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TRADING WITH THE ENEMY:  AN EXPOSE OF THE NAZI-AMERICAN MONEY PLOT 1933-1949

Chapter 3:  The Secrets of Standard Oil

In 1941, Standard Oil of New Jersey was the largest petroleum corporation in the world. Its bank was Chase, its owners the Rockefellers. Its chairman, Walter C. Teagle, and its president, William S. Farish, matched Joseph J. Larkin's extensive connections with the Nazi government. 

Six foot three inches tall, and weighing over two hundred and fifty pounds, Walter C. Teagle was so large a man that it was said that when he stood up from his seat on the subway, it was to make room for two women. He smoked Havana cigars through a famous amber holder. He spoke with measured deliberation, fixing his fellow conversationalists with a frightening, unblinking, and powerful stare. 

Teagle came from a prominent Cleveland family just below the millionaire class. He early showed a dominant will, expressed in a thunderous voice, a humorless intensity, and a rugged disrespect for those who questioned his judgment. He was known as a dominant presence at Cornell. Kept out of football by an injury, he worked off his colossal energy in school debates, which he invariably won hands down. Entering the Standard Oil empire under the wing of John D. Rockefeller I, he rose rapidly through his Horatio Alger concern for work and his strong international sense: he drew many foreign countries and their leaders into the Standard Oil web. He weathered scandal after scandal in which Standard stood charged with monopolistic and other illegal practices.

From the 1920s on Teagle showed a marked admiration for Germany's enterprise in overcoming the destructive terms of the Versailles Treaty. His lumbering stride, booming tones, and clouds of cigar smoke became widely and affectionately known in the circles that helped supFord the rising Nazi party. He early established a friendship with the dour and stubby Hermann Schmitz of I.G. Farben, entertaining him frequently for lunch at the Cloud Room in the Chrysler Building, Teagle's favorite Manhattan haunt of the late 1920s and the 1930s. Teagle also was friendly with the pro-Nazi Sir Henri Deterding of Royal Dutch-Shell, who agreed with his views about capitalist domination of Europe and the ultimate need to destroy Russia.

Teagle, Schmitz, and Deterding shared a passion for grouse shooting and game hunting; they vied with each other as wing shots.  Teagle's love of hunting deer and wild birds was to earn him the admiration of Reichsmarschall Hennann Goring.

Teagle was close to Henry Ford. He first met him in the early 1900s when he wanted to make a deal for oil with a new Detroit auto assembly shop. He walked into the shop, saw how miserably rundown it was, and decided that he would have difficulty in collecting for the gasoline contract. But he took a chance on the thin, gaunt proprietor and went ahead. Many years later the two men met again and formed a friendship. Ford looked at him sharply and said, "We've met before." Teagle remembered at once. "Sure," Teagle said, "I sold you your first gasoline contract. You were stripping down a Winton chassis." Ford replied, "I was. And I was so hard up, I didn't even own the goddam thing!"

Because of his commercial and personal association with Hermann Schmitz, and his awareness that he must protect Standard's interest in Nazi Germany, Teagle made many visits to Berlin and the Standard tanks and tank cars in Germany throughout the 1930s. He became director of American I.G. Chemical Corp., the giant chemicals firm that was a subsidiary of I.G. Farben. He invested heavily in American I.G. and American I.G. invested heavily in Standard. He sat on the I.G. board with Fraternity brothers Edsel Ford and William E. Weiss, chairman of Sterling Products.

Following the rise of Hitler to power, Teagle and Hermann Schmitz jointly gave a special assignment to Ivy Lee, the notorious New York publicity man, who had for some years worked for the Rockefellers.  They engaged Lee for the specific purpose of economic espionage.  He was to supply I.G. Farben, and through it the Nazi government, with intelligence on the American reaction to such matters as the German armament program, Germany's treatment of the Church, and the organization of the Gestapo. He was also to keep the American public bamboozled by papering over the more evil aspects of Hitler's regime. For this, Lee was paid first $3,000 then $4,000 annually, the money paid to him through the Bank for International Settlements in the name of I.G. Chemie. The contract was for obvious reasons kept oral and the money was transferred in cash. No entries were made in the books of the employing companies or in those of Ivy Lee himself. After a short period Lee's salary was increased to $25,000 per year and he began distributing inflammatory Nazi propaganda in the United States on behalf of I.G. Farben, including virulent attacks on the Jews and the Versailles Treaty.

In February 1938 the Securities and Exchange Commission held a meeting to investigate Nazi ownership of American I.G. through a Swiss subsidiary. The commissioners grilled Teagle on the ownership of the Swiss company. He pretended that he did not know the owners were I.G. Farben and the Nazi government. The commissioners tried to make him admit that at least American I.G. was "controlled by 'European' interests." Teagle replied dodgily, "Well, I think that would be a safe assumption." Asked who voted for him as a proxy  at Swiss meetings, again he asserted that he didn't know. He also neglected to mention that Schmitz and the Nazi government owned thousands of shares in American I.G.

Teagle was sufficiently embarrassed by the hearing to resign from the American I.G. board, but he retained his connections with the company. He remained in partnership with Farben in the matter of tetraethyl lead, an additive used in aviation gasoline. Goring's air force couldn't fly without it. Only Standard, Du Pont, and General Motors had the rights to it. Teagle helped to organize a sale of the precious substance to Schmitz, who in 1938 traveled to London and "borrowed" 500 tons from Ethyl, the British Standard subsidiary. Next year, Schmitz and his partners returned to London and obtained $15 million worth. The result was that Hitler's air force was rendered capable of bombing London, the city that had provided the supplies.  Also, by supplying Japan with tetraethyl, Teagle helped make it possible for the Japanese to wage World War II.

There was a further irony. The British Royal Air Force had to pay royalties to Nazi Germany through Ethyl- Standard for the gasoline used to fly Goring's bombers that were attacking London. The payments were held in Germany by Farben's private banks for Standard until the end of the war.

Following the embarrassment of the Securities and Exchange Commission hearing, Teagle took more and more of a backseat and handed over his front office to his partner and close friend, William Stamps Farish. Farish was somewhat different in character from Teagle. Tall, bald from youth, bespectacled, given to publishing homilies and pious patriotic articles in the pages of American Magazine, he had a reserved, almost scholarly manner that barely concealed a flaring temper and a fierce self-protectiveness that made him seem guilty in  controversies over Standard when he was not necessarily so. He was so emotionally locked into the company that he was indivisible from it. He never understood a rule of power: to keep calm and polite when the opposition is angry and threatening. He could not resist striking back at anyone who criticized him, sometimes with a rather feeble attempt at physical violence. He shared with Teagle a mania for salmon fishing, dog training, bird-dogging, quail shooting, and fox hunts. Like Teagle, he devoted as much as eighteen hours a day  to office affairs, immense journeys by ship and train, and board meetings that sometimes went on into the small hours of the morning.  Both had the capacity of senior executives to exhaust everyone but themselves with their certainties. They allowed little area for discussion and brooked nothing save approval.

Farish, like Teagle, was mesmerized by Germany and spent much time with Hermann Schmitz. With Teagle's approval he staffed the Standard Oil tankers with Nazi crews. When war broke out in Europe, he ran into trouble with British Intelligence, which boarded some of his vessels outside territorial waters on the Atlantic and Pacific seaboards and seized Nazi agents who were passengers. When the British began interrogating Nazi crews on the Hitler-Standard connection, Farish fired the Germans en masse and changed the registration of the entire fleet to Panamanian to avoid British seizure or search. His vessels carried oil toTenerife in the Canary Islands, where they refueled and siphoned oil to German tankers for shipment to Hamburg. They also fueled U-boats even after the American government declared such shipments morally indefensible and while Roosevelt was fighting an undeclared war in the Atlantic. Standard tankers supplied the self-same submarines which later sank American ships.  By a humorous twist of fate, one of the ships the U-boats sank was the S.S. Walter Teagle.

It was important for the Nazis to convert the oil in the Canaries to aviation gasoline for the Luftwaffe. Once again, Farish proved helpful. As early as 1936 his associate Harry D. Collier of California Standard had built units for conversion in the Canaries. Simultaneously, Teagle had built a refinery in Hamburg that produced 15,000 tons of aviation gasoline for Goring every week.

With war in Europe, General Aniline and Film, successor to American I.G., stood in danger of being taken over by the U.S. government. Teagle and Farish's friend, the Rockefeller associate Sosthenes Behn of ITT, was narrowly stopped from buying the corporation, thus rendering it "American" and not subject to seizure. Henry Morgenthau prevented the deal. For once, The Fraternity was frustrated.  Teagle and Farish could not buy GAP themselves, as it would have too clearly betrayed their association with the Nazis.

By 1939, Americans were dangerously short of rubber. The armed services were hard put to complete wheels for planes, tanks, and armored cars. At this time Standard Oil had made a deal with Hitler whereby he would obtain certain kinds of Standard artificial rubber and America would get nothing. This deal continued until after Pearl Harbor.

When war broke out, Frank A. Howard, one of the more dynamic vice-presidents of Standard (also on the board of Chase), flew to Europe with Farish's authorization. In London he held an urgent meeting with U.S. Ambassador Joseph P. Kennedy, who allegedly wanted to negotiate a separate peace that would bring the European war to an immediate end. Kennedy enthusiastically approved Howard's meeting with Farben's representative Fritz Ringer. The meeting was set up in Holland. Howard flew to The Hague on September 22,  1939, supplied with a special Royal Air Force bomber for the occasion. 

At the Hague meeting, held in the Standard Oil offices, Howard and Ringer talked for many hours about their plans for the future.  Ringer handed over a thick bundle of German patents that were locked into Standard agreements so that they would not be seized in wartime. The two men drew up an agreement that specified they would remain in business together, "whether or not the United States came into the war." Another clause in the agreement known as the Hague Memorandum guaranteed that the moment war was over, I.G. Farben  would get back its patents. Howard returned to London and Kennedy arranged for the patents to be flown by American diplomatic bag to Ambassador William Bullitt in Paris, who forwarded them on by special courier to Farish in New York.

As the war continued in Europe before America's entry, Germany grew more and more desperate for oil. Her domestic supplies were minimal. But for many years Teagle and Farish had exploited the resources of Rumania, setting up extensive oil exploration in the Ploiesti fields and netting millions from Germany in the process. I.G. Farben financed the notorious Rumanian Iron Guard, a fascistic military organization led by General Ion Antonescu. Hermann Schmitz, through Antonescu and in league with Standard, held an exercising control over the oil fields. On March 5, 1941, Goring arranged a special private performance of Madame Butterfly by the Austrian State Opera at the Belvedere Palace in Vienna in Antonescu's honor. After the performance, Goring sat down for an urgent discussion with Antonescu on securing the use of the Standard Oil fields if Germany and America should go to war. Antonescu conferred with Schmitz and Standard executives in Bucharest. The result of the meeting was that Goring paid $11 million in bonds for the use of the oil, whether or not America came into the war.

Farish now proceeded to make another deal with Goring. Hungary was second only to Rumania as an oil source for the Nazi war machine. Teagle had started drilling there in 1934.

In July 1941, Farish and Frank Howard filed an application with Treasury for a license to sell its Hungarian subsidiary to I.G. Farben.  Farben would, the application said, pay $5.5 million in Swedish, Swiss, and Latin American currencies, $13.5 million in gold to be delivered at Lisbon, Portugal, and later shipped to the United States; and it would supply a promissory note for $5 million by I.G. "to be paid three months after the war ended." This note was to be secured by the blocked assets of General Aniline and Film in America. Treasury refused the application, whereupon Farish asked if the full amount could be paid in gold at Lisbon. That suggestion also was rejected.  Farish protested bitterly.

The British blockade ran the length of the Americas upon the Atlantic seaboard, stopping shipments to Nazi Germany wherever possible. Given the problem, how could Farish go on supplying Goring and Hermann Schmitz with oil in time of war? He soon found the solution. He sent large amounts of petroleum to Russia and thence by Trans-Siberian Railroad to Berlin long after Roosevelt's moral embargo. He shipped to Vichy North Africa. In May 1940, British authorities captured a French tanker in U.S. territorial waters that was sailing to Casablanca with 16,000 tons of Standard oil, allegedly for reshipment to Hitler. Cordell Hull demanded the British government yield up the tanker. Restricted by maritime law, the British agreed.  The tanker sailed on to Africa, followed by six more.

Farish fueled the Nazi-controlled L.A.T.I. airline from Rome to Rio via Madrid, Lisbon, and Dakar. The airline flew spies, patents, and diamonds for foreign currency. Only Standard could make this  shipment possible. Only Standard had the high-octane gasoline that enabled the lumbering clippers to make the 1,680-mile hop across the Atlantic.

A hard-working young man, William La Varre of the Department of Commerce, set about uncovering Standard's deals with this Nazi airline. He knew L.A.T.I. was the means by which the Nazis evaded the British blockade. The airline was not subject to boarding and search. Spies traveled by L.A.T.I. between the United States, Germany, and Italy by way of Brazil.

In addition to spies, the planes flew, in 1941, 2,365 kilos of books containing Nazi propaganda, legal and illegal drugs addressed to Sterling Products, Reichsbank money for the National City Bank in New York, wartime horror pictures prepared by Dr. Joseph Goebbels to frighten Latin Americans out of a world conflict. There were electrical materials and gold and silver jewelry for sale to Brazil. American companies in South America shipped the Nazis thousands of  kilos of mica and platinum, which existed in quantity only in Brazil,  and which were strategic war materials for Germany. Semiprecious stones were bought cheaply, shipped to Germany, cut in Belgium in slave camps, and shipped back to Brazil for sale.

In order to supply the airline, Farish changed more of his vessels from German to Panamanian registry. Now they were granted immunity under the Panamanian flag by James V. Forrestal, Under Secretary of the Navy, vice-president of General Aniline and Film, and Fraternity member. But U.S. Intelligence constantly checked on the members of the Gestapo, the Abwehr, and the Farben spy network  N.W.7. who used the airline. Early in 1941, Adolf Berle of the State Department insisted that Cordell Hull stop these shipments. Hull talked to William Farish. He told him he was going to apply export control to the shipments.

Farish was forced to reach a compromise. He would supply L.A.T.I. and the other Nazi airline, Condor, through Standard's Brazilian subsidiary with permission from the American ambassador in Rio.  The ambassador gave permission and the airlines continued to fly. It was not until just before Pearl Harbor that La Varre and Berle real-ized what Farish was doing: By making the deal through the Brazilian company, he was not subject to blacklisting. Thus, the shipments continued until after Pearl Harbor when the Brazilian government stepped in and closed down the airlines. Farish totally ignored his government's request to be loyal. Germany and money came first. 

On March 31, 1941, Sumner Welles of the State Department stepped into the picture with a detailed report on refueling stations in Mexico and Central and South America that were suspected of furnishing oil to Italian or German merchant vessels now in port. Among those suspected of fueling enemy ships were Standard Oil of New Jersey and California. There is no record of any action being taken on this matter.

On May 5, the U.S. Legation at Managua, Nicaragua, reported that Standard Oil subsidiaries were distributing Epoca, a publication filled with pro-Nazi propaganda. John J. Muccio, of the U.S. Consulate, made an investigation and found that Standard was distributing this inflammatory publication all over the world. By a peculiar irony, Nelson Rockefeller was at that moment in his post of Coordinator of Inter-American Affairs, seeking to insure the loyalty to United States interests of all of the governments of Latin America.

On July 17, 1941, Nelson Rockefeller had joined with Dean Acheson, Morgenthau, Francis Biddle, and Secretary of Commerce Jesse Jones to fulfill a presidential order to prepare what was known as the  Proclaimed List of enemy-associated corporations with which it was illegal to trade in time of European war. Acheson was appointed chairman of the interdepartmental committee in charge of the group of Cabinet members. Six months later, in a lengthy memorandum to Milo R. Perkins, executive director of the Economic Defense Board, on January 5, 1942, Acheson laid down the conditions of the Proclaimed List. Rockefeller's claim that he was unfamiliar with the details of Standard Oil practices on behalf of the Axis before and after  Pearl Harbor is difficult to believe given the fact that he himself sat on the Proclaimed List committee. 

In his official capacity, Nelson Rockefeller was in the peculiar position of having to ask the managers of his South American companies how many Germans they employed, despite the fact that his company and official records both contained the information. He was one thing as coordinator and quite something else as Standard Oil executive. In July 1941, Standard, with his knowledge, authorized the continuance of the lease of its headquarters in Caracas, Venezuela, from a Proclaimed List national, Gustav Zingg, because it would be legally very difficult to terminate the lease. The Coordinator of Inter-American Affairs, with billions at his disposal, leased from a Nazi collaborator for the duration because of a technical issue of a leasing arrangement. More surprising still, a doctor who was in constant touch with Nazis in Caracas, and was on a suspect list, was  permitted to remain a member of the medical department of Standard Oil of Venezuela.

On July 15, 1941, Major Charles A. Burrows of Military Intelligence reported to the War Department that Standard Oil was shipping oil from Aruba in the Dutch West Indies to Tenerife in the Canary  Islands. The report continued:

[Standard] is ... diverting about 20 percent of this fuel oil to the present German Government. About six of the ships operating on this route are reputed to be manned mainly by Nazi officers. Seamen have reported to the informant that they have seen submarines in the immediate vicinity of the Canary Islands and have learned that the submarines are refueling there. The informant also stated that the Standard Oil Company has not lost any ships to date by torpedoing as have other American companies whose ships operate to other ports.

On July 22, 1941, there was a meeting of several Treasury officials with Acheson on the subject of oil shipments to Tangier, including those of Standard Oil. Tangier was an open port that was leaking supplies to the Nazis. The meeting was inconclusive. Among the subjects discussed was the possible sale by Standard Oil of its Berlin property. There was no real pressure on the corporation to dispose of that office.

On October 28, 1941, Cordell Hull sent a peculiar letter to Treasury's Edward H. Foley, Jr., who was acting in Morgenthau's absence on vacation. Hull asked Foley whether "Standard Oil Company (New Jersey) may, through its subsidiaries in the other American republics, sell or deliver petroleum or petroleum products, to have other dealings with" persons whose names appeared on the blacklist of Nazi collaborators! Incredibly, he even asked whether Standard Oil might, through its subsidiary, Standard Oil of Brazil, sell petroleum to Nazi Condor, largely from Aruba. The reply was almost as surprising. Foley said that such transactions fell under Executive Order 8389 and "such transactions, irrespective of whether they are provided for by contract, should not be engaged in except as specifically authorized by the Secretary of Treasury under Executive Order 8389."  What Foley was pointing out was that it would be quite possible to trade with Nazi associates with Treasury's specific approval.

This arrangement did not change with Pearl Harbor. Acting in collusion, Treasury and State continued to issue licenses permitting Standard Oil and other corporations to trade with enemy collaborators in time of war.

Over three weeks after Pearl Harbor, on December 31, 1941, Warren E. Hoagland of Standard wrote to Green H. Hackworth, legal advisor to the Department of State, asking which foreign countries and their residents and corporations should be considered as allies of the enemy. In reply, Hackworth informed him that the Department  had "not issued a list of enemy or allied enemy countries." Hackworth's note, dated January 6, 1942, contains a touch of unconscious  humor: "The Congress of the United States has, you doubtless are  aware, declared that a state of war exists between the governments of Japan, Germany and Italy and the Government and people of the United States." The letter goes on to refer Hoagland to the presidential license dated December 13, 1941 permitting transactions prohibited by the Trading with the Enemy Act, provided such trading was authorized by the Treasury.

Immediately after Pearl Harbor, Harold Ickes, Secretary of the Interior and Petroleum Administrator and Coordinator for National Defense and War, began to close in on Farish because of his dealings with Nazi Germany. Farish, who already had savage enemies in Morgenthau and Harry Dexter White, had an even more formidable foe in Ickes.

Ickes was popularly known as the Old Curmudgeon: an inspired if irritating gadfly who was almost certainly the most unpopular celebrity of his day in America. A tense, dark, sharp-eyed, impatient man, he deliberately put his worst foot forward on every possible occasion in the hope of provoking widespread fury and the maximum amount of publicity. He began life with a hatred of the privileged: he was the second of seven children of an impoverished Pennsylvania sharecropping family and spent his childhood sweeping and dusting,  washing dishes, kneading dough, basting beef, and flipping flapjacks.  He was pinch-hit nursemaid, woodchopper, fire builder, and chicken executioner. In 1890, working as a clerk in his uncle's Chicago  drugstore, he was so sickened by the rich with their coachmen, footmen, and high-stepping horses that he mixed seidlitz powders so they would explode in the faces of hated wealthy customers. He became a journalist, writing muckraker articles in Chicago that helped run political gangs out of town. He sharply attacked what he called the "turbulent, grasping, selfish men" personified by Farish and Teagle.  His greatest moment was when Roosevelt offered him the post of Secretary of the Interior with the words "Mr. Ickes, you and I have been speaking the same language for the past twenty years. I have come to the conclusion that the man I want is you."

Fiercely committed to Roosevelt, Ickes spent much of the war years with his legs knotted together under a battle-scarred desk from his reporting days, banging away at his ancient typewriter and producing reams of rude letters, newspaper column squibs, interoffice memoranda, and diary entries savaging the trusts led by the Rockefellers.  He would frequently break off from watering or cross-pollinating his prized dahlia collection to pick up a phone and shower the hated Secretary of Commerce Jesse H. Jones or Walter C. Teagle with a  blistering rain of invective. He became known as Roosevelt's conscience. He maddened Roosevelt by his refusal to compromise; his "cumbrous honesty" -- as Heywood Broun called it -- which led him to disrupt the delicate relationship Roosevelt had established with the Standard Oil leaders to turn them to his own uses.

