This chapter covers the dynasty through the 'cold war' which actually resembles a corporate attack on the 3rd world,particularly Latin and South America, as well as Southeast Asia.It looks like this clan of pond scum was the first to coin the old 'humanitarian' nonsense to invade other countries for their resources,with Indonesia standing out as the most ugly of US interventions in the phony crusade against communism, and the aftermath of the American humanitarian effort.And lets not forget the over 15 Billion the clan made helping 'defend American security' from 64-72 in the police action referred to in the propaganda rag sheets as the Vietnam War.
DuPont Dynasty
Behind the Nylon Curtain
By Gerard Colby
Twelve
COLD WARRIORS
FROM WILMINGTON
1.
THE ICEMAN COMETH
In 1953 Irénée du Pont was asked by reporters if he thought the New Deal would ever
come back. “I hope I’ll be thoroughly tucked away in the family cemetery before then,”
1
the old industrialist replied.
Irénée needn’t have worried. His own remarks served as fitting confirmation that the
anti-Du Pont days of the New Deal were as much buried in the past as their august
creator. In many ways it was a symbolic twist of history that only one year after Franklin
Roosevelt’s death, the War Department gave the late President’s private yacht, the
Potomac, to Maryland’s fisheries fleet in exchange for another reconverted yacht, The
DuPont.
Wilmington’s relations with Washington certainly underwent a dramatic change for
the better in the postwar era. The Cold War administrations of both Truman and
Eisenhower were filled with former Du Pont lieutenants and allies. Tom Clark, a former
Texas lobbyist for the Du Pont-owned Ethyl Gas Corporation, charged in the 1930’s
with unethical practices by a Texas Senate Investigating Committee, became Truman’s
Attorney General in May 1945. Dean Acheson, lawyer for the Du Ponts, became
Secretary of State. Lewis M. Douglas, a G.M. director, was chosen for the important
post of ambassador to Great Britain. Louis Johnson, one of the key American Legion
figures allegedly involved with DuPonts in the abortive 1934 coup, was made the
second Secretary of Defense in 1949, after the suicide of James Forrestal. Four years
later G.M. president Charles Wilson, who had earlier won the hearts of Wilmington
with his purchase of G.M. tires from Du Pont-controlled U.S. Rubber, became
Eisenhower’s Secretary of Defense. Eisenhower’s CIA director was Allen Dulles, a Du
Pont confidante as far back as the 1920’s and president of United Fruit, in which the Du
Ponts held a substantial block of stock.2
These appointments reflected the two main concerns of major corporate interests at
that time: labor pacification and international expansion. The achievement of both was
essential to corporate leaders if the rebellious nightmare of the Depression was not to
be repeated. And the answer for both has become known as the Cold War.
On the domestic front the DuPonts, like most corporate leaders, were beset by labor
almost immediately after the war. Workers across the country, restrained during the war
by a federal wage freeze and Roosevelt’s clarion calls for patriotism, now hit the
bricks, demanding relief from inflation and speedups. Like many corporations, G.M. felt
1946 was not the year for the decisive battle against a militant labor movement, and
after forcing a bitter strike, granted a raise of 18½ cents per hour. But even as that was
done, the DuPonts were joining other members of the National Association of
Manufacturers in preparing the greatest repression known to American labor.
The DuPonts and other NAM members had never given up their opposition to the
Wagner Act and other New Deal laws. In 1944 the Du Ponts had futilely donated over
$109,000 to the Republican attempt to defeat Roosevelt.
3 After this failure, the DuPonts
saw the need of organizations outside of NAM to widen its base of support.
The two main nongovernment organizations used by the Du Ponts for this campaign
were American Action, Inc. and the National Economic Council. Both were designed to
build bipartisan support for NAM’s anti-labor crusade and lead a purge of New Dealers
who had survived Roosevelt in Congress.
Of the two groups, American Action was the most obvious successor to the Liberty
League mantle. In 1946 Lammot du Pont and John Raskob joined high-ranking officials
from the American Legion and Veterans of Foreign Wars, and corporate leaders like
Ernest Weir[L] (steel) and Joseph Pew[R] (Sun Oil) in backing American Action, Inc. “to fight
communism, defeat communist-backed candidates for Congress, and rally to this job
anti-communist voters all over the country.”
4 Lammot and John Raskob both made large
donations to support the seed of reaction.
5
The Chicago Sun’s headlines amply explained the purpose of the new organization.
“BIG FINANCIERS AID MOVEMENT—MILLION RAISED FOR PURGE OF 187 CONGRESSMEN.” A
week later, on October 28, the most notorious anti-Semite of the Thirties, Gerald L. K.
Smith, requested “all people associated with the America First Crusade” to cooperate
with American Action. Significantly, one Wisconsin Republican candidate who enjoyed
particular support from American Action was none other than Joseph R. McCarthy, the
decade’s grand inquisitor. In South Dakota another reactionary, Senator Harlan J.
Bushfield, received $4,000 from Lammot du Pont. The Great Witch-Hunt had begun,
accompanied by a chorus of headlines echoing the State Department’s growing
bellicosity toward the Soviet Union and “Godless communism.” Truman’s Secretary of
Navy, Francis P. Matthews, chairman of the Securities Acceptance Corp., joined other
members of the Chamber of Commerce’s Committee on Socialism and Communism in
producing a series of hysterical anti-communist pamphlets and films.
It was through a celebration by industrialists of their Congressional victories in
November 1946 that the population was introduced to the second organization used by
the DuPonts, the National Economic Council. The NEC gathered for a dinner at the
Waldorf-Astoria to pay homage to Upton Close, a red-baiting radio commentator who
had three times been driven off the air by popular protests. And there, sitting proudly at
the head table, were Lammot du Pont and John J. Raskob.
While American Action scored victories in the heat of campaigns, the NEC was
designed to succeed in more covert, whispered struggles in the halls and lobbies of
Congress. Many of the NEC’s proposals failed precisely because they were so
outrageously bold: the removal of the Supreme Court on the grounds of its alleged
socialism, or a constitutional amendment that would limit the government’s power to
levy taxes and place a ceiling on income taxes. But other suggestions, such as aid to
Franco’s fascist regime in Spain and the surrender of oil-rich federal tidelands to the
more manipulatable state legislatures, eventually became law. The NEC’s greatest
victory, however, was the Taft-Hartley Act.
Written, according to charges by eighteen representatives and five senators,
6 by NAM
leaders William Ingles, a G.E. lobbyist, Theodore Isserman, legal counsel for Chrysler,
and corporate lawyers Mark Jones and Jerry Morgan, and introduced by Republican
Senator Robert Taft and Representative Hartley, the Taft-Hartley Act effectively
repealed the Wagner Act, the Norris-LaGuardia Anti-Injunction Law, and the Fair Labor
Standards Act. Supported by the DuPonts and their NEC and NAM allies, the act
outlawed the closed shop, industry-wide bargaining, jurisdictional strikes, and strikes
by government employees. The court injunction was restored as a strikebreaking
weapon against unions, and union rights for federal mediation were withdrawn from any
union whose officers failed to sign non-communist pledges. At the law’s passage in June
1947, Business Week, the voice of the U.S. Chamber of Commerce, accurately
described it as “A New Deal for America’s Employers.” The campaign to break the
independent will of organized labor now had legal sanction. Soon, thousands of the
most militant rank-and-file leaders of unions, most of them not communists, were purged
or smeared as “Russian Reds,” and the way paved for anti-socialist bureaucrats to
strangle rank-and-file democracy and seize control of most of the country’s unions.
Within a few years, the weakened CIO, through a merger, was brought under the control
of the conservative AFL leadership from which it had broken earlier in the Thirties.
Although polls recorded no popular demand for the act’s passage or retention, the
Taft-Hartley Act has remained the guide of federal labor policy to this day. In content,
the Taft-Hartley Act was not an aberration of federal policy, however, but merely the
culmination of what had been corporate-government design all along, ever since the
New Deal’s NRA—institutionalized control of labor.
On August 7, 1947, Truman chose Cyrus Ching of DuPont-controlled U.S. Rubber as
Director of Federal Mediation and Conciliation Service. In this post, Ching
administered the new law as chief arbitrator in major labor-management disputes.
Meanwhile, Attorney General Tom Clark carried out Truman’s order that all government
employees be forced to take a loyalty oath. Clark set up the Loyalty Board, which became a smoke screen for the smashing of left-wing trade unions, and drew up the
infamous “subversive organizations” list that became the bible of every Cold War
inquisitor.
With these victories under its belt, the NEC continued its hate campaign across the country. “We have already covered the states of Michigan, Ohio, and Indiana, and most of Illinois,” reported NEC President Merwin Hart to Lammot DuPont, “so far as libraries and colleges are concerned, as well as certain other sections.” 7 Again, after the 80th Congress adjourned, Hart wrote Irénée: “We have definite evidence in a number of instances that our work with respect to measures before Congress had been decisive in the disposition of these measures. All we need, in order to be a conclusive influence on a substantial number of measures, is the funds to get additional personnel and to meet other necessary costs.” 8 Irénée obliged, sending Hart a check for $21,000, bringing Irénée’s total contributions to the NEC to $31,513. 9 Lammot and Raskob also made large tax-deductible gifts. Through these and other corporate donations, the NEC continued its campaigns against federal aid to education, displaced persons legislation, public housing, immigration, federal civil rights bills, rent and price controls, increased social security, the United Nations, and even U.S. ratification of the Geneva Convention.
Not only were laws influenced, but also talented personnel were recruited by the DuPonts from these witch-hunts. One prime example was Irving Shapiro, now DuPont chairman. His story is one of success through persecution and disgrace.
Emboldened by the government’s attack on labor and communists, many right-wingers openly assaulted “Reds” and “pinko” liberals after the war. Even former Vice-President Henry Wallace’s 1948 presidential campaign was marked by physical beatings, pelting with eggs and debris, and attacks by fascist bands while police often looked the other way. President Truman himself once remarked at a press conference, “Why doesn’t Wallace go back to Russia?” This was the atmosphere in which a series of events led to the rise of Irving Shapiro into the highest DuPont circles.
When Irving S. Shapiro joined Du Pont in 1951 he was in his middle thirties. To anyone familiar with the backgrounds and personalities of the organization’s top executives, there could hardly have been a more unlikely candidate for the chairmanship of the company. Yet he reached that post after only a little more than twenty years of service.
For example, Shapiro is a Jew, a lawyer, a Democrat, and not even remotely related to any Du Pont or any relative of a Du Pont. Yet, here he is top man of the company. As a boy of eight, Shapiro began working in the Minneapolis dry-cleaning shop of his father, a Lithuanian immigrant to the United States. One of Shapiro’s brothers still runs that plant, but another deserted to set up his own carpet company. Irving’s career took him even further afield. After getting his LL.B. with honors from the University of Minnesota Law School in 1941, Shapiro headed for the nation’s capital and the O.P.A., where he worked alongside another young lawyer, who was to become even more prominent, much sooner, Richard Milhous Nixon.
In 1943, Shapiro, who was kept out of service by an asthmatic condition, joined the Justice Department. He soon impressed his superiors in the criminal division and in 1948 was named an assistant prosecutor in one of the most controversial trials of the time, that of eleven top leaders of the United States Communist Party on the charge of advocating the overthrow of the government. The trial, a raucous one that went on for nine long months, was presided over by Judge Harold S. Medina, a former corporate lawyer who had also been a professor at Columbia Law School. The communist leadership were convicted. They appealed. Shapiro handled the appeal for the government and he won. The law under which the communists were convicted was the Registration Act, a repressive law which Harvard Law School’s Professor Zachariah Chafee described as “the most drastic restriction on the freedom of speech ever enacted by the United States during peace.…” 10 “The Communist Party is on trial only so far as free speech itself is on trial,” declared a statement issued by Utah’s Chief Justice, James Wolfe, Charles Houston of Harvard Law School, and Arthur Garfield Hays of the ACLU. “Such a decision would, in fact, outlaw the Communist Party and other left-wing groups in the United States in a manner hardly to be distinguished from the outlawing of the Communist Party by Hitler, Mussolini, or Franco.” 11 It was a futile cry. Only many years later, when the witch-hunting extended even to the hallowed liberal U.S. Senators, would the inquisitions be exposed for their lies and demagoguery and brought to an end.
Irving Shapiro never relented on these sorry days. In fact, they made his career. In 1951 his reputation won him the post of legal counsel to the DuPonts in fighting their anti-trust suits, and he did so well that he steadily reaped the rewards of Du Pont Company management. In 1965 he was appointed assistant general counsel for Du Pont. In 1970 Shapiro became vice-president in charge of finance. Three years later he was appointed chairman and now sits contentedly at the Du Pont board of directors, guiding its acquisitions and price deals, charting its labor strategies, and steering the firm clear of the rocks of antitrust prosecutions.
The anti-communist crusade was not left only to hirelings. Irénée and Henry B. DuPont were both among the country’s most outspoken head-hunters. To these multimillionaires, American capitalism was Utopia and dissidents were heretics bewitched by a foreign ideology. “A century ago,” stated the company’s public relations department in its 1950 Autobiography, “Karl Marx dreamed and wrote of a Utopia where the people would own the tools of production and share in their output. His dream has come true, not in the Communist state founded on the theories he propounded so ardently, but in capitalist America.” 12
By that date, however, DuPont’s Utopian “capitalist America” was again suffering from its chronic disease, overproduction. Despite their public ridicule of Marx’s theories on overproduction, privately in the board room of the Wilmington headquarters the DuPonts had always paid the greatest attention to the market problems of overproduction. Ideologically they preferred to describe this chronic ailment as a “lack of aggregate demand,” the Keynesian’s semantic substitution for “underconsumption,” the classical economic term used by Marx. But no matter how it was expressed, it essentially came out the same thing—the need for expanding markets.
During the Fifties DuPont’s 2,500-man advertising department tackled the need for an expanded consumer market with mass media promotion and its “impulse-buying” surveys. The latter were used to inform corporate customers of the consumer’s psychology and encourage the use of DuPont products as a means toward manipulating it. “Cellophane packages have a special appeal for children shopping with their families,” a Du Pont pamphlet explained to retailers. “The sight of candy stimulates appetite appeal, influences more ‘Store Decisions’ and builds profitable candy volume. … Cellophane bags emphasizing special holidays and printed cellophane holiday overwraps increase sales.” This conclusion in 1954 was the result of Du Pont’s fifth impulse-buying survey, which tested the attitudes of 5,338 shoppers in 250 supermarkets in 35 cities throughout the United States. “Does she [the shopper] plan to buy candy in advance or decide in the store? Here are the facts from the survey.… Nine of ten decisions to buy candies are made in the store.” Cellophane increased the sales of potato chips, pretzels, macaroni, and baked goods such as bread, rolls, and pies, explained Du Pont. Showing a picture of a little girl pointing at cookies, the company summed it all up: “She sees them. They look good. Then she decides to buy.” 13
Although a crucial role was played by this new advertising field, the consumer market remained inadequate. To keep up its traditional 10 percent rate of return on invested capital, the family inevitably returned to the two keystones on which the DuPont Company had originally been built—the cheap labor market and government patronage.
At first DuPont’s postwar move toward areas of cheap labor was primarily domestic, in the southern United States. This move had already been initiated as far back as the Twenties, when DuPont opened its first rayon and cellophane plants in Tennessee, Virginia, and West Virginia. Following the textile drift below the Mason-Dixon, in the late Thirties Lammot du Pont constructed the first nylon plants in Belle, West Virginia, and in Seaford, located in southern Delaware. But it was only after Crawford Greenewalt replaced the interim-presidency of Walter Carpenter in 1948, that DuPont really began its full-scale Dixie invasion.
“We have linked our destiny to the South …,” explained D. F. O’Conner of Du Pont’s Explosives Department in 1951. “Of greatest significance is the expansion program which has taken place since the end of World War II.” 14 Eight new plants had been built in the South by then, making a total of twenty DuPont plants in nine southern states, nearly half of the company’s total investments and inventories. Thirty thousand workers produced neoprene rubber in Louisville, Kentucky, plastics in Parkersburg, West Virginia, agricultural chemicals in La Porte, Texas, sulphuric acid in Richmond, Virginia, Orion in Camden, South Carolina, nylon “salts” in Orange, Texas, nylon intermediate chemicals in Victoria, Texas, and nylon in Chattanooga, Tennessee. Maryland, Missouri, and Alabama were also dotted with Du Pont plants. Within three years after Greenewalt took over the presidency, the Chattanooga nylon plant tripled its capacity, while Du Pont financial agents were busily selling stock to local wealth in Virginia, Texas, and Florida, securing the support of the South’s richest states.
It is worthwhile to note the South’s political atmosphere at the time of DuPont’s Dixie expansion. In what was to prove a successful attempt to check rising labor militancy and strangle the CIO’s postwar union-organizing drive, southern wealth had generated some of the most rabid anti-communism and racist hysteria in the region’s history. In this campaign, the rulers of the South found enthusiastic allies in northern corporations. The Southern States Industrial Council was one offspring of this corporate mating. Founded during the Thirties to fight the NRA, unions, and “government regulation,” the Southern States Industrial Council was one of the most influential forces in the postwar South. Through the dedicated efforts of its vice-president, Thurman Sensing, the SSIC built a highly effective propaganda apparatus to influence over 1,000 weekly newspapers across the South. But the SSIC owed its effectiveness largely to the generosity of its largest contributor, DuPont, which donated four times as much money as its nearest contender for first place, the Chesapeake and Ohio Railroad Company. Other major contributors were General Motors, Firestone, General Electric, and Household Finance Company.
The red-baiting defeat of Florida’s New Deal senator, Claude Pepper, probably the most eloquent voice for liberalism in the South, was financed and organized by Alfred I. DuPont family interests. This defeat was a symbol that the entire region was being dragged back into the dark ages of bigotry and reactionary narrow-mindedness that many southern New Dealers had hoped would never again return. But return it did, and in its grim wake came northern industry, led by DuPont.
During this expansion Du Pont was understandably touchy on the question of cheap labor. “This is another ghost that should be laid to rest so far as the chemical industry is concerned,” said O’Conner. “The ratio of skilled operators to unskilled in this industry is very high and the wages paid to chemical operators are among the highest of any industry, North or South.” 15 Yet, despite that ratio, DuPont did not come to the South for its higher-paid skilled labor. In fact only 17 percent of the Ph.D.’s, M.A.’s, and B.A.’s hired by DuPont came from the South. DuPont’s real interest in the South lay in its unskilled labor, who were paid as much as 20 percent lower than their northern counterparts. With this boon, and the availability of petroleum, water power, coal, and other raw and crude material sources, Dixie represented the most valuable capital market for DuPont in the Fifties.
By the 1960’s DuPont had constructed even more plants in the South: at Kingston, North Carolina, to produce the new wool-like Dacron, and at Memphis, Tennessee, to produce sodium cyanide and hydrogen peroxide. As one South Carolina businessman remarked, “The question is whether Du Pont is out to buy up the South.” 16 For Wilmington, there was no question about it.
In the marbled corridors of Washington, DuPont found the second means to wider markets. Behind its Cold War policies, the federal government was engaged in supporting a massive investment program overseas by American corporations. In Africa, the Middle East, and Asia, American business interests increasingly replaced the war-exhausted European colonialist, while in devastated Europe, the Marshall Plan encouraged U.S. corporate control over the industries and markets of electronics, automobiles, synthetic rubber, petroleum, and farm machinery. “Economic stability” continued as the hallmark of U.S. foreign policy—as Assistant Secretary of State Dean Acheson put it, “chiefly as a matter of national self-interest”—and where the dollar went soon followed the flag. To pursue George Kennan’s “containment policy” of antirevolution through anti-communism, a large military arsenal of armaments and overseas bases was built and the “red scare” propagated, while a U.S. Navy document secretly pointed out the real issue: “Realistically, all wars have been for economic reasons. To make them politically palatable, ideological issues have always been involved. Any possible future war will undoubtedly conform to historical precedent.” 17
The first conflict grew out of U.S. intervention in Japan’s former colony, Korea. After occupying southern Korea in 1945, U.S. troops under the command of General Hodges forcibly dissolved the Korean Provisional Congress in Seoul, and Syngman Rhee was flown in from Washington to establish a regime of pro-western military leaders and landlords. With U.S. encouragement, Rhee declared the 38th parallel to be a permanent border dividing Korea, and began liquidating all opposition, particularly trade unions and intellectuals. Over a quarter-million people were massacred. In the midst of a contrived “election” (which was boycotted by most political parties and organizations in the south), riots broke out against the new Rhee dictatorship. As full-scale civil war erupted, the legitimacy of Rhee’s regime was further undermined by new elections held throughout the south and north which established the Democratic People’s Republic of Korea. The alternate government based its capital north of the 38th parallel, where Korean forces who had fought the Japanese guaranteed safety under the communist leadership of Kim Il Sung.
One of the D.P.R.’s first acts was to request the withdrawal of all Allied occupying forces. In December, 1948, the Soviet commander obliged. The U.S. command in Seoul refused, and as Rhee’s position deteriorated in the south with his defeat in the May 1950 elections, skirmishes along the 38th parallel increased. On June 17, John Foster Dulles arrived at the 38th parallel and assured Rhee’s troops that the time was “not far off” when they would be able to display their “prowess.” On June 25 war broke out between Rhee’s forces and D.P.R. troops stationed along the parallel. In a burst of enthusiasm, Rhee promised his regime in Seoul that Pyongyang, the D.P.R. capital, would be occupied by his forces within three days. Three days later D.P.R. troops were in Seoul. Rhee was in Tokyo with his American wife, having fled with the country’s gold reserves.
Washington was enraged. Backed by a resolution it rammed through the United Nations to restore the U.S.-imposed status quo only in the south, the United States landed troops at Inchon and also invaded the north. Levelling the countryside with jet bombers, General Douglas MacArthur marched U.S. troops right up to the Chinese border, threatening attack on the new communist government of Mao Tse-tung, even suggesting the use of the atomic bomb. At this point, China intervened, pushing MacArthur’s armies back into southern Korea.
Wilmington was enraged also. Irénée DuPont called for increased aid to the dictatorship of Chiang Kai-shek “to help run the Reds out of China, instead of just sending more American boys to Korea.” 18 Apparently, Irénée had forgotten that it was Chiang who had already been run out of China. Truman’s memory was a little better, and although the U.S. did intervene in the Chinese civil war by protecting Chiang on Taiwan with the Seventh Fleet, he avoided Irénée’s suggestion of an attack on China.
Besides the more important aspect of defending the new Asian economic frontier and traditional “Open Door” foreign policy, the Korean War also proved good business for the new Military-Industrial Complex that had emerged out of World War II. Du Pont, of course, was one among many giants who took the bulk of government war orders. Years later Henry B. du Pont would admit in a public statement that the lion’s share of military orders and profits during the Korean War and the armaments race went to the biggest corporations. 19 In 1950 Du Pont scored one of its highest annual profits, 13.3 percent. 20 G.M. reaped an even higher return. During the war years of 1950–1952 G.M. averaged an annual profit rate, before taxes, six times that of the 1929 boom year. From July 1950 to June 1952 G.M. grossed $5.5 billion in war contracts.
The Korean War may have ended, but the armaments race did not. Eisenhower continued the traditional Open Door policy of foreign markets being the key to continual corporate profit expansion and domestic prosperity. “For all our material might,” declared the new President in his Inaugural Address, “even we need the markets in the world for the surpluses of our farms and factories. Equally we need for these same farms and factories vital materials and products of distant lands.”
Helping arm for Pax America as Ike’s new Secretary of Defense, was G.M. president Charles E. Wilson. “What is good for America is good for General Motors,” he once exclaimed at his confirmation hearings, “and vice versa.” It is an amusing footnote to Wilson’s successful government career that it began so embarrassingly. On his way to Ike’s Inaugural Ball his shiny new G.M. Cadillac broke down. Again, when the first cabinet meeting was held later that week, the first empty chair was Wilson’s, his absence reported as the result of a similar breakdown. Apparently, in these cases, what was financially good for General Motors was not even good for Charles Wilson, much less America.
Under Wilson’s reign the Defense Department was good also for DuPont. Although only 5.3 percent of the chemical industry’s output went to the military, by 1960 over 20 percent of its total expenditures for research and development was financed directly by the Defense Department, with DuPont receiving a generous portion. 21 Additionally, defense contracts to DuPont customers for non-explosive material, from paint to nylon, spurred Washington’s sales.
DuPont itself did not heavily diversify into the defense sector, but the family found the arms race profitable in other spheres of holdings. As a director, Irénée du Pont’s son-in-law, Colgate Darden, watched over the family’s holding in Newport News Shipbuilding and Dry Dock Company, one of the country’s largest shipbuilders, which grossed over 80 percent of its income from war contracts. North American Aviation (with Henry B. DuPont as the controlling stockholder) and Boeing Aircraft (of which Crawford Greenewalt became a director) were both big money makers. By 1957, North American and Boeing were reaping profits of 19.9 percent and 21.3 percent, respectively. 22 On the basis of return on investment, only five of the top fifty companies in sales in 1957 were among the top fifty in profits. These five firms happened to be exactly the five with the largest amounts of new defense contracts that year. And among the five were North American Aviation and Boeing.
Henry’s company, a leader in missile frames and rocket engine technology, was undoubtedly the most active DuPont interest in war contracts during the Fifties, and probably the boldest. On May 7, 1959, for example, North American ran a large ad in the Wall Street Journal offering high-level employment to a top-ranking officer of the Air Force or Navy, preferably with experience with the Joint Chiefs of Staff. This job, explained the ad, required giving information about the Department of Defense’s “product development strategy” and “weapons system requirements,” as well as personally assisting in military sales. It was too blatant to be left ignored. “You are trying,” said Representative Edward Hebert of the Armed Services Committee to a North American witness, “to buy not only an individual’s ability, but also knowledge he acquired in a high echelon position where secret planning was done.” 23 Henry’s executives merely shrugged and continued their policies. After all, went the reasoning, they were only doing what was common business practice. By 1969, 2,072 officers with the rank of Colonel or Navy Captain or above were employed by the ninety-five leading military contractors, 24 North American proudly being one.
Phillips Petroleum was another Du Pont interest in the arms race of the Forties, Fifties, and Sixties. Since Phillips’ founding in 1917, Eugene E. DuPont was guardian of the family’s stock holding in this sphere, 25 and personally served on the board of directors until 1954. During his postwar tenure, Phillips was extremely aggressive, increasing its assets from $332 million to $1.3 billion and its net income from $23 million to $95 million. Phillips was attracted particularly to new oil resources. In southeastern Alaska, for example, it secured an operating agreement on nearly one million acres of land. For $39 million, it acquired over 200,000 acres of offshore holdings.
Phillips often joined with other DuPont family interests in big deals. With Henry’s North American Aviation, it formed Astrodyne, Inc., to develop solid fuels for missiles and space rockets. After the Rubber Act of 1948 ended government ownership of a number of synthetic rubber plants, Phillips joined DuPont-owned U.S. Rubber (in which Henry B. was also a major personal stockholder) and other oil and rubber giants in buying up the government’s general-purpose synthetic rubber and butyl industrial capacity. Eisenhower sold twenty-six plants for $285 million, which was above their net value, yet these plants yielded $166 million in profits from 1951 to 1955 alone. At the time of the sales, five dissenters on the Senate Banking and Currency Committee correctly but futilely argued that the government could have reaped more in operational profits in four to five years than the total amount of the sales.
Phillips had other legislative boons during the Fifties. As the largest seller of natural gas to interstate pipelines, it was the sole supplier to the Michigan-Wisconsin Pipeline Company. Since the war, helpless consumers found their gas rates climbing higher and higher. State officials and the pipeline company stood helpless as Phillips claimed its need for a 12 percent profit. When the Federal Power Commission refused to regulate the rates in 1951, the Wisconsin Public Service Commission went to court, while a Phillips official warned that if the case persisted “the people of Wisconsin could freeze … they would never get another cubic foot of natural gas.”
The Wisconsin PSC won its case before the Supreme Court, which ordered the FPC to review and regulate Phillips’s rates. But the FPC’s Eisenhower appointees, while publicizing their opposition to Phillips, moved slowly in implementing the court’s decision. Then, in 1955, the Harris-Fulbright bill freed gas producers from public regulation. A 5- to 10-cent increase per 1,000 cubic feet quickly ensued, producing a gain for the industry of up to $3 billion a year. As the second largest holder of gas reserves in the United States, Phillips got the lion’s share.
These and other defense contracts to Remington Arms and U.S. Rubber comprised the bulk of the DuPont family’s profits from the Cold War during the Fifties.
For DuPont Company itself, the most direct sustained contact with the arms race was its work in developing the most terrifying weapon on earth—the hydrogen bomb.
In August 1950 a very lean, relaxed Crawford Greenewalt appeared before the Congressional Joint Committee on Atomic Energy. By the end of the day he walked out with an Atomic Energy Commission contract to develop the hydrogen bomb and operate its plant production. Although Crawford boasted to the press of DuPont’s agreeing to a $1 a year fee, he did not bother to mention that two other companies, G.E. and Sandria Corporation, had done likewise. Nor did he mention that DuPont was to be one of four big contractors who would together receive an AEC “compensation” of over $2.5 billion yearly.
For the DuPonts, it was a symbolic contribution to their celebration of the 150th anniversary of their landing on the lucrative American shore.
From every part of the United States, and four European countries, 632 DuPonts gathered on this New Year’s Day for the first family reunion in half a century. Over half of them did not have far to travel, however, living nearby on the two dozen DuPont estates that filled the hills surrounding Wilmington. Of those present, 75 percent were blood descendants of the French nobleman, Pierre DuPont de Nemours, the rest were kin by marriage. Many didn’t even know their relatives. Each was given a name card on arrival, the color of which designated to which of six branches of the family he or she belonged. But the centrifugal force was the name of E. I. DuPont; the image of his original residence, Eleutherian Mills, was stamped on every ashtray at the dozens of round tables.
Half of the seventy-four members at the 1900 reunion were there, and their palates may have sensed that little had changed in DuPont taste since then. Pierre hired the same caterer, Holland’s of Philadelphia, to serve a similar menu: seafood cocktail, green salad, claret wine, filet mignon with mushrooms, potato balls, string beans, game pie (a heavily spiced dish made from a variety of wild animals), terrapin stew, coffee, champagne, pudding, and the old family favorite, johnnycake, to commemorate the first DuPont meal in America on January 1, 1800—the meal that had been stolen by their newly arrived ancestors from the house of a colonial family gone to church (accounts differed as to whether old Père DuPont left behind a few gold pieces in compensation). But this time Pierre made sure the family paid its own way: he assessed each member 50 cents for each year of age. At 80, Pierre paid the highest tab.
Amid popping flashbulbs of photographers from such national magazines as Life, the DuPonts royally ate their historic midday meal. There was no head table. There were no speeches. This day the whole family basked in glory. Some, of course, had more glory than others: Crawford Greenewalt, for example, who collected a salary of over $138,000 the previous year and another $300,000 in cash and stock bonuses, for a total $438,000 “compensation” for the same year the average annual wage of a DuPont worker was $3,430. Or Henry B. du Pont, his broad face flushed with the triumph of $300,000 in salaries and bonuses from Du Pont alone, never mind his other holdings in U.S. Rubber and North American Aviation. Nearby sat Emile F. DuPont, his always busy mind ticking away behind his bushy brows, counting the $65,000 in DuPont salary and bonuses he would reap that year and the millions returning their yield from stock speculations. But the most contented of all was old Pierre. Flanked by his aging brothers Lammot and Irénée, Pierre saw this day’s gathering through the eyes of a financial conqueror. General Motors, DuPont, U.S. Rubber, Remington Arms, all part of a vast corporate empire, were now safely in his family’s hands. If anyone had the right to swell in triumph, it was he.
Ironically, Pierre’s greatest day came on the eve of his greatest defeat, a defeat which would kick a crucial keystone—General Motors—out of the DuPont empire.
The family’s troubles in G.M. began in 1948, the year of DuPont’s biggest sales record yet, $968 million. In November Lammot was called before a federal hearing to testify on DuPont interests in General Motors, U.S. Rubber, Ethyl Gasoline, Bendix Aviation, and a host of other firms. Although accompanied by so esteemed a counsel as Dean Acheson, former Undersecretary of State, Lammot still had his difficulties. “I made a bad showing at the end of the session,” he admitted to reporters as he emerged from the hearing. “I testified that I had not written a certain letter and then the government pulled the letter out of the files. It was very embarrassing.” Yet the impending blow remained unforeseen. “We still don’t know what it’s all about,” 26 Lammot said.
Six months later, he found out. Attorney General Tom Clark, moving on the government’s desire to preserve some balance among corporate interests and prevent the total domination of G.M. by the DuPont family, filed an anti-trust suit in Chicago’s District Court to break up “the largest single concentration of power in the United States.” 27 Over 100 defendants were named, including the family holding companies, Christiana Securities and Delaware Realty and Investment Corporation. But the real target was DuPont Company’s $560 million investment in General Motors. In a 65-page complaint, the government charged that DuPont controlled the selection of G.M. officers, directors, and policies. The G.M. bonus plan operated to make executives more responsive to DuPont’s wishes, since DuPonts dominated the committee that gave out the bonus incentives. Citing these as violations of the Sherman and Clayton anti-trust laws, the complaint asked for the cancellation of all G.M.-DuPont contracts, and the sale of all DuPont holdings in U.S. Rubber, G.M., and Kinetic Chemicals (refrigerants).
This was no laissez-faire “free market” approach by the government. Since the Justice Department’s “rule of reason” fifty years earlier, the government had abandoned any pretense toward turning back the clock and restoring a private enterprise system free of trusts. The G.M. suit merely represented the opinion that General Motors was now simply too large an economic force to allow its domination by any one family or financial group. Rather, control over the largest corporation in the world would have to be shared jointly by many financial groups.
The reaction in Wilmington was a mixture of shock and suspicion: shock that the suit had come, and that it was pressed by Clark, a former DuPont lobbyist who was believed friendly to the company’s interests; and whispered suspicion that behind this move was the hand of Morgan interests in G.M. and Truman’s need for a corporate scapegoat to mitigate his anti-labor image.
“An unjustified attack,” responded Greenewalt, promising the stockholders, “your company will fight.” 28 His first step was to give the real meaning to his claim of public support by requesting a change of venue to Wilmington. This was denied, but Henry B. DuPont had already outlined the next step in responding to public attacks on the growing power of big business. “These criticisms have in the main come from the lips of many people in politics, bureaucrats, irresponsible labor elements, and unfortunately, also from many well-meaning but uninformed people, and they have been fanned by the radical section of the press and radio.” 29 Accordingly, the DuPonts expended most of their energies the following year in the political arena, DuPont’s public relations department grinding out the proper image.
The Korean War and the hydrogen bomb contract cooled the administration’s crusading fires for a while. Then the Justice Department’s scoring of the family’s use of its minors as holding companies reopened the battle in 1952. The government filed a class action suit against 186 DuPonts related by blood or marriage to Pierre, Irénée, and Lammot. “Evidence in the record in this case,” stated the government brief, “shows it is the practice and policy of senior members of the class and their defendant representatives to distribute during their lifetimes a substantial portion of their stock holdings to minors in the family, usually by setting up trusts of stock.” 30
It took Irénée 701 pages to explain his denial of the government’s charges. But the one most upset by this attack on the very lifeblood of DuPont inheritance was Lammot, bitterly describing it as “another indication of the lengths to which the government’s prosecution of anti-trust cases has led it.” 31 Lammot was infuriated, but this was one fight he would have to pass up.
In July 1952, 225 lineal or marital descendants of E. I. DuPont and 6,000 of their
employees gathered on the banks of the Brandywine to celebrate the sesquicentennial of
his founding of the powder company. Across the country, 80,000 workers in seventy-one
DuPont plants were given a special holiday. A national radio broadcast followed the
dramatic reenactment of the founding of the original Eleutherian Mills and tours were
given by fourteen DuPont ladies in specially designed dresses of the period. Speeches
were given by Crawford Greenewalt and Henry B. DuPont. But one familiar, grim face
was conspicuously absent: that of Lammot DuPont.
Lammot had been stricken with a heart attack the previous week while vacationing at
his summer mansion at Fisher’s Island, New York. He had long suffered from an
arteriosclerotic heart ailment—this was one reason for his resignation from General
Motors in 1946—but worries over maintaining control of the Motors firm returned to
haunt him in the government’s anti-trust prosecution, agitating the convulsion of his 71-
year-old heart a week before the anniversary celebration. In the morning of July 24
Lammot suffered a second attack, this one from a massive pulmonary embolism. The
doctor arrived at his bedside just a few minutes before his death at 7:00 A.M. Although
Lammot had gone through four wives, breeding ten children, not one was at his bedside.
In a great sense, he died as he lived—alone.
A few days later Pierre and Irénée watched with the rest of the clan as Lammot was buried at Sand Hole Woods. It was only too obvious that the fifth generation of DuPont's was dying out. A. Felix, Sr., was already lying there, having died in 1947 at the age of 69. So were his brothers Ernest, who died in 1944, and E. Paul DuPont, who died of a heart attack in 1950. Ethel Hallock DuPont, wife of Pierre’s dead brother William K., had died in 1951; Bessie, Alfred’s first wife, in 1949; Pierre’s sister Isabella, in 1946. Later that year cousin Julia, sister of Eugene, Jr., would die, and Henry B. would lose his mother Eleuthera the following year. Of the three famous brothers, Irénée was over 70, Pierre over 80, and now Lammot was gone. Having already distributed most of his fortune to family trusts and foundations, Lammot left behind only a $70 million estate.
Death spared Lammot from taking the witness stand in the G.M. case, but his ghost haunted the trial. His words ironically spoke across decades in correspondence, proving the government’s charge of Du Pont control. “It seems that DuPont has always assumed the responsibility for the financial direction of G.M.,” 32 Lammot wrote Sloan in 1923 on G.M.’s board and finance committee composition. The full meaning of such responsibility, the government contended, was that in 1941 G.M. took 93 percent of Du Pont’s automobile Duco production. The Du Ponts retorted that they acquired G.M.’s business because their products were superior, but the government only countered that better quality products by Du Pont were in the company’s interest of protecting its 23 percent investment in G.M.
In 1945 Sloan had written Du Pont president Walter S. Carpenter, Jr., on the prospects of inviting General George Marshall onto the G.M. board, “recognizing the position he holds in the community and among the government people.” 33 But it was Lammot who answered three days later: “My reasons for not favoring his membership on the board are first, his age; second, his lack of stockholdings; and third, his lack of experience in industrial business affairs.” 34 With those words, the idea was squashed.
DuPont control over the board’s membership was absolute. In 1943 the DuPonts opposed allowing any more bankers on the G.M. board, and Alfred Sloan followed suit. In 1947, after the DuPonts expressed favorable reaction to the idea of bankers, Sloan completely reversed his policy.
In February 1953, 76-year-old Irénée took the stand, his lean figure now topped with
a crown of white hair. The old industrialist remained his amiable self, at times even
apologetic for his failing hearing. At one point, he finally gave up his hearing aid and
cupped a hand to each question. “These things are very badly made,” he commented;
“the Du Pont Company ought to go into the business.”
35 The courtroom, crowded with
business executives from a nearby convention, rang with laughter.
But it was old, bald and pouchy Pierre who gave the most important testimony. While
his younger brother watched proudly from the spectators’ bench, the 83-year-old owlish
financial giant wiggled his bushy white mustache with answers that showed he was as
sharp as ever under questioning. From behind the bright blue eyes a keen memory
worked, recording a sweeping grasp of developments since 1890. DuPont’s
involvement in World War I was an act of patriotism, Pierre contended, as was his
seizure of control of the company from Alfred. Claiming to have been tipped by British
Intelligence through Imperial Chemical’s Kraftmeier that the Germans were about to buy
up a large bloc of DuPont stock, Pierre admitted he had encouraged Coleman to sell his
stock to him. After this testimony, however, the government produced a 1915 letter from
Pierre to Coleman stating that “if they [the Germans] come forward with orders in
quantity similar to the order of the allied nations, we would be willing to sell.” And one
government witness, Sir William Wiseman, head of British Intelligence in the United
States during World War I, testified that “I can state definitely that Mr. Kraftmeier was
never at any time connected with the British Intelligence Service.”
36 The “patriotism”
motive by itself simply did not stand up.
Despite a volume of evidence against him, Pierre managed to deftly dodge any attempt by the government to make him admit G.M. control. The potential market “had no connection whatever with my opinion of the G.M. purchase or my vote,” 37 he insisted, branding the government’s charge of building a $5 billion empire against the law as “false.” For days on end, Pierre recorded the whole history of the company’s growth, as he saw it. Some said it was his finest hour. Whatever the opinion, it was also his last.
One year later Pierre joined his brother Lammot at Sand Hole Woods. Pierre had just finished one of his dinners at his, Longwood estate when he was struck by severe abdominal pain. He had ruptured a blood vessel. Rushed to Wilmington Memorial Hospital, he died within hours, Irénée and Margaretta, the sister who married Ruly Carpenter, at his bedside. Although childless, Pierre, unlike his very prolific brother, died among friends.
In one way, though, Pierre’s death was like Lammot’s—its financial outcome. Pierre had also divested the bulk of his estate among family trusts long before he died. What was left, $80 million, was willed to his tax-free Longwood Foundation for the upkeep of his vast gardens.
Pierre’s passing at 84 in 1954, and Eugene’s death at 81 the same year, were expected by the family. But the autumn chill of the following September brought a real shock: 21-year-old David Flett DuPont, Lammot’s youngest son, was fatally injured in an auto crash on Fisher’s Island while visiting his mother; he died in the same hospital as his father did three years earlier.
These were not all bad times, however, for the family did succeed in the anti-trust case. First, the government retreated from its attack on the family as a whole, dropping charges against all but seven individuals. Then, in December 1954, Judge Walter La Buy ruled that the government had not proved the family had intended to create a monopoly when they bought into G.M. It was merely a historical accident. “We were confident that this would be the result,” 38 declared a jubilant President Crawford Greenewalt, standing beside his grinning father-in-law, Irénée du Pont, and his predecessor, Walter Carpenter, Jr. Indeed, a million dollars can buy a lot of legal confidence. That day, DuPont’s stock rose 4½ points.
But the real battle had been won before the case even went to trial. From the very first day the government filed its suit, Du Pont’s public relations department took up the brunt of the counterattack. On taking office, Crawford Greenewalt had been advised by Walter Carpenter to make public relations his most important concern. Fully agreeing, Crawford now handed the job of defending the company to his two top public relations officers, Harold Brayman, former president of the National Press Club and the prestigious Gridiron Club, and his assistant, Glen Perry, formerly of the New York Sun.
Brayman went right to work, adopting the position that the government’s charges were an attack on “bigness” per se, and correctly countering that only bigness could have provided the capital for the original research and plant investment for everything from nylon to atomic energy. Brayman’s argument carried infallible logic—greater concentration of capital and resources was superior to the disjointed economy of the laissez-nous faire nostalgics. But as logical as it was, his case lacked emotional appeal for the public.
For the first three years of deliberations, Brayman and Perry continued their campaign, waiting for the opportunity for an emotional appeal to appear. Brayman reversed DuPont’s traditional fear of press probes and sought instead to use them to the company’s advantage. This change in policy stemmed from Brayman’s “precinct” publicity concept, a term that reflected his many years spent in observation of political organizations. Under this concept, publicity was directed to three key audiences: (1) employees, customers, stockholders, suppliers, business associations, and towns where plants were located; (2) writers, the press and media, and campus intellectuals; and (3) government officials. By centering on these, all of whom already had an interest in the company, Brayman estimated that a ripple of “public” opinion started by the company’s usual broad releases would become a wave.
He was right. When Fortune approached the firm for information for an article on the company, a special office was set up in DuPont headquarters and its writers and researchers were given exclusive interviews and details from the company’s viewpoint. The result was an article favorable to DuPont. Other magazines were soon attracted to Wilmington. Newsweek had already run a cover story, “Is It Bad to Be Big,” with Crawford’s picture on the cover. In April 1951 Time did likewise.
Crawford made a rare appearance before the National Press Club. Vice-president Harry Haskell, Sr., made another speech in Maine, and Lammot DuPont Copeland, then secretary, also spoke publicly. All these speeches were distributed by Brayman to every newspaper editor in the country. But still the emotional impact was missing.
The solution came in 1952. The government charged that the Du Pont children, through their trust funds, were being used as holding companies by their parents. Seizing the opportunity, Brayman then published a photo of Alletta DuPont Bredin, “a hardened conspirator of eight months,” sitting in her playpen. The picture made the government’s case look absurd. Hardly a newspaper in the country failed to print it.
A month later, on April 14, Brayman made his report to DuPont management that “it seems reasonable to say that the picture appeared in more than 1,200 American newspapers.…” Of 376 clippings received, “With only two exceptions, all of it was critical of the Department of Justice and favorable to DuPont.” “An impression was created in the minds of millions of people,” Brayman later recalled, “which won the case for us with the public—if we could keep it won when the case came to trial.” 39
To help at the Chicago end, Brayman appointed Robert Curtin, Delaware correspondent for the New York Times, to get to know personally the correspondents, wire service reporters, and media men covering the trial in the Windy City. To add a human touch to DuPont’s staid image, Pierre and Irénée were encouraged to be present at the early days of the proceedings and grant their rarest of gifts, pictures and interviews. Articles favorable to the DuPont executives’ image were persistent throughout the trial, while many large corporations, cautiously sympathetic to Du Pont’s line that the case represented an attack on all big business, lent their support in government and elsewhere.
By the time La Buy delivered his juryless decision, it was obvious that Du Pont had won a political battle as well as an economic one. Brayman’s precinct technique used the press agentry of political parties. In that important sense, the favorable ruling was a political triumph precisely because Du Pont’s public relations department had become a political organization, molding and organizing public beliefs on an essentially political issue—trust-busting.
The La Buy decision only confirmed Crawford’s convictions about public relations. Already DuPont’s radio and TV experiment with “Cavalcade of America” had produced excellent results. In 1937 the Psychological Corporation’s survey had reported to the DuPonts that fewer than half of the 10,000 people questioned had a favorable opinion of the company, and 16 percent had a downright hostile view of the munitions makers. Through twenty-two years of award-winning plays written by such quality writers as Arthur Miller and Stephen Vincent Benét, DuPont changed its image. Its 781 radio episodes and 202 TV network shows stressed the company’s “Better Things for Better Living … Through Chemistry” line. The merchants of death became a foggy memory, replaced by the smiling chemist. In 1958 the Psychological Corporation found that 79 percent of those tested thought well of DuPont Company; less than 3 percent were unfavorable. Satisfied, the DuPonts ended the annual surveys that year.
Euphoria filled the air along the Brandywine mansions these days. Grateful for this Eisenhower era, the DuPonts gave $248,000, the highest amount contributed to the Republican campaign in 1956, to defeat liberal Democrat Adlai Stevenson. This was a huge increase over their $74,000 investment in Eisenhower in 1952, but it represented the family’s feelings that political dividends had been amply returned. Once, when asked by a reporter if he disliked ‘Ike,’ Irénée gave him a dollar. Why? the astonished reporter queried. “Because you ought to have your head examined,” 40 Irénée answered.
Eisenhower’s administration had already protected many companies in which the DuPonts had interests. In 1954, for example, United Fruit was spared the indignity of having to surrender 400,000 acres of unused land to the Guatemalan government for redistribution to peasants. The Guatemalan government was willing to provide compensation and 3 percent interest. A U.S. arms embargo followed, backed finally by an open invasion from Honduras given air cover by F-47 bombers flown by the CIA. The United Nations protested and the Security Council authorized the sending of an emergency peace-keeping force to guarantee Guatemala’s borders, but the temporary president of the Security Council, who happened to be the U.S. ambassador, failed to give the Secretary-General the needed order. The Guatemalan government was overthrown. The head of the CIA, General Walter Bedell Smith, then joined the board of United Fruit, while United Fruit’s president, Allen Dulles, became CIA Director.
Less covert was DuPont’s support of the new oil depreciation allowance. Besides DuPont’s own direct involvement with the oil industry through the production of synthetic rubber and its Ethyl Gasoline Corporation, the family had invested personal funds in Phillips Petroleum, Chanslor-Western Oil, Ardee Oil (in Texas and Montana), and Oil Associates (in Louisiana and Texas). By the 1960’s, Lammot DuPont Copeland’s Delaware Fund would hold huge blocks of stock in Universal Oil, Standard Oil of New Jersey, Royal Dutch Petroleum, Occidental Petroleum, and Gulf Oil; E. I. du Pont’s New England Fund would be a large stockholder in Mobil and Texaco; and Emile F. DuPont’s Blue Ridge Mutual Securities in Continental Oil, Atlantic Richfield, Cities Service, and Union Oil of California.
But probably the greatest incentive for Du Pont’s production of the film “It Never Rains Oil” was its heavy investment in the automobile industry, particularly General Motors. Sponsored by the leading oil associations, Du Pont’s film presented the case for the depreciation allowance, a curious logic that argues that a business should be paid by the taxpayer for selling its product on the market. According to the minutes of the National Petroleum Council in 1953, Deputy Petroleum Administrator Joseph La Fortune, on leave as vice-chairman of Gulf’s Warren Oil Corporation, “furnished the information as to the money expended by DuPont for having the film made in Hollywood, its fine possibility as education mediums for use in colleges, high schools, etc., availability and cost to those interested in showing the film.”
At this meeting of the biggest oil companies, La Fortune tried to propose standby pipeline facilities on the East Coast in case of an energy crisis. The president of Sinclair Oil objected: “The surpluses in our industry are an anathema,” he explained, “but I think we are particularly sensitive to it, or at least I feel that way about it. Surpluses not handled or controlled are an anathema, because they have a way of destroying price structures, they have a way of breaking down progress, and they can destroy an industry.… I am talking particularly here about standby pipeline facilities. It applies with equal force to standby tanker facilities, standby refining facilities, standby storage, and if you please, standby production.…”
“I assure you,” answered La Fortune, “that our government is not trying to ask you to do something that is unprofitable or would be unsuccessful. They are trying to bring up something here that they think will be helpful to our country in the event of an emergency.
“If it is unpractical, gentlemen, you can forget about it.”
They did. 41
Such easy victories as these and the domination of the “free” world’s business by American finance and industry produced a general feeling of omnipotence among corporate leaders in the Fifties, and the DuPonts were no exception. Their lawyer in the anti-trust proceedings of the Thirties and Forties, Dean Acheson, became Secretary of State. The new postwar dispenser of government favors, the Department of Defense, was headed by a G.M. president, Charles Wilson. The U.S. Commissioner of Roads from 1953 to 1955 who initiated the huge road-building campaign (and subsequent decline in mass transit planning for the future) was Francis V. DuPont. The lawyer who had successfully argued their case before La Buy, John Harlan, was soon after rewarded with a Supreme Court robe, and thousands of copies of La Buy’s decision itself were reprinted by DuPont and distributed triumphantly to the country’s newspapers.
Then in 1955, less than a year later, the DuPonts made their most dramatic announcement of the decade—they were investing another $75 million in General Motors. In their triumph, they had lit the fuse of destruction.
Wall Street stirred anxiously, including the offices of the Morgan group. G.M.’s management had increased its membership on the board of directors with full Morgan approval after the war and the directorship of Richard King Mellon of Mellon National Bank had also been allowed. This injection of another power group reflected G.M.’s need for more outside capital to finance domestic and overseas plant expansion after World War II, plus, many hoped, a new willingness on the part of the Du Ponts to allow other financial interests in G.M. As the Mellons had often been considered rivals of the DuPonts, the appearance of R. K. Mellon was taken by many as a sign that the Morgan hand was strengthened, especially as no one from Wilmington had replaced Lammot DuPont when he retired in 1946. This power change was also accompanied by a 10 percent drop in G.M.’s business with DuPont Company. Now, however, with this new massive injection of capital from Wilmington, the DuPont yoke about G.M. looked stronger than ever.
But this time the family had gone too far; they had chosen the wrong time for so bold a move. DuPont’s attempt to even further dominate the world’s largest corporation stood in the face of a general business trend, encouraged by corporate circles in power in Washington, toward joint control in the larger corporations by several financial groups, a trend toward financial diversification in many fields that could prevent the pitfalls of concentrating holdings in one or two areas of an unstable marketplace and act as a breaker against the threat of a general “dominos” contraction in the capital market which could trigger a depression. This trend had been encouraged by Roosevelt and Rockefeller interests and been endorsed by Congress in its 1950 amendment to the Clayton Anti-trust Act, an amendment that allowed vertical expansion but not single group monopoly.
With the DuPont family’s open rejection of this trend (possibly in fear of eventually losing exclusive control over their own firm in exchange for being allowed entrance into other corporations), the corporate and financial leaders in government now had to demonstrate the necessity of legal enforcement. Thus the DuPont-G.M. prosecution represented a major trial case.
On June 3, 1957, in one sweeping decision, the Supreme Court’s corporate liberals undid all that the DuPonts had built over fifty years. Although Eisenhower’s Justice Department did not contest La Buy’s 1954 denial of any market conspiracy in its appeal, the Warren Court, with Harlan and Tom Clark abstaining as interested parties, reversed the La Buy decision by a 4 to 2 opinion. “It is not requisite,” held the Court, “to the proof of a violation of Section 7 [of the Clayton Anti-trust Act] to show that restraint or monopoly was intended.” 42 Commercial and financial domination by one family, a less tolerable aspect of monopoly to the Court than financial domination by many groups, had been proved. It is worthy to note that of the four justices who comprised the majority, Black and Douglas were both New Deal appointees who shared Roosevelt’s concern over single-group concentration that had spurred his TNEC probe, and the other two, Eisenhower appointees, Warren and Brennan, had both been New Deal sympathizers who understood the need to encourage diversification.
The news hit Wall Street like a thunderbolt, sparking the busiest activity of the year. DuPont’s stock gyrated up and down aimlessly before ending the day up 1 point. The boards of G.M. and U.S. Rubber, meeting at the time, refused comment, but Crawford did manage to remark that he was “naturally disappointed.” The power of the state, it was clear, was being imposed to bring industrial mavericks like the DuPonts into line. Meanwhile, the case was returned for “equitable relief” to La Buy, who avoided a decision in the ensuing election year.
The DuPonts did not sit idly by and await their fate. In 1958 they joined Eisenhower and Vice-President Richard Nixon in supporting the gubernatorial candidacy of Senator William E. Knowland, the “open-shop” candidate of California’s big corporations. The labor unions saw Knowland, a proud holder of a long anti-labor record in Washington, as part of the nationwide campaign of candidacies and bills being directed by NAM. “California has been chosen as a battleground to test ‘right to work,’” 43 charged C. J. Hagerty, secretary-treasurer of California’s State Federation of Labor. These suspicions were subsequently confirmed with Knowland’s support for Proposition 18, which would have outlawed a union shop. But the most explosive tip-off was Knowland’s use of a Du Pont-sponsored pamphlet written by Joseph Kamp, who was described by the New York Times as a “veteran pamphleteer of extreme right-wing causes.” Kamp was notorious for his opposition to the liberal Supreme Court of Earl Warren, who also had no friends in Wilmington.
Kamp’s pamphlet, “Meet the Man Who Plans to Rule America,” was a rabid attack on AFL-CIO vice-president Walter Reuther; it was fully endorsed by Mrs. Helen Knowland, the Senator’s wife, as “a powerful message which could actually swing the pendulum in California if it could be gotten into the hands of millions of people.”
Helping in this endeavor were DuPont directors Pierre S. DuPont III, son of Lammot, and DuPont in-law Donaldson Brown, former vice-chairman of G.M. Brown, in fact, was so enthusiastic about Kamp’s tirades that he not only contributed generously, but also provided Kamp with a list of names to whom his name could be mentioned when donations were requested.
The DuPont involvement was all Knowland’s opponent, Attorney General Pat Brown, needed to lock up the election. Asserting that Knowland’s campaign had been directly linked with “fascistic anti-Semitic forces in the East supporting his drive to take over the governorship of this state,” Brown rode the angry labor tide to victory. Meanwhile, a spokesman for Pierre asked the people to “let the facts speak for themselves.” 44 On election day the facts did speak—with an eloquence even Pierre du Pont III could not ignore.
The Knowland campaign was the last time for over a decade that the DuPonts publicly involved themselves in a political campaign, and for good reason. In an era of declining witch-hunts, the linking of Du Pont with right-wing causes threatened to undermine the “Better Things for Better Living … Through Chemistry” image that had been so carefully nurtured since the turbulent Thirties. Now the brand of Du Pont was again being used by Democrats attacking Republican candidates. Only a few weeks after Brown’s charges in California, Tammany Boss Carmine De Sapio described the Rochester, New York, Republican state convention as dominated by Irénée DuPont, Richard Nixon, and Rockefeller interests. “These men were the phantom delegates to the Republican state convention in Rochester who determined its course, who chose its candidates, who wrote its platform and who dedicated its philosophy to the greater glory of big business.” 45
No doubt De Sapio’s charges carried more than a grain of truth. The convention had indeed been controlled by Winthrop Aldrich, George Champion, president of Chase Manhattan, and former New York governor Thomas Dewey. Aldrich’s nephew, Nelson Rockefeller, did emerge as the gubernatorial candidate. And Nixon and Irénée DuPont did indeed have a great voice in the national Republican apparatus. But the picture of a Tammany Boss charging the Republicans with being bossed did not inspire anger, but an impotent cynicism that only further crippled any effort to stop Rockefeller’s triumphant march to Albany.[No kidding,anyone who has been reading the History of Tammany Hall,that I have been republishing on this blog,knows that is like the pot calling the kettle black DC]
That the word “DuPont” could again be used against the family’s interests, almost as effectively as their use of “communist,” was disquieting to many DuPonts. Not since the Thirties had such a tactic against them been so successful. For the Du Ponts, 1958 marked the beginning of a decade of extreme political caution, of working unseen in the wings of the political arena to try to determine government policy, while at the same time striving to keep their famous name out of political print.
Undoubtedly the greatest immediate reason for this low-key political profile was General Motors. Crawford, Irénée, and the others still hoped to emerge from the courtroom debacle with most of their G.M. treasure. Wilmington had worked out a scheme to keep its G.M. stock but surrender the voting rights of the company to individual DuPont stockholders, effectively preserving the family’s control.
In October 1959, after hearing testimony by DuPont witnesses (including Neil H. Jacoby, dean of UCLA’s Graduate School of Business Administration and later chairman of President Nixon’s Pay Board as a “neutral representative of the public”), Judge La Buy accepted the company’s plan, declaring complete divestiture by the family “unnecessarily harsh and punitive.” But La Buy had another reason for this ruling: the “severe impact” on the stock market, another echo from Du Pont’s public relations campaign. From the bench the judge read a letter of a 90-year-old woman who was concerned with the case because her only income came from G.M. stock. “The Court will not assume the responsibility of such a risk,” 46 declared the judge, himself a resident of Chicago’s exclusive Lakeshore Drive area appropriately dubbed “the Gold Coast.”
“We are gratified,” 47 responded Crawford humbly. “A victory,” hailed the stock market. “It is favorable to the DuPont family group because they avoid an enormous tax confiscation,” commented Gerald Loeb, partner of E. F. Hutton & Company. “Other DuPont stockholders are protected from varying amounts of taxes. The decision is favorable to corporations in general which have stock in other companies.” Loeb’s own firm, of course, was one of these holders of G.M. stock. But perhaps the most penetrating remarks came from stockholder Jacques Coe: “You can quote me as saying ‘the mountain labored and brought forth a mouse.’”
Two months later, on December 7, Donaldson Brown, Walter S. Carpenter, Henry B. DuPont, and Lammot du Pont Copeland resigned from G.M.’s board. It is interesting to note what interests were allowed to replace them immediately on the finance and bonuses committees: Lloyd Brace, trustee of the Rockefeller Foundation, director of A.T. & T., Gillette, and John Hancock Mutual Life Insurance, and chairman of First National Bank of Boston; and General Lucius Clay, chairman of Continental Can (in which the DuPonts held a substantial block of stock)—symbolizing G.M.’s ties in the Military-Industrial Complex. Both men, although enjoying association with Morgan interests, were intimate with the Rockefellers.
DuPont dropped all joint consultants with G.M. It dropped G.M. executives as transfer agents for its stock, assigning Chemical Bank (a bank now jointly held by Rockefeller-Morgan interests) and surrendering the company’s voting rights to individual stockholders, meaning the family. Everyone was happy. Judge La Buy was happy. The DuPont family was happy. Rockefeller interests, with their first foothold in G.M.’s door, were happy.
The Supreme Court, however, was not. On May 22, 1961, the high court ruled, by the same majority of liberals, that DuPont Company must also yield its 63 million shares of G.M. stock, worth over $3.5 billion, within ten years. “We think the public is entitled to the surer, clearer remedy of divestiture,” explained the Court.
The impact of the decision was sharp. A selling flood of DuPont stock ensued with bids one-eighth off the last sale. DuPont closed 5½ points down; G.M., 2% points down.
But the real concern of the family was taxes. Existing income tax laws could collectively cost individual family stockholders well over a billion dollars. This was because distributing G.M. shares to DuPont’s shareholders was the only feasible way of divesting most of DuPont’s G.M. holdings. DuPont couldn’t sell all its holdings openly on the market. The average daily volume of General Motors on the New York Stock Exchange was only 28,100 at the time. DuPont’s sale of 63 million shares of G.M. stock over ten years would mean selling 25,100 shares daily, doubling the market’s volume. The market was unable to absorb this sale and still keep G.M.’s stock prices from falling. By the same token, secondary distributions on the market were deemed unwise, as most stock purchasers would not buy at the high prices of the first distribution, but would wait for the cheaper prices of the second distribution. The only recourse left was a distribution to Du Pont’s 210,840 shareholders. Each shareholder of 100 DuPont shares would receive 137 shares of G.M. To pay the resultant increase in income taxes, stockholders in upper income levels would have to sell G.M. shares.
This was the company’s main concern—as it had always been—the family. “We hope the present Congress will move promptly to protect these shareholders …,” 48 Crawford told the press on hearing of the decision. The New York Times understood the meaning of his words. “Legislation on the tax problem,” it commented, “is expected to have a much better chance in Congress as a result of the decision.”
Lending his helping hand in Congress was Delaware’s own Democratic Senator, J. Allen Frear. Frear introduced a bill that not only changed the designation of the divestiture from “ordinary” income to “capital gains,” but “modified capital gains,” and allowed Christiana’s divestiture of 18 million shares to be tax-free up to their original purchase value. This would save DuPont’s stockholders a total $530 million. Later Frear would be appointed to a vice presidency of Wilmington Trust, the DuPont family bank, and a seat on the board of Diamond State Telephone.
The bill found friends everywhere. Conservatives endorsed it as a protection of property rights. Liberals such as Senator Eugene McCarthy warned that failure to pass the bill “might have the effect of distorting operations of the two corporations, and of distorting the investment portfolios of holdings of many persons or corporations.”
But the biggest surprise was the support of President Kennedy. The DuPonts had opposed his candidacy in 1960, backing Vice-President Richard Nixon with the largest contribution of his campaign, $125,000. 49 Yet an aura of good feelings had developed between Washington and Wilmington during the Cold War, and this extended into the new Kennedy administration. In May 1961, the same month the Supreme Court handed down its final decision, Jacqueline Kennedy was seen at Winterthur being hosted by Henry F. du Pont (Henry, in fact, was appointed chairman of the White House’s Fine Arts Committee because of his expertise on antiques). But the real reason for the President’s support was the activity of DuPont lobbyist Clark Clifford.
For a cool $1 million (some Washington insiders insist the fee was closer to $2 million) the Du Ponts bought the services of this leading Washington lobbyist. It was an investment that soon paid high dividends.
While encouraging Crawford Greenewalt to personally lobby more than sixty Congressmen and administration officials, Clifford brought his own personal pressure down on the White House. This was no light matter for Kennedy. Clifford was one of the most powerful men in the country. He had married into the Kimball Arms Company, and his star had risen since his wartime association with Missouri banker Jack Vardaman landed him the post of special assistant to Vardaman’s old crony, President Harry Truman. One of the administration’s strongest opponents of the United Mine Workers’ strike, Clifford also drafted the Military Unification Plan of 1947, which concentrated power in the secretary of the renamed War Department, the Department of Defense. Through the next thirteen years, Clifford was one of the strongest proponents of the Cold War’s armaments race, and he was offered the directorship of the CIA (which he also played a central role in establishing in 1946) by President Kennedy after the CIA’s invasion of Cuba ended in humiliating defeat. This was a man whose corporate clients included I.T. & T., G.E., Hughes Tool (Howard Hughes), Phillips Petroleum, and the Pennsylvania Railroad. As a consequence, he enjoyed the confidence of Congressmen and Presidents, including Kennedy.
One day, while Greenewalt and his Du Pont lieutenants prowled the legislative halls, Clifford led a corporate cortege into the Treasury Department’s legal offices. There, Clifford had just begun presenting his case to Robert Knight, the Treasury’s general counsel, when a secretary interrupted: “Mr. Knight, the President is calling.”
Clifford turned to his assistants and advised, “I think it would be appropriate for all of us to leave the room.”
“Oh, but the call isn’t for Mr. Knight,” explained the secretary, “it’s for Mr. Clifford!” 50 Calls from the President, joked the others, follow Mr. Clifford at such opportune moments.
On February 3, 1962, President Kennedy signed the DuPont bill into law.
A month later Judge La Buy paid the DuPonts his final service. On March 1 he ruled that thirty-five of the seventy-five DuPont defendants would be allowed to receive their portion of 18 million G.M. shares held by Christiana Securities. In addition, all members of the family would be permitted to directly purchase G.M. shares then and in the future. La Buy also refused a government request for a permanent injunction against future DuPont-G.M. interlocking directorships and other related activities, insisting that only a ten-year ban applied.
This ruling was in direct violation of the administration’s own public posture and the Supreme Court’s intention. “It should be clearly understood,” President Kennedy had said to reporters when signing the tax-relief bill, “that neither the Congressmen nor I have approved a divestiture which will permit the stock of General Motors to pass through Christiana to the stockholders of Christiana. If the pass-through occurred, a large percentage of General Motors stock would be acquired by members of the DuPont family. This, it is argued, would mean that the DuPont family would still effectively control both DuPont and General Motors.” 51 La Buy’s decision allowed the family through its private trusts and in-laws to retain an estimated 17 percent holding, 52 well over the 5 percent defined later as a “controlling interest” by the House Banking Committee. 53 In opposition to this position, on March 10 Senators Paul Douglas and Albert Gore made public a letter they had sent to Attorney General Robert F. Kennedy, warning that La Buy’s “wholly inadequate” ruling would nullify the Supreme Court’s decision. At the time, even government prosecutors warned that the family would be able to retain a holding of at least 6 percent.
The Kennedy administration, however, refused to appeal.
La Buy’s ruling settled the case, but not Clifford’s lobbying. The DuPont bill had allowed Christiana Securities to distribute its G.M. holdings as a “return of capital,” which simply meant getting your money back, a tax-free transaction. But the legislation stipulated this tax-free bonus only insofar as the value of the G.M. stock returned to the shareholders equaled what the shareholders paid for Christiana stock. Any value above that was naturally taxable as a capital gain.
By 1964, when the last 8.5 million G.M. shares were to be distributed, this tax-free limit had already been exhausted by the two previous distributions. And since G.M.’s stock price had nearly doubled since 1961, from $45–55 a share to $100 a share, the DuPonts were facing almost twice the capital gains taxes they would have had to pay for the same shares in 1961.
Again Clifford silently worked his way into the highest circles, this time of the new Johnson administration, most of whom were still Kennedy appointees. On July 4, 1964, he met with Treasury Secretary C. Douglas Dillon and argued for a change in the tax rules to permit a tax-free non-pro-rata distribution. In this way, younger DuPonts and recent buyers of Christiana could get distributed G.M. stock tax-free, since Christiana stock in recent years had sold high enough to absorb the additional G.M. stock value. Older, longer-term holders of Christiana, who had bought their Christiana stock years before at lower prices, would simply not participate in the distribution, thus avoiding any capital gains tax.
The greatest opposition to this proposal came from the tax lawyers of the Treasury, who honestly questioned why the DuPonts should be given special relief. Again Clifford exerted pressure. In the early fall he visited the Treasury’s legal offices, where Fred Smith had replaced Robert Knight as general counsel. And again he pulled his “call to the President” routine (Clifford’s closeness to the President is exemplified by the fact that he was later appointed Secretary of Defense by Johnson), specifically asking Smith if he could use his private office to make the call. The pressure was on.
A few days later Robert Knight received a phone call at his Wall Street law office,Shearman and Sterling. It was Clark Clifford. “He asked me,” Knight later testified before the Senate Finance Committee, “whether the fact that his clients produced a lot of revenue was the kind of factor that would permit a reconsideration” 54 of a disproportional distribution. Clifford warned that Secretary Dillon might be calling Knight back soon for a consultation on the subject. A request from so powerful a financial figure as C. Douglas Dillon, heir of the founder of Dillon Read & Co., Clifford knew, could not be ignored by any ambitious Wall Street lawyer such as Knight.
On November 2 Dillon did just that, and two days later Knight was in Washington being briefed by Clifford. By the following week, on November 10, Knight was in a joint meeting with Treasury and Christiana lawyers, and ten days later he publicly reversed his 1962 decision, recommending the Clifford plan. In December the Treasury Department announced that it, too, was reversing its previous policy. The DuPonts had won.
Almost immediately, challenges arose. Senator Albert Gore demanded and got a public hearing. Dillon hurriedly claimed it was his policy to avoid personal knowledge of specific tax cases. Knight explained that the original ruling was based on Congress’s anticipation of a specific tax collection of $450 million based on G.M.’s $55 a share. The doubled G.M. value, he explained, would still produce this amount, despite the tax free decision. Gore, among others, countered that Congress had not specified any amount. The $450 million estimate was, in fact, based on updating an earlier estimate of $350 million, when G.M. stock was only $45. Knight’s claim simply did not stand up to the record of the Congressional debate over the DuPont bill at the time. Moreover, what if G.M.’s stock had fallen? Had Congress ever intended to tax additionally to collect its full $450 million estimate? Never. The Treasury’s ruling, charged Gore, was “negotiated and issued in secrecy and contrary to the clear intent of Congress.” 55
Yet it was not changed. “Very frankly,” said Senator Douglas, “it seems to me this has been a heads-I-win, tails-you-lose ruling—heads Du Pont wins, tails the government loses.” 56 The government, in fact, lost an additional $56 million to $100 million to the Du Ponts.
All told, the DuPonts saved an estimated $2 billion in taxes. Clifford certainly earned his famous fee.
In 1965 the DuPont Company completed its divestiture. Twenty-three million G.M. shares had been distributed in 1962, 17 million in 1964, and now the last 23 million. At the stockholders meeting on April 12, 1965, Lammot du Pont Copeland, who was the new president, proudly announced that owners of distributed G.M. stock were now getting a higher combined income from both stocks than they had formerly received through just DuPont. What he did not mention was that this was partly due to G.M.’s spurt of growth after being relieved of DuPont’s commercial yoke.
DuPont, meanwhile, tried to prevent selling of its stock by increasing dividends from $7.50 in 1961 to $7.75 in 1962. Its net income actually rose during these early years of the divestiture, from $418 million in 1961 to $472 million in 1963, a 12 percent rise. There are reasons for this rise, reasons that had much to do with Lammot DuPont Copeland’s emphasis on expanding overseas investment where consumer markets, cheap labor, and lower taxes reside, reasons that also had much to do with Copeland’s emphasis on building a direct consumer market in the United States. The early success of these shifts marked Copeland’s rise within the family and his assumption of the presidency in 1962. But the decline in earnings that the company consistently suffered from 1963 on was in good part due to the loss of G.M. dividends—by 1965, more than $300 million worth. Copeland was undoubtedly right about individual family shareholders earning more through their variety of stocks, but the company itself had suffered what chairman Crawford Greenewalt aptly described to the stockholders as “the end of an era.” 57
Some 300 formally dressed DuPonts, including seven of Irénée’s eight children and most of his thirty-five grandchildren, gathered in the shimmering Grand Ballroom of Hotel DuPont to pay homage to the clan’s Grand Patriarch on his 80th birthday. While magazine photographers recorded the rare assembly for the entire country, the DuPonts danced, filled themselves with cake, and drank chilled champagne. Irénée seemed the happiest of all, puffing on his cigar as he made the rounds, amusing Walter Carpenter, Jr., and Mrs. A. Felix, Jr., at their table, joking with son-in-law Bruce Bredin on the dance floor. As spry as ever, old Irénée whirled through almost every dance during the evening. Finally, at 1:30 A.M. a daughter told him the party was over. “Oh,” he countered with a grin, “I thought it had just begun.” 58
That remark probably best depicts Irénée’s general outlook on life. He once described his main contribution to the company as “optimism, when it was needed.” 59 To a man so wealthy as Irénée DuPont, such an attitude was not difficult to maintain, even in his waning years.
From Granogue, his magnificent hillside mansion outside Wilmington, Irénée daily kept close tabs on DuPont Company developments, often being consulted as a patriarch should be, by his son-in-law, Du Pont president Crawford Greenewalt. But it was at Xanadu, his vast Cuban estate, that Irénée spent the most enjoyable months of his last years.
Xanadu was Irénée’s own private empire in a foreign land, a 450-acre ocean-front estate carved out of the Cuban jungle, complete with a nine-hole golf course.
Irénée’s interest in Cuba extended back to the Twenties, when the Florida land boom sparked interest also in Cuban real estate. Irénée chose one of the most beautiful areas on earth, the northern coast of Cuba’s Matanzas Province, for the materialization of his dream of “Xanadu,” the mythical kingdom of Coleridge’s “Kubla Khan.” Soon bulldozers were clearing away the palm trees and workers were putting in the first sewer system of the region, later to be known as one of the most exclusive resort areas of the world, Varadero Beach. To guard the boundaries of the estate, a tall stone wall was built in the gunpowder-making architectural tradition of Delaware’s first family. Outside the wall were lined rows of stone houses for Xanadu’s fifty servants, who were undoubtedly some of the best-paid Cubans on this island of poverty and de facto American colonization.
The only break in Xanadu’s stone wall was a huge iron gate, through which Irénée would ride his limousine when returning from tours of the island or trips to Havana, then the “fun city” of American corporate leaders. Through these gates Irénée would enter his estate and ride along his private two-lane paved road, traveling over hundreds of hilly acres of manicured green grass and swaying palm trees, until finally his limousine climbed up the last high hill, on which stood his imposing twenty-room mansion.
Irénée’s hacienda was one of the most elegant pieces of architecture in Cuba. Floored with Italian marble, paneled with mahogany woodwork, and roofed with Spanish tiles, the mansion became the scene of dinner parties for some of the most famous and privileged people of the world. At any moment, Irénée might arrive unannounced with furred and jeweled guests, emerging from his plane on the estate’s private landing strip or walking off his 60-foot yacht Icacos. Although Irénée’s parties were often unanticipated, Xanadu would always be ready to entertain his and his guests’ slightest whim. The rambling house, although furnished in poor taste with cheap shoddy furniture, was four stories high, the first with an 18-foot-high ceiling designed to make Irénée seem powerful and others seem small. It worked.
Here Irénée was undisputed lord and master, residing in Cuba four months out of every year, having his cigars lit by Cuban servants, fishing with Cuban dictators Machado and Batista, swimming while wearing prescription-lensed goggles so he could enjoy the details of underwater coral life in a country where most of the population that needed glasses went without.
But the most bizarre of Irénée’s pastimes was his large collection of iguanas. Irénée spent thousands of dollars to breed, feed, and keep these crocodile-like lizards in specially constructed pens. Some of these tough, vicious lizards grew to 3 feet in length under Irénée’s loving care, and more than once the old industrialist was seen marching about with one of these ugly beasts crawling next to him on a leash. Irénée derived a peculiar kind of pleasure from these lizards. By barking a command, he could make them all come out of their pens and surround him, standing at attention. He had trained them, on another command, to attack a target to kill. It was an appalling example to the Cubans of the degeneracy of the idle rich. In a moment of the bizarre captured for history, a Life photographer in 1957 recorded old Irénée feeding his iguanas papaya from a jar at a time when most of the Cuban population was suffering from malnutrition.
Next to the U.S. ambassador, Irénée was probably the most powerful American in Cuba. When James Roosevelt visited Cuba on an official mission for his father in 1937, his first visit was to the Cuban Secretary of State; his second, and last, was to Xanadu. Once, the story goes, Irénée even had the Cuban president, General Fulgencio Batista, denied entrance to the estate. Yet such haughty insults didn’t prevent the Cuban dictator from awarding the old industrialist with the medal of the Order of Carlos Manuel de Céspedes in 1954. Irénée, too busy to attend the honors personally, proudly accepted from afar.
In 1957 the Master of Xanadu played host to sons-in-law Crawford Greenewalt and Colgate Dardin, the latter a Du Pont director and president of the University of Virginia, while at the very same time, some miles away, Fidel Castro and Che Guevara fought a desperate guerrilla war against Batista’s armies. Two years later Castro triumphantly entered Havana and Irénée’s reign over Xanadu came to an end. Today Xanadu is “Casa DuPont,” a public restaurant and museum where Cubans see for themselves how American corporate leaders once lavishly lived in their land.
Although Cuba’s new revolutionary government refused to give Irénée compensation, the U.S. Congress did. Delaware’s Senator John Williams, the “conscience of the Senate,” sponsored an amendment to a tax bill that allowed a $2.1 million tax write-off for the family.
Xanadu was not Irénée’s greatest loss, however. Irene, his cousin-wife, died in 1961, leaving her octogenarian husband heartbroken. Two years later Irénée followed her to Sand Hole Woods. He was 86.
Most of Irénée’s $400 million fortune had been distributed among family trusts and foundations before he died. Control over the remaining $40 million estate was given to three trustees, Crawford Greenewalt, Irénée DuPont, Jr. (his only son), and son-in-law Ernest May (who subsequently lost control, in a bitter suit against the others). Of the three, lean, serious-minded Iréne, Jr., who had succeeded to his father’s seat on DuPont’s board in 1959, clearly emerged as the rising new power in the family. But it was not Irénée, Jr., who held the spotlight when the family gathered at Sand Hole Woods to bury the old patriarch. Rather, it was his cousin, Lammot DuPont Copeland, the new president.
The son of DuPont director Charles Copeland and Irénée’s sister Louisa, Copeland
did not make the most impressive of appearances; his round, pudgy face and short black
hair were in sharp contrast to his trim, handsome predecessor, Crawford Greenewalt.
Only the sharp, penetrating eyes shrewdly peering with a touch of humor from behind
light-rimmed glasses betrayed the analytical mind that had propelled Copeland to the
top among a score of able relatives in the company. Imbued with a complete devotion to
the company, and a pleasant personality, Copeland had risen steadily in the company,
first as successor to his father’s post as secretary, where he headed the new
stockholder’s relation program, then as finance committee chairman (the traditional
stepping-stone), and finally president in 1962.
Copeland’s personal wealth no doubt added to his stature. Enjoying the benefits of many inheritances, Copeland was one of DuPont’s largest stockholders by the time of his ascension to the presidency; he held 190,941 shares of DuPont common and 338,348 of Christiana Securities, making, with other corporate holdings, his total worth somewhere between $200 million and $400 million. Residing in Mt. Cuba, his luxurious 3,000-acre estate outside Wilmington, Copeland avidly collected the works of such painters as Charles Baskerville and was a member of the exclusive Walpole Society (an organization of American antique connoisseurs, whose membership was limited to thirty), president of Henry F. DuPont’s Winterthur (Museum) Corporation, and treasurer of the family’s Eleutherian Mills-Hagley (Library) Foundation. To anyone familiar with DuPont wealth, this seemingly shy hunter and fisherman was no financial lightweight.
Yet what most marked Copeland’s rise was his ability to listen attentively and answer forthrightly, often with a humorous approach. And during the Fifties the man he listened to most was president Crawford Greenewalt. “Mr. Greenewalt and I look at life from a similar point of view,” 60 he commented after his appointment as president—and one of Greenewalt’s foremost projects in the late Fifties had been overseas expansion.
Living off the fat of General Motors and its own earnings, DuPont was late in joining the tremendous postwar surge of corporate investment abroad. The embarrassment of its cartel agreements with I. G. Farben, despite its fervent denials of their existence, forced DuPont to release “exclusive” rights on I. G. Farben nylon patents to the Alien Property Custodian in 1947. These patents, however, were described by one official as “not of importance and of pretty foggy” utilization. In other words, DuPont really lost nothing.
On September 28, 1951, DuPont and Remington Arms had been convicted of conspiring with Britain’s Imperial Chemicals, Ltd. to divide the wartime markets in munitions, chemicals, and small arms. On the basis of the 1939 agreement, the government also named West Germany’s I. G. Farben as an accomplice, but not a defendant. Throughout the trial, Lammot DuPont, Walter Carpenter, and Charles Davis claimed that their innocence rested on their acting as corporate executives under the direction of the DuPont board. But the image of Lammot DuPont being a puppet for anyone was simply unconvincing. Although federal judge Sylvester Ryan found “that the nylon agreement of 1939 was illegal because it was part of a licensing scheme, accomplished by concerted action of DuPont and I.C.I. for allocation of territories and pooling of patents embracing the whole of the nylon manufacturing industry and the whole of the nylon technology,” 61 Lammot, Carpenter, and Davis received no penalties. “Their acts were not calculated to bring them direct personal gain,” the judge held, while in the same breath admitting, “any profit which they might have received came through stock ownership (and of this we have no proof).”
To settle this case so happily, DuPont agreed to release nylon patents for free. The newspapers gleefully reiterated the government’s contention that this would break DuPont’s nylon monopoly. Actually, nylon production processes were no secret, but its operation required huge investments which up to then had scared away most everyone but the giant from Wilmington. To avoid another anti-trust suit, DuPont allowed a small company in Florida, Chemstrand, to take a license for nylon production. Then Chemstrand was bought by a larger chemical firm, Monsanto, which was willing to borrow enough capital to give DuPont a run for its money with improved technology. By 1967, twenty-three other companies had joined the nylon race.
Six years followed the severing of profitable arrangements with I.C.I. before DuPont adopted a serious program of capital expansion overseas. By then DuPont was the tortoise in the chemical industry’s hot race to go abroad after World War II. Although the leader in exports, DuPont lagged in foreign plant investment, and rising U.S. taxes and inflation were making it more and more difficult to generate the traditional 10 percent yield on domestic plant investment. In contrast to DuPont, Monsanto increased its overseas assets from $57 million in 1953 to $160 million in 1959, reaping the high profits of cheap foreign labor and the revived European market, and becoming a leading competitor.
DuPont’s growing move abroad paralleled its growing legal defeats in attempting to hold onto G.M.’s annual dividends. In 1957, the year of the Supreme Court divestiture decision, DuPont established its first wholly owned foreign subsidiary in Holland and began construction on a $30 million neoprene plant in Derry, Northern Ireland. This move was an attempt to break into the Common Market, where revived European industry and other American corporations threatened the markets DuPont sought. By having a toehold inside Europe, the DuPonts expected to be able to cash in on the elimination of tariff walls inside the Common Market.
The company by then had set up a new style of overseas operation, shifting from the previous emphasis on technological exports it had maintained under the I.C.I. agreement, to more profitable and direct product exports. From 1953 to 1957 this export trade sharply grew from $100 million to $146 million. With foreign and American competition threatening these new markets, Wilmington increasingly saw the need to protect them. The impending loss of G.M. earnings made this concern even more paramount.
In 1958 DuPont made its first full commitment to major overseas expansion. W. Sam Carpenter III, the ruggedly handsome middle-aged son of Walter Carpenter, Jr., was made general manager of the new International Department. The International Department was no mere revitalized Foreign Relations Department. Its scope was wider and its concern more direct and detailed, because DuPont was now to be physically present in foreign lands. In recognition of this prospect, Carpenter’s department was put on a level with the industrial department in the company hierarchy, responsible directly to the executive committee for management and financial returns on all DuPont foreign enterprises.
As the International Department had no technological resources of its own, Carpenter had to rely on specific industrial departments for know-how and technically trained personnel to run the plants abroad. In return, Carpenter advised the industrial divisions on the best use of foreign markets for their export sales. In this way, DuPont’s capital market aided the commodities market in a coordinated system of exploitation.
Probably most revealing of Wilmington’s foreign ambitions, however, was the worldwide scope of the new department’s concerns. Two geographic divisions were immediately set up, one covering all of Latin America, and the other, Europe. For each manager stationed overseas to run the plant operations, Carpenter had a deputy manager in Wilmington who integrated the domestic departments with overseas activities. Carpenter also set up two smaller staff divisions concerned with future overseas business: (1) the Development Division, to handle the administrative details of licensing and to find further opportunities for DuPont ventures overseas; and (2) the Foreign Trade Division, to maintain representatives who searched for markets in areas where there was not sufficient volume to warrant a manager for each of DuPont’s products.
It was a complex operation, but a necessary one.
Undaunted by 200 Irish construction workers carrying placards reading “Du Pont: the dictators of 1958” and “Freedom before Du Pont domination,” striking over the arbitrary dismissal of a shop steward, Carpenter pushed through the completion of the Derry plant and customer service lab for Great Britain in 1959. By then DuPont had a finishes plant in Venezuela; Freon refrigerant plants in Brazil and Argentina; a paint plant in Cuba (subsequently lost to the revolution); a finishes plant in Belgium; an Orion plant in the Netherlands; and a key sales subsidiary in Switzerland for marketing DuPont products throughout Europe. Canada, Ltd., another DuPont subsidiary, was also going well, increasing its sales from $56 million in 1954 to $96 million in 1959. Carpenter had also begun plans for expanding the nylon and cellophane production in Argentina, and building a titanium dioxide plant in Mexico.
DuPont’s overseas invasion was now in full swing.
Crawford Greenewalt gave this expansion every encouragement. But the one person most closely involved with overseeing and judging Carpenter’s results was Greenewalt’s protégé, the chairman of the finance committee, Lammot DuPont Copeland.
By the time he rose to the presidency, Copeland was committed to the concept that the future progress and well-being of DuPont was greatly linked to its overseas expansion. “The key to success,” he told the National Convention of the Foreign Trade Council in November 1963, “lies first with a lively research establishment. But an enterprise must also have an aggressive marketing organization attuned to world markets and able to move as promptly with its new product abroad as it does at home. This is the course we have charted for DuPont.” 62 It was a course that had already produced results. In 1954 only 6 percent of DuPont’s sales were foreign. When Copeland spoke in 1963, foreign sales had risen to over 15 percent.
But more important was the fact that DuPont’s foreign plants were already returning a higher percentage increase in profits each year than Wilmington was able to increase exports abroad. Over 16,000 foreign workers were now working for DuPont in thirtyfive plants in thirteen different countries. Du Pont was no longer tied to mere export trade. Now the race for overseas markets involved open exploitation of foreign labor.
Copeland himself explained this foreign expansion as the result of market competition. “Since there are other potential producers in each of our product lines, a competitor will build a plant there if we don’t.” And what of the underdeveloped countries of Asia, Latin America, and Africa, the former victims of colonization and imperialism? “In the developing countries, there are other factors,” he elucidated, “close government control of the economy which closes the border to imports when the first local producer is established, tariffs and other trade restrictions. The point is that the export business in both these areas will be lost in any event. But if we build the plant, we lose the market to ourselves.” And the profits, of course, are not returned to the local economy, but are forwarded to Wilmington, chemicals’ new Rome. Copeland underscored this fact. “In the last ten years,” he told the assembled industrialists, “the DuPont Company’s own favorable balance of international payments adds up to the scarcely insignificant figure of $1.3 billion. Moreover, in the future, despite what we anticipate will be continued heavy investment abroad, we expect our balance of international payments will be even more favorable. While the figures are not exactly comparable, the chemical industry as a whole has had a favorable balance of payments of $9 billion in the last ten years, and, in recent years, this balance has been more than $1 billion annually.” In some cases, in the advanced industrial countries, Copeland pointed out, increased exports even paid for the new plants. “For example, the announcement of our synthetic rubber and acrylic fiber plant in Europe a few years ago resulted in increased export sales of about $63 million by the time the plants went on steam. This amount far exceeded the cost of the new plant.”
But in the underdeveloped countries the situation was far different. Centuries of European colonialism and economic imperialism had prevented the development of indigenous industry. Without these industries, increased buying of DuPont products could not be stimulated merely by Wilmington’s announcing plans to build a local plant. Still suffering from the crippling polio of foreign exploitation, the underdeveloped countries offered only two opportunities for profit: cheap labor and raw and crude resources. But both opportunities were capable of returning a higher yield on plant investment than the United States or Europe, since costs were lower. Accordingly, by 1970 half of DuPont’s overseas plants were in Latin America.
Copeland’s extraordinary and frank address in 1963 marked the beginning of a new era for DuPont, an era of overseas investment. It also marked a change in the family’s political policies. Only a decade before, the DuPonts had been in general opposition to increased U.S. foreign aid to underdeveloped countries. DuPont director Colgate Darden, later Irénée’s son-in-law, had served on the Fairless Committee, named after its chairman, Benjamin Fairless of U.S. Steel. Joining John L. Lewis, Fairless, and the chairmen of Proctor & Gamble, the New York Herald Tribune, and the Bank of America, Darden attacked most of the State Department’s foreign aid programs.
With DuPont’s personal involvement in overseas investment, Wilmington’s foreign policy changed dramatically, accepting the basic arguments of corporate liberalism. U.S. foreign aid was a means to encourage political stability in the revolutionary tempest sweeping the underdeveloped countries, Copeland explained. Corporate investment overseas was now advanced by Wilmington as “humanitarian.” But in his entire speech, Copeland devoted only one sentence of lip service to this aspect, before going on to the more important concern of “the eventual development of tremendous, profitable markets.… As businessmen, however, we also recognize that, in most of these areas, markets are relatively small, and there is often a high degree of economic and political instability. It seems to me that this presents an opportunity to our government and to other governments which have undertaken programs of economic assistance to the emerging nations. The objectives and the implementation of these programs should be sharpened up to foster political and economic stability so that private capital will be attracted to these areas.”
To DuPont, Washington should use foreign aid as a bludgeon of bribery to force economically desperate governments to maintain law and order in the face of popular uprisings or creeping socialism. “… we have the freedom and responsibility to specify the terms on which we will assist, and we should exercise this fully. Once stability or indications of it have been achieved in the developing countries, private capital, both domestic and foreign, will be attracted to the obvious market opportunities. We should make certain that this is well understood because it should act as an additional incentive for the establishment of stability.
“DuPont already has invested quite substantial amounts in some of the developing countries, and we are prepared to increase investments for profitable projects when we find solid evidence of political and economic stability. Mexico is a good example of what I mean.” Mexico, with a so-called “nationalistic” government, was indeed a good example. Although Mexican law stipulated that all foreign companies must be majority- owned by Mexican nationals, a special deal was struck in the case of DuPont. Three plants, Policrón de México, S.A., Pigmentos y Productos Químicos, S.A., and Tetraetilo de México, S.A., were set up as companies with 49 percent DuPont control. In exchange, DuPont Company was allowed to establish two wholly owned subsidiaries, Colorquím, S.A., and DuPont, S.A., which, with Endo Laboratories, Inc., another DuPont subsidiary, ran and wholly owned four plants throughout Mexico. This effectively put Mexico’s chemical industry under Du Pont domination.
No longer would Wilmington cry “communism!” when Asian, Latin American, or African governments built their own public projects. “We must be prepared to accept the fact that a significant proportion of economic and social progress in the developing countries will be achieved through government initiative,” said Copeland. “These nations need roads and dams and schools and health facilities on which a sound economic system can be built. And frankly, I am not concerned by the use of government enterprise in the developing countries if it is limited to these purposes and accompanied by the growth of political and economic maturity. But once the basic facilities exist, the developing nations will have to depend upon private capital to fuel their engines of human progress.”
Copeland’s own remarks revealed that a new political maturity in the family had been reached, a maturity of class consciousness that understood the use of state power to financially develop political order and the economic preconditions for business expansion abroad. Forty years before, Herbert Hoover had made a similar recommendation regarding the financing of public works abroad, only he had suggested the use of corporate funds. Now the American taxpayer, the bulk of whom were of the middle and working classes, paid the tab for the corporations.
Copeland’s address was the most important public statement by the DuPont family since Lammot DuPont’s dramatic offer of reconciliation to FDR in 1937, and in many ways it represented an extension of the Wilmington-Washington détente that had developed since then. It was fitting indeed that Copeland’s speech was not to DuPont stockholders, or even to the chemical industry as a whole, but to a national convention of some of the most sophisticated corporate leaders in the country, gathered to celebrate the fiftieth anniversary of the National Foreign Trade Council, a corporate organization founded just before World War I to promote the first big investment drive of American monopolies overseas. And it was an indication of the political sophistication the family had reached that Copeland had defined the investment problems of particular corporations as a national problem. Copeland by then was firmly convinced that not only the destiny of DuPont, but also of the present system of U.S. government, the country, and capitalism itself, were tied to overseas expansion. “We must certainly take accurate bearings of the vital questions of exports, foreign investments, the U.S. balance of payments deficit, and proposed tariff reductions under the Expansion Act of 1962. And any course that we set obviously must serve the broad, national interest of the United States and the countries with which our foreign trade is conducted as well as our corporate interests.” No longer was DuPont the only concern; now a coordinated system of overseas expansion was necessary. “The course we chart in world markets will determine, in part, the profitability of our own enterprises and the economic strength and stature of the United States abroad.… If we don’t participate in the rapidly expanding markets abroad, we will soon be the victims of economic isolation.” Overseas markets, in a general sense for all U.S. business, must be protected and extended at all costs.
In this regard, Copeland was particularly disturbed by the Kennedy administration’s failure to consult the DuPonts before negotiating over tariffs with economically revived European capitalism. Those negotiations with west European powers resulted in lower chemical tariffs that hurt DuPont’s markets. “It should be pointed out to the officials responsible for these negotiations that such attrition is not a simple and painless matter for industry and its people. It is not something which can easily be dismissed in high sounding words about the broader national interest. A few months ago, DuPont was forced out of the indigo dye business by foreign competition.”
Three days after Copeland’s speech, President Kennedy was assassinated; the new Johnson administration almost immediately began preparing for massive military escalation in Vietnam. Although Kennedy’s tariff agreements with Europe were not reversed, his reservations about fully engaging in an Asian war were. For Johnson, Indochina was the first domino of the Asian market, an opinion ideologically strengthened by the fact that the anti-colonial revolution in Indochina was led by communists who had fought the Japanese and the French.
This “domino” theory and all measures to protect U.S. markets abroad were accepted by the DuPonts. The CIA-financed military overthrow of President Goulart, who threatened to limit foreign profits to 10 percent in Brazil (where DuPont had a subsidiary and two large plants), was viewed with relief in Wilmington. So also, Johnson’s intervention in 1965 with 20,000 “neutral” marines to crush a popular revolt in the Dominican Republic, the “sugar bowl” replacement for Cuba, was viewed warmly by the family. Significantly, American Sugar & Refining Company, in which the DuPonts held a substantial interest, used the island as a resource for its sugar production.
That same year, another CIA-backed military coup overthrew Indonesia’s President Sukarno. Sukarno had resisted political demands made by the United States in exchange for foreign aid, demands that would have ended his nationalization of U.S. and European corporate properties. Sukarno threatened to found a new United Nations of underdeveloped and exploited countries. He was preparing to replace Indonesia’s U.S.- trained army with a people’s militia, when the army struck first in 1965. Over one million of Sukarno’s followers died in one of the greatest bloodbaths in history. The New York Times reported that the carnage was so massive that bodies were even clogging the country’s canals. As a result, U.S. corporate properties, including the rubber plantations of DuPont-controlled U.S. Rubber Company, were saved from public ownership.
But that was not all. The new regime of General Suharto put political prisoners to work on the rubber plantations. NBC news, on February 19, 1967, at 6:30 P.M., captured the scene of political prisoners working American corporate-owned rubber fields in Sumatra and Borneo as slave labor under the guns of Suharto’s soldiers. The two biggest American corporations on those islands were Goodyear and the U.S. Rubber Company. Two years later Alex Campbell, managing editor of the New Republic, upon visiting the “New Order” of Indonesia, reported, “The government plans to send some 60,000 [political prisoners] to forced labor on rubber plantations in Borneo. Perhaps 10,000 have already gone there. They are said to be dying like flies. Meanwhile those still in the camps may be slowly dying of starvation.” 63 Among the rubber plantations reportedly involved were those of U.S. Rubber Company, which owns 44,000 acres in Indonesia, and a subsidiary, U.S. Rubber Sumatra Plantations.
In July 1969 President Nixon, who in Foreign Affairs magazine, October 1967, termed Indonesia, “containing the region’s richest hoard of natural resources,” as “the greatest prize in the Southeast Asian area,” personally flew to Indonesia to endorse the “progress” of General Suharto. Today, in violation of the same international accords that were used at Nuremberg to convict Alfred Krupp for using Nazi concentration camp prisoners in his munitions plants, U.S. Rubber (now Uniroyal) is allegedly benefiting from the use of thousands of political prisoners as slave labor in the rubber fields of Indonesia. It is unlikely that J. Simpson Dean, brother-in-law of Irénée DuPont, Jr., is unaware of the source of this plantation labor. Dean, a director also of Wilmington Trust, the DuPont family’s bank, sits on the board of Uniroyal with a loyal family lieutenant, J. W. Chinn, Jr., chief executive officer of Wilmington Trust and a director of Irénée DuPont, Jr.’s Greater Wilmington Development Council. Other DuPonts who are major stockholders in Uniroyal are Lammot DuPont Copeland, Pierre S. DuPont III (Lammot du Pont’s eldest son), George P. Edmonds and Colgate Darden, Jr. (Lammot and Irénée DuPont’s sons-in-law), and until his death in 1970, Henry B. DuPont. Congressman Pierre S. DuPont IV also owns over $140,000 worth of Uniroyal common. All together, the family holds a controlling block of 18 percent of Uniroyal stock.
The Indonesian coup may have been lucrative for the DuPonts, but the return would have been minuscule compared to the immediate financial gains won through U.S. intervention in Indochina.
During the 1964 presidential campaign Barry Goldwater’s call for the bombing of North Vietnam won him $71,000 in DuPont family donations, his third largest contribution. 64 Polly Buck, daughter-in-law of Alice DuPont, even called the roll of states at the national convention in San Francisco’s Cow Palace that led to Goldwater’s nomination. Polly, in fact, was the secretary of the Republican National Committee.
When the “liberal” alternative, President Johnson, carried out Goldwater’s threat the following year, Wilmington applauded with enthusiasm. In the heat of the 1965 escalation, the American Conservatives Union pushed for full invasion of North Vietnam and the overthrow of its government. The president of the ACU was Lammot DuPont Copeland, Jr., who was also national treasurer of the arch-conservative Young Americans for Freedom from 1962 to 1966.
Most of the DuPonts quietly shared young Copeland’s enthusiasm for intervention, but steered clear of the publicity hazards of open promotion. The pro-war leaders in the family were Lammot DuPont Copeland, Jr., his father, Lammot du Pont Copeland, Sr., R. R. M. (Bobby) Carpenter, Jr., and P. S. DuPont III, who was a member of the ultraconservative Freedoms Foundation. The DuPonts well understood that Vietnam was the controlling hub of an area—as Secretary of State John Foster Dulles put it in 1954, the first year of direct U.S. intervention—“rich in many raw materials such as tin, oil, rubber, and iron ore. The area has great strategic value.” 65
A year before, on August 4, 1953, President Eisenhower himself had told a conference of the U.S. state governors in Seattle: “Now let us assume that we lost Indochina.… The tin and tungsten that we so greatly value from that area would cease coming.… So when the United States votes 400 million dollars to help that war, we are not voting a give-away program. We are voting for the cheapest way that we can to prevent the occurrence of something that would be of a most terrible significance to the United States of America, our security, our power and ability to get certain things we need from the riches of the Indochinese territory and from Southeast Asia.”
By 1965, Henry Cabot Lodge, Ambassador to the U.S.-installed Diem dictatorship in southern Vietnam, addressed the exclusive Middlesex Club of Cambridge in similar terms. “Geographically,” he was reported saying by the Boston Sunday Globe on February 28, 1965, “Vietnam stands at the hub of a vast area of the world—Southeast Asia—an area with a population of 249 million persons.… He who holds or has influence in Vietnam can affect the future of the Philippines and Formosa to the east, Thailand and Burma with their huge rice surpluses to the west, and Malaysia and Indonesia with their rubber, ore, and tin to the south.… Vietnam thus does not exist in a geographical vacuum—from it large storehouses of wealth and population can be influenced and undermined.”
But an aspect of more concern to the DuPonts was the potential Indochina held for capital investment. As Jules Henry explained in the Nation: “The establishment throughout Southeast Asia of industrial complexes backed by American capital is sure to have a salutary effect on the development of our foreign involvement: the vast land’s cheap labor pool will permit competition with the lower production costs of Chinese and Japanese industry, which have immobilized our trading capabilities in Asia for many years.… The destruction of the Vietnamese countryside is the first, and necessary, step to the industrialization of Vietnam and the nationalization of its agriculture.” 66 [Oh yeah plenty of humanitarian outlook in that statement..geez DC]
“After the war,” asserted Arthur Tunnell of the Saigon branch of Investors Overseas Services, “there is going to be a big future for American businessmen here.” 67 First National City’s vice-president Henry M. Sperry agreed. “We believe we’re going to win this war,” he said, “… Afterwards, you’ll have a major job of reconstruction on your hands. That will take financing, and financing means banks.” 68 That was in 1965. Within five years DuPont established DuPont Far East, Inc., with branch offices in Hong Kong, Bangkok (Thailand), Taipei (Taiwan), and Tokyo (Japan). In Chiang Kai shek’s Taiwan, where labor receives very low wages, Wilmington also set up DuPont Taiwan, Ltd., with a plant busily turning out “Mylar” polyester film. In Japan DuPont had already bought 50 percent interest into two Mitzui Chemicals subsidiaries and established 50 percent interest in two other companies, Showa Neoprene KK and Tokyo Products Company, Ltd. In addition, DuPont was just expanding its market in Australia, where a subsidiary manufactured and sold pigments, photographic products, and urea herbicides.
These investments all underscored the DuPont’s growing stake in the Asian labor market and hopes for future expansion. Other family interests were also looking to the East. Uniroyal then owned (and still does own, under “perpetuity” leases) some 30,000 acres of crude rubber plantations in Malaysia, a former British colony directly below Vietnam. Uniroyal also owns plants in India and Japan, where it also has controlling interests in Kaisha Company and Sumitomo Naugatuck Kabushiki Company.
DuPont Company lent itself well to the Vietnam war effort, again, as in previous wars, for a price. The escalation years of 1965 and 1966 resulted in the highest earnings ever achieved by the company, and dividends of $6.00 and $6.75 per share. As Vice President Henry B. DuPont once put it while addressing the Virginia State Chamber of Commerce, “National Security must not be auctioned to the lowest bidder.… There are no bargains in the safeguarding of our freedom.” 69
There were especially no bargains from DuPont for GI’s in Vietnam. DuPont IMR
(“improved military rifle”) powder made at the Carney Point, New Jersey, plant was
linked to the infamous jamming of M-16 rifles during combat. The DuPont powder left
a residue in rifles which caused the lethal jammings. Finding a higher rate of malfunction with DuPont powder in tests in Panama, where conditions are similar to
those in Vietnam, Secretary of Defense Robert McNamara reluctantly ordered a switch
to Olin Mathieson in 1968.
70 But the DuPonts were not hurting. Other war contracts,
totaling $171 million for 1968 alone, soon found their way to Wilmington. Again, as in
the past, it helped to have a friend in Washington. Johnson’s new Secretary of Defense
was none other than former DuPont lobbyist Clark Clifford. [And if by memory serves me correctly this same Clark Clifford would play a major role in the BCCI scandal of the 80's]
Although Wilmington has not released figures of its profits from the Vietnam War, its own 1966 Annual Report confirmed that “the Department of Defense military buildup has resulted in the increased use of DuPont commercial products.” Here are the products specifically mentioned: textile fibers, packaging films, photographic films, plastics, dyes, methanol and formaldehyde, elastomers, Freon fluorocarbon products, protective fabrics and finishes, and petroleum chemicals. In addition, the company noted that “increased demands for military explosives and related specialties have resulted in accelerated schedules for increased quantities of products.” 71 That year DuPont’s sales scored a new record: $3.19 billion. There is little doubt that the Pentagon’s spending had much to do with stimulating the economy, which had recently been stagnating for lack of markets. DuPont itself received a massive injection of military adrenaline, scoring $161 million in war orders in 1966, up from $69 million in 1964. 72
The following year, 1967, DuPont announced it was furnishing the U.S. Army ordnance plant at Parsons, Kansas, with engineering services and production management. DuPont itself reaped $23 million in war orders, and its subsidiary, Remington Arms, another $156 million. 73 In addition, the company was continuing its operation of the Atomic Energy Commission’s Savannah River plant and laboratory. “The major objective of the work,” Wilmington reported, “was the production of nuclear materials for national defense, but a substantial effort was devoted to other AEC programs of national interest.” 74
In 1968 a slight breeze from the barren sands of Utah’s desert blew in over pasture lands. Silently and swiftly, it passed over some 6,400 sheep peacefully grazing on warm green grass. Within seconds, all were dead, the pasture suddenly resembling a battlefield littered with corpses. And, in fact, that was just what it was.
The sheep were the hapless victims of one of the U.S. Army’s newest weapons: XV nerve gas. Produced by the Army using chemicals procured from chemical companies, including DuPont, the invisible death had escaped from tests at the Army’s Dugway Proving Grounds, carried on something as innocent as a breeze. Now the word was out. The U.S. government was secretly producing chemical weapons in flagrant opposition to most international accords, including the Geneva Convention. As Vice-President Henry B. DuPont had put it just five years before, to suggest “that science and technology serve ends which differ from the common purpose seems to me as fallacious as it is dangerous.” 75
The incident triggered a public outcry, and the Pentagon, first denying then admitting secret research, hurriedly set up a Permanent Chemical Safety Committee. Except for establishing standards for preventing another embarrassing occurrence, this committee resolved nothing. DuPont’s production of internationally outlawed chemical warfare bombs continued, assisted (under independent defense contracts) by Dr. William A. Mosher and Dr. James Moore of the University of Delaware, who also procured rare chemicals for use in the CIA’s secret mind-control experiments at some 80 hospitals, prisons and universities around the country. Significantly, the Permanent Chemical Safety Committee was chaired by DuPont’s own production manager, Jake T. Nolen.
DuPont developed other weapons for the Department of Defense in violation of the Geneva Convention, which the U.S. has conveniently never signed. Besides storing VX nerve gas at its Newport, Indiana, plant, DuPont had a defense contract for “research and development of a Micro-Gravel concept” for anti-personnel mines similar to small “letter bombs”: the mines were to be dropped from overhead planes. This contract, awarded to DuPont in 1968, contributed to the record $212 million in war orders scored by DuPont in 1969. 76
Other DuPont family interests did as well in 1969. DuPont-controlled Uniroyal grossed $174 million from the Defense Department that year. Hercules Chemicals, the DuPont spin-off in which the family held a substantial interest, collected over $179 million for rocket propellants and anti-personnel weapons, including the infamous burning jelly, napalm. Boeing Aircraft, over which former DuPont chairman Crawford Greenewalt served as a director, raked in over $653 million for its production of B52’s and other aerial weaponry. Henry B. DuPont’s North American Aviation, which merged with Rockwell family interests in 1967 to form North American Rockwell, took in $674 million for its production of OU-10 “Bronco” counterinsurgency aircraft, homing optical bombs (TV guided), F-100’s, Condor air-to-surface missiles, and liquid rocket fuels for ICBM’s and a score of other missiles. General Motors, in which the family retained an estimated 17 percent holding, collected $584 million for tanks, aircraft engines, rocket launchers, and M-16 rifles. Indeed, DuPont stockholder ties in G.M. were still so strong that chairman Lammot DuPont Copeland found it important enough to stress at the annual meeting in May 1969 that “Since the divestiture, the G.M. dividends have been paid directly to DuPont stockholders who retained the G.M. shares distributed to them. Our dividend on common last year was $5.75 and the G.M. dividend was $4.55 per share.” 77
The beneficial effect the Vietnam War had on Du Pont interests can be easily seen by noting the various percentages of total sales the Pentagon’s military orders represented for 1969 alone.
For DuPont Company and its subsidiaries, Pentagon orders in 1969 amounted to 6.8 percent of total sales, or $212 million out of a total $3,078 million.
For Henry B. DuPont’s North American Rockwell, Pentagon orders amounted to 28 percent of total sales, or $674.2 million out of a total $2,438 million.
For Uniroyal, Pentagon orders amounted to 14 percent of total sales, or $174.1 million out of a total $1260 million.
For Hercules, Inc., 27 percent or $179.6 million out of a $642 million total.
For Boeing Aircraft, 22 percent, or $653.6 million out of a $2,880 million total.
For Newport News Shipbuilding and Dry Dock Company (a Tenneco subsidiary which has Irénée du Pont’s son-in-law, Colgate Darden, as a major stockholder), 13 percent, or $236 million out of a Tenneco total of $1.7 billion.
It is interesting to note that North American Rockwell, which in 1969 was the eighth largest Pentagon contractor, employed 104 high-ranking retired officers. Boeing, which was the ninth largest, employed 169 retired officers. Retired generals and admirals are very useful in contract negotiations with the Pentagon, since 90 percent of all military contracts are personally negotiated rather than awarded on a formally advertised competitive basis. 78
With their G.M. diversification funds, many DuPonts also invested in new firms utilizing the latest scientific technology, including computers, which worked on military contracts during the Vietnam era. William H. DuPont, the son of William DuPont, Jr., set up Sci-Tek, Inc., a computer-based operation which took in $15,000 in Navy contracts in 1971, $80,000 in 1972. 79 Emile F. DuPont’s Dukane Corporation grossed $20,744 on one Navy contract in 1972 for developing a locator system in jet planes. 80 Reynolds and Richard C. DuPont’s All-American Engineering raked in $1.6 million in 1972, bringing its Vietnam era (1964–1972) total to $11 million.
All told, the family’s varied corporate interests grossed over 15 billion in war contracts between 1964, the year of the first arms buildup, and 1972. Of the top ten war contractors, three (North American Rockwell, Boeing, and General Motors) represented large investments of the DuPont family. Of the top forty Pentagon contractors, eight (North American Rockwell, Boeing, General Motors, Newport News Shipbuilding, DuPont, Hercules, and Uniroyal), or one-fifth, were DuPont interests. DuPont Company alone reaped over $1 billion in war contracts. One DuPont enthusiast recently became very flustered at the suggestion of war profiteering by his favorite family. “I challenge anyone to show proof of any money made off this tragic war."
NEXT
The Crisis Years 436s
Notes
Chapter 12
1. New York Times, December 20, 1963.
2. Temporary National Economic Commission (TNEC), Monograph 29, p. 119.
3. John R. Carlson, The Plotters (New York: E. P. Dutton & Co., Inc., 1946), p. 248.
4. United Press, October 19, 1946.
5. Karl Schriftgiesser, The Lobbyist (Boston: Little, Brown & Co., 1951), p. 198.
6. Congressmen O’Toole, Klein, Sabath, Lesinski, Holifield, Buchanan, Norton, and Blatnik, statements in Congressional Record, April 14–16, 1946.
7. Merwin Hart to Lammot du Pont, Hearings, Part 4, p. 76, House Select Committee on Lobbying Activities, 81st Congress, 2nd session.
8. Hearings, Ibid., p. 78.
9. Ibid., General Interim Report (1950), pp. 11 and 20.
10. Albert E. Kahn, High Treason (New York: Lear Publishers, 1950), p. 336.
11. Ibid.
12. Du Pont, The Autobiography of an American Enterprise (Wilmington: E. I. du Pont de Nemours & Co., 1952), p. 176.
13. “Latest Facts About Candy Purchases in Super Markets,” pamphlet published by E. I. du Pont de Nemours & Co. (Wilmington: 1954).
14. New York Times, June 4, 1951, p. 41.
15. Ibid.
16. Ibid.
17. Congressional Record, April 5, 1947.
18. New York Times, March 3, 1953.
19. Joseph P. Morray, From Yalta to Disarmament (New York: Monthly Review Press, 1961), p. 186.
20. Du Pont Autobiography, p. 131.
21. National Science Foundation, Funds for Research and Development (Washington, D.C.: Government Printing Office, 1960), pp. 9 and 12.
22. Fortune, July 1958.
23. Committee on Armed Services, “Employment of Retired Military and Civilian Personnel by Defense Contract Industries,” Hearings, 1959, pp. 163 and 166.
24. New York Times, March 22, 1969.
25. NEC, Monograph 29, p. 116.
26. New York Times, November 18–20, 1948.
27. Ibid., June 4, 1957, pp. 1, 23, and 24.
28. Ibid., July 12, 1949, p. 37.
29. H. B. du Pont, “That No Man Shall Be Poor,” Vital Speeches, XIV (July 15, 1948), 587–90.
30. Associated Press, March 21, 1952, Chicago.
31. New York Times, March 6, 1952, p. 38.
32. Ibid., January 7, 1953, p. 33.
33. Ibid.
34. Ibid.
35. Ibid., February 18 (p. 39), 19, and 28 (p. 25), 1953.
36. Ibid., February 26, 1953, p. 37.
37. Ibid., February 17 (p. 35), 19, 20 (p. 29), and 27 (p. 31), 1953.
38. Ibid., December 4, 1953, pp. 1 and 12.
39. L. L. L. Golden, Only By Public Consent (New York: Hawthorn Books, Inc., 1968), p. 307.
40. New York Times, December 20, 1965, p. 26.
41. Robert Engler, The Politics of Oil (Chicago: University of Chicago Press, 1961), pp. 172–73.
42. New York Times, June 4, 1957, pp. 1, 23, and 24.
43. Ibid., September 14, 1958, p. 1.
44. Ibid.
45. Ibid., October 14, 1958, p. 26.
46. Ibid., October 3, 1959, p. 1.
47. Ibid.
48. Ibid., May 23, 1961, p. 1.
49. Senator Albert Gore, Congressional Record, Senate, May 26, 1965, pp. 11399– 903; also I. F. Stone’s Weekly, July 26, 1965, p. 3.
50. Recounted in David Walsh and David Horowitz, “Attorney at Law,” Ramparts, VII, No. 10 (January 25-February 7, 1969), 134.
51. New York Times, February 4, 1962, p. 46.
52. Ferdinand Lundberg, The Rich and the Super-Rich (New York: Lyle Stuart, Inc., 1968), p. 255.
53. “Commercial Banks and Their Trust Activities: Emerging Influences on the American Economy,” Staff Report, Subcommittee on Domestic Finance, House Committee on Banking and Currency, 1967.
54. Walsh and Horowitz, “Attorney at Law.”
55. Ibid.
56. Ibid.
57. New York Times, April 13, 1965, p. 49.
58. Life, February 25, 1957, p. 145.
59. Ibid., August 19, 1957, p. 108.
60. New York Times, September 23, 1962, Sec. III, p. 3.
61. Ibid., September 29, 1951, p. 1.
62. Lammot du Pont Copeland, “World Trade—the National and Corporate Interests” (November 19, 1963), reprinted in Vital Speeches, XXX (February 15, 1964), 264– 67.
63. Alex Campbell, “Indonesia—The Greatest Prize,” New Republic, CLX (April 19, 1969), 18.
64. Congressional Record, Senate, May. 26, 1965, pp. 11399–903; also I. F. Stone’s Weekly, July 26, 1965, p. 3.
65. “Why the U.S. Risks War in Indochina,” U.S. News and World Report, April 4, 1954.
66. Jules Henry, “Capital’s Last Frontier,” Nation, April 25, 1966.
67. Ibid.
68. Ibid.
69. Speech by H. B. du Pont before the Virginia State Chamber of Commerce, April 8, 1954. 70. New York Times, January 30, 1968, p. 5.
71. E. I. du Pont de Nemours & Co., Annual Report, 1966, p. 20.
72. Figures from 100 Companies and Their Subsidiary Corporations Listed According to Net Value of Military Prime Contract Awards, U.S. Department of Defense, 1964 and 1966.
73. Department of Defense, 100 Top Contractors, 1967.
74. E. I. du Pont de Nemours & Co., Annual Report, 1967, p. 26.
75. New York Times, April 1, 1963, p. 43.
76. Department of Defense, 100 Top Contractors, 1969.
77. Wilmington Evening Journal, May 12, 1969.
78. New York Times, March 22, 1969.
79. Defense/Aerospace Contract Quarterly, DMS Computer Systems (Company sequence) (1971–73 quarterly reports).
80. Ibid., Contract No. 421 72-C-6790.
With these victories under its belt, the NEC continued its hate campaign across the country. “We have already covered the states of Michigan, Ohio, and Indiana, and most of Illinois,” reported NEC President Merwin Hart to Lammot DuPont, “so far as libraries and colleges are concerned, as well as certain other sections.” 7 Again, after the 80th Congress adjourned, Hart wrote Irénée: “We have definite evidence in a number of instances that our work with respect to measures before Congress had been decisive in the disposition of these measures. All we need, in order to be a conclusive influence on a substantial number of measures, is the funds to get additional personnel and to meet other necessary costs.” 8 Irénée obliged, sending Hart a check for $21,000, bringing Irénée’s total contributions to the NEC to $31,513. 9 Lammot and Raskob also made large tax-deductible gifts. Through these and other corporate donations, the NEC continued its campaigns against federal aid to education, displaced persons legislation, public housing, immigration, federal civil rights bills, rent and price controls, increased social security, the United Nations, and even U.S. ratification of the Geneva Convention.
Not only were laws influenced, but also talented personnel were recruited by the DuPonts from these witch-hunts. One prime example was Irving Shapiro, now DuPont chairman. His story is one of success through persecution and disgrace.
Emboldened by the government’s attack on labor and communists, many right-wingers openly assaulted “Reds” and “pinko” liberals after the war. Even former Vice-President Henry Wallace’s 1948 presidential campaign was marked by physical beatings, pelting with eggs and debris, and attacks by fascist bands while police often looked the other way. President Truman himself once remarked at a press conference, “Why doesn’t Wallace go back to Russia?” This was the atmosphere in which a series of events led to the rise of Irving Shapiro into the highest DuPont circles.
When Irving S. Shapiro joined Du Pont in 1951 he was in his middle thirties. To anyone familiar with the backgrounds and personalities of the organization’s top executives, there could hardly have been a more unlikely candidate for the chairmanship of the company. Yet he reached that post after only a little more than twenty years of service.
For example, Shapiro is a Jew, a lawyer, a Democrat, and not even remotely related to any Du Pont or any relative of a Du Pont. Yet, here he is top man of the company. As a boy of eight, Shapiro began working in the Minneapolis dry-cleaning shop of his father, a Lithuanian immigrant to the United States. One of Shapiro’s brothers still runs that plant, but another deserted to set up his own carpet company. Irving’s career took him even further afield. After getting his LL.B. with honors from the University of Minnesota Law School in 1941, Shapiro headed for the nation’s capital and the O.P.A., where he worked alongside another young lawyer, who was to become even more prominent, much sooner, Richard Milhous Nixon.
In 1943, Shapiro, who was kept out of service by an asthmatic condition, joined the Justice Department. He soon impressed his superiors in the criminal division and in 1948 was named an assistant prosecutor in one of the most controversial trials of the time, that of eleven top leaders of the United States Communist Party on the charge of advocating the overthrow of the government. The trial, a raucous one that went on for nine long months, was presided over by Judge Harold S. Medina, a former corporate lawyer who had also been a professor at Columbia Law School. The communist leadership were convicted. They appealed. Shapiro handled the appeal for the government and he won. The law under which the communists were convicted was the Registration Act, a repressive law which Harvard Law School’s Professor Zachariah Chafee described as “the most drastic restriction on the freedom of speech ever enacted by the United States during peace.…” 10 “The Communist Party is on trial only so far as free speech itself is on trial,” declared a statement issued by Utah’s Chief Justice, James Wolfe, Charles Houston of Harvard Law School, and Arthur Garfield Hays of the ACLU. “Such a decision would, in fact, outlaw the Communist Party and other left-wing groups in the United States in a manner hardly to be distinguished from the outlawing of the Communist Party by Hitler, Mussolini, or Franco.” 11 It was a futile cry. Only many years later, when the witch-hunting extended even to the hallowed liberal U.S. Senators, would the inquisitions be exposed for their lies and demagoguery and brought to an end.
Irving Shapiro never relented on these sorry days. In fact, they made his career. In 1951 his reputation won him the post of legal counsel to the DuPonts in fighting their anti-trust suits, and he did so well that he steadily reaped the rewards of Du Pont Company management. In 1965 he was appointed assistant general counsel for Du Pont. In 1970 Shapiro became vice-president in charge of finance. Three years later he was appointed chairman and now sits contentedly at the Du Pont board of directors, guiding its acquisitions and price deals, charting its labor strategies, and steering the firm clear of the rocks of antitrust prosecutions.
The anti-communist crusade was not left only to hirelings. Irénée and Henry B. DuPont were both among the country’s most outspoken head-hunters. To these multimillionaires, American capitalism was Utopia and dissidents were heretics bewitched by a foreign ideology. “A century ago,” stated the company’s public relations department in its 1950 Autobiography, “Karl Marx dreamed and wrote of a Utopia where the people would own the tools of production and share in their output. His dream has come true, not in the Communist state founded on the theories he propounded so ardently, but in capitalist America.” 12
By that date, however, DuPont’s Utopian “capitalist America” was again suffering from its chronic disease, overproduction. Despite their public ridicule of Marx’s theories on overproduction, privately in the board room of the Wilmington headquarters the DuPonts had always paid the greatest attention to the market problems of overproduction. Ideologically they preferred to describe this chronic ailment as a “lack of aggregate demand,” the Keynesian’s semantic substitution for “underconsumption,” the classical economic term used by Marx. But no matter how it was expressed, it essentially came out the same thing—the need for expanding markets.
During the Fifties DuPont’s 2,500-man advertising department tackled the need for an expanded consumer market with mass media promotion and its “impulse-buying” surveys. The latter were used to inform corporate customers of the consumer’s psychology and encourage the use of DuPont products as a means toward manipulating it. “Cellophane packages have a special appeal for children shopping with their families,” a Du Pont pamphlet explained to retailers. “The sight of candy stimulates appetite appeal, influences more ‘Store Decisions’ and builds profitable candy volume. … Cellophane bags emphasizing special holidays and printed cellophane holiday overwraps increase sales.” This conclusion in 1954 was the result of Du Pont’s fifth impulse-buying survey, which tested the attitudes of 5,338 shoppers in 250 supermarkets in 35 cities throughout the United States. “Does she [the shopper] plan to buy candy in advance or decide in the store? Here are the facts from the survey.… Nine of ten decisions to buy candies are made in the store.” Cellophane increased the sales of potato chips, pretzels, macaroni, and baked goods such as bread, rolls, and pies, explained Du Pont. Showing a picture of a little girl pointing at cookies, the company summed it all up: “She sees them. They look good. Then she decides to buy.” 13
Although a crucial role was played by this new advertising field, the consumer market remained inadequate. To keep up its traditional 10 percent rate of return on invested capital, the family inevitably returned to the two keystones on which the DuPont Company had originally been built—the cheap labor market and government patronage.
At first DuPont’s postwar move toward areas of cheap labor was primarily domestic, in the southern United States. This move had already been initiated as far back as the Twenties, when DuPont opened its first rayon and cellophane plants in Tennessee, Virginia, and West Virginia. Following the textile drift below the Mason-Dixon, in the late Thirties Lammot du Pont constructed the first nylon plants in Belle, West Virginia, and in Seaford, located in southern Delaware. But it was only after Crawford Greenewalt replaced the interim-presidency of Walter Carpenter in 1948, that DuPont really began its full-scale Dixie invasion.
“We have linked our destiny to the South …,” explained D. F. O’Conner of Du Pont’s Explosives Department in 1951. “Of greatest significance is the expansion program which has taken place since the end of World War II.” 14 Eight new plants had been built in the South by then, making a total of twenty DuPont plants in nine southern states, nearly half of the company’s total investments and inventories. Thirty thousand workers produced neoprene rubber in Louisville, Kentucky, plastics in Parkersburg, West Virginia, agricultural chemicals in La Porte, Texas, sulphuric acid in Richmond, Virginia, Orion in Camden, South Carolina, nylon “salts” in Orange, Texas, nylon intermediate chemicals in Victoria, Texas, and nylon in Chattanooga, Tennessee. Maryland, Missouri, and Alabama were also dotted with Du Pont plants. Within three years after Greenewalt took over the presidency, the Chattanooga nylon plant tripled its capacity, while Du Pont financial agents were busily selling stock to local wealth in Virginia, Texas, and Florida, securing the support of the South’s richest states.
It is worthwhile to note the South’s political atmosphere at the time of DuPont’s Dixie expansion. In what was to prove a successful attempt to check rising labor militancy and strangle the CIO’s postwar union-organizing drive, southern wealth had generated some of the most rabid anti-communism and racist hysteria in the region’s history. In this campaign, the rulers of the South found enthusiastic allies in northern corporations. The Southern States Industrial Council was one offspring of this corporate mating. Founded during the Thirties to fight the NRA, unions, and “government regulation,” the Southern States Industrial Council was one of the most influential forces in the postwar South. Through the dedicated efforts of its vice-president, Thurman Sensing, the SSIC built a highly effective propaganda apparatus to influence over 1,000 weekly newspapers across the South. But the SSIC owed its effectiveness largely to the generosity of its largest contributor, DuPont, which donated four times as much money as its nearest contender for first place, the Chesapeake and Ohio Railroad Company. Other major contributors were General Motors, Firestone, General Electric, and Household Finance Company.
The red-baiting defeat of Florida’s New Deal senator, Claude Pepper, probably the most eloquent voice for liberalism in the South, was financed and organized by Alfred I. DuPont family interests. This defeat was a symbol that the entire region was being dragged back into the dark ages of bigotry and reactionary narrow-mindedness that many southern New Dealers had hoped would never again return. But return it did, and in its grim wake came northern industry, led by DuPont.
During this expansion Du Pont was understandably touchy on the question of cheap labor. “This is another ghost that should be laid to rest so far as the chemical industry is concerned,” said O’Conner. “The ratio of skilled operators to unskilled in this industry is very high and the wages paid to chemical operators are among the highest of any industry, North or South.” 15 Yet, despite that ratio, DuPont did not come to the South for its higher-paid skilled labor. In fact only 17 percent of the Ph.D.’s, M.A.’s, and B.A.’s hired by DuPont came from the South. DuPont’s real interest in the South lay in its unskilled labor, who were paid as much as 20 percent lower than their northern counterparts. With this boon, and the availability of petroleum, water power, coal, and other raw and crude material sources, Dixie represented the most valuable capital market for DuPont in the Fifties.
By the 1960’s DuPont had constructed even more plants in the South: at Kingston, North Carolina, to produce the new wool-like Dacron, and at Memphis, Tennessee, to produce sodium cyanide and hydrogen peroxide. As one South Carolina businessman remarked, “The question is whether Du Pont is out to buy up the South.” 16 For Wilmington, there was no question about it.
In the marbled corridors of Washington, DuPont found the second means to wider markets. Behind its Cold War policies, the federal government was engaged in supporting a massive investment program overseas by American corporations. In Africa, the Middle East, and Asia, American business interests increasingly replaced the war-exhausted European colonialist, while in devastated Europe, the Marshall Plan encouraged U.S. corporate control over the industries and markets of electronics, automobiles, synthetic rubber, petroleum, and farm machinery. “Economic stability” continued as the hallmark of U.S. foreign policy—as Assistant Secretary of State Dean Acheson put it, “chiefly as a matter of national self-interest”—and where the dollar went soon followed the flag. To pursue George Kennan’s “containment policy” of antirevolution through anti-communism, a large military arsenal of armaments and overseas bases was built and the “red scare” propagated, while a U.S. Navy document secretly pointed out the real issue: “Realistically, all wars have been for economic reasons. To make them politically palatable, ideological issues have always been involved. Any possible future war will undoubtedly conform to historical precedent.” 17
The first conflict grew out of U.S. intervention in Japan’s former colony, Korea. After occupying southern Korea in 1945, U.S. troops under the command of General Hodges forcibly dissolved the Korean Provisional Congress in Seoul, and Syngman Rhee was flown in from Washington to establish a regime of pro-western military leaders and landlords. With U.S. encouragement, Rhee declared the 38th parallel to be a permanent border dividing Korea, and began liquidating all opposition, particularly trade unions and intellectuals. Over a quarter-million people were massacred. In the midst of a contrived “election” (which was boycotted by most political parties and organizations in the south), riots broke out against the new Rhee dictatorship. As full-scale civil war erupted, the legitimacy of Rhee’s regime was further undermined by new elections held throughout the south and north which established the Democratic People’s Republic of Korea. The alternate government based its capital north of the 38th parallel, where Korean forces who had fought the Japanese guaranteed safety under the communist leadership of Kim Il Sung.
One of the D.P.R.’s first acts was to request the withdrawal of all Allied occupying forces. In December, 1948, the Soviet commander obliged. The U.S. command in Seoul refused, and as Rhee’s position deteriorated in the south with his defeat in the May 1950 elections, skirmishes along the 38th parallel increased. On June 17, John Foster Dulles arrived at the 38th parallel and assured Rhee’s troops that the time was “not far off” when they would be able to display their “prowess.” On June 25 war broke out between Rhee’s forces and D.P.R. troops stationed along the parallel. In a burst of enthusiasm, Rhee promised his regime in Seoul that Pyongyang, the D.P.R. capital, would be occupied by his forces within three days. Three days later D.P.R. troops were in Seoul. Rhee was in Tokyo with his American wife, having fled with the country’s gold reserves.
Washington was enraged. Backed by a resolution it rammed through the United Nations to restore the U.S.-imposed status quo only in the south, the United States landed troops at Inchon and also invaded the north. Levelling the countryside with jet bombers, General Douglas MacArthur marched U.S. troops right up to the Chinese border, threatening attack on the new communist government of Mao Tse-tung, even suggesting the use of the atomic bomb. At this point, China intervened, pushing MacArthur’s armies back into southern Korea.
Wilmington was enraged also. Irénée DuPont called for increased aid to the dictatorship of Chiang Kai-shek “to help run the Reds out of China, instead of just sending more American boys to Korea.” 18 Apparently, Irénée had forgotten that it was Chiang who had already been run out of China. Truman’s memory was a little better, and although the U.S. did intervene in the Chinese civil war by protecting Chiang on Taiwan with the Seventh Fleet, he avoided Irénée’s suggestion of an attack on China.
Besides the more important aspect of defending the new Asian economic frontier and traditional “Open Door” foreign policy, the Korean War also proved good business for the new Military-Industrial Complex that had emerged out of World War II. Du Pont, of course, was one among many giants who took the bulk of government war orders. Years later Henry B. du Pont would admit in a public statement that the lion’s share of military orders and profits during the Korean War and the armaments race went to the biggest corporations. 19 In 1950 Du Pont scored one of its highest annual profits, 13.3 percent. 20 G.M. reaped an even higher return. During the war years of 1950–1952 G.M. averaged an annual profit rate, before taxes, six times that of the 1929 boom year. From July 1950 to June 1952 G.M. grossed $5.5 billion in war contracts.
The Korean War may have ended, but the armaments race did not. Eisenhower continued the traditional Open Door policy of foreign markets being the key to continual corporate profit expansion and domestic prosperity. “For all our material might,” declared the new President in his Inaugural Address, “even we need the markets in the world for the surpluses of our farms and factories. Equally we need for these same farms and factories vital materials and products of distant lands.”
Helping arm for Pax America as Ike’s new Secretary of Defense, was G.M. president Charles E. Wilson. “What is good for America is good for General Motors,” he once exclaimed at his confirmation hearings, “and vice versa.” It is an amusing footnote to Wilson’s successful government career that it began so embarrassingly. On his way to Ike’s Inaugural Ball his shiny new G.M. Cadillac broke down. Again, when the first cabinet meeting was held later that week, the first empty chair was Wilson’s, his absence reported as the result of a similar breakdown. Apparently, in these cases, what was financially good for General Motors was not even good for Charles Wilson, much less America.
Under Wilson’s reign the Defense Department was good also for DuPont. Although only 5.3 percent of the chemical industry’s output went to the military, by 1960 over 20 percent of its total expenditures for research and development was financed directly by the Defense Department, with DuPont receiving a generous portion. 21 Additionally, defense contracts to DuPont customers for non-explosive material, from paint to nylon, spurred Washington’s sales.
DuPont itself did not heavily diversify into the defense sector, but the family found the arms race profitable in other spheres of holdings. As a director, Irénée du Pont’s son-in-law, Colgate Darden, watched over the family’s holding in Newport News Shipbuilding and Dry Dock Company, one of the country’s largest shipbuilders, which grossed over 80 percent of its income from war contracts. North American Aviation (with Henry B. DuPont as the controlling stockholder) and Boeing Aircraft (of which Crawford Greenewalt became a director) were both big money makers. By 1957, North American and Boeing were reaping profits of 19.9 percent and 21.3 percent, respectively. 22 On the basis of return on investment, only five of the top fifty companies in sales in 1957 were among the top fifty in profits. These five firms happened to be exactly the five with the largest amounts of new defense contracts that year. And among the five were North American Aviation and Boeing.
Henry’s company, a leader in missile frames and rocket engine technology, was undoubtedly the most active DuPont interest in war contracts during the Fifties, and probably the boldest. On May 7, 1959, for example, North American ran a large ad in the Wall Street Journal offering high-level employment to a top-ranking officer of the Air Force or Navy, preferably with experience with the Joint Chiefs of Staff. This job, explained the ad, required giving information about the Department of Defense’s “product development strategy” and “weapons system requirements,” as well as personally assisting in military sales. It was too blatant to be left ignored. “You are trying,” said Representative Edward Hebert of the Armed Services Committee to a North American witness, “to buy not only an individual’s ability, but also knowledge he acquired in a high echelon position where secret planning was done.” 23 Henry’s executives merely shrugged and continued their policies. After all, went the reasoning, they were only doing what was common business practice. By 1969, 2,072 officers with the rank of Colonel or Navy Captain or above were employed by the ninety-five leading military contractors, 24 North American proudly being one.
Phillips Petroleum was another Du Pont interest in the arms race of the Forties, Fifties, and Sixties. Since Phillips’ founding in 1917, Eugene E. DuPont was guardian of the family’s stock holding in this sphere, 25 and personally served on the board of directors until 1954. During his postwar tenure, Phillips was extremely aggressive, increasing its assets from $332 million to $1.3 billion and its net income from $23 million to $95 million. Phillips was attracted particularly to new oil resources. In southeastern Alaska, for example, it secured an operating agreement on nearly one million acres of land. For $39 million, it acquired over 200,000 acres of offshore holdings.
Phillips often joined with other DuPont family interests in big deals. With Henry’s North American Aviation, it formed Astrodyne, Inc., to develop solid fuels for missiles and space rockets. After the Rubber Act of 1948 ended government ownership of a number of synthetic rubber plants, Phillips joined DuPont-owned U.S. Rubber (in which Henry B. was also a major personal stockholder) and other oil and rubber giants in buying up the government’s general-purpose synthetic rubber and butyl industrial capacity. Eisenhower sold twenty-six plants for $285 million, which was above their net value, yet these plants yielded $166 million in profits from 1951 to 1955 alone. At the time of the sales, five dissenters on the Senate Banking and Currency Committee correctly but futilely argued that the government could have reaped more in operational profits in four to five years than the total amount of the sales.
Phillips had other legislative boons during the Fifties. As the largest seller of natural gas to interstate pipelines, it was the sole supplier to the Michigan-Wisconsin Pipeline Company. Since the war, helpless consumers found their gas rates climbing higher and higher. State officials and the pipeline company stood helpless as Phillips claimed its need for a 12 percent profit. When the Federal Power Commission refused to regulate the rates in 1951, the Wisconsin Public Service Commission went to court, while a Phillips official warned that if the case persisted “the people of Wisconsin could freeze … they would never get another cubic foot of natural gas.”
The Wisconsin PSC won its case before the Supreme Court, which ordered the FPC to review and regulate Phillips’s rates. But the FPC’s Eisenhower appointees, while publicizing their opposition to Phillips, moved slowly in implementing the court’s decision. Then, in 1955, the Harris-Fulbright bill freed gas producers from public regulation. A 5- to 10-cent increase per 1,000 cubic feet quickly ensued, producing a gain for the industry of up to $3 billion a year. As the second largest holder of gas reserves in the United States, Phillips got the lion’s share.
These and other defense contracts to Remington Arms and U.S. Rubber comprised the bulk of the DuPont family’s profits from the Cold War during the Fifties.
For DuPont Company itself, the most direct sustained contact with the arms race was its work in developing the most terrifying weapon on earth—the hydrogen bomb.
In August 1950 a very lean, relaxed Crawford Greenewalt appeared before the Congressional Joint Committee on Atomic Energy. By the end of the day he walked out with an Atomic Energy Commission contract to develop the hydrogen bomb and operate its plant production. Although Crawford boasted to the press of DuPont’s agreeing to a $1 a year fee, he did not bother to mention that two other companies, G.E. and Sandria Corporation, had done likewise. Nor did he mention that DuPont was to be one of four big contractors who would together receive an AEC “compensation” of over $2.5 billion yearly.
For the DuPonts, it was a symbolic contribution to their celebration of the 150th anniversary of their landing on the lucrative American shore.
2. YEARS OF TRIUMPH
Old Man Winter brought his usual holiday tidings to Delaware in January 1950, with
freezing winds racing south along the Brandywine, chilling everything in their path. But
a few miles to the north, just across the Pennsylvania border, a tropical fantasy unrolled
before the eyes of scores of DuPont children eating bananas fresh from flourishing
banana plants and darting between bougainvillea-covered marble columns. Behind the
steamed glass walls of Longwood’s conservatory, over 400 well-dressed relatives
strolled along 3½ lush acres of alleys lined with poinsettias, roses, and orchids,
listening to the melodies a hidden organist played on Pierre du Pont’s $250,000 organ,
or inspecting a collection of family relics (wedding dresses, E. I. DuPont’s original
European furniture, letters from Lafayette and Jefferson) gathered in honor of this 150th
anniversary of the landing of the DuPonts in America. From every part of the United States, and four European countries, 632 DuPonts gathered on this New Year’s Day for the first family reunion in half a century. Over half of them did not have far to travel, however, living nearby on the two dozen DuPont estates that filled the hills surrounding Wilmington. Of those present, 75 percent were blood descendants of the French nobleman, Pierre DuPont de Nemours, the rest were kin by marriage. Many didn’t even know their relatives. Each was given a name card on arrival, the color of which designated to which of six branches of the family he or she belonged. But the centrifugal force was the name of E. I. DuPont; the image of his original residence, Eleutherian Mills, was stamped on every ashtray at the dozens of round tables.
