NOTES

CHAPTER FOUR

1. Cabot's obituary notice was in the New York Times, November 3, 1962; 25:4. He is extensively noticed in the National Cyclopedia of American Biography, Vol. 14, p. 251, and Vol. 34, p. 13, in which many other entries relate to the taciturn Cabot family and its offshoots. Up to this writing no public report of dispositions under Cabot's will has come to my attention.

2. New York Herald Tribune, October, 2, 1965; 18:3.

3. William H. A. Carr, The Du Ponts of Delaware, Dodd, Mead & Company, N.Y., 1964, p. 2.

4. Moody's Bank and Finance Manual, 1964, p. 648. Other financial details about Christiana Securities are available at this source.

5. Ibid., p. 648.

6. New York Times, June 3, 1962; 12:3.

7. Temporary National Economic Committee (TNEC), United States Securities Exchange Commission, Investigation of Concentration of Economic Power, U.S. Senate, 76th Congress, 3rd session, Monograph No. 29, 1940-1941, 1557 pp. At p. 867 it is shown that Christiana held 27.56 per cent of E. I. du Pont common, with the Du Pont family holding 74 per cent of Christiana or 20.39 participation in E. I. du Pont through this single channel alone. But this was far from the whole story. For at p. 869 it is shown that the Du Ponts personally and through a network of family subholding companies and trust funds held altogether 43.93 per cent of E. I. du Pont common, enough to insure absolute control. This without taking into consideration family holdings of preferred and debenture stock. These data are now, to be sure, somewhat dated. But what they show of contemporary relevance is the pattern of Du Pont holdings. Since the ownership position in General Motors was increased it is reasonable to infer that the general situation is no different in E. I. du Pont and in Christiana Securities. Later data will be cited showing the position to be about the same. See also ibid., p. 107.

8. Carr, p. 2.

9. Ibid., p. 348.

10. Foundation Directory, 1964, pp. 136, 138.

11. New York Times, May 23, 1961; 32:6.

12. TNEC, Investigation..., p. 869.

13. Ibid., pp. 1510-11.

14. Ibid., pp. 869, 1441.

15. Ibid., p. 1511.

16. Ibid., p. 1512.

17. New York Times, April 27, 1964; 49:1.

18. Carr, p. 299.

19. Max Dorian, The Du Ponts: From Gunpowder to Nylon, Little, Brown and Company, Boston, 1961, pp. 278-79. Carr, pp. 293-94.

20. Carr, pp. 191-94.

21. Ibid., p. 241.

22. Ibid., p. 243.

23. Ibid., p. 244.

24. Ibid.

25. Ibid., p. 245.

26. Ibid.

27. Edward W. Proctor, Anti-Trust Policy and the Industrial Explosives Industry, doctoral dissertation, Harvard University, 1961. Cited by Carr, pp. 245-46.

28. Carr, p. 246.

29. Ibid., pp. 286, 334.

30. Ibid., p. 285.

31. Ibid., p. 288.

32. Ibid., p. 299.

33. Cited by Carr, pp. 333-34.

34. TNEC, Investigation..., pp. 1514-21.

35. Ibid., pp. 628-31, 964-65, 1010-13.

36. Harvey O' Connor, Mellon's Millions, The John Day Company, N.Y., 1933, pp. 52-53.

37. Ibid., p. 100. The ins and outs of the Mellons's complicated wheeling and dealing that finally gave them fingers in more than 100 well-known companies are carefully traced by Harvey O' Connor.

38. New York Times, May 20, 1960; 1:2, and May 21, 1960; 25:8.

39. Ibid.

40. TNEC, Investigation..., pp. 1324-29 and passim.

41. Ibid.

42. Ibid., p. 129.

43. New York Times, July 21, 1937; 21:2.

44. TNEC, Investigation..., 126-31. A word on the money-value given for these holdings may perhaps be in order here. The 1937 values of the big oil company holdings are those given by TNEC. The December 31, 1964, values are the result of my own computations, conducted as follows: The closing prices of stocks for 1964 were taken from The Commercial and Financial Chronicle, January 3, 1965. These were computed against the entire outstanding stock issue of each company as given in Moody's Industrial Manual, 1965; Moody's Public Utility Manual, 1965; and Moody's Transportation Manual, 1964. For the industrials and public utilities the stock outstanding at the end of 1964 was taken, and for the railroads the stock outstanding at the end of 1963. The prices were multiplied with the outstanding stock issue and then the TNEC percentages were extracted. While tedious, this computation was not complicated except in the case of the Middle West Corporation, a public utility holding company later dissolved by government order. The constituent company stocks were in this case apportioned according to the break-up formula and the computation was made, taking into consideration later stock splits but not the issuance of rights to subscribe to new stock; nor was cognizance taken of later stock sales by the constituent companies to reduce indebtedness because they did not appear to dilute existing equities. Also, a capital distribution of $4.50 in cash per share of Middle West was added. While the Middle West Corporation figure is the most approximate in the column, it appears to be closely representative of what the stock would have been worth in the market had the company continued to exist. But owing to the noncomputation of subscription rights throughout and the ignoring of tax advantages, accruing from stock dividends and stock split-ups, the final figure, while not intended to indicate the total of any existing investment portfolio, represents if anything an understatement of the total Rockefeller funds as surveyed by TNEC.

