This piece began in KTB #153.

In the US, gasoline had been more than $2 per gallon in some areas. In Germany, gas had cost about 2 Marks per liter, a liter is a little more than a quart, a Mark is equal to about 50 cents, making gas in Germany equal to about $4/gal. Who is responsible?

Obviously, the big oil companies are trying to maximize their profits - but this is not the first time. Who can remember the so-called 'Arab Oil Embargo' of 1973? I remember it well, because I was Inventory Control Director at the corporate level of a major petrochemical company and I can assure you, there was no shortage of feedstock or petroleum at all. This contrived shortage allowed the company to raise their prices by 500% on both their industrial chemicals and the consumer products, including a nationally known brand of automotive anti-freeze. These products all use feedstock coming from petroleum and it was never in short supply.

Who gave us WWII? It was the 'Seven Sisters" in part. The 'Seven Sisters' were the world's petroleum companies, of which Standard Oil was the largest. The Chief Executive Officer of Shell Oil was so pro-Nazi that the British Government had to force him out in order to get fuel for their own military. In an interview in LIFE Magazine in 1940, the Chief Executive Officer of Texaco (Thorkold Reiber) stated that if any German U-boat Skipper saw a Texaco tanker helping the Allies, he had Reiber's permission to sink the Texaco tanker. But perhaps the one that made the most profit out of these world events was Standard Oil, today known as Exxon. When the German Luftwaffe bombed England during the Battle of Britain, they got fuel from Standard Oil. When the RAF went up to protect their homeland, they got their fuel from Standard, When the Japanese attacked Pearl Harbor, they had fuel from Standard Oil in their tanks. CHARLES HIGHAM (35-1984) put all this in his book Trading with the Enemy but there is more -- and it is in the records of the United States Senate! What you read in this piece comes directly from the testimony of Hearings before a Special Committee investigating the National Defense Program during the 77th Congress, pursuant to Senate Resolution #71 in 1942.

Committee Meeting

The Committee met at 10:38am pursuant to adjournment on Friday, March 27 in Room 318, Senate Office Building with Senator James M. Mead presiding. This piece began in KTB #153.

Mr. Farish continues his testimony: “The only additional comment I have is that the writer of the letter of May 15, 1940 which was called to your attention, was not familiar with the entire situation, as so often happens in an organization as large as ours, and had merely been told of this matter of the 20,000 gallons of Toluol on which we were working at the time was an Army development on which we wished to say nothing whatsoever to anyone. This statement was somewhat embellished in the letter quoted and the embellishment was promptly criticized by others in the company who knew the facts. We were manufacturing only 20,000 gallons of Toluol for the government for use by the DuPont Company designated by the government - in testing its effectiveness in TNT.”

Senator Ball: “Mr. Farish, on this process you finally developed, you didn’t get the entire process from I. G. Farben?”

Mr. Farish: “No, sir.”

Senator Ball: “You made considerable improvements?”

Mr. Farish: “Yes, sir.”

Senator Ball: “Did you then turn them back to I.G. Farben as you made them under your agreement?”

Mr. Farish: “I don’t think so because this was after we had acquired full possession of those patents.”

Senator Ball: “I see. Do you know whether I.G. Farben is making Toluol, or any German companies, from Toluol?”

Mr. Farish: “From petroleum? I do not. I presume not. Their source has been from coal, as I understand it.”

Mr. Fulton: “Mr. Farish, in that connection, isn’t it true that the Toluol was developed by Standard Oil and not by I.G. Farben?”

Mr. Farish: “Yes, sir.”

Mr. Fulton: “In other words, it is a hydro-forming process and not a hydrogenation process.”

Mr. Farish: “That is the hydro-forming process we got from the I.G. in the 1929 agreement.”

Mr. Fulton: “Then you mean you did not develop Toluol but got it from the German company?”

Mr. Farish: “No, sir. I mean exactly what I say, that we did develop it, but the German development came to us in the 1929 contract with the I.G., as I explained at the very beginning of that statement, and we proceeded to develop the actual manufacturing of it.”

Mr. Fulton: “You mean, then……….”

Mr. Farish (interposing): “The first sentence of your statement, if you will pardon me…..(restating) ‘Among the processes which we acquired under the 1929 agreements there was one which had in it the germ of synthetic Toluol production.”

Mr. Fulton: “Oh, then it is the germ that you got and on that you erected your own studies.”

Mr. Farish: “Right.”

Mr. Fulton: “From which you found out how to make Toluol.”

Mr. Farish: “Right.”

Mr. Fