Bosch "Invasion"

To the U. S. from Frankfort on the Main last week came Germany's Farbenindustrie (farben: to dye) accompanied by enthusiastic activity on the part of U. S. bond purchasers and a lone wail of protest from Finance-Writer Hugh Farrell. The German chemical "invasion" of U. S. territory took the form of the incorporation of American I. G. Chemical Corp. as a Delaware affiliate of I. G. Farbenindustrie Aktiengesellschaft of Frankfort, commonly known as I. G. Dyes and loosely referred to as the German Dye Trust. When Chemist Carl Bosch, I. G. Dyes' president and Dr. Karl Dueysberg, its Chairman, came to U. S. shores (TIME, April 1), only Vonly, the astute observer, suspected the object of their visit. And when, last week, the U. S. affiliate, with a distinguished German-American directorate, announced a $30,000,000 bond issue, only Writer Farrell seemed to detect a significance, let alone a menace, in what Herren Bosch & Dueysberg had accomplished. He, anti-Teutonic, antiSemitic, shrilled at U. S. financiers for associating with the "notorious" German Dye Trust, harked back to War days in which German chemists had unkindly embarrassed the U. S. dye industry through failure to publish their dye patents and processes, and closed with an unfriendly gibe at the presence of Edsel Ford and Paul Warburg on the same directorate.*

In spite of Writer Farrell, however, the new company sold its initial bond issue in something less than one hour and began its corporate existence under the most pleasing auspices. Representing a combination of I. G. Dyes, Standard Oil of New Jersey, National City Bank, International Acceptance and Ford Motors, the American I. G. Chemical Corp. included on its directorate Herren Doktoren Bosch, Schmitz and Greif of I. G. Dyes, President Walter Teagle of Standard Oil, Chairman Mitchell and Warburg of the two Manhattan banking houses, and President Edsel Ford of Ford. What proportion of the new company's stock will be held, respectively, by its U. S. and German interests is not stated. Control, however, was assumed to rest at Frankfort on the Main.

Products of the new company can be described only in many pages of chemical formulae. Its Frankfort parent has a long list of products -- a list roughly comparable to that of E. I. du Pont de Nemours & Co., Inc. Chief among these products are:

Dyes

Insecticides

Fungicides

Solvents

Lacquers

Light Metals (Elektronmetal)

Films and other photographic products

Artificial silk

Fertilizer and other Nitrogen products

Synthetic gasoline

It should be noticed that dyes, solvents and "other Nitrogen products" cover a variety of articles, one other Nitrogen product, for instance, being high explosive. It is the air's nitrogen, not its oxygen, by which chemical companies live. The synthetic nitrogen plants of the Frankfort company produce annually some 700,000 tons of pure nitrogen, more than 40% of present world nitrogen consumption. American I. G. Chemical Corp. also will acquire a "substantial interest"* in Agfa-Ansco Corp., photographic company second only to Eastman, and in General Aniline Works, Inc. This latter was formerly Grasselli Dyestuff Corp., was separated from other chemical interests when (1928) Grasselli was merged with du Pont. Grasselli Dyestuffs has U. S. rights in all I. G. Dyes dye patents. Potency of the new company can perhaps best be judged by the fact that its Frankfort sponsor is largest European corporation (TIME, April 1), and that its 1927 earnings of approximately $25,000,000 were equal to the 1927 net of Allied Chemical & Dye Corp. ($24,586,873) world's largest chemical organization.

U. S. Interest. The I. G. Dyes process for obtaining gasoline from coal is presumably the reason for U. S. interest in American I. G. Corp. When Director Edsel Ford attends his American I. G. directors' meetings, his presence will mark the first occasion on which a member of the Ford family has sat at anything other than a steering wheel.* Obvious, however, is the interest both of Director Ford and Director Teagle in synthetic gasoline. No new thing, however, is the connection between Standard of New Jersey and Farbenindustrie, as the two companies have been associated since 1927 in the development of the synthetic gasoline process.

Weighty as President Teagle's person (200 Ib.) was President Teagle's prompt denial of the rumor that Standard of New Jersey was to enter the general chemical field. Since the time (1900) when he refused a Cornell instructorship to drive tank cars in his father's Cleveland oil company, oil has been the major, the consuming Teagle interest./- Famed in European, as well as U. S. oil circles, is the Teagle nose for oil. Oil has brought him leadership of a $1,500,000,000 corporation, a $125,000 a year salary, with cigars & theatre tickets added. Oilman Teagle he has been and Oilman Teagle he will remain. It was stated that Standard of New Jersey would not own a single share of American I. G. Stock. The admission was made that Ford Man Ford (Junior) had certain American I.G. holdings, but his presence on the board was described as a complimentary return for presence of I. G Farbenindustrie executives on the board of Ford German Motors. Emphatic was the statement that American I. G. should be regarded as a Frankfort subsidiary.

* They became directors of the new company only at the last moment.

* Rule 1 in the Handbook of Corporation Finance is: Never List a Subsidiary As Such.

* It is also unusual for Banker Mitchell to be on other than banking directorates, but National City is chief sponsor of American I. G., Corp. bonds.

/-His father, John Teagle of Scofield, Schurmcr & Teagle, Cleveland. His maternal grandfather, Morris Clark, was original John D. Rockefeller partner.