PART 1 OF 2
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.