Ickes constantly complained to Roosevelt that Teagle and Farish were prominent on various government boards including the War Petroleum Board and that American car owners were forming gas lines while the Germans and Japanese had all the gas they needed. Roosevelt was furious.

On June 22, 1941, Roosevelt sent Ickes a rude and peremptory letter on the matter of his restricting oil. He pinned his ears back once and for all by instructing him to release the shipments by arrangement with Cordell Hull. That same day Ickes wrote in his diary (a statement that was censored out of the published version) that for two years now the President had broken promise after promise to him and that he had even begun to lie to him unashamedly. He added that he had often wondered if he could not be of greater assistance to the people on the outside by telling the truth, rather than staying inside, helping to deceive. He was referring to the fact that Roosevelt and Hull were lying to the public about the extent of exports to belligerent powers.

More and more in 1941, Ickes was cut down by pressure from Standard Oil on the State Department. In June, State set up a Caribbean division without even consulting him. This allowed shipments to Axis-influenced neutral countries from Standard and other wells in Venezuela for transshipment via the refineries in Aruba.

Three and a half weeks after Pearl Harbor, Ickes really had his fingers chopped off. Without telling him, Roosevelt set up a committee under the Economic Warfare Council (later the Board of Economic Warfare), which was to handle all duties and responsibilities in the matter of exporting petroleum products.  To Ickes's horror, William S. Farish's right-hand man, Max Thornburg, was appointed Foreign Petroleum Coordinator, with Farish and Harry D. Collier on the board. Thornburg, a smart executive, received $8,000 a year from the State Department for his job -- and $13,000 a year from Standard.

Ickes was so maddened by this sign of alleged corruption and collusion that he called Vice-President Henry Wallace at home on January 4, 1942, demanding to know why Wallace, as Economic Warfare Council chairman, could tolerate such an arrangement. Ickes charged Thornburg with being ambitious, not overscrupulous, capable of being disloyal; he insisted to Wallace that Thornburg had schemed for the appointment and even presented Roosevelt with the letter authorizing his appointment, standing over the President while it was signed. He said this indicated the degree of influence Standard had at the White House. Wallace did not reply.

Throughout the early months of 1942, Ickes kept hammering away at Wallace to have Thornburg dismissed. Frustrated in his efforts, he charged Wallace with "trampling on his enemies and betraying his friends." His hatred for Wallace matched his hatred for Thornburg.  With his stubborn sense of integrity he simply did not understand that in order to win the war, Roosevelt and Wallace had to get into bed with the oil companies. 

As a result of his needling, Ickes was forbidden by Roosevelt and Wallace to attend meetings held by Thornburg and Teagle to which agencies of the government involved in oil were invited. Ickes was under constant threat from Roosevelt not to interfere with anything that happened. He was tempted to resign and indeed drafted his resignation on several occasions but finally decided to dig in and fight the Establishment. Through his spies he unraveled the fact that Secretary of Commerce Jesse Jones and Bill Farish were interlocked in business interests in Texas. And at last he found an ally who had the courage to confront the President and the pro-Standard chief in Washington head on: Thurman Arnold.

Arnold was a man after Ickes's own heart. He was a grass-roots all-American publicity hound who had worked his way up to become head of the Antitrust Division of the Department of Justice. A heavy-weight like Walter Teagle and Farish, he could face these men eyeball-to-eyeball. Shock-haired, ruddy-cheeked, with immense shoulders, he would argue or laugh over a dirty joke with equal vehemence, spewing out a stream of witty, filthy words through a heavily chewed cigar. He was described as looking like a small-town  storekeeper and talking like a storm trooper. He was a tough homesteader, former mayor of Laramie, Wyoming, and a cattle-country lawyer of the old school. Like Ickes and Morgenthau, he hated the Big Guys. He was a bitter enemy of corruption. After only a few months in office he cleaned up the building industry, bringing in 74  indictments against 985 defendants. He was accompanied everywhere by his beloved dog, Duffy Arnold. He was so boastful that at one White House banquet, he said to fellow trustbuster Norman Littell,  "You know, I'm the most famous Arnold that ever lived." "How about Benedict?" Littell's wife quipped.

During the first weeks after Pearl Harbor, Arnold drove his 1930 La Salle automobile with its shaky rear end through the streets of Washington to a series of meetings with Ickes at Ickes's house. As a result of these meetings Arnold obtained permission from the nervous and weak Attorney General Francis Biddle to hold a meeting with Farish in the matter of the synthetic rubber restrictions that favored Germany still and drastically inconvenienced American motorists and  the Army, Navy, and Air Force. 

On February 27, 1942, Arnold, with documents stuffed under his arms, followed by his loyal team of secretaries and aides, strode into the lion's den of Standard at 30 Rockefeller Plaza. Just behind him were Secretary of the Navy Franklin Knox and Secretary of the Army Henry L. Stimson. William S. Farish was there to greet them. In the boardroom Arnold sharply laid down his charges while the others looked hard at him. He spelled it out that he had the goods on Standard: that by continuing to favor Hitler in rubber deals and patent arrangements, the Rockefellers, Teagle, and Farish had acted against the interests of the American government. Chewing his cigar to pulp as he turned over the documents, Arnold coolly suggested a fine of  $1.5 million and a consent decree whereby Standard would turn over for the duration all the patents Frank Howard had picked up in Holland.

Farish rejected the proposal on the spot. He pointed out that Standard, which was fueling a high percentage of the Army, Navy, and Air Force, was making it possible for America to win the war. Where would America be without it? This was blackmail, and Arnold was forced into a defensive position. He conferred hastily with Stimson and Knox. The result was that he asked Farish to what Standard would agree. After all, there had to be at least a token punishment. Farish said with icy contempt that he would pay $50,000, to be divided  equally among so long a list of executives and corporations that each would wind up paying no more than $600. Arnold, Stimson, and Knox soon realized they had no power to compare with that of Standard. They did manage to reduce the number of defendants to ten.  Farish paid $1,000, or a quarter of one week's salary, for having betrayed America.

Standard underwent a process of law in the criminal courts of Newark, New Jersey. This was a technicality in order to satisfy public opinion. The charges of criminal conspiracy with the enemy were dropped in return for Standard releasing its patents and paying the modest fine. Ickes wrote in his diary on April 5 that when the light was thrown on a situation like this, it made it easier to understand why some of the great and powerful in the country were Nazi-minded and were confident of their ability to get along with Hitler. After all, he added, they had been doing business with Hitler right along. They understood each other's language and their aims were common. A complete exposure, he added, would have a very good effect on the United States.

Arnold agreed. Although he had crumbled at the meeting at Rockefeller Plaza, he had another recourse by which he could drag Standard through the mud. He and Ickes had a sturdy ally in Harry S. Truman, an enemy of Jesse Jones. The Senator from Missouri was in charge of the Truman defense committee, dedicated to exposing treasonable arrangements. With great enthusiasm Give 'em Hell Harry embarked on a series of hearings in March 1942, in order to disclose the truth about Standard.