Half of the seventy-four members at the 1900 reunion were there, and their palates may have sensed that little had changed in DuPont taste since then. Pierre hired the same caterer, Holland’s of Philadelphia, to serve a similar menu: seafood cocktail, green salad, claret wine, filet mignon with mushrooms, potato balls, string beans, game pie (a heavily spiced dish made from a variety of wild animals), terrapin stew, coffee, champagne, pudding, and the old family favorite, johnnycake, to commemorate the first DuPont meal in America on January 1, 1800—the meal that had been stolen by their newly arrived ancestors from the house of a colonial family gone to church (accounts differed as to whether old Père DuPont left behind a few gold pieces in compensation). But this time Pierre made sure the family paid its own way: he assessed each member 50 cents for each year of age. At 80, Pierre paid the highest tab.
Amid popping flashbulbs of photographers from such national magazines as Life, the DuPonts royally ate their historic midday meal. There was no head table. There were no speeches. This day the whole family basked in glory. Some, of course, had more glory than others: Crawford Greenewalt, for example, who collected a salary of over $138,000 the previous year and another $300,000 in cash and stock bonuses, for a total $438,000 “compensation” for the same year the average annual wage of a DuPont worker was $3,430. Or Henry B. du Pont, his broad face flushed with the triumph of $300,000 in salaries and bonuses from Du Pont alone, never mind his other holdings in U.S. Rubber and North American Aviation. Nearby sat Emile F. DuPont, his always busy mind ticking away behind his bushy brows, counting the $65,000 in DuPont salary and bonuses he would reap that year and the millions returning their yield from stock speculations. But the most contented of all was old Pierre. Flanked by his aging brothers Lammot and Irénée, Pierre saw this day’s gathering through the eyes of a financial conqueror. General Motors, DuPont, U.S. Rubber, Remington Arms, all part of a vast corporate empire, were now safely in his family’s hands. If anyone had the right to swell in triumph, it was he.
Ironically, Pierre’s greatest day came on the eve of his greatest defeat, a defeat which would kick a crucial keystone—General Motors—out of the DuPont empire.
The family’s troubles in G.M. began in 1948, the year of DuPont’s biggest sales record yet, $968 million. In November Lammot was called before a federal hearing to testify on DuPont interests in General Motors, U.S. Rubber, Ethyl Gasoline, Bendix Aviation, and a host of other firms. Although accompanied by so esteemed a counsel as Dean Acheson, former Undersecretary of State, Lammot still had his difficulties. “I made a bad showing at the end of the session,” he admitted to reporters as he emerged from the hearing. “I testified that I had not written a certain letter and then the government pulled the letter out of the files. It was very embarrassing.” Yet the impending blow remained unforeseen. “We still don’t know what it’s all about,” 26 Lammot said.
Six months later, he found out. Attorney General Tom Clark, moving on the government’s desire to preserve some balance among corporate interests and prevent the total domination of G.M. by the DuPont family, filed an anti-trust suit in Chicago’s District Court to break up “the largest single concentration of power in the United States.” 27 Over 100 defendants were named, including the family holding companies, Christiana Securities and Delaware Realty and Investment Corporation. But the real target was DuPont Company’s $560 million investment in General Motors. In a 65-page complaint, the government charged that DuPont controlled the selection of G.M. officers, directors, and policies. The G.M. bonus plan operated to make executives more responsive to DuPont’s wishes, since DuPonts dominated the committee that gave out the bonus incentives. Citing these as violations of the Sherman and Clayton anti-trust laws, the complaint asked for the cancellation of all G.M.-DuPont contracts, and the sale of all DuPont holdings in U.S. Rubber, G.M., and Kinetic Chemicals (refrigerants).
This was no laissez-faire “free market” approach by the government. Since the Justice Department’s “rule of reason” fifty years earlier, the government had abandoned any pretense toward turning back the clock and restoring a private enterprise system free of trusts. The G.M. suit merely represented the opinion that General Motors was now simply too large an economic force to allow its domination by any one family or financial group. Rather, control over the largest corporation in the world would have to be shared jointly by many financial groups.
The reaction in Wilmington was a mixture of shock and suspicion: shock that the suit had come, and that it was pressed by Clark, a former DuPont lobbyist who was believed friendly to the company’s interests; and whispered suspicion that behind this move was the hand of Morgan interests in G.M. and Truman’s need for a corporate scapegoat to mitigate his anti-labor image.
“An unjustified attack,” responded Greenewalt, promising the stockholders, “your company will fight.” 28 His first step was to give the real meaning to his claim of public support by requesting a change of venue to Wilmington. This was denied, but Henry B. DuPont had already outlined the next step in responding to public attacks on the growing power of big business. “These criticisms have in the main come from the lips of many people in politics, bureaucrats, irresponsible labor elements, and unfortunately, also from many well-meaning but uninformed people, and they have been fanned by the radical section of the press and radio.” 29 Accordingly, the DuPonts expended most of their energies the following year in the political arena, DuPont’s public relations department grinding out the proper image.
The Korean War and the hydrogen bomb contract cooled the administration’s crusading fires for a while. Then the Justice Department’s scoring of the family’s use of its minors as holding companies reopened the battle in 1952. The government filed a class action suit against 186 DuPonts related by blood or marriage to Pierre, Irénée, and Lammot. “Evidence in the record in this case,” stated the government brief, “shows it is the practice and policy of senior members of the class and their defendant representatives to distribute during their lifetimes a substantial portion of their stock holdings to minors in the family, usually by setting up trusts of stock.” 30
It took Irénée 701 pages to explain his denial of the government’s charges. But the one most upset by this attack on the very lifeblood of DuPont inheritance was Lammot, bitterly describing it as “another indication of the lengths to which the government’s prosecution of anti-trust cases has led it.” 31 Lammot was infuriated, but this was one fight he would have to pass up.
A few days later Pierre and Irénée watched with the rest of the clan as Lammot was buried at Sand Hole Woods. It was only too obvious that the fifth generation of DuPont's was dying out. A. Felix, Sr., was already lying there, having died in 1947 at the age of 69. So were his brothers Ernest, who died in 1944, and E. Paul DuPont, who died of a heart attack in 1950. Ethel Hallock DuPont, wife of Pierre’s dead brother William K., had died in 1951; Bessie, Alfred’s first wife, in 1949; Pierre’s sister Isabella, in 1946. Later that year cousin Julia, sister of Eugene, Jr., would die, and Henry B. would lose his mother Eleuthera the following year. Of the three famous brothers, Irénée was over 70, Pierre over 80, and now Lammot was gone. Having already distributed most of his fortune to family trusts and foundations, Lammot left behind only a $70 million estate.
Death spared Lammot from taking the witness stand in the G.M. case, but his ghost haunted the trial. His words ironically spoke across decades in correspondence, proving the government’s charge of Du Pont control. “It seems that DuPont has always assumed the responsibility for the financial direction of G.M.,” 32 Lammot wrote Sloan in 1923 on G.M.’s board and finance committee composition. The full meaning of such responsibility, the government contended, was that in 1941 G.M. took 93 percent of Du Pont’s automobile Duco production. The Du Ponts retorted that they acquired G.M.’s business because their products were superior, but the government only countered that better quality products by Du Pont were in the company’s interest of protecting its 23 percent investment in G.M.
In 1945 Sloan had written Du Pont president Walter S. Carpenter, Jr., on the prospects of inviting General George Marshall onto the G.M. board, “recognizing the position he holds in the community and among the government people.” 33 But it was Lammot who answered three days later: “My reasons for not favoring his membership on the board are first, his age; second, his lack of stockholdings; and third, his lack of experience in industrial business affairs.” 34 With those words, the idea was squashed.
DuPont control over the board’s membership was absolute. In 1943 the DuPonts opposed allowing any more bankers on the G.M. board, and Alfred Sloan followed suit. In 1947, after the DuPonts expressed favorable reaction to the idea of bankers, Sloan completely reversed his policy.
Despite a volume of evidence against him, Pierre managed to deftly dodge any attempt by the government to make him admit G.M. control. The potential market “had no connection whatever with my opinion of the G.M. purchase or my vote,” 37 he insisted, branding the government’s charge of building a $5 billion empire against the law as “false.” For days on end, Pierre recorded the whole history of the company’s growth, as he saw it. Some said it was his finest hour. Whatever the opinion, it was also his last.
One year later Pierre joined his brother Lammot at Sand Hole Woods. Pierre had just finished one of his dinners at his, Longwood estate when he was struck by severe abdominal pain. He had ruptured a blood vessel. Rushed to Wilmington Memorial Hospital, he died within hours, Irénée and Margaretta, the sister who married Ruly Carpenter, at his bedside. Although childless, Pierre, unlike his very prolific brother, died among friends.
In one way, though, Pierre’s death was like Lammot’s—its financial outcome. Pierre had also divested the bulk of his estate among family trusts long before he died. What was left, $80 million, was willed to his tax-free Longwood Foundation for the upkeep of his vast gardens.
Pierre’s passing at 84 in 1954, and Eugene’s death at 81 the same year, were expected by the family. But the autumn chill of the following September brought a real shock: 21-year-old David Flett DuPont, Lammot’s youngest son, was fatally injured in an auto crash on Fisher’s Island while visiting his mother; he died in the same hospital as his father did three years earlier.
These were not all bad times, however, for the family did succeed in the anti-trust case. First, the government retreated from its attack on the family as a whole, dropping charges against all but seven individuals. Then, in December 1954, Judge Walter La Buy ruled that the government had not proved the family had intended to create a monopoly when they bought into G.M. It was merely a historical accident. “We were confident that this would be the result,” 38 declared a jubilant President Crawford Greenewalt, standing beside his grinning father-in-law, Irénée du Pont, and his predecessor, Walter Carpenter, Jr. Indeed, a million dollars can buy a lot of legal confidence. That day, DuPont’s stock rose 4½ points.
But the real battle had been won before the case even went to trial. From the very first day the government filed its suit, Du Pont’s public relations department took up the brunt of the counterattack. On taking office, Crawford Greenewalt had been advised by Walter Carpenter to make public relations his most important concern. Fully agreeing, Crawford now handed the job of defending the company to his two top public relations officers, Harold Brayman, former president of the National Press Club and the prestigious Gridiron Club, and his assistant, Glen Perry, formerly of the New York Sun.
Brayman went right to work, adopting the position that the government’s charges were an attack on “bigness” per se, and correctly countering that only bigness could have provided the capital for the original research and plant investment for everything from nylon to atomic energy. Brayman’s argument carried infallible logic—greater concentration of capital and resources was superior to the disjointed economy of the laissez-nous faire nostalgics. But as logical as it was, his case lacked emotional appeal for the public.
For the first three years of deliberations, Brayman and Perry continued their campaign, waiting for the opportunity for an emotional appeal to appear. Brayman reversed DuPont’s traditional fear of press probes and sought instead to use them to the company’s advantage. This change in policy stemmed from Brayman’s “precinct” publicity concept, a term that reflected his many years spent in observation of political organizations. Under this concept, publicity was directed to three key audiences: (1) employees, customers, stockholders, suppliers, business associations, and towns where plants were located; (2) writers, the press and media, and campus intellectuals; and (3) government officials. By centering on these, all of whom already had an interest in the company, Brayman estimated that a ripple of “public” opinion started by the company’s usual broad releases would become a wave.
He was right. When Fortune approached the firm for information for an article on the company, a special office was set up in DuPont headquarters and its writers and researchers were given exclusive interviews and details from the company’s viewpoint. The result was an article favorable to DuPont. Other magazines were soon attracted to Wilmington. Newsweek had already run a cover story, “Is It Bad to Be Big,” with Crawford’s picture on the cover. In April 1951 Time did likewise.
Crawford made a rare appearance before the National Press Club. Vice-president Harry Haskell, Sr., made another speech in Maine, and Lammot DuPont Copeland, then secretary, also spoke publicly. All these speeches were distributed by Brayman to every newspaper editor in the country. But still the emotional impact was missing.
The solution came in 1952. The government charged that the Du Pont children, through their trust funds, were being used as holding companies by their parents. Seizing the opportunity, Brayman then published a photo of Alletta DuPont Bredin, “a hardened conspirator of eight months,” sitting in her playpen. The picture made the government’s case look absurd. Hardly a newspaper in the country failed to print it.
A month later, on April 14, Brayman made his report to DuPont management that “it seems reasonable to say that the picture appeared in more than 1,200 American newspapers.…” Of 376 clippings received, “With only two exceptions, all of it was critical of the Department of Justice and favorable to DuPont.” “An impression was created in the minds of millions of people,” Brayman later recalled, “which won the case for us with the public—if we could keep it won when the case came to trial.” 39
To help at the Chicago end, Brayman appointed Robert Curtin, Delaware correspondent for the New York Times, to get to know personally the correspondents, wire service reporters, and media men covering the trial in the Windy City. To add a human touch to DuPont’s staid image, Pierre and Irénée were encouraged to be present at the early days of the proceedings and grant their rarest of gifts, pictures and interviews. Articles favorable to the DuPont executives’ image were persistent throughout the trial, while many large corporations, cautiously sympathetic to Du Pont’s line that the case represented an attack on all big business, lent their support in government and elsewhere.
By the time La Buy delivered his juryless decision, it was obvious that Du Pont had won a political battle as well as an economic one. Brayman’s precinct technique used the press agentry of political parties. In that important sense, the favorable ruling was a political triumph precisely because Du Pont’s public relations department had become a political organization, molding and organizing public beliefs on an essentially political issue—trust-busting.
The La Buy decision only confirmed Crawford’s convictions about public relations. Already DuPont’s radio and TV experiment with “Cavalcade of America” had produced excellent results. In 1937 the Psychological Corporation’s survey had reported to the DuPonts that fewer than half of the 10,000 people questioned had a favorable opinion of the company, and 16 percent had a downright hostile view of the munitions makers. Through twenty-two years of award-winning plays written by such quality writers as Arthur Miller and Stephen Vincent Benét, DuPont changed its image. Its 781 radio episodes and 202 TV network shows stressed the company’s “Better Things for Better Living … Through Chemistry” line. The merchants of death became a foggy memory, replaced by the smiling chemist. In 1958 the Psychological Corporation found that 79 percent of those tested thought well of DuPont Company; less than 3 percent were unfavorable. Satisfied, the DuPonts ended the annual surveys that year.
Euphoria filled the air along the Brandywine mansions these days. Grateful for this Eisenhower era, the DuPonts gave $248,000, the highest amount contributed to the Republican campaign in 1956, to defeat liberal Democrat Adlai Stevenson. This was a huge increase over their $74,000 investment in Eisenhower in 1952, but it represented the family’s feelings that political dividends had been amply returned. Once, when asked by a reporter if he disliked ‘Ike,’ Irénée gave him a dollar. Why? the astonished reporter queried. “Because you ought to have your head examined,” 40 Irénée answered.
Eisenhower’s administration had already protected many companies in which the DuPonts had interests. In 1954, for example, United Fruit was spared the indignity of having to surrender 400,000 acres of unused land to the Guatemalan government for redistribution to peasants. The Guatemalan government was willing to provide compensation and 3 percent interest. A U.S. arms embargo followed, backed finally by an open invasion from Honduras given air cover by F-47 bombers flown by the CIA. The United Nations protested and the Security Council authorized the sending of an emergency peace-keeping force to guarantee Guatemala’s borders, but the temporary president of the Security Council, who happened to be the U.S. ambassador, failed to give the Secretary-General the needed order. The Guatemalan government was overthrown. The head of the CIA, General Walter Bedell Smith, then joined the board of United Fruit, while United Fruit’s president, Allen Dulles, became CIA Director.
Less covert was DuPont’s support of the new oil depreciation allowance. Besides DuPont’s own direct involvement with the oil industry through the production of synthetic rubber and its Ethyl Gasoline Corporation, the family had invested personal funds in Phillips Petroleum, Chanslor-Western Oil, Ardee Oil (in Texas and Montana), and Oil Associates (in Louisiana and Texas). By the 1960’s, Lammot DuPont Copeland’s Delaware Fund would hold huge blocks of stock in Universal Oil, Standard Oil of New Jersey, Royal Dutch Petroleum, Occidental Petroleum, and Gulf Oil; E. I. du Pont’s New England Fund would be a large stockholder in Mobil and Texaco; and Emile F. DuPont’s Blue Ridge Mutual Securities in Continental Oil, Atlantic Richfield, Cities Service, and Union Oil of California.
But probably the greatest incentive for Du Pont’s production of the film “It Never Rains Oil” was its heavy investment in the automobile industry, particularly General Motors. Sponsored by the leading oil associations, Du Pont’s film presented the case for the depreciation allowance, a curious logic that argues that a business should be paid by the taxpayer for selling its product on the market. According to the minutes of the National Petroleum Council in 1953, Deputy Petroleum Administrator Joseph La Fortune, on leave as vice-chairman of Gulf’s Warren Oil Corporation, “furnished the information as to the money expended by DuPont for having the film made in Hollywood, its fine possibility as education mediums for use in colleges, high schools, etc., availability and cost to those interested in showing the film.”
At this meeting of the biggest oil companies, La Fortune tried to propose standby pipeline facilities on the East Coast in case of an energy crisis. The president of Sinclair Oil objected: “The surpluses in our industry are an anathema,” he explained, “but I think we are particularly sensitive to it, or at least I feel that way about it. Surpluses not handled or controlled are an anathema, because they have a way of destroying price structures, they have a way of breaking down progress, and they can destroy an industry.… I am talking particularly here about standby pipeline facilities. It applies with equal force to standby tanker facilities, standby refining facilities, standby storage, and if you please, standby production.…”
“I assure you,” answered La Fortune, “that our government is not trying to ask you to do something that is unprofitable or would be unsuccessful. They are trying to bring up something here that they think will be helpful to our country in the event of an emergency.
“If it is unpractical, gentlemen, you can forget about it.”
They did. 41
Such easy victories as these and the domination of the “free” world’s business by American finance and industry produced a general feeling of omnipotence among corporate leaders in the Fifties, and the DuPonts were no exception. Their lawyer in the anti-trust proceedings of the Thirties and Forties, Dean Acheson, became Secretary of State. The new postwar dispenser of government favors, the Department of Defense, was headed by a G.M. president, Charles Wilson. The U.S. Commissioner of Roads from 1953 to 1955 who initiated the huge road-building campaign (and subsequent decline in mass transit planning for the future) was Francis V. DuPont. The lawyer who had successfully argued their case before La Buy, John Harlan, was soon after rewarded with a Supreme Court robe, and thousands of copies of La Buy’s decision itself were reprinted by DuPont and distributed triumphantly to the country’s newspapers.
Then in 1955, less than a year later, the DuPonts made their most dramatic announcement of the decade—they were investing another $75 million in General Motors. In their triumph, they had lit the fuse of destruction.
3.
END OF AN ERA
DuPont’s announcement of its new $75 million investment in General Motors set off
a chain reaction from Washington to New York. To many in the capital, it was seen as a
direct slap in the government’s face, an act of tightening economic domination by one
family too bold to be ignored. Wall Street stirred anxiously, including the offices of the Morgan group. G.M.’s management had increased its membership on the board of directors with full Morgan approval after the war and the directorship of Richard King Mellon of Mellon National Bank had also been allowed. This injection of another power group reflected G.M.’s need for more outside capital to finance domestic and overseas plant expansion after World War II, plus, many hoped, a new willingness on the part of the Du Ponts to allow other financial interests in G.M. As the Mellons had often been considered rivals of the DuPonts, the appearance of R. K. Mellon was taken by many as a sign that the Morgan hand was strengthened, especially as no one from Wilmington had replaced Lammot DuPont when he retired in 1946. This power change was also accompanied by a 10 percent drop in G.M.’s business with DuPont Company. Now, however, with this new massive injection of capital from Wilmington, the DuPont yoke about G.M. looked stronger than ever.
But this time the family had gone too far; they had chosen the wrong time for so bold a move. DuPont’s attempt to even further dominate the world’s largest corporation stood in the face of a general business trend, encouraged by corporate circles in power in Washington, toward joint control in the larger corporations by several financial groups, a trend toward financial diversification in many fields that could prevent the pitfalls of concentrating holdings in one or two areas of an unstable marketplace and act as a breaker against the threat of a general “dominos” contraction in the capital market which could trigger a depression. This trend had been encouraged by Roosevelt and Rockefeller interests and been endorsed by Congress in its 1950 amendment to the Clayton Anti-trust Act, an amendment that allowed vertical expansion but not single group monopoly.
With the DuPont family’s open rejection of this trend (possibly in fear of eventually losing exclusive control over their own firm in exchange for being allowed entrance into other corporations), the corporate and financial leaders in government now had to demonstrate the necessity of legal enforcement. Thus the DuPont-G.M. prosecution represented a major trial case.
On June 3, 1957, in one sweeping decision, the Supreme Court’s corporate liberals undid all that the DuPonts had built over fifty years. Although Eisenhower’s Justice Department did not contest La Buy’s 1954 denial of any market conspiracy in its appeal, the Warren Court, with Harlan and Tom Clark abstaining as interested parties, reversed the La Buy decision by a 4 to 2 opinion. “It is not requisite,” held the Court, “to the proof of a violation of Section 7 [of the Clayton Anti-trust Act] to show that restraint or monopoly was intended.” 42 Commercial and financial domination by one family, a less tolerable aspect of monopoly to the Court than financial domination by many groups, had been proved. It is worthy to note that of the four justices who comprised the majority, Black and Douglas were both New Deal appointees who shared Roosevelt’s concern over single-group concentration that had spurred his TNEC probe, and the other two, Eisenhower appointees, Warren and Brennan, had both been New Deal sympathizers who understood the need to encourage diversification.
The news hit Wall Street like a thunderbolt, sparking the busiest activity of the year. DuPont’s stock gyrated up and down aimlessly before ending the day up 1 point. The boards of G.M. and U.S. Rubber, meeting at the time, refused comment, but Crawford did manage to remark that he was “naturally disappointed.” The power of the state, it was clear, was being imposed to bring industrial mavericks like the DuPonts into line. Meanwhile, the case was returned for “equitable relief” to La Buy, who avoided a decision in the ensuing election year.
The DuPonts did not sit idly by and await their fate. In 1958 they joined Eisenhower and Vice-President Richard Nixon in supporting the gubernatorial candidacy of Senator William E. Knowland, the “open-shop” candidate of California’s big corporations. The labor unions saw Knowland, a proud holder of a long anti-labor record in Washington, as part of the nationwide campaign of candidacies and bills being directed by NAM. “California has been chosen as a battleground to test ‘right to work,’” 43 charged C. J. Hagerty, secretary-treasurer of California’s State Federation of Labor. These suspicions were subsequently confirmed with Knowland’s support for Proposition 18, which would have outlawed a union shop. But the most explosive tip-off was Knowland’s use of a Du Pont-sponsored pamphlet written by Joseph Kamp, who was described by the New York Times as a “veteran pamphleteer of extreme right-wing causes.” Kamp was notorious for his opposition to the liberal Supreme Court of Earl Warren, who also had no friends in Wilmington.
Kamp’s pamphlet, “Meet the Man Who Plans to Rule America,” was a rabid attack on AFL-CIO vice-president Walter Reuther; it was fully endorsed by Mrs. Helen Knowland, the Senator’s wife, as “a powerful message which could actually swing the pendulum in California if it could be gotten into the hands of millions of people.”
Helping in this endeavor were DuPont directors Pierre S. DuPont III, son of Lammot, and DuPont in-law Donaldson Brown, former vice-chairman of G.M. Brown, in fact, was so enthusiastic about Kamp’s tirades that he not only contributed generously, but also provided Kamp with a list of names to whom his name could be mentioned when donations were requested.
The DuPont involvement was all Knowland’s opponent, Attorney General Pat Brown, needed to lock up the election. Asserting that Knowland’s campaign had been directly linked with “fascistic anti-Semitic forces in the East supporting his drive to take over the governorship of this state,” Brown rode the angry labor tide to victory. Meanwhile, a spokesman for Pierre asked the people to “let the facts speak for themselves.” 44 On election day the facts did speak—with an eloquence even Pierre du Pont III could not ignore.
The Knowland campaign was the last time for over a decade that the DuPonts publicly involved themselves in a political campaign, and for good reason. In an era of declining witch-hunts, the linking of Du Pont with right-wing causes threatened to undermine the “Better Things for Better Living … Through Chemistry” image that had been so carefully nurtured since the turbulent Thirties. Now the brand of Du Pont was again being used by Democrats attacking Republican candidates. Only a few weeks after Brown’s charges in California, Tammany Boss Carmine De Sapio described the Rochester, New York, Republican state convention as dominated by Irénée DuPont, Richard Nixon, and Rockefeller interests. “These men were the phantom delegates to the Republican state convention in Rochester who determined its course, who chose its candidates, who wrote its platform and who dedicated its philosophy to the greater glory of big business.” 45
No doubt De Sapio’s charges carried more than a grain of truth. The convention had indeed been controlled by Winthrop Aldrich, George Champion, president of Chase Manhattan, and former New York governor Thomas Dewey. Aldrich’s nephew, Nelson Rockefeller, did emerge as the gubernatorial candidate. And Nixon and Irénée DuPont did indeed have a great voice in the national Republican apparatus. But the picture of a Tammany Boss charging the Republicans with being bossed did not inspire anger, but an impotent cynicism that only further crippled any effort to stop Rockefeller’s triumphant march to Albany.[No kidding,anyone who has been reading the History of Tammany Hall,that I have been republishing on this blog,knows that is like the pot calling the kettle black DC]
That the word “DuPont” could again be used against the family’s interests, almost as effectively as their use of “communist,” was disquieting to many DuPonts. Not since the Thirties had such a tactic against them been so successful. For the Du Ponts, 1958 marked the beginning of a decade of extreme political caution, of working unseen in the wings of the political arena to try to determine government policy, while at the same time striving to keep their famous name out of political print.
Undoubtedly the greatest immediate reason for this low-key political profile was General Motors. Crawford, Irénée, and the others still hoped to emerge from the courtroom debacle with most of their G.M. treasure. Wilmington had worked out a scheme to keep its G.M. stock but surrender the voting rights of the company to individual DuPont stockholders, effectively preserving the family’s control.
In October 1959, after hearing testimony by DuPont witnesses (including Neil H. Jacoby, dean of UCLA’s Graduate School of Business Administration and later chairman of President Nixon’s Pay Board as a “neutral representative of the public”), Judge La Buy accepted the company’s plan, declaring complete divestiture by the family “unnecessarily harsh and punitive.” But La Buy had another reason for this ruling: the “severe impact” on the stock market, another echo from Du Pont’s public relations campaign. From the bench the judge read a letter of a 90-year-old woman who was concerned with the case because her only income came from G.M. stock. “The Court will not assume the responsibility of such a risk,” 46 declared the judge, himself a resident of Chicago’s exclusive Lakeshore Drive area appropriately dubbed “the Gold Coast.”
“We are gratified,” 47 responded Crawford humbly. “A victory,” hailed the stock market. “It is favorable to the DuPont family group because they avoid an enormous tax confiscation,” commented Gerald Loeb, partner of E. F. Hutton & Company. “Other DuPont stockholders are protected from varying amounts of taxes. The decision is favorable to corporations in general which have stock in other companies.” Loeb’s own firm, of course, was one of these holders of G.M. stock. But perhaps the most penetrating remarks came from stockholder Jacques Coe: “You can quote me as saying ‘the mountain labored and brought forth a mouse.’”
Two months later, on December 7, Donaldson Brown, Walter S. Carpenter, Henry B. DuPont, and Lammot du Pont Copeland resigned from G.M.’s board. It is interesting to note what interests were allowed to replace them immediately on the finance and bonuses committees: Lloyd Brace, trustee of the Rockefeller Foundation, director of A.T. & T., Gillette, and John Hancock Mutual Life Insurance, and chairman of First National Bank of Boston; and General Lucius Clay, chairman of Continental Can (in which the DuPonts held a substantial block of stock)—symbolizing G.M.’s ties in the Military-Industrial Complex. Both men, although enjoying association with Morgan interests, were intimate with the Rockefellers.