45. New York Times, April 18, 1947; 23:3; April 19, 1947; 1:4.

46. Sward, p. 464. Henry Ford is something of a folk hero. He is popularly thought of as the once-poor, small-town bicycle mechanic who not only showed the city slickers a thing or two, by cracky, but who brought a cheap automobile into the price range of the deserving common man. He was all of this. But, as Dr. Sward incontrovertibly shows, he was also extremely ignorant, narrow-minded, bigoted, slow to learn, dictatorial, grasping, unsympathetic and unimaginative. His spectacular success probably enhanced his natural anxieties as it thrust him more and more into a complex world where the trusty maxims of the cracker barrel were continually set at naught.

47. Dwight Macdonald, The Ford Foundation: The Men and the Millions, Reynal & Company, N.Y., 1955, p. 3.

48. Ibid.

49. Ibid., p. 4.

50. "Estate Planning," Federal Estate and Gift Tax Reporter, Commerce Clearing House, Inc., N.Y., p. 7553, insertion no. 287-5, dated August 18, 1960.

51. ASF, pp. 286-373.

52. New York Times, October 29, 1948; 22:6.

53. Ibid., June 4, 1943; 26:3.

54. Ibid.

55. Some readers may wonder why the Fords did not keep their 10 per cent of voting stock and simply sell 90 per cent of nonvoting stock to get tax money. They could not have done this because experienced buyers shy away from nonvoting stocks, and the stock for tax purposes would obviously have been worth less than claimed. There is, then, a factor of value about the voting power of a stock. But the Fords could meet legal requirements by retaining initial 100 per cent voting power in their stock and giving the foundation nonvoting stock with equal dividend rights, provided they made the foundation stock eventually salable by allowing it some voting rights after sale or transfer. However, the Ford stock retained by the family, even though it is technically possible for it to be reduced to equality with the common, is worth more, share for share, than either the Class A or common stocks. This greater worth would be displayed only if a substantial block of the B stock were ever publicly offered, which will presumably never happen. A further element of astuteness in the way chosen to market the common stock was in deferring the time with its sale and making it possible to sell it gradually. Had 90 per cent of voting stock of Ford Motor been offered for sale between 1948 and 1950 the prices realized would have been very low in an unfavorable market. Sophisticated operators, when they have a choice, sell stock only in rising markets; the unsophisticated do just the opposite.

56. TNEC, Investigation..., pp. 1330-31.

57. Moody's Industrial Manual, June, 1966, p. 537.

58. John T. Flynn, God's Gold, Harcourt, Brace and Company, N.Y., 1932, p. 449.

59. Such is the power of propaganda that the name of Wilson for most people still suggests liberalism and progressivism. Wilson, in fact, was a standpat southern conservative, opposed to trust-busting and every kind of social reform. His administration was little more than an adjunct to J. P. Morgan and Company, whose representatives had little difficulty switching him from a policy of neutrality with respect to the European war to one of belligerency. For data on Wilson the reader should consult the definitive Arthur S. Link, Wilson, 4 vols., Princeton University Press, Princeton, 1946-1954, and Woodrow Wilson and the Progressive Era, Harper, N.Y., 1954. Thorough analysis of the misnamed progressive era is also to be found in Gabriel Kolko, The Triumph of Conservatism, The Free Press of Glencoe, N.Y., 1964; as to Wilson see pages 190-278 and especially 205-6. For essentially the same conclusions but without so much specialized documentation see ASF, pp. 106-48, "The Politics of Pecuniary Aggrandizement: 1912-1920." For a recent brief treatment of the way the United States was unceremoniously switched into belligerency in 1917 see Robert Sobel, The Big Board: A History of the New York Stock Market, The Free Press, N.Y., 1965, pp. 206-21.

60. Richard F. Hamilton, "Conviction or Convenience: The Trap of the Great Society," The Nation, November 22, 1965.

61. New York Times, November 22, 1965; 57:4.