On March 26, Arnold appeared before Truman in an exceptionally buoyant mood in order to lay in front of the committee his specific charges against the oil company. He had dug up a great deal of dirt.  He produced documents showing that Standard and Farben in Germany had literally carved up the world markets, with oil and chemical monopolies established all over the map. He flourished papers showing that Farish had refused to send vital patent information to Canada because Germany and Canada were at war. He showed how Farish had flagrantly disregarded Lend-Lease and good neighbor policies in his connivance with Hitler. He zeroed in on the subject of synthetic rubber, pointing out that it had been denied to the U.S. Navy, and that Farish and Howard had deliberately sidetracked a Navy representative from seeing the processes. He charged that cables  showed Standard's arrangements with Japan that were to continue throughout any conflict or break in trade. Leaving the Senate chamber on March 28, surrounded by lots of reporters and photographers, Truman was asked, "Is this treason?" He replied in the affirmative.

Farish completely lost his head. Instead of riding out the storm with cool indifference and waiting for his appearance before the committee, he held press conferences, fired off telegrams from Rockefeller Plaza to the President, issued lengthy and complicated statements on the radio, and told The New York Times in a statement prepared by Teagle, who sat up all night to write it, that Arnold's charges had "not a shadow of foundation." Appearing before the committee on March 31, he shouted at Truman and Arnold that he repudiated everything said about Standard "with indignation and resentment" and asserted that he had not in any way been disloyal to the United States. He claimed that the deal with I.G. Farben helped the United States since a number of patents were now in America's possession. He neglected to add that the only reason they were in America's  possession was that a criminal court judge had ordered them to be. 

On April 2 a flushed and irritable Thurman Arnold came to Ickes's office from a further hearing in which Farish had repeated his denials, and told him, "The Standard Oil guys have committed perjury.  I know it. I have reported it. Will they be indicted?" He already knew  he answer: They would not be indicted. Arnold went on to denounce Secretary Jesse H. Jones to Ickes for complicity with Standard in the whole matter.

Roosevelt was very unhappy with the hearings. Publicly exposing Teagle and Farish was not helping him use them for America's purposes. He had had enough of Arnold as the hearings concluded. He kicked him upstairs to the U.S. Court of Appeals. Ickes wrote in his diary on April 5 that Arnold had been more or less gagged. The War and Navy departments insured that Roosevelt suspended any further antitrust actions against the corporations for the duration. They couldn't (as the Rockefeller Plaza meeting had made clear) run an Army and Navy without Standard.

Teagle was so aggravated and distressed by the attacks of the Truman Committee and Arnold that he sent Roosevelt a letter trying to explain his position and tendering his resignation as chief of the National War Labor Board. On April 2, 1942, Roosevelt wrote to him, "My Dear Mr. Teagle: I have your letter of March 23rd about resigning from the National War Labor Board. I hope you will not do so as your work on the Board has been, and I know will prove to be, of great service to the country. Your connection with the suit against the Standard Oil Company does not in my opinion (and I have discussed this with the Attorney General) afford a reason for your withdrawing from the Board." But in September, Teagle, shattered by the further disclosures of the subsequent Bone Committee, again offered his resignation and Roosevelt this time accepted it with the  carefully put together statement, "I do want you to know how much I appreciate the long months of hard work which you have put in ... and the sincere and very valuable contribution you have made to the war effort."

Farish remained on the War Petroleum Board. On April 3, 1942, Ickes called Roosevelt in the Oval Office. He protested against Farish's being in that position, but Roosevelt instructed him not to ask Farish to resign. That same day Ickes called John D. Rockefeller II at home in Tarry town. Despite Roosevelt's statement Ickes decided to risk his job and ask Rockefeller to dismiss Farish from the post on the theory that Rockefeller would want to clean his own nest and escape the drastically unfavorable publicity caused by the hearings.  He began by telling Rockefeller that he knew of the relationship between Standard and I.G. Farben. Rockefeller was silent. Ickes went on, saying that public opinion would force him to take action; that he was not recommending that Rockefeller get rid of Farish but telling him in advance that an embarrassing situation might develop with  further hearings that would force Farish to go.

Rockefeller said that he had the utmost confidence in Farish and Teagle; that he believed in their honesty, their sincerity, and their patriotism. Rockefeller alleged that he took no active part in the affairs of Standard and knew nothing of what was going on, despite the existence of Schroder, Rockefeller, Inc. He added that he was going to stand by these two men unless further facts convinced him they were in the wrong. But he did not expect to discover that they had been in the wrong. The Rockefellers, he said, always stood by  their friends; perhaps that was the reason why the Rockefellers had so many friends.

Ickes said he didn't want to make snap judgments, but in a situation like this, where the administration was concerned, one had to pay some attention to public opinion. He added that he had the people to consider, that the people be persuaded that the government was not covering up or protecting any individual to the detriment of the war effort. Unfortunately, as Ickes very well knew, that was exactly what the government was doing.

The following day Truman came to lunch with Ickes. Truman said that Ickes ought to fire Farish immediately from the War Petroleum Board. Ickes didn't have the nerve to tell Truman that the President had protected Farish. Instead he blamed the newspapers for putting  an effective lid on the stinking pot with the utmost celerity and dexterity. He told Truman that he had never seen a better job of underplaying the news, except for the first stories that came off the presses.  He added that within his experience there had never been a more  complete justification of the charge that big business and advertisers had tremendous influence with the press. He added, in his diary for April 11, that there was no use in butting his head against a stone wall. 

Truman told the Secretary of the Interior he was drastically against the monopolies. He condemned the dollar- a-year men who were featherbedding their own industries at the government's expense. He promised to do what he could with further inquiries.

Ickes was not content. He prodded Senator Homer T. Bone into the Patents Committee, which began hearings in the Senate on May 1. Bone shared the feistiness of Ickes, Arnold, and Truman when it came to the  question of Standard. On May 2, Arnold's keenest friend in the Antitrust, young Irving Lipkowitz, shoveled up still more dirt:  He could prove that Standard had deliberately retarded production of  the vital war material acetic acid in favor of the Nazis.  He charged Standard with being "I.G. Farben's Charlie McCarthy in the chemicals field." Lipkowitz was followed by Senator Robert M. La Follette, Jr., who denounced Teagle and Farish for issuing ''as despicable a piece of public relations work by a giant corporation as I have ever  seen." He went on, "The Standard officials not only did not have guts enough to come before this Committee today where they could  be sworn and cross-examined, but they left the officials who made their denials anonymous." He said that Standard and Farish "adopted that age-old rule of debate, when you are weak on facts, give 'em hell.'"

On May 6, John R. Jacobs, Jr., of the Attorney General's department, testified that Standard had interfered with the American explosives industry by blocking the use of a method of producing synthetic ammonia. As a result of its deals with Farben, the United States had been unable to get the use of this vital process even after Pearl Harbor. Also, the United States had been restricted in techniques of producing hydrogen from natural gas and from obtaining paraflow, a product used for airplane lubrication at high altitudes. Jacobs produced a document showing that on September 1, 1939, the day Germany invaded Poland, Standard cabled Farben offering $20,000 for its 20 percent interest in a Standard subsidiary handling the patents they shared between them. Jacobs showed a Standard memo that read, "Of course what we have in mind is protecting this minority interest of I.G. in the event of war between ourselves and Germany as it would certainly be very undesirable to have this 20 percent Standard-I.G. pass to an alien property custodian of the U.S. who might sell it to an unfriendly interest."