DuPont dropped all joint consultants with G.M. It dropped G.M. executives as transfer agents for its stock, assigning Chemical Bank (a bank now jointly held by Rockefeller-Morgan interests) and surrendering the company’s voting rights to individual stockholders, meaning the family. Everyone was happy. Judge La Buy was happy. The DuPont family was happy. Rockefeller interests, with their first foothold in G.M.’s door, were happy.
The Supreme Court, however, was not. On May 22, 1961, the high court ruled, by the same majority of liberals, that DuPont Company must also yield its 63 million shares of G.M. stock, worth over $3.5 billion, within ten years. “We think the public is entitled to the surer, clearer remedy of divestiture,” explained the Court.
The impact of the decision was sharp. A selling flood of DuPont stock ensued with bids one-eighth off the last sale. DuPont closed 5½ points down; G.M., 2% points down.
But the real concern of the family was taxes. Existing income tax laws could collectively cost individual family stockholders well over a billion dollars. This was because distributing G.M. shares to DuPont’s shareholders was the only feasible way of divesting most of DuPont’s G.M. holdings. DuPont couldn’t sell all its holdings openly on the market. The average daily volume of General Motors on the New York Stock Exchange was only 28,100 at the time. DuPont’s sale of 63 million shares of G.M. stock over ten years would mean selling 25,100 shares daily, doubling the market’s volume. The market was unable to absorb this sale and still keep G.M.’s stock prices from falling. By the same token, secondary distributions on the market were deemed unwise, as most stock purchasers would not buy at the high prices of the first distribution, but would wait for the cheaper prices of the second distribution. The only recourse left was a distribution to Du Pont’s 210,840 shareholders. Each shareholder of 100 DuPont shares would receive 137 shares of G.M. To pay the resultant increase in income taxes, stockholders in upper income levels would have to sell G.M. shares.
This was the company’s main concern—as it had always been—the family. “We hope the present Congress will move promptly to protect these shareholders …,” 48 Crawford told the press on hearing of the decision. The New York Times understood the meaning of his words. “Legislation on the tax problem,” it commented, “is expected to have a much better chance in Congress as a result of the decision.”
Lending his helping hand in Congress was Delaware’s own Democratic Senator, J. Allen Frear. Frear introduced a bill that not only changed the designation of the divestiture from “ordinary” income to “capital gains,” but “modified capital gains,” and allowed Christiana’s divestiture of 18 million shares to be tax-free up to their original purchase value. This would save DuPont’s stockholders a total $530 million. Later Frear would be appointed to a vice presidency of Wilmington Trust, the DuPont family bank, and a seat on the board of Diamond State Telephone.
The bill found friends everywhere. Conservatives endorsed it as a protection of property rights. Liberals such as Senator Eugene McCarthy warned that failure to pass the bill “might have the effect of distorting operations of the two corporations, and of distorting the investment portfolios of holdings of many persons or corporations.”
But the biggest surprise was the support of President Kennedy. The DuPonts had opposed his candidacy in 1960, backing Vice-President Richard Nixon with the largest contribution of his campaign, $125,000. 49 Yet an aura of good feelings had developed between Washington and Wilmington during the Cold War, and this extended into the new Kennedy administration. In May 1961, the same month the Supreme Court handed down its final decision, Jacqueline Kennedy was seen at Winterthur being hosted by Henry F. du Pont (Henry, in fact, was appointed chairman of the White House’s Fine Arts Committee because of his expertise on antiques). But the real reason for the President’s support was the activity of DuPont lobbyist Clark Clifford.
For a cool $1 million (some Washington insiders insist the fee was closer to $2 million) the Du Ponts bought the services of this leading Washington lobbyist. It was an investment that soon paid high dividends.
While encouraging Crawford Greenewalt to personally lobby more than sixty Congressmen and administration officials, Clifford brought his own personal pressure down on the White House. This was no light matter for Kennedy. Clifford was one of the most powerful men in the country. He had married into the Kimball Arms Company, and his star had risen since his wartime association with Missouri banker Jack Vardaman landed him the post of special assistant to Vardaman’s old crony, President Harry Truman. One of the administration’s strongest opponents of the United Mine Workers’ strike, Clifford also drafted the Military Unification Plan of 1947, which concentrated power in the secretary of the renamed War Department, the Department of Defense. Through the next thirteen years, Clifford was one of the strongest proponents of the Cold War’s armaments race, and he was offered the directorship of the CIA (which he also played a central role in establishing in 1946) by President Kennedy after the CIA’s invasion of Cuba ended in humiliating defeat. This was a man whose corporate clients included I.T. & T., G.E., Hughes Tool (Howard Hughes), Phillips Petroleum, and the Pennsylvania Railroad. As a consequence, he enjoyed the confidence of Congressmen and Presidents, including Kennedy.
One day, while Greenewalt and his Du Pont lieutenants prowled the legislative halls, Clifford led a corporate cortege into the Treasury Department’s legal offices. There, Clifford had just begun presenting his case to Robert Knight, the Treasury’s general counsel, when a secretary interrupted: “Mr. Knight, the President is calling.”
Clifford turned to his assistants and advised, “I think it would be appropriate for all of us to leave the room.”
“Oh, but the call isn’t for Mr. Knight,” explained the secretary, “it’s for Mr. Clifford!” 50 Calls from the President, joked the others, follow Mr. Clifford at such opportune moments.
On February 3, 1962, President Kennedy signed the DuPont bill into law.
A month later Judge La Buy paid the DuPonts his final service. On March 1 he ruled that thirty-five of the seventy-five DuPont defendants would be allowed to receive their portion of 18 million G.M. shares held by Christiana Securities. In addition, all members of the family would be permitted to directly purchase G.M. shares then and in the future. La Buy also refused a government request for a permanent injunction against future DuPont-G.M. interlocking directorships and other related activities, insisting that only a ten-year ban applied.
This ruling was in direct violation of the administration’s own public posture and the Supreme Court’s intention. “It should be clearly understood,” President Kennedy had said to reporters when signing the tax-relief bill, “that neither the Congressmen nor I have approved a divestiture which will permit the stock of General Motors to pass through Christiana to the stockholders of Christiana. If the pass-through occurred, a large percentage of General Motors stock would be acquired by members of the DuPont family. This, it is argued, would mean that the DuPont family would still effectively control both DuPont and General Motors.” 51 La Buy’s decision allowed the family through its private trusts and in-laws to retain an estimated 17 percent holding, 52 well over the 5 percent defined later as a “controlling interest” by the House Banking Committee. 53 In opposition to this position, on March 10 Senators Paul Douglas and Albert Gore made public a letter they had sent to Attorney General Robert F. Kennedy, warning that La Buy’s “wholly inadequate” ruling would nullify the Supreme Court’s decision. At the time, even government prosecutors warned that the family would be able to retain a holding of at least 6 percent.
The Kennedy administration, however, refused to appeal.
La Buy’s ruling settled the case, but not Clifford’s lobbying. The DuPont bill had allowed Christiana Securities to distribute its G.M. holdings as a “return of capital,” which simply meant getting your money back, a tax-free transaction. But the legislation stipulated this tax-free bonus only insofar as the value of the G.M. stock returned to the shareholders equaled what the shareholders paid for Christiana stock. Any value above that was naturally taxable as a capital gain.
By 1964, when the last 8.5 million G.M. shares were to be distributed, this tax-free limit had already been exhausted by the two previous distributions. And since G.M.’s stock price had nearly doubled since 1961, from $45–55 a share to $100 a share, the DuPonts were facing almost twice the capital gains taxes they would have had to pay for the same shares in 1961.
Again Clifford silently worked his way into the highest circles, this time of the new Johnson administration, most of whom were still Kennedy appointees. On July 4, 1964, he met with Treasury Secretary C. Douglas Dillon and argued for a change in the tax rules to permit a tax-free non-pro-rata distribution. In this way, younger DuPonts and recent buyers of Christiana could get distributed G.M. stock tax-free, since Christiana stock in recent years had sold high enough to absorb the additional G.M. stock value. Older, longer-term holders of Christiana, who had bought their Christiana stock years before at lower prices, would simply not participate in the distribution, thus avoiding any capital gains tax.
The greatest opposition to this proposal came from the tax lawyers of the Treasury, who honestly questioned why the DuPonts should be given special relief. Again Clifford exerted pressure. In the early fall he visited the Treasury’s legal offices, where Fred Smith had replaced Robert Knight as general counsel. And again he pulled his “call to the President” routine (Clifford’s closeness to the President is exemplified by the fact that he was later appointed Secretary of Defense by Johnson), specifically asking Smith if he could use his private office to make the call. The pressure was on.
A few days later Robert Knight received a phone call at his Wall Street law office,Shearman and Sterling. It was Clark Clifford. “He asked me,” Knight later testified before the Senate Finance Committee, “whether the fact that his clients produced a lot of revenue was the kind of factor that would permit a reconsideration” 54 of a disproportional distribution. Clifford warned that Secretary Dillon might be calling Knight back soon for a consultation on the subject. A request from so powerful a financial figure as C. Douglas Dillon, heir of the founder of Dillon Read & Co., Clifford knew, could not be ignored by any ambitious Wall Street lawyer such as Knight.
On November 2 Dillon did just that, and two days later Knight was in Washington being briefed by Clifford. By the following week, on November 10, Knight was in a joint meeting with Treasury and Christiana lawyers, and ten days later he publicly reversed his 1962 decision, recommending the Clifford plan. In December the Treasury Department announced that it, too, was reversing its previous policy. The DuPonts had won.
Almost immediately, challenges arose. Senator Albert Gore demanded and got a public hearing. Dillon hurriedly claimed it was his policy to avoid personal knowledge of specific tax cases. Knight explained that the original ruling was based on Congress’s anticipation of a specific tax collection of $450 million based on G.M.’s $55 a share. The doubled G.M. value, he explained, would still produce this amount, despite the tax free decision. Gore, among others, countered that Congress had not specified any amount. The $450 million estimate was, in fact, based on updating an earlier estimate of $350 million, when G.M. stock was only $45. Knight’s claim simply did not stand up to the record of the Congressional debate over the DuPont bill at the time. Moreover, what if G.M.’s stock had fallen? Had Congress ever intended to tax additionally to collect its full $450 million estimate? Never. The Treasury’s ruling, charged Gore, was “negotiated and issued in secrecy and contrary to the clear intent of Congress.” 55
Yet it was not changed. “Very frankly,” said Senator Douglas, “it seems to me this has been a heads-I-win, tails-you-lose ruling—heads Du Pont wins, tails the government loses.” 56 The government, in fact, lost an additional $56 million to $100 million to the Du Ponts.
All told, the DuPonts saved an estimated $2 billion in taxes. Clifford certainly earned his famous fee.
In 1965 the DuPont Company completed its divestiture. Twenty-three million G.M. shares had been distributed in 1962, 17 million in 1964, and now the last 23 million. At the stockholders meeting on April 12, 1965, Lammot du Pont Copeland, who was the new president, proudly announced that owners of distributed G.M. stock were now getting a higher combined income from both stocks than they had formerly received through just DuPont. What he did not mention was that this was partly due to G.M.’s spurt of growth after being relieved of DuPont’s commercial yoke.
DuPont, meanwhile, tried to prevent selling of its stock by increasing dividends from $7.50 in 1961 to $7.75 in 1962. Its net income actually rose during these early years of the divestiture, from $418 million in 1961 to $472 million in 1963, a 12 percent rise. There are reasons for this rise, reasons that had much to do with Lammot DuPont Copeland’s emphasis on expanding overseas investment where consumer markets, cheap labor, and lower taxes reside, reasons that also had much to do with Copeland’s emphasis on building a direct consumer market in the United States. The early success of these shifts marked Copeland’s rise within the family and his assumption of the presidency in 1962. But the decline in earnings that the company consistently suffered from 1963 on was in good part due to the loss of G.M. dividends—by 1965, more than $300 million worth. Copeland was undoubtedly right about individual family shareholders earning more through their variety of stocks, but the company itself had suffered what chairman Crawford Greenewalt aptly described to the stockholders as “the end of an era.” 57
4.
THE YOUNG CHARLEMAGNE'S
Amid a white cloud of smoke from eighty smoldering candles, spectacled old Irénée DuPont gaily took the knife offered by his daughter Irene and began the long deep cut
down eight tiers of frosted cake. When he finally reached bottom with a triumphant
smile, the largest birthday party in Delaware’s history began. Some 300 formally dressed DuPonts, including seven of Irénée’s eight children and most of his thirty-five grandchildren, gathered in the shimmering Grand Ballroom of Hotel DuPont to pay homage to the clan’s Grand Patriarch on his 80th birthday. While magazine photographers recorded the rare assembly for the entire country, the DuPonts danced, filled themselves with cake, and drank chilled champagne. Irénée seemed the happiest of all, puffing on his cigar as he made the rounds, amusing Walter Carpenter, Jr., and Mrs. A. Felix, Jr., at their table, joking with son-in-law Bruce Bredin on the dance floor. As spry as ever, old Irénée whirled through almost every dance during the evening. Finally, at 1:30 A.M. a daughter told him the party was over. “Oh,” he countered with a grin, “I thought it had just begun.” 58
That remark probably best depicts Irénée’s general outlook on life. He once described his main contribution to the company as “optimism, when it was needed.” 59 To a man so wealthy as Irénée DuPont, such an attitude was not difficult to maintain, even in his waning years.
From Granogue, his magnificent hillside mansion outside Wilmington, Irénée daily kept close tabs on DuPont Company developments, often being consulted as a patriarch should be, by his son-in-law, Du Pont president Crawford Greenewalt. But it was at Xanadu, his vast Cuban estate, that Irénée spent the most enjoyable months of his last years.
Xanadu was Irénée’s own private empire in a foreign land, a 450-acre ocean-front estate carved out of the Cuban jungle, complete with a nine-hole golf course.
Irénée’s interest in Cuba extended back to the Twenties, when the Florida land boom sparked interest also in Cuban real estate. Irénée chose one of the most beautiful areas on earth, the northern coast of Cuba’s Matanzas Province, for the materialization of his dream of “Xanadu,” the mythical kingdom of Coleridge’s “Kubla Khan.” Soon bulldozers were clearing away the palm trees and workers were putting in the first sewer system of the region, later to be known as one of the most exclusive resort areas of the world, Varadero Beach. To guard the boundaries of the estate, a tall stone wall was built in the gunpowder-making architectural tradition of Delaware’s first family. Outside the wall were lined rows of stone houses for Xanadu’s fifty servants, who were undoubtedly some of the best-paid Cubans on this island of poverty and de facto American colonization.
The only break in Xanadu’s stone wall was a huge iron gate, through which Irénée would ride his limousine when returning from tours of the island or trips to Havana, then the “fun city” of American corporate leaders. Through these gates Irénée would enter his estate and ride along his private two-lane paved road, traveling over hundreds of hilly acres of manicured green grass and swaying palm trees, until finally his limousine climbed up the last high hill, on which stood his imposing twenty-room mansion.
Irénée’s hacienda was one of the most elegant pieces of architecture in Cuba. Floored with Italian marble, paneled with mahogany woodwork, and roofed with Spanish tiles, the mansion became the scene of dinner parties for some of the most famous and privileged people of the world. At any moment, Irénée might arrive unannounced with furred and jeweled guests, emerging from his plane on the estate’s private landing strip or walking off his 60-foot yacht Icacos. Although Irénée’s parties were often unanticipated, Xanadu would always be ready to entertain his and his guests’ slightest whim. The rambling house, although furnished in poor taste with cheap shoddy furniture, was four stories high, the first with an 18-foot-high ceiling designed to make Irénée seem powerful and others seem small. It worked.
Here Irénée was undisputed lord and master, residing in Cuba four months out of every year, having his cigars lit by Cuban servants, fishing with Cuban dictators Machado and Batista, swimming while wearing prescription-lensed goggles so he could enjoy the details of underwater coral life in a country where most of the population that needed glasses went without.
But the most bizarre of Irénée’s pastimes was his large collection of iguanas. Irénée spent thousands of dollars to breed, feed, and keep these crocodile-like lizards in specially constructed pens. Some of these tough, vicious lizards grew to 3 feet in length under Irénée’s loving care, and more than once the old industrialist was seen marching about with one of these ugly beasts crawling next to him on a leash. Irénée derived a peculiar kind of pleasure from these lizards. By barking a command, he could make them all come out of their pens and surround him, standing at attention. He had trained them, on another command, to attack a target to kill. It was an appalling example to the Cubans of the degeneracy of the idle rich. In a moment of the bizarre captured for history, a Life photographer in 1957 recorded old Irénée feeding his iguanas papaya from a jar at a time when most of the Cuban population was suffering from malnutrition.
Next to the U.S. ambassador, Irénée was probably the most powerful American in Cuba. When James Roosevelt visited Cuba on an official mission for his father in 1937, his first visit was to the Cuban Secretary of State; his second, and last, was to Xanadu. Once, the story goes, Irénée even had the Cuban president, General Fulgencio Batista, denied entrance to the estate. Yet such haughty insults didn’t prevent the Cuban dictator from awarding the old industrialist with the medal of the Order of Carlos Manuel de Céspedes in 1954. Irénée, too busy to attend the honors personally, proudly accepted from afar.
In 1957 the Master of Xanadu played host to sons-in-law Crawford Greenewalt and Colgate Dardin, the latter a Du Pont director and president of the University of Virginia, while at the very same time, some miles away, Fidel Castro and Che Guevara fought a desperate guerrilla war against Batista’s armies. Two years later Castro triumphantly entered Havana and Irénée’s reign over Xanadu came to an end. Today Xanadu is “Casa DuPont,” a public restaurant and museum where Cubans see for themselves how American corporate leaders once lavishly lived in their land.
Although Cuba’s new revolutionary government refused to give Irénée compensation, the U.S. Congress did. Delaware’s Senator John Williams, the “conscience of the Senate,” sponsored an amendment to a tax bill that allowed a $2.1 million tax write-off for the family.
Xanadu was not Irénée’s greatest loss, however. Irene, his cousin-wife, died in 1961, leaving her octogenarian husband heartbroken. Two years later Irénée followed her to Sand Hole Woods. He was 86.
Most of Irénée’s $400 million fortune had been distributed among family trusts and foundations before he died. Control over the remaining $40 million estate was given to three trustees, Crawford Greenewalt, Irénée DuPont, Jr. (his only son), and son-in-law Ernest May (who subsequently lost control, in a bitter suit against the others). Of the three, lean, serious-minded Iréne, Jr., who had succeeded to his father’s seat on DuPont’s board in 1959, clearly emerged as the rising new power in the family. But it was not Irénée, Jr., who held the spotlight when the family gathered at Sand Hole Woods to bury the old patriarch. Rather, it was his cousin, Lammot DuPont Copeland, the new president.
Copeland’s personal wealth no doubt added to his stature. Enjoying the benefits of many inheritances, Copeland was one of DuPont’s largest stockholders by the time of his ascension to the presidency; he held 190,941 shares of DuPont common and 338,348 of Christiana Securities, making, with other corporate holdings, his total worth somewhere between $200 million and $400 million. Residing in Mt. Cuba, his luxurious 3,000-acre estate outside Wilmington, Copeland avidly collected the works of such painters as Charles Baskerville and was a member of the exclusive Walpole Society (an organization of American antique connoisseurs, whose membership was limited to thirty), president of Henry F. DuPont’s Winterthur (Museum) Corporation, and treasurer of the family’s Eleutherian Mills-Hagley (Library) Foundation. To anyone familiar with DuPont wealth, this seemingly shy hunter and fisherman was no financial lightweight.
Yet what most marked Copeland’s rise was his ability to listen attentively and answer forthrightly, often with a humorous approach. And during the Fifties the man he listened to most was president Crawford Greenewalt. “Mr. Greenewalt and I look at life from a similar point of view,” 60 he commented after his appointment as president—and one of Greenewalt’s foremost projects in the late Fifties had been overseas expansion.
Living off the fat of General Motors and its own earnings, DuPont was late in joining the tremendous postwar surge of corporate investment abroad. The embarrassment of its cartel agreements with I. G. Farben, despite its fervent denials of their existence, forced DuPont to release “exclusive” rights on I. G. Farben nylon patents to the Alien Property Custodian in 1947. These patents, however, were described by one official as “not of importance and of pretty foggy” utilization. In other words, DuPont really lost nothing.
On September 28, 1951, DuPont and Remington Arms had been convicted of conspiring with Britain’s Imperial Chemicals, Ltd. to divide the wartime markets in munitions, chemicals, and small arms. On the basis of the 1939 agreement, the government also named West Germany’s I. G. Farben as an accomplice, but not a defendant. Throughout the trial, Lammot DuPont, Walter Carpenter, and Charles Davis claimed that their innocence rested on their acting as corporate executives under the direction of the DuPont board. But the image of Lammot DuPont being a puppet for anyone was simply unconvincing. Although federal judge Sylvester Ryan found “that the nylon agreement of 1939 was illegal because it was part of a licensing scheme, accomplished by concerted action of DuPont and I.C.I. for allocation of territories and pooling of patents embracing the whole of the nylon manufacturing industry and the whole of the nylon technology,” 61 Lammot, Carpenter, and Davis received no penalties. “Their acts were not calculated to bring them direct personal gain,” the judge held, while in the same breath admitting, “any profit which they might have received came through stock ownership (and of this we have no proof).”
To settle this case so happily, DuPont agreed to release nylon patents for free. The newspapers gleefully reiterated the government’s contention that this would break DuPont’s nylon monopoly. Actually, nylon production processes were no secret, but its operation required huge investments which up to then had scared away most everyone but the giant from Wilmington. To avoid another anti-trust suit, DuPont allowed a small company in Florida, Chemstrand, to take a license for nylon production. Then Chemstrand was bought by a larger chemical firm, Monsanto, which was willing to borrow enough capital to give DuPont a run for its money with improved technology. By 1967, twenty-three other companies had joined the nylon race.
Six years followed the severing of profitable arrangements with I.C.I. before DuPont adopted a serious program of capital expansion overseas. By then DuPont was the tortoise in the chemical industry’s hot race to go abroad after World War II. Although the leader in exports, DuPont lagged in foreign plant investment, and rising U.S. taxes and inflation were making it more and more difficult to generate the traditional 10 percent yield on domestic plant investment. In contrast to DuPont, Monsanto increased its overseas assets from $57 million in 1953 to $160 million in 1959, reaping the high profits of cheap foreign labor and the revived European market, and becoming a leading competitor.
DuPont’s growing move abroad paralleled its growing legal defeats in attempting to hold onto G.M.’s annual dividends. In 1957, the year of the Supreme Court divestiture decision, DuPont established its first wholly owned foreign subsidiary in Holland and began construction on a $30 million neoprene plant in Derry, Northern Ireland. This move was an attempt to break into the Common Market, where revived European industry and other American corporations threatened the markets DuPont sought. By having a toehold inside Europe, the DuPonts expected to be able to cash in on the elimination of tariff walls inside the Common Market.
The company by then had set up a new style of overseas operation, shifting from the previous emphasis on technological exports it had maintained under the I.C.I. agreement, to more profitable and direct product exports. From 1953 to 1957 this export trade sharply grew from $100 million to $146 million. With foreign and American competition threatening these new markets, Wilmington increasingly saw the need to protect them. The impending loss of G.M. earnings made this concern even more paramount.
In 1958 DuPont made its first full commitment to major overseas expansion. W. Sam Carpenter III, the ruggedly handsome middle-aged son of Walter Carpenter, Jr., was made general manager of the new International Department. The International Department was no mere revitalized Foreign Relations Department. Its scope was wider and its concern more direct and detailed, because DuPont was now to be physically present in foreign lands. In recognition of this prospect, Carpenter’s department was put on a level with the industrial department in the company hierarchy, responsible directly to the executive committee for management and financial returns on all DuPont foreign enterprises.
As the International Department had no technological resources of its own, Carpenter had to rely on specific industrial departments for know-how and technically trained personnel to run the plants abroad. In return, Carpenter advised the industrial divisions on the best use of foreign markets for their export sales. In this way, DuPont’s capital market aided the commodities market in a coordinated system of exploitation.
Probably most revealing of Wilmington’s foreign ambitions, however, was the worldwide scope of the new department’s concerns. Two geographic divisions were immediately set up, one covering all of Latin America, and the other, Europe. For each manager stationed overseas to run the plant operations, Carpenter had a deputy manager in Wilmington who integrated the domestic departments with overseas activities. Carpenter also set up two smaller staff divisions concerned with future overseas business: (1) the Development Division, to handle the administrative details of licensing and to find further opportunities for DuPont ventures overseas; and (2) the Foreign Trade Division, to maintain representatives who searched for markets in areas where there was not sufficient volume to warrant a manager for each of DuPont’s products.
It was a complex operation, but a necessary one.
Undaunted by 200 Irish construction workers carrying placards reading “Du Pont: the dictators of 1958” and “Freedom before Du Pont domination,” striking over the arbitrary dismissal of a shop steward, Carpenter pushed through the completion of the Derry plant and customer service lab for Great Britain in 1959. By then DuPont had a finishes plant in Venezuela; Freon refrigerant plants in Brazil and Argentina; a paint plant in Cuba (subsequently lost to the revolution); a finishes plant in Belgium; an Orion plant in the Netherlands; and a key sales subsidiary in Switzerland for marketing DuPont products throughout Europe. Canada, Ltd., another DuPont subsidiary, was also going well, increasing its sales from $56 million in 1954 to $96 million in 1959. Carpenter had also begun plans for expanding the nylon and cellophane production in Argentina, and building a titanium dioxide plant in Mexico.
DuPont’s overseas invasion was now in full swing.
Crawford Greenewalt gave this expansion every encouragement. But the one person most closely involved with overseeing and judging Carpenter’s results was Greenewalt’s protégé, the chairman of the finance committee, Lammot DuPont Copeland.
By the time he rose to the presidency, Copeland was committed to the concept that the future progress and well-being of DuPont was greatly linked to its overseas expansion. “The key to success,” he told the National Convention of the Foreign Trade Council in November 1963, “lies first with a lively research establishment. But an enterprise must also have an aggressive marketing organization attuned to world markets and able to move as promptly with its new product abroad as it does at home. This is the course we have charted for DuPont.” 62 It was a course that had already produced results. In 1954 only 6 percent of DuPont’s sales were foreign. When Copeland spoke in 1963, foreign sales had risen to over 15 percent.
But more important was the fact that DuPont’s foreign plants were already returning a higher percentage increase in profits each year than Wilmington was able to increase exports abroad. Over 16,000 foreign workers were now working for DuPont in thirtyfive plants in thirteen different countries. Du Pont was no longer tied to mere export trade. Now the race for overseas markets involved open exploitation of foreign labor.
Copeland himself explained this foreign expansion as the result of market competition. “Since there are other potential producers in each of our product lines, a competitor will build a plant there if we don’t.” And what of the underdeveloped countries of Asia, Latin America, and Africa, the former victims of colonization and imperialism? “In the developing countries, there are other factors,” he elucidated, “close government control of the economy which closes the border to imports when the first local producer is established, tariffs and other trade restrictions. The point is that the export business in both these areas will be lost in any event. But if we build the plant, we lose the market to ourselves.” And the profits, of course, are not returned to the local economy, but are forwarded to Wilmington, chemicals’ new Rome. Copeland underscored this fact. “In the last ten years,” he told the assembled industrialists, “the DuPont Company’s own favorable balance of international payments adds up to the scarcely insignificant figure of $1.3 billion. Moreover, in the future, despite what we anticipate will be continued heavy investment abroad, we expect our balance of international payments will be even more favorable. While the figures are not exactly comparable, the chemical industry as a whole has had a favorable balance of payments of $9 billion in the last ten years, and, in recent years, this balance has been more than $1 billion annually.” In some cases, in the advanced industrial countries, Copeland pointed out, increased exports even paid for the new plants. “For example, the announcement of our synthetic rubber and acrylic fiber plant in Europe a few years ago resulted in increased export sales of about $63 million by the time the plants went on steam. This amount far exceeded the cost of the new plant.”
