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GARVSH DEMANDS
HARDING CLEAR HIM
Writes to President That He
Has Been Grossly Mis
led by Daugherty.
New York. —Flatly refusing to return
to the United States government a
single chemical patent right owned by
the Chemical Foundation, Inc., of
which he is president, Francis P. Oar
van, in a spirited and energetic letter
to President Harding, asserted that
the President, “grossly misled by the
attorney-general,’’ is, for the first time
in American history, attempting to
abrogate a solemn Executive order of
a predecessor, and is acting, moreover,
on information “furnished by German
agents and interpreted by lawyers
whose sole knowledge of the war and
Us lessons is derived from association
with German clients.”
Absolute legality in the sale of 4,700
and odd former German patents to the
Foundation, and complete publicity in
the organization and operation of this
quasi-public institution, together with
the highest of ethical motives, are
earnestly maintained by Mr. Garvan in
his communication, and he asserts with
emphasis that no person connected
with the Foundation has ever made a
dollar out of it, or ever could do so
under Its charter and by-laws, himself
least of all : he fortifies that statement
with figures which show that the capi
tal of the Institution consisted of $428,-
900, all of which has been spent in the
purchase of the patents and in educat
ing the people through schools and
colleges and in the encouragement of
chemical societies, and says that the
Foundation Income from licenses bare
ly meets the modest running expenses.
All of these financial details have
long been available, Mr. Garvan re
minds President Harding, and demands
that the President ascertain the truth
and tell the people whether the Foun
dation and its head have deserved the
abuse they have received.
“Gave All and Got Abuse”
“It has given its ail,” Mr. Garvan
writes. “You can take away nothing
but the opportunity of service. It was
all we got from the government. It
is all we have.
“Mr. President, you have had the
temerity to impugn the honor of the
gentlemen who boast a part in the
great work of building up or preserv
ing the possibility of progress in or
ganic chemistry for America. You have
again been misinformed as to the
nature of the trust we bore. That trust
was not for the German Kartel, the
owner of practically all the important
patents, who had received them under
the unthinking graciousness of latvs
they had induced. That trust was for
the American people, their industrial
independence and for the safety and
health of their children and their chil
dren's children.”
At the outset of his letter Mr. Garvan
states that he has forwarded to the
Alien Property Custodian the Chemical
Foundation’s formal answer to his
demand, an answer “as an American
corporation ready at all times to de
fend its rights in the courts,” but that
!he public in whose interests the Foun
dation was organized, is entitled to he
fully informed as to the circumstances
under which the demand was made and
the reason why it is unqualifiedly re
fused. The demand itself. Mr. Garvan
asserts, together witli the letter written
by tlte President and the statement
made by Attorney-General Daugherty,
“demonstrate that you. Mr. President,
have been grossly misled by the attor
ney-general, both as to the law and the
facts of the case.”
Eliminating "Enemy Interest”
Thereupon Mr. Garvan contends M)
that the attorney-general' lias listened
exclusively to German agents, which is
no investigation: (2), that the Uniter!
States government lias no interest in
the suit brought hv the Foundation to
determine the ownership of funds held
by the treasury; (3), that when Presi
dent Wilson authorized the sale of the
German patents, neither Hip President,
secretary of state nor alien property
custodian was, under the law. in the
remotest sense a trustee for the Ger
man enemies; (4), that specific power
to sell the patents was granted by Con
gress after full committee hearings on
November 4. 1918. and on December 3.
1918, President Wilson, vested with
cower to supervise all sales, authorized
Acting Secretary of State Frank U.
Polk to approve the sale of the German
chemical and other patents; (5), that
on February 2fi. 1919. Polk ordered the
sale in the public Interest, noting that
a public sale was not in the best in
terests of tlie public because it would
offer opportunity for the patents to get
into tlte hands of speculators and
monopolists, and that the Chemical
Foundation, obligated to grant non
exclusive licenses, was the best means
for “eliminating alien interests hostile
to American industries and of the ad
vancement of chemical and allied in
dustries In the United States;” (<!).
that President Wilson, returning from
abroad, confirmed Polk's order on Feb
ruary 13. 1920. with this comment:
“Mr reasons for the foregoing determi
nation and order are stated in the said
orders of Frank L. Polk . . . and in
addition thereto, the public interest
i will he best served by the elimination
of any enemy interest adverse to
V meric an citizens arising by reason of
said choses in action, or mghts, inter
ests and benefits under said agree
ments . . . .”
“This sale.” Mr. Garvan continues,
“was made in the full light of all
branches of the government and in the
full light of publicity. The idea of its
formation was the result of the inti
mate knowledge of the past use ot these
patents in a manner hostile to rtie
United States’ interests, and in full
consultation with all of the executives
of the government, the experts of our
army and navy, and leaders of our
chemical business organizations and
the heads of all our scientific ami re_
search organizations. I do not ask you
to a-.cept my present statement of the
matter hut insert here an extract from
the 1 cport of A. Mitchell Palmer, filed
with the President February 22, 1919,
and hv him forwarded to the Congress,
and by that Congress made a public
document and most widely commented
on by the press of the country.”
