atomic reaction in history, DuPont’s efforts finally bore their deadly fruit. In two blinding flashes through the skies of Japan, the cities of Hiroshima and Nagasaki and 70,000 people disappeared in rising mushrooms of ugly black smoke.
The bomb and the coinciding Soviet attack on Japan ended the Second World War. But for two long years Roosevelt had delayed in relieving the besieged Soviets with an attack on Hitler’s western European front. Many in the administration were openly worried about the possible loss of European markets to a postwar social revolution backed by a strong Soviet army, and some agreed with Harry Truman’s earlier proposal to let Nazi Germany and the Soviet Union fight it out. “We cannot go through ten years like the ten years at the end of the Twenties and the beginning of the Thirties,” Assistant Secretary of State Dean Acheson asserted to Congressmen in 1944, “without having the most far-reaching consequences upon our economic and social systems.… We have got to see that what the country produces is used and sold under financial arrangements [profits] which make its production possible.… My contention is that we cannot have full employment and prosperity in the United States without the foreign markets.” 55
It was a sentiment with which most DuPont's heartily concurred. With the Wehrmacht crumbling before Soviet forces, German corporate and military leaders, more frightened of socialism than American or British occupation, threw the bulk of their forces, averaging 180 German divisions, on the eastern front to try to hold back the Soviet advance of 225 infantry divisions and 22 armored corps on Berlin, while only 37 Anglo-American divisions advanced steadily from the west. 56
Roosevelt, fearing a separate German-Soviet peace and needing the Soviets to help clear Japan from Asia, made concessions to the Soviet concern for an East European buffer zone as a defense against possibly revived German militarism in the future. As the Soviets had already endured 20 million deaths and the complete destruction of a land area comparable in the United States to an expanse from New York to Chicago, the Soviet concern carried a strong logic. Since eastern Europe was also the conduit for supplies for the Soviet troops advancing on eastern Germany, and the political contours of the area reflected the imposing reality of Soviet armed presence, both Roosevelt and Churchill felt their position weak and reluctantly acquiesced at Yalta.
The War Department and corporate leaders like the DuPont's were dismayed over these developments, and probably with small justification. For Roosevelt had avoided any commitment to withdraw U.S. troops in eastern Germany or to offer reconstruction aid to the Soviets, seeing both moves as possible diplomatic levers against the Russians in the future. Germany’s surrender, coupled with the successful Los Alamos testing of the atom bomb, removed the key obstacles to corporate desires to hold onto East European and Asian markets. And Roosevelt’s untimely death removed what personal hesitations may have previously plagued the White House in considering a break with the Russian allies.
In July, President Harry Truman, guided by State Department policymakers like Dean Acheson and W. A. Harriman, met Stalin and other Soviet leaders at Potsdam and demanded a reversal of the Yalta agreements in Poland, threatening to exclude the Soviet Union from any reconstruction aid such as later developed under the Marshall Plan. American market concern for Asia, particularly China and Indochina, made them even more adamant the following month. Ignoring Japanese peace approaches, as well as requests by Fermi that the potency of the atom bomb be first demonstrated openly to give Japan a chance knowledgeably to surrender, Truman ordered the dropping of the atom bomb. “Our dropping of the atomic bomb on Japan,” the President later observed, “had forced Russia to reconsider her position in the Far East.” 57
Indeed it had. The Soviet Union—fearing the return of colonialist and conservative regimes hostile to its social system, as had already been allowed by the U.S. in Italy (and later in Indochina, India, and Western Germany), and already concerned about American corporate expansion in the Middle East—entered the war against Japan, attacking occupied Manchuria and joining the Korean guerrilla forces led by Kim Il Sung in their assault on Japanese occupation forces. While the Soviets carefully avoided any conflict with the atomic-armed United States, their presence in Eastern Europe and Asia encouraged the forming of communist governments which were understood per se by Washington as detrimental to the Open Door policy of corporate expansion abroad. “Democracy” had little meaning beyond propaganda for the State Department, as anti-communist dictatorships were embraced in Asia, the Middle East, and Europe. Talk of a crusading war for “free enterprise” democracy was widespread in the highest government circles. By then Truman had summed up America’s posture toward her former Soviet ally in one startling statement: “They could go to hell.” 58
One “hot” world war for America’s economic frontiers had come to an end, only to have another “cold” world war begin. And out of it all, the DuPonts would build an even larger empire. For these were the historical forces that propelled Wilmington to extend its own frontiers abroad, until the “DuPont” brand name was stamped on every continent on earth.