But in the underdeveloped countries the situation was far different. Centuries of European colonialism and economic imperialism had prevented the development of indigenous industry. Without these industries, increased buying of DuPont products could not be stimulated merely by Wilmington’s announcing plans to build a local plant. Still suffering from the crippling polio of foreign exploitation, the underdeveloped countries offered only two opportunities for profit: cheap labor and raw and crude resources. But both opportunities were capable of returning a higher yield on plant investment than the United States or Europe, since costs were lower. Accordingly, by 1970 half of DuPont’s overseas plants were in Latin America.
Copeland’s extraordinary and frank address in 1963 marked the beginning of a new era for DuPont, an era of overseas investment. It also marked a change in the family’s political policies. Only a decade before, the DuPonts had been in general opposition to increased U.S. foreign aid to underdeveloped countries. DuPont director Colgate Darden, later Irénée’s son-in-law, had served on the Fairless Committee, named after its chairman, Benjamin Fairless of U.S. Steel. Joining John L. Lewis, Fairless, and the chairmen of Proctor & Gamble, the New York Herald Tribune, and the Bank of America, Darden attacked most of the State Department’s foreign aid programs.
With DuPont’s personal involvement in overseas investment, Wilmington’s foreign policy changed dramatically, accepting the basic arguments of corporate liberalism. U.S. foreign aid was a means to encourage political stability in the revolutionary tempest sweeping the underdeveloped countries, Copeland explained. Corporate investment overseas was now advanced by Wilmington as “humanitarian.” But in his entire speech, Copeland devoted only one sentence of lip service to this aspect, before going on to the more important concern of “the eventual development of tremendous, profitable markets.… As businessmen, however, we also recognize that, in most of these areas, markets are relatively small, and there is often a high degree of economic and political instability. It seems to me that this presents an opportunity to our government and to other governments which have undertaken programs of economic assistance to the emerging nations. The objectives and the implementation of these programs should be sharpened up to foster political and economic stability so that private capital will be attracted to these areas.”
To DuPont, Washington should use foreign aid as a bludgeon of bribery to force economically desperate governments to maintain law and order in the face of popular uprisings or creeping socialism. “… we have the freedom and responsibility to specify the terms on which we will assist, and we should exercise this fully. Once stability or indications of it have been achieved in the developing countries, private capital, both domestic and foreign, will be attracted to the obvious market opportunities. We should make certain that this is well understood because it should act as an additional incentive for the establishment of stability.
“DuPont already has invested quite substantial amounts in some of the developing countries, and we are prepared to increase investments for profitable projects when we find solid evidence of political and economic stability. Mexico is a good example of what I mean.” Mexico, with a so-called “nationalistic” government, was indeed a good example. Although Mexican law stipulated that all foreign companies must be majority- owned by Mexican nationals, a special deal was struck in the case of DuPont. Three plants, Policrón de México, S.A., Pigmentos y Productos Químicos, S.A., and Tetraetilo de México, S.A., were set up as companies with 49 percent DuPont control. In exchange, DuPont Company was allowed to establish two wholly owned subsidiaries, Colorquím, S.A., and DuPont, S.A., which, with Endo Laboratories, Inc., another DuPont subsidiary, ran and wholly owned four plants throughout Mexico. This effectively put Mexico’s chemical industry under Du Pont domination.
No longer would Wilmington cry “communism!” when Asian, Latin American, or African governments built their own public projects. “We must be prepared to accept the fact that a significant proportion of economic and social progress in the developing countries will be achieved through government initiative,” said Copeland. “These nations need roads and dams and schools and health facilities on which a sound economic system can be built. And frankly, I am not concerned by the use of government enterprise in the developing countries if it is limited to these purposes and accompanied by the growth of political and economic maturity. But once the basic facilities exist, the developing nations will have to depend upon private capital to fuel their engines of human progress.”
Copeland’s own remarks revealed that a new political maturity in the family had been reached, a maturity of class consciousness that understood the use of state power to financially develop political order and the economic preconditions for business expansion abroad. Forty years before, Herbert Hoover had made a similar recommendation regarding the financing of public works abroad, only he had suggested the use of corporate funds. Now the American taxpayer, the bulk of whom were of the middle and working classes, paid the tab for the corporations.
Copeland’s address was the most important public statement by the DuPont family since Lammot DuPont’s dramatic offer of reconciliation to FDR in 1937, and in many ways it represented an extension of the Wilmington-Washington détente that had developed since then. It was fitting indeed that Copeland’s speech was not to DuPont stockholders, or even to the chemical industry as a whole, but to a national convention of some of the most sophisticated corporate leaders in the country, gathered to celebrate the fiftieth anniversary of the National Foreign Trade Council, a corporate organization founded just before World War I to promote the first big investment drive of American monopolies overseas. And it was an indication of the political sophistication the family had reached that Copeland had defined the investment problems of particular corporations as a national problem. Copeland by then was firmly convinced that not only the destiny of DuPont, but also of the present system of U.S. government, the country, and capitalism itself, were tied to overseas expansion. “We must certainly take accurate bearings of the vital questions of exports, foreign investments, the U.S. balance of payments deficit, and proposed tariff reductions under the Expansion Act of 1962. And any course that we set obviously must serve the broad, national interest of the United States and the countries with which our foreign trade is conducted as well as our corporate interests.” No longer was DuPont the only concern; now a coordinated system of overseas expansion was necessary. “The course we chart in world markets will determine, in part, the profitability of our own enterprises and the economic strength and stature of the United States abroad.… If we don’t participate in the rapidly expanding markets abroad, we will soon be the victims of economic isolation.” Overseas markets, in a general sense for all U.S. business, must be protected and extended at all costs.
In this regard, Copeland was particularly disturbed by the Kennedy administration’s failure to consult the DuPonts before negotiating over tariffs with economically revived European capitalism. Those negotiations with west European powers resulted in lower chemical tariffs that hurt DuPont’s markets. “It should be pointed out to the officials responsible for these negotiations that such attrition is not a simple and painless matter for industry and its people. It is not something which can easily be dismissed in high sounding words about the broader national interest. A few months ago, DuPont was forced out of the indigo dye business by foreign competition.”
Three days after Copeland’s speech, President Kennedy was assassinated; the new Johnson administration almost immediately began preparing for massive military escalation in Vietnam. Although Kennedy’s tariff agreements with Europe were not reversed, his reservations about fully engaging in an Asian war were. For Johnson, Indochina was the first domino of the Asian market, an opinion ideologically strengthened by the fact that the anti-colonial revolution in Indochina was led by communists who had fought the Japanese and the French.
This “domino” theory and all measures to protect U.S. markets abroad were accepted by the DuPonts. The CIA-financed military overthrow of President Goulart, who threatened to limit foreign profits to 10 percent in Brazil (where DuPont had a subsidiary and two large plants), was viewed with relief in Wilmington. So also, Johnson’s intervention in 1965 with 20,000 “neutral” marines to crush a popular revolt in the Dominican Republic, the “sugar bowl” replacement for Cuba, was viewed warmly by the family. Significantly, American Sugar & Refining Company, in which the DuPonts held a substantial interest, used the island as a resource for its sugar production.
That same year, another CIA-backed military coup overthrew Indonesia’s President Sukarno. Sukarno had resisted political demands made by the United States in exchange for foreign aid, demands that would have ended his nationalization of U.S. and European corporate properties. Sukarno threatened to found a new United Nations of underdeveloped and exploited countries. He was preparing to replace Indonesia’s U.S.- trained army with a people’s militia, when the army struck first in 1965. Over one million of Sukarno’s followers died in one of the greatest bloodbaths in history. The New York Times reported that the carnage was so massive that bodies were even clogging the country’s canals. As a result, U.S. corporate properties, including the rubber plantations of DuPont-controlled U.S. Rubber Company, were saved from public ownership.
But that was not all. The new regime of General Suharto put political prisoners to work on the rubber plantations. NBC news, on February 19, 1967, at 6:30 P.M., captured the scene of political prisoners working American corporate-owned rubber fields in Sumatra and Borneo as slave labor under the guns of Suharto’s soldiers. The two biggest American corporations on those islands were Goodyear and the U.S. Rubber Company. Two years later Alex Campbell, managing editor of the New Republic, upon visiting the “New Order” of Indonesia, reported, “The government plans to send some 60,000 [political prisoners] to forced labor on rubber plantations in Borneo. Perhaps 10,000 have already gone there. They are said to be dying like flies. Meanwhile those still in the camps may be slowly dying of starvation.” 63 Among the rubber plantations reportedly involved were those of U.S. Rubber Company, which owns 44,000 acres in Indonesia, and a subsidiary, U.S. Rubber Sumatra Plantations.
In July 1969 President Nixon, who in Foreign Affairs magazine, October 1967, termed Indonesia, “containing the region’s richest hoard of natural resources,” as “the greatest prize in the Southeast Asian area,” personally flew to Indonesia to endorse the “progress” of General Suharto. Today, in violation of the same international accords that were used at Nuremberg to convict Alfred Krupp for using Nazi concentration camp prisoners in his munitions plants, U.S. Rubber (now Uniroyal) is allegedly benefiting from the use of thousands of political prisoners as slave labor in the rubber fields of Indonesia. It is unlikely that J. Simpson Dean, brother-in-law of Irénée DuPont, Jr., is unaware of the source of this plantation labor. Dean, a director also of Wilmington Trust, the DuPont family’s bank, sits on the board of Uniroyal with a loyal family lieutenant, J. W. Chinn, Jr., chief executive officer of Wilmington Trust and a director of Irénée DuPont, Jr.’s Greater Wilmington Development Council. Other DuPonts who are major stockholders in Uniroyal are Lammot DuPont Copeland, Pierre S. DuPont III (Lammot du Pont’s eldest son), George P. Edmonds and Colgate Darden, Jr. (Lammot and Irénée DuPont’s sons-in-law), and until his death in 1970, Henry B. DuPont. Congressman Pierre S. DuPont IV also owns over $140,000 worth of Uniroyal common. All together, the family holds a controlling block of 18 percent of Uniroyal stock.
The Indonesian coup may have been lucrative for the DuPonts, but the return would have been minuscule compared to the immediate financial gains won through U.S. intervention in Indochina.
During the 1964 presidential campaign Barry Goldwater’s call for the bombing of North Vietnam won him $71,000 in DuPont family donations, his third largest contribution. 64 Polly Buck, daughter-in-law of Alice DuPont, even called the roll of states at the national convention in San Francisco’s Cow Palace that led to Goldwater’s nomination. Polly, in fact, was the secretary of the Republican National Committee.
When the “liberal” alternative, President Johnson, carried out Goldwater’s threat the following year, Wilmington applauded with enthusiasm. In the heat of the 1965 escalation, the American Conservatives Union pushed for full invasion of North Vietnam and the overthrow of its government. The president of the ACU was Lammot DuPont Copeland, Jr., who was also national treasurer of the arch-conservative Young Americans for Freedom from 1962 to 1966.
Most of the DuPonts quietly shared young Copeland’s enthusiasm for intervention, but steered clear of the publicity hazards of open promotion. The pro-war leaders in the family were Lammot DuPont Copeland, Jr., his father, Lammot du Pont Copeland, Sr., R. R. M. (Bobby) Carpenter, Jr., and P. S. DuPont III, who was a member of the ultraconservative Freedoms Foundation. The DuPonts well understood that Vietnam was the controlling hub of an area—as Secretary of State John Foster Dulles put it in 1954, the first year of direct U.S. intervention—“rich in many raw materials such as tin, oil, rubber, and iron ore. The area has great strategic value.” 65
A year before, on August 4, 1953, President Eisenhower himself had told a conference of the U.S. state governors in Seattle: “Now let us assume that we lost Indochina.… The tin and tungsten that we so greatly value from that area would cease coming.… So when the United States votes 400 million dollars to help that war, we are not voting a give-away program. We are voting for the cheapest way that we can to prevent the occurrence of something that would be of a most terrible significance to the United States of America, our security, our power and ability to get certain things we need from the riches of the Indochinese territory and from Southeast Asia.”
By 1965, Henry Cabot Lodge, Ambassador to the U.S.-installed Diem dictatorship in southern Vietnam, addressed the exclusive Middlesex Club of Cambridge in similar terms. “Geographically,” he was reported saying by the Boston Sunday Globe on February 28, 1965, “Vietnam stands at the hub of a vast area of the world—Southeast Asia—an area with a population of 249 million persons.… He who holds or has influence in Vietnam can affect the future of the Philippines and Formosa to the east, Thailand and Burma with their huge rice surpluses to the west, and Malaysia and Indonesia with their rubber, ore, and tin to the south.… Vietnam thus does not exist in a geographical vacuum—from it large storehouses of wealth and population can be influenced and undermined.”
But an aspect of more concern to the DuPonts was the potential Indochina held for capital investment. As Jules Henry explained in the Nation: “The establishment throughout Southeast Asia of industrial complexes backed by American capital is sure to have a salutary effect on the development of our foreign involvement: the vast land’s cheap labor pool will permit competition with the lower production costs of Chinese and Japanese industry, which have immobilized our trading capabilities in Asia for many years.… The destruction of the Vietnamese countryside is the first, and necessary, step to the industrialization of Vietnam and the nationalization of its agriculture.” 66 [Oh yeah plenty of humanitarian outlook in that statement..geez DC]
“After the war,” asserted Arthur Tunnell of the Saigon branch of Investors Overseas Services, “there is going to be a big future for American businessmen here.” 67 First National City’s vice-president Henry M. Sperry agreed. “We believe we’re going to win this war,” he said, “… Afterwards, you’ll have a major job of reconstruction on your hands. That will take financing, and financing means banks.” 68 That was in 1965. Within five years DuPont established DuPont Far East, Inc., with branch offices in Hong Kong, Bangkok (Thailand), Taipei (Taiwan), and Tokyo (Japan). In Chiang Kai shek’s Taiwan, where labor receives very low wages, Wilmington also set up DuPont Taiwan, Ltd., with a plant busily turning out “Mylar” polyester film. In Japan DuPont had already bought 50 percent interest into two Mitzui Chemicals subsidiaries and established 50 percent interest in two other companies, Showa Neoprene KK and Tokyo Products Company, Ltd. In addition, DuPont was just expanding its market in Australia, where a subsidiary manufactured and sold pigments, photographic products, and urea herbicides.
These investments all underscored the DuPont’s growing stake in the Asian labor market and hopes for future expansion. Other family interests were also looking to the East. Uniroyal then owned (and still does own, under “perpetuity” leases) some 30,000 acres of crude rubber plantations in Malaysia, a former British colony directly below Vietnam. Uniroyal also owns plants in India and Japan, where it also has controlling interests in Kaisha Company and Sumitomo Naugatuck Kabushiki Company.
DuPont Company lent itself well to the Vietnam war effort, again, as in previous wars, for a price. The escalation years of 1965 and 1966 resulted in the highest earnings ever achieved by the company, and dividends of $6.00 and $6.75 per share. As Vice President Henry B. DuPont once put it while addressing the Virginia State Chamber of Commerce, “National Security must not be auctioned to the lowest bidder.… There are no bargains in the safeguarding of our freedom.” 69
Although Wilmington has not released figures of its profits from the Vietnam War, its own 1966 Annual Report confirmed that “the Department of Defense military buildup has resulted in the increased use of DuPont commercial products.” Here are the products specifically mentioned: textile fibers, packaging films, photographic films, plastics, dyes, methanol and formaldehyde, elastomers, Freon fluorocarbon products, protective fabrics and finishes, and petroleum chemicals. In addition, the company noted that “increased demands for military explosives and related specialties have resulted in accelerated schedules for increased quantities of products.” 71 That year DuPont’s sales scored a new record: $3.19 billion. There is little doubt that the Pentagon’s spending had much to do with stimulating the economy, which had recently been stagnating for lack of markets. DuPont itself received a massive injection of military adrenaline, scoring $161 million in war orders in 1966, up from $69 million in 1964. 72
The following year, 1967, DuPont announced it was furnishing the U.S. Army ordnance plant at Parsons, Kansas, with engineering services and production management. DuPont itself reaped $23 million in war orders, and its subsidiary, Remington Arms, another $156 million. 73 In addition, the company was continuing its operation of the Atomic Energy Commission’s Savannah River plant and laboratory. “The major objective of the work,” Wilmington reported, “was the production of nuclear materials for national defense, but a substantial effort was devoted to other AEC programs of national interest.” 74
In 1968 a slight breeze from the barren sands of Utah’s desert blew in over pasture lands. Silently and swiftly, it passed over some 6,400 sheep peacefully grazing on warm green grass. Within seconds, all were dead, the pasture suddenly resembling a battlefield littered with corpses. And, in fact, that was just what it was.
The sheep were the hapless victims of one of the U.S. Army’s newest weapons: XV nerve gas. Produced by the Army using chemicals procured from chemical companies, including DuPont, the invisible death had escaped from tests at the Army’s Dugway Proving Grounds, carried on something as innocent as a breeze. Now the word was out. The U.S. government was secretly producing chemical weapons in flagrant opposition to most international accords, including the Geneva Convention. As Vice-President Henry B. DuPont had put it just five years before, to suggest “that science and technology serve ends which differ from the common purpose seems to me as fallacious as it is dangerous.” 75
The incident triggered a public outcry, and the Pentagon, first denying then admitting secret research, hurriedly set up a Permanent Chemical Safety Committee. Except for establishing standards for preventing another embarrassing occurrence, this committee resolved nothing. DuPont’s production of internationally outlawed chemical warfare bombs continued, assisted (under independent defense contracts) by Dr. William A. Mosher and Dr. James Moore of the University of Delaware, who also procured rare chemicals for use in the CIA’s secret mind-control experiments at some 80 hospitals, prisons and universities around the country. Significantly, the Permanent Chemical Safety Committee was chaired by DuPont’s own production manager, Jake T. Nolen.
DuPont developed other weapons for the Department of Defense in violation of the Geneva Convention, which the U.S. has conveniently never signed. Besides storing VX nerve gas at its Newport, Indiana, plant, DuPont had a defense contract for “research and development of a Micro-Gravel concept” for anti-personnel mines similar to small “letter bombs”: the mines were to be dropped from overhead planes. This contract, awarded to DuPont in 1968, contributed to the record $212 million in war orders scored by DuPont in 1969. 76
Other DuPont family interests did as well in 1969. DuPont-controlled Uniroyal grossed $174 million from the Defense Department that year. Hercules Chemicals, the DuPont spin-off in which the family held a substantial interest, collected over $179 million for rocket propellants and anti-personnel weapons, including the infamous burning jelly, napalm. Boeing Aircraft, over which former DuPont chairman Crawford Greenewalt served as a director, raked in over $653 million for its production of B52’s and other aerial weaponry. Henry B. DuPont’s North American Aviation, which merged with Rockwell family interests in 1967 to form North American Rockwell, took in $674 million for its production of OU-10 “Bronco” counterinsurgency aircraft, homing optical bombs (TV guided), F-100’s, Condor air-to-surface missiles, and liquid rocket fuels for ICBM’s and a score of other missiles. General Motors, in which the family retained an estimated 17 percent holding, collected $584 million for tanks, aircraft engines, rocket launchers, and M-16 rifles. Indeed, DuPont stockholder ties in G.M. were still so strong that chairman Lammot DuPont Copeland found it important enough to stress at the annual meeting in May 1969 that “Since the divestiture, the G.M. dividends have been paid directly to DuPont stockholders who retained the G.M. shares distributed to them. Our dividend on common last year was $5.75 and the G.M. dividend was $4.55 per share.” 77
The beneficial effect the Vietnam War had on Du Pont interests can be easily seen by noting the various percentages of total sales the Pentagon’s military orders represented for 1969 alone.
For DuPont Company and its subsidiaries, Pentagon orders in 1969 amounted to 6.8 percent of total sales, or $212 million out of a total $3,078 million.
For Henry B. DuPont’s North American Rockwell, Pentagon orders amounted to 28 percent of total sales, or $674.2 million out of a total $2,438 million.
For Uniroyal, Pentagon orders amounted to 14 percent of total sales, or $174.1 million out of a total $1260 million.
For Hercules, Inc., 27 percent or $179.6 million out of a $642 million total.
For Boeing Aircraft, 22 percent, or $653.6 million out of a $2,880 million total.
For Newport News Shipbuilding and Dry Dock Company (a Tenneco subsidiary which has Irénée du Pont’s son-in-law, Colgate Darden, as a major stockholder), 13 percent, or $236 million out of a Tenneco total of $1.7 billion.
It is interesting to note that North American Rockwell, which in 1969 was the eighth largest Pentagon contractor, employed 104 high-ranking retired officers. Boeing, which was the ninth largest, employed 169 retired officers. Retired generals and admirals are very useful in contract negotiations with the Pentagon, since 90 percent of all military contracts are personally negotiated rather than awarded on a formally advertised competitive basis. 78
With their G.M. diversification funds, many DuPonts also invested in new firms utilizing the latest scientific technology, including computers, which worked on military contracts during the Vietnam era. William H. DuPont, the son of William DuPont, Jr., set up Sci-Tek, Inc., a computer-based operation which took in $15,000 in Navy contracts in 1971, $80,000 in 1972. 79 Emile F. DuPont’s Dukane Corporation grossed $20,744 on one Navy contract in 1972 for developing a locator system in jet planes. 80 Reynolds and Richard C. DuPont’s All-American Engineering raked in $1.6 million in 1972, bringing its Vietnam era (1964–1972) total to $11 million.
All told, the family’s varied corporate interests grossed over 15 billion in war contracts between 1964, the year of the first arms buildup, and 1972. Of the top ten war contractors, three (North American Rockwell, Boeing, and General Motors) represented large investments of the DuPont family. Of the top forty Pentagon contractors, eight (North American Rockwell, Boeing, General Motors, Newport News Shipbuilding, DuPont, Hercules, and Uniroyal), or one-fifth, were DuPont interests. DuPont Company alone reaped over $1 billion in war contracts. One DuPont enthusiast recently became very flustered at the suggestion of war profiteering by his favorite family. “I challenge anyone to show proof of any money made off this tragic war."
NEXT
The Crisis Years 436s
Notes
Chapter 12
1. New York Times, December 20, 1963.
2. Temporary National Economic Commission (TNEC), Monograph 29, p. 119.
3. John R. Carlson, The Plotters (New York: E. P. Dutton & Co., Inc., 1946), p. 248.
4. United Press, October 19, 1946.
5. Karl Schriftgiesser, The Lobbyist (Boston: Little, Brown & Co., 1951), p. 198.
6. Congressmen O’Toole, Klein, Sabath, Lesinski, Holifield, Buchanan, Norton, and Blatnik, statements in Congressional Record, April 14–16, 1946.
7. Merwin Hart to Lammot du Pont, Hearings, Part 4, p. 76, House Select Committee on Lobbying Activities, 81st Congress, 2nd session.
8. Hearings, Ibid., p. 78.
9. Ibid., General Interim Report (1950), pp. 11 and 20.
10. Albert E. Kahn, High Treason (New York: Lear Publishers, 1950), p. 336.
11. Ibid.
12. Du Pont, The Autobiography of an American Enterprise (Wilmington: E. I. du Pont de Nemours & Co., 1952), p. 176.
13. “Latest Facts About Candy Purchases in Super Markets,” pamphlet published by E. I. du Pont de Nemours & Co. (Wilmington: 1954).
14. New York Times, June 4, 1951, p. 41.
15. Ibid.
16. Ibid.
17. Congressional Record, April 5, 1947.
18. New York Times, March 3, 1953.
19. Joseph P. Morray, From Yalta to Disarmament (New York: Monthly Review Press, 1961), p. 186.
20. Du Pont Autobiography, p. 131.
21. National Science Foundation, Funds for Research and Development (Washington, D.C.: Government Printing Office, 1960), pp. 9 and 12.
22. Fortune, July 1958.
23. Committee on Armed Services, “Employment of Retired Military and Civilian Personnel by Defense Contract Industries,” Hearings, 1959, pp. 163 and 166.
24. New York Times, March 22, 1969.
25. NEC, Monograph 29, p. 116.
26. New York Times, November 18–20, 1948.
27. Ibid., June 4, 1957, pp. 1, 23, and 24.
28. Ibid., July 12, 1949, p. 37.
29. H. B. du Pont, “That No Man Shall Be Poor,” Vital Speeches, XIV (July 15, 1948), 587–90.
30. Associated Press, March 21, 1952, Chicago.
31. New York Times, March 6, 1952, p. 38.
32. Ibid., January 7, 1953, p. 33.
33. Ibid.
34. Ibid.
35. Ibid., February 18 (p. 39), 19, and 28 (p. 25), 1953.
36. Ibid., February 26, 1953, p. 37.
37. Ibid., February 17 (p. 35), 19, 20 (p. 29), and 27 (p. 31), 1953.
38. Ibid., December 4, 1953, pp. 1 and 12.
39. L. L. L. Golden, Only By Public Consent (New York: Hawthorn Books, Inc., 1968), p. 307.
40. New York Times, December 20, 1965, p. 26.
41. Robert Engler, The Politics of Oil (Chicago: University of Chicago Press, 1961), pp. 172–73.
42. New York Times, June 4, 1957, pp. 1, 23, and 24.
43. Ibid., September 14, 1958, p. 1.
44. Ibid.
45. Ibid., October 14, 1958, p. 26.
46. Ibid., October 3, 1959, p. 1.
47. Ibid.
48. Ibid., May 23, 1961, p. 1.
49. Senator Albert Gore, Congressional Record, Senate, May 26, 1965, pp. 11399– 903; also I. F. Stone’s Weekly, July 26, 1965, p. 3.
50. Recounted in David Walsh and David Horowitz, “Attorney at Law,” Ramparts, VII, No. 10 (January 25-February 7, 1969), 134.
51. New York Times, February 4, 1962, p. 46.
52. Ferdinand Lundberg, The Rich and the Super-Rich (New York: Lyle Stuart, Inc., 1968), p. 255.
53. “Commercial Banks and Their Trust Activities: Emerging Influences on the American Economy,” Staff Report, Subcommittee on Domestic Finance, House Committee on Banking and Currency, 1967.
54. Walsh and Horowitz, “Attorney at Law.”
55. Ibid.
56. Ibid.
57. New York Times, April 13, 1965, p. 49.
58. Life, February 25, 1957, p. 145.
59. Ibid., August 19, 1957, p. 108.
60. New York Times, September 23, 1962, Sec. III, p. 3.
61. Ibid., September 29, 1951, p. 1.
62. Lammot du Pont Copeland, “World Trade—the National and Corporate Interests” (November 19, 1963), reprinted in Vital Speeches, XXX (February 15, 1964), 264– 67.
63. Alex Campbell, “Indonesia—The Greatest Prize,” New Republic, CLX (April 19, 1969), 18.
64. Congressional Record, Senate, May. 26, 1965, pp. 11399–903; also I. F. Stone’s Weekly, July 26, 1965, p. 3.
65. “Why the U.S. Risks War in Indochina,” U.S. News and World Report, April 4, 1954.
66. Jules Henry, “Capital’s Last Frontier,” Nation, April 25, 1966.
67. Ibid.
68. Ibid.
69. Speech by H. B. du Pont before the Virginia State Chamber of Commerce, April 8, 1954. 70. New York Times, January 30, 1968, p. 5.
71. E. I. du Pont de Nemours & Co., Annual Report, 1966, p. 20.
72. Figures from 100 Companies and Their Subsidiary Corporations Listed According to Net Value of Military Prime Contract Awards, U.S. Department of Defense, 1964 and 1966.
73. Department of Defense, 100 Top Contractors, 1967.
74. E. I. du Pont de Nemours & Co., Annual Report, 1967, p. 26.
75. New York Times, April 1, 1963, p. 43.
76. Department of Defense, 100 Top Contractors, 1969.
77. Wilmington Evening Journal, May 12, 1969.
78. New York Times, March 22, 1969.
79. Defense/Aerospace Contract Quarterly, DMS Computer Systems (Company sequence) (1971–73 quarterly reports).
80. Ibid., Contract No. 421 72-C-6790.
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