Jacobs revealed that it had been arranged that Farben in Germany should file applications in France and England for various oil developments in Standard's name during the war. Senator Bone was so shocked by this disclosure that he called it "astounding" and said, "If the war does nothing else, it ought to clean up a system like this." On May 7, Farish hailed the committee with a furious telegram. He denied that he had avoided appearing and said that he had sought to appear to clear the record but had been refused permission.  The telegram was several hundred words long and was so complicated as to be virtually unreadable. As usual, Farish was simply trying to confuse and bamboozle the committee, which was in fact perfectly prepared to have him appear. It was quite obvious that he preferred to shelter behind intricate and expensive telegrams rather than face the committee in person.

The hearings resumed on August 7. Texas oil operator C. R. Starnes appeared to testify that Standard had blocked him at every turn in his efforts to produce synthetic rubber after Pearl Harbor. Farish fired off  another telegram to Bone, saying he was at a loss to understand why Bone permitted his committee to be used as a sounding board for "reckless, unsupported accusations." He charged Starnes with uttering "glaring falsehoods and misrepresentations," and he flatly denied that he had restricted Starnes in any way. Flying in the face of Starnes's evidence, he said that "like all Americans, who want to get  on with this war, we have hesitated to contribute in any way to prolonged public controversy and name-calling. But the abuses of democratic procedures which occurred at yesterday's hearing must be promptly and openly branded for what they are, or we shall be in danger of losing the very things this nation is fighting for." He went on:

The most slanderous statements of Mr. Starnes were torn from the press release, and these mutilated copies were actually distributed to the press in your committee room by your own committee counsel. Your counsel can hardly plead that he was unaware of the wild and scurrilous nature of the statements the witness was going to make. The circumstances of the witness's appearance are peculiar. Even though you personally stated that he had appeared on his own initiative, it is a singular coincidence that the testimony of this man was presented on the identical mimeograph set-up as had been the testimony of previous witnesses presented under the committee's sponsorship.

These fulminations sat ill with Bone and with Roosevelt's special rubber committee headed by the famous Bernard Baruch, which was holding meetings on park benches in Lafayette Square feeding pigeons while it discussed the rubber crisis. Hatless and in shirtsleeves in the heat, the Baruch committee wrangled desperately in an effort to overcome the rubber shortage.

On August 12, Richard J. Dearborn of the Rubber Reserve Co., a federal agency, angrily denied Starnes's charges. However, since he was affiliated with Standard and with the Texas Company, his denials could scarcely be said to be objective. John R. Jacobs reappeared in an Army private's uniform (he had been inducted the day before) to bring up yet another disagreeable matter: Standard had also in league with Farben restricted production of methanol, a wood alcohol that was sometimes used as motor fuel.

Finally, on August 20, the various complications were ironed out and Farish and Howard turned up before the committee. Howard argued that Standard was aiding the war effort with oils, synthetics, and other products now used in fighting planes, tanks, cannon, and ships. He added that so far as Standard had learned through examinations of oils, fuels, and rubber taken from Nazi planes that had been shot down, Germany had "not made extensive use" of the exchange information. He did not explain how he had had access to planes that had been shot down or how he had been able to make such determinations from mangled or exploded fuselages.

Creekmore Fath, committee counsel, prodded Farish fiercely about supplying aviation gasoline to the Nazi airlines in Brazil. He snarled, "With the Lend-Lease program in action, were you following the United States or the Almighty dollar in supplying gasoline to the Lati Line?" 

"I was following the Almighty State Department," Farish retorted. "Do you question the motives of the State Department?"  Clashes between Fath, Farish, and Howard were frequent. Farish was subjected to a grueling cross-examination in which Fath frequently accused him of lying. Bone snapped at Farish, "Are you familiar with court procedure in which the plaintiff is heard first?"

Farish snapped back, "Do you mean to compare this inquiry to a court proceeding?"

Bone added, "Standard Oil may be a large outfit but it is not going to misinform the American people while I remain alive. I'm fed up with outfits like yours intimating that Congress is trying to ride them.  God knows we're not. No one is big enough to ride your outfit; you're the biggest corporation in the world."

The effect of the inquiries on the Teagle and Farish families was ultimately shattering. Farish's two sons were in the Army Air Force and must have been told often that Standard was fueling the planes that they were combatting. Mrs. Teagle and Mrs. Farish had to cope with the women's clubs. As for stockholders' meetings, they were uncomfortable to say the least. Sales dropped and customers were angered. In desperation Farish's Big Board hired a top-flight public relations consultant, Earl Newsom, to improve the company's damaged image. John D. Rockefeller questioned Teagle and Farish on the matters, obviously trying to avoid direct entanglement by seeming not to know the details of the German transactions. Press conferences were held in which Farish made glowing announcements of the help that was being given the war effort. All of this failed to heal the trauma caused by the severe ordeal in Washington. Farish literally died in all except the physical sense during the Bone Committee hearings. Almost equally shattered, Teagle seldom attended a board meeting again. He was so deeply wounded that he would sleep for long hours and even showed a diminished interest in hunting. The corridors of Rockefeller Plaza seldom heard his heavy tread. Whatever he might pretend, Truman and Bone and Thunnan Arnold had jointly destroyed him.

On November 29, Farish, after spending Thanksgiving with his family in New York, drove up to his hunting lodge, Dietrich Farms, near Millbrook, New York. He spent the day walking through the golden woods surrounding the farm. Those who saw him noticed that his brows were knitted in worry and that he looked pale. Shortly after two o 'clock that night, he felt very ill and a doctor came to the house.  At two thirty the following morning he called out to his wife in an adjoining room that he had a severe pain in his arm. A few minutes later he was dead of a heart attack. The funeral took place at St. James Episcopal Church in New  York on Monday. Another service was held in Houston, where he was buried.

Among the pallbearers were Teagle and the new chairman, Ralph W. Gallagher. Others accompanying the coffin were General Motors,  Alfred P. Sloan and the National City Bank's president, William G. Brady, Jr. Frank Howard was also in attendance. Harold Ickes, whose diaries daily excoriated the Standard-Nazi connection, felt compelled to deliver a hypocritical tribute for the occasion. Inspired more by propriety than honesty, the Old Curmudgeon lied:

I feel a very real sense of loss in the death of Mr. Farish. He was a member, from the beginning, of our petroleum industry committees and of the petroleum industry War Council. As such he gave the fullest measure of sincere, able and patriotic service to the manifold program which has been necessary to mobilize oil, first for national defense and then for war. He did so even when the taking of these steps called for a disregard of normal competitive consideration. His place in the petroleum war program will not be easily filled.

Meanwhile, on August 8, 1942, Standard was still busy. The company's West India Oil Company had shipped to the Nazi-associated Cia Argentinia Comercial de Pesqueria in Buenos Aires on Treasury licenses. The U.S. Embassy in Argentina and the State Department authorized the transaction, along with members of the Petroleum Board in Washington who were also receiving a salary from Standard.

On August 24, John J. Muccio, First Secretary of the U.S. Embassy in Panama, wrote a letter to Cordell Hull headed "Suspicious correspondence -- possible Axis control of fuel patent." The district postal censor had intercepted a letter from Miguel Braun, a Costa Rican inventor, to Frank Howard and H. M. McLarin of Standard, offering for sale a newly invented fuel known as Braunite that Braun had developed. Braun was secretary and treasurer of Chemnyco, I.G. Farben's blacklisted New York subsidiary. The responding letter from Howard expressed interest in purchasing the patent and soon after proceeded to negotiate for it. 

On August 28, a commercial attache staff member in Argentina permitted a Standard subsidiary to sell to another Farben subsidiary of Buenos Aires despite the fact that the Argentine subsidiary was blacklisted.

In the fall of 1942 it became clear that Germany was already in desperate need of oil. Because of severe weather, shipment of barges and tank cars was drastically restricted. In Africa, General Bernard Montgomery had smashed the Germans and Italians at El Alamein. The Russians had succeeded in their offensive against the Nazi armies.

Switzerland proved more and more valuable as a neutral country. On the surface leaning in the direction of the Allies, that country was in fact in a permanent state of equivocation, exchanging raw materials in Germany for precision instruments and tools. Germany used  Switzerland as a conduit for oil into France, which by mid- November  was completely in German hands. It behooved all loyal American companies to do everything in their power to stop the flow of petroleum from Rumania and Hungary through Switzerland for the trucks and armored cars and tanks. But the crumbling regime of William Farish had no such consideration for patriotism, any more than Edsel Ford had when he approved the supply of trucks for that same enemy. 

In Switzerland the headquarters staff of Standard Oil was in constant touch with Rockefeller Plaza. It was not chartered to separate itself independently since it was in neutral territory. At the beginning of November 1942, Henri Henggler and David Duvoisin, the Standard bosses in Berne, paid an urgent visit to Leland Harrison and  Daniel Reagan, respectively minister and commercial attache of the United States. They asked permission to continue shipping Nazi oil from Rumania, from the oil fields that Standard had sold (or leased) to the Nazis. The oil was to be carried by tank car through Switzerland for use by, among others, the German and Hungarian embassies.  Harrison and Reagan had been given a clear mandate by the State Department on July 10, allowing them to license transactions between American concerns and enemy nationals based on the original Executive Order 8389 permitting such transactions. The procedure was that local members of the diplomatic corps had to apply to both Dean Acheson and Morgenthau for the issuing of such licenses. The meeting between Henggler and Duvoisin of Swiss Standard and Harrison and Reagan was extremely cordial. While Harrison and Reagan promised to take the matter up in Washington, they suggested that  Henggler and Duvoisin should drop in and see the Swiss political department to see what the local government's attitude might be. The two Standard men went over to the government offices, where they  received a characteristically Swiss reply. The officials reminded their visitors that "We shall of course, gentlemen, have to take into consideration our local laws.  Article 273 of our Penal Code provides that anyone who sells to an alien with whom he is at war can be sentenced in this country to imprisonment." The officials told Henggler and  Duvoisin that they would proceed as follows. The Standard men must agree not to reveal the names of the enemy companies to which they would be supplying products. Thus, Switzerland would be neatly let off the hook.

Daniel Reagan wrote to Acheson on November 4, urging him to agree to the arrangement for the oil shipment. He said that since the Swiss would not authorize the arrangements that instructions for the shipments should come directly from New York. Reagan wrote:

Standard wants permission to store and transport in Switzerland gasoline and fuel oils imported for the use of the Nazi and Hungarian Legations. Standard will unload at the Swiss railway station from railroads controlled by the Axis. American and British oil companies are dependent upon the enemy for petroleum supplies imported by the Swiss syndicate, Petrola. To irritate the enemy by ordering Standard to discontinue the service performed for enemy legations might give the enemy a pretext for refusing to permit oil of enemy origin to be distributed by American companies.* The U.S. Legation is heated by coal of enemy origin and the legation's automobiles are propelled by enemy gasoline. If Standard discontinues storing and transporting oil and gasoline for enemy legations, the latter can undoubtedly have this service performed by a non-American company. To compel the American concern to cease these transactions with enemy legations ... might result in  eprisals against Standard and other American and British oil companies. The legation accordingly recommends that Standard be licensed to continue this operation.

Reagan also asked for Standard to be given permission to pay a Nazi employee of Standard a monthly payment through a German-Swiss clearing account. Reagan went on to discuss Standard's ownership of the Rhine barge Esso 4, which was presently commandeered  by Germany. DAPG, the German Standard subsidiary, had continued after Pearl Harbor to pay rental to U.S. Standard for the barge.  Also, the Danube barges Pico I and Pico II were supplying I.G. Farben, Krupp, and other Nazi industrial powers, and DAPG was siphoning payments through to New York. Reagan asked if the payments could continue.

The matter of Jean Inglessi came up. He was an official of the Standard Oil office in Paris under the Nazi occupation. He was also on Swiss Standard's board in Lausanne. Reagan urged that Inglessi be kept on.

Furthermore, Reagan urged State to approve the matter of Standard railway tank cars carrying oil through Occupied France to Switzerland. Several of these had been commandeered by the German army.  The cars were covered by Swiss war risk insurance. Standard wanted permission to assist the Swiss authorities to obtain reimbursement from the Nazis because the tank cars had been bombed by the British.  On December 11, Minister Leland Harrison advised Cordell Hull and  he others that the British Legation in Switzerland concurred with the recommended arrangements.

On December 26, 1941, John G. Winant, U.S. Ambassador to Britain, discussed the matter with the Chancellor of the Exchequer, Sir Kingsley Wood. Instead of stopping these transactions at once, Winant and Wood decided that it would eventually be "preferable"  if a Swiss company transported oil for the enemy legations but that there was no objection to the procedure continuing and that "It is best not to incur any risk of [offending the enemy] by raising this issue." The note continued, "Embassy concurs with British view that on balance there is no reason for taking action which would at most be only minor irritant to Germans and which might complicate an already difficult situation or lead to unfortunate consequences as regards to future operations of American and British oil companies."

The embassy and the British agreed that the Nazi employee could be paid each month, that payment for the barges should be licensed, and that Jean Inglessi should be allowed to continue in office provided he did not live in Occupied France. Also, the license should be given to permit Standard to communicate with France, via the Chase Bank in Paris, to recover the tank cars or obtain war risk indemnity from the Germans, again through the Chase.

On December 29, Winant's office -- he was en route to Washington -- advised that all licenses should be granted as requested.

The matter was handed over to Morgenthau, who under severe pressure from State was compelled to authorize almost all of the arrangements but deferred decision on the business of supplying the enemy consulates with oil and allowing Standard to ship that oil.  However, he permitted the shipments to continue until the Swiss company could efficiently take over.

On January 28, 1943, Harrison protested the decision on shipment by repeating that "to provoke enemy unnecessarily [was] highly undesirable." But he did promise efforts would be made to have the Swiss company transfer the services. Inglessi must surely be allowed to stay in office even though, Harrison revealed, he was working for Standard in Occupied France.

The result of all this was that Standard continued to fuel the enemy, and the enemy fueled the U.S. Legation and its automobiles, until at least mid-1943.

Other transactions continued. On March 5, 1943, a license was granted permitting Standard in Brazil to pay an enemy corporation for special apparatus. On March 22 an enemy agent on the blacklist was licensed to receive $3,668 by Standard for legal services in Rio.  The licensing went on and on. On April 21, 1943, Duvoisin cabled  Zurich confirming the shipment of 16.7 tons of fuel to the Axis. The message was intercepted by censorship and sent most urgently to all branches of intelligence but nothing was done about it.

On June 1, 1943, I.P. Stone of The Nation (who knew nothing of the aforementioned secret correspondences which were classified up to 1981) attended the Standard stockholders' luncheon at the Patrons of Husbandry Hall in Plemington, New Jersey. He reported that in an early American setting, Ralph W. Gallagher, successor to Walter Teagle as chairman, sought to reply to the angry stockholders who questioned the I.G. Farben association. Gallagher pulled two rabbits out of a hat: two meek young men who had survived torpedoed Standard Oil tankers that had been sunk (by some miscalculation). One Standard supporter asked the crowd how anyone could question the patriotism of a company that had given the lives of three hundred of its men in the war against the submarine." At this point, Stone wrote, "your correspondent was taken ill."

James W. Gerard, former ambassador to Germany, spoke in support of the company, saying that he had no knowledge of any such American-German relations. Only a handful of those present knew that he had left Germany and his post there a decade before I.G. Farben was formed.

As a grand finale to a meeting notable for its black humor, Ralph W. Gallagher said unblushingly, "We never had any cartel arrangement with I.G. Farben." At that moment The Nation's reliable correspondent again felt unwell.

Only eight days later, in a secret document dated June 9, 1943, C. P. Savourin of Standard Oil in Venezuela was authorized to continue trading in oil with Gustav Zingg s * company and three other Proclaimed List corporations to the tune of a total of 13,000 kilos a month.

On June 15, Joseph Flack, American charge d'affaires in Caracas, sent to Hull an astonishing list of "sales made to Proclaimed List  nationals"! Such monthly lists were sent to Washington throughout the entire war.

State Department memoranda in August 1943 show trading was permitted between a Standard subsidiary and five Proclaimed List nationals in Caracas, Venezuela, that were shipping oil to Aruba for use in Spain.

None of these transactions was ever made public. The details of them remained buried in classified files for over forty years. However, it proved impossible for Ralph Gallagher and Walter Teagle, who remained active behind the scenes, to conceal the fact that shipments of oil continued to fascist Spain throughout World War II, paid for by Franco funds that had been unblocked by the Federal Reserve Bank while Loyalist funds were sent to Nazi Germany from the vaults of the Bank of England, the Bank of France, and the Bank for International Settlements.

The shipments to Spain indirectly assisted the Axis through Spanish transferences to Hamburg. At the same time, there were desperate shortages in the United States, long lines at the gas stations, and even petroleum rationing. While American civilians and the armed services suffered alike from restrictions, more gasoline went to Spain than it did to domestic customers.

The whistle was blown by U.S. Ambassador Carlton J. H. Hayes in Madrid on February 26, 1943, who made a statement that "oil products available in this country of Spain are considerably higher than the present per capita distribution to the people of the Atlantic Seaboard of the United States." Asked by The New York Times how this could be explained, a spokesman for Cordell Hull declared blandly that the oil came from the Caribbean and not from the United States and was hauled by Spanish tankers. The evasiveness of the response was typical. The spokesman also neglected to mention that shipments were going to Vichy and to French West Indian possessions under collaborative influence.

Hayes revealed that the gasoline and petroleum products equaled the full capacity of the Spanish tanker fleet. He neglected to add that much of that fleet proceeded regularly to Germany and helped to fuel Nazis, including their embassies and consulates and military installations, tanks and armored cars as well as Spanish troop transports on the Russian front, fighting against the Soviet Union, which was America's ally. 

In addition to oil, 25,000 tons of sulphate of ammonia were shipped to Spain in 1943 along with 10,000 tons of cotton, despite American shortages in both commodities.

The economist Henry Waldman wrote to The New York Times on February 26, stating it accurately as it was: "Here we are, a nation actually assisting an enemy in time of war, and not only that, but stating through our Ambassador, that we stand ready to continue and extend such help ... Spain is [an enemy] and yet we aid her."

Needled by this and other criticisms, Sumner Welles announced on March 11 that "adequate guarantees have been furnished to satisfy the British and United States governments that none of these quantities of oil will reach Germany or German territory." He evidently chose not to reveal that such guarantees from the mouth of General Franco were useless.

The flow of oil continued. On January 22, 1944, Dean Acheson said that "Oil is allowed to go to Spain as part of the bargaining done with neutral countries to keep them from supplying the enemy with what he wants from them." This statement was made on an NBC broadcast entitled "The State Department Speaks."  He was  telling only half the story.

The fact that this was so was revealed within less than a week. Despite opposition by Acheson, Harold Ickes overruled everybody and went to see Roosevelt. The result was that the United States suspended oil shipments to Spain. Ickes had accumulated a dossier from his special staff of investigators. The dossier showed that in fact oil was going to Germany, that German agents were operating freely on Spanish territory, and that Franco had just released 400 million pesetas of credit to Germany. This would insure the Germans a flow of all the oil it needed, plus unlimited supplies of wolfram, the ore from which tungsten, a hard substance capable of penetrating steel, was made.

Of course, all of this was known to the United States State Department long before Ickes took drastic action. Nevertheless, nothing whatsoever was done about it. For a brief period the truth emerged about Spain. Spanish ships were searched at sea, showing that oil, platinum, industrial diamonds, and liver extract, from which the Germans made a tonic for fliers, submarine crews, and even shock troops, were coming from Argentina and the Caribbean on Spanish vessels, admitted through the British blockade by American licenses.

On January 28, 1944, the British government cut off oil, gasoline, and other petroleum products to Spain. Franco protested violently.  Dean Acheson remained sensibly silent.

It was a brief period of sanity. On May 2, 1944, after only three and a half months of suspension, the oil lobby won a fight to restore shipments and to allow limited wolfram exports to Germany as well.  In order to secure this important move, Cordell Hull arranged for General Franco to expel Nazi agents from Spain, Tangier, and the Spanish Zone of North Africa. Although Franco more or less followed these polite requests, he continued to harbor large numbers of Nazis sheltering under diplomatic immunity. There was never any question of breaking off diplomatic relations with Germany: 48,000 tons a month of American oil and 1,100 tons of wolfram began to flow back to the Nazis.

A certain grim amusement could be extracted from an interview with R.T. Haslam, vice-president of Standard, on September 19, 1944, in The New York Times. Haslam said that "Germany has succeeded in producing a fine gasoline, the equivalent of our own, but in limited quantities." The remark passed almost unnoticed.

On July 13, 1944, Ralph W. Gallagher of Jersey Standard sued the U.S. government for having seized the synthetic rubber patents handed over to Frank Howard at The Hague. I.G. Farben lawyer August von  Knieriem flew in from Germany to testify against Standard. Gallagher's face was a picture when he saw Knieriem enter the courtroom.  He knew Knieriem would reveal much of the truth of Standard's dealings with the Nazis.

On November 7, 1945, Judge Charles E. Wyzanski gave his verdict. He decided that the government had been entitled to seize the patents. Gallagher appealed. On September 22, 1947, Judge Charles Clark delivered the final word on the subject. He said, "Standard Oil can be considered an enemy national in view of its relationships with  I.G. Farben after the United States and Germany had become active enemies." The appeal was denied.

_______________

Notes:

*Nelson Rockefeller's lessor in Caracas.

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