next
COLD WARRIORS FROM WILMINGTON
notes
Chapter 11
1. Ruth du Pont to Eleanor Roosevelt, November 12, 1934, FDR Memorial Library, Papers of Eleanor Roosevelt, File 100.
2. Eleanor Roosevelt to Ruth du Pont, November 20, 1934. Papers of Eleanor Roosevelt, File 100.
3. Ruth du Pont to FDR, May 24, 1935. FDR Memorial Library, Papers of Franklin D. Roosevelt, Box 348, D-Folder 2.
4. FDR to Ruth du Pont, May 24, 1935, Ibid.
5. FDR to P. S. du Pont, May 27, 1935, Ibid.
6. Stephen Birmingham, The Right People—A Portrait of the American Social Establishment (Boston: Little, Brown & Co., 1958), p. 70.
7. New York Times, January 31, 1934, p. 25.
8. Ibid., December 8, 1937, p. 1.
9. Ibid., December 31, 1937.
10. Harold Ickes, Secret Diary, II (New York: Simon & Schuster, 1953), p. 326.
11. New York Times, December 28, 1937, p. 4.
12. Ibid., June 27, 1938, p. 2.
13. Christian Century, July 27, 1938, p. 910.
14. Robert Engler, The Politics of Oil (Chicago: University of Chicago Press, 1961), p. 175.
15. Fortune, December 1937, p. 85.
16. Ibid.
17. “Du Pont,” Script of “The Cavalcade of America,” May 25, 1938, Eleutherian-Mills Library.
18. William S. Dutton, Du Pont—One Hundred and Forty Years (New York: Charles Scribner’s Sons, 1942), p. 377.
19. William H. Carr, The du Ponts of Delaware (New York: Dodd, Mead & Co., 1964), p. 317.
20. Associated Press, March 24, 1938.
21. New York Times, January 25, 1940, p. 28.
22. William A. Williams, The Tragedy of American Diplomacy (New York: Dell Publishing Co., Inc., 1962), p. 170.
23. Ibid.
24. Ibid., p. 178.
25. New York Times, September 28, 1936, p. 8.
26. Williams, Tragedy, pp. 191–192.
27. Ibid., p. 193.
28. Time, March 7, 1938; also Williams, Tragedy, pp. 160–61.
29. Williams, Tragedy, p. 195.
30. Ibid.
31. New York Times, July 21, 1939, p. 2. 32. Ibid., October 31, p. 16.
33. Congressional Record, June 21, 1944, p. 6480.
34. See Frederic R. Sanborn, “Design for War: A Study of Secret Power Politics, 1937– 41,” in William A. Williams, ed., The Shaping of American Diplomacy (Chicago: Rand McNally & Co., 1960).
35. New York Times, October 30, 1938, Sec. 111, p. 9.
36. Testimony of Assistant Attorney General Wendell Berge, September 7, 1944, Kilgore Senate Committee.
37. Ibid.
38. Senate Committee on Military Affairs (1944), “Economic and Political Aspects of International Cartels,” Monograph 1, pp. 62–64.
39: Ibid.
40. New York Times, February 12, 1940, p. 11.
41. See Admiral Robert Theobold, The Secret of Pearl Harbor: The Washington Contribution to the Japanese Attack, With Corroborative Forewords by Fleet Admiral William F. Halsey and Rear Admiral Husband E. Kimmel (New York: Devine-Adair Company, 1954).
42. New York Times, December 12, 1946, p. 1.
43. Speech by Lammot du Pont at Resolutions Committee, National Association of Manufacturers, Hotel Pennsylvania, New York, New York, September 1942.
44. Special Committee on Post-War Economic Policy and Planning, U.S. Senate, 1943, Report, pp. 16–17.
45. Carr, The DuPonts of Delaware, p. 330.
46. Dutton, Du Pont, p. 374.
47. New York Times, May 9, 1943, p. 9.
48. Ibid.
49. Dutton, Du Pont, p. vii.
50. New York Times, May 9, 1943, p. 9; June 4, p. 29.
51. Ibid., September 23, 1943, p. 27.
52. Ibid., September 13, 1943, p. 21.
53. Moody’s Industrials, 1945 (Du Pont Company).
54. Ibid. (N.A. Aviation).
55. Williams, Tragedy, p. 203.
56. See John Bagguley, “The World War and the Cold War,” Containment and Revolution (Boston: Beacon Press, 1967), pp. 76–124.
57. Williams, The Shaping of American Diplomacy, p. 946.
58. Williams, Tragedy, p. 203.