Palmer’s Version of It
Mr. Palmer stated in the course of
the- report refered to by Mr. Garvan:
"These patents, as had already been
indicated, formed a colossal obstacle to
the development of the American dye
stuff industry. Evidently they had not
been taken out with any intention of
manufacturing in this country or from
any fear of American manufacture
. . . upon consideration it seemed that
these patents offered a possible solu
tion for the problem, hitherto unsolv
ahle, of protecting the new American
dye industry against German competi
tion after the war . . . The idea was
accordingly conceived that if the Ger
man chemical patents could he placed
in the hands of any American institu
tion strong enough to protect them, a
real obstacle might be opposed to Ger
man importation after the war, and at
the same time the American industry
might he freed from the prohibition en
forced by the patents against the man
ufacture of the most valuable dye
stuffs. Accordingly these considerations
were laid before various associations of
chemical manufacturers, notably the
Dye Institute and the American Manu
facturing Chemists’ Association. The
suggestion was met with an instan
taneous and enthusiastic approval, and
as a result a corporation has been or
ganized to be known as the Chemical
Foundation (Inc.), in which practically
every important manufacturer will be
a stockholder, the purpose of which Is
to acquire by purchase these German
patents and to hold them as a trustee
for American industry The first
president of the Chemical Foundation
will he Francis P. Garvan of the New
York bar, to whose clear vision and in
defatigable industry I am chiefly in
debted for the working out of this plan.
The combination was not objection
able to public policy, since it was so
organized that any genuine American,
whether a stockholder of the com
pany or not, could secure the benefits
of the patents on fair and equal terms.”
A Quasi-Public Idea
Mr. Garvan goes on to state that at
that time he was a dollar a year man,
with no expectation whatever of be
coming alien property custodian; that
it was only when Attorney-General
Gregory resigned and Palmer was ap
pointed attorney-general that Palmer
asked him to take the custodian’s
place. Three months later, he writes,
he testified before the Ways and Means
Committee of the house : “The founda
tion of the Chemical Foundation was
an effort to form an organization to
represent as nearly as possible at that
time the public interests. Judge In
graham of New York and Judge Gray
of Delaware had charge of drawing
our charter and our trust agreement
and our certificate of incorporation.
We have endeavored to make it as
nearly a public institution as our laws
allow, and at the same time to have
it an official organization. We wanted
to sell these patents to the govern
ment, and if there had been any
method by which we could make them
a working force and still have them
owned and controlled by the govern
ment. it would have relieved us of a
great deal of responsibility, and if
there is at this time any suggestion for
modification or amendment of our plan
wliich will insure in the minds of the
committee a more definite and certain
fulfillment of the intention and pur
poses of our organization I am certain
that the Chemical Foundation and all
its stockholders and all who are Inter
ested in it would be glad to conform
to the wishes of the committee, be
cause, in so far as we have public rec
ognition and public support and gov
ernment recognition and government
support, we become more efficient and
become more able to carry out the in
tentions which are in our hearts and
minds.”
Mr. Garvan states £hat the total or
gross income of the Foundation has
averaged $143,216.65 per year. The run
ning expenses, bare overhead, have
averaged a net excess of
'21.245.30 or .049 per cent on the $428,-
900 invested, allowing nothing for de
preciation. The average life of the
patents is eight years, so that 12%
>or cent of the $271,850 cash paid for
die patents, or $33,981 per year,
should he subtracted from the appar
>nt net receipts per year, which leaves
■ui actual annual operation deficit of
•‘12,735.70. In educational work, Mr.
larvan informs the President, the
Foundation has spent $204,017.85, the
entire balance of its capital.
Quotes English Prediction
Firmly maintaining that the Founda
tion is the keystone of the wall raised
to protect tiie American people from
German chemical domination, Mr. Gar
van maintains such protection is indis
nensahle to riie future happiness, health
and safety of the American people, and
quotes from a recent open letter to
parliament written by James Morton,
largest carpet manufacturer of Eng
land, “Organic chemistry is the key to
the world of new values,’ and that
America in five years’ time will have
dye works and general chemical works
equal to Germany.
As regards the development of or
ganic chemistry for national defense,
Mr. Garvan calls to his aid testimony
by Marshal Foch and the late Field
Marehal Sir Henry Wilson to the gen
eral conclusion that a nation thorough
ly equipped chemically may almost
guarantee the peace of the future. And
as regards its importance in the de
velopment of medicine he quotes Prof.
Tulius Stiglitz of the University of
Chicago, world famous chemist:
“The pitiful calls of our hospitals for
local anaesthetics 1:o alleviate suffering
an the operating table, the frantic ap
peals for the hypnotic that soothes the
epileptic and staves off his seizure, the
almost furious demands f»r remedy
after remedy that came in the early
years of the war, are still ringing in
the hearts of many of us. No wonder
that our small army of chemists is
grimly determined not to give up the
independence in chemistry which the -
war achieved for us! Only a widely
enlightened public, however, can In
sure the permanence of what far see
ing men have started to accomplish
In developing the power of chemistry
through research in every domain
which chemistry touches.”
“These,” Mr. Garvan concludes,
‘were the thoughts which were in the
minds of the men who knew the war
and its lessons when they formed the
Chemical Foundation.”
•p-vX-v-:-.:; i-m i r fm-h-H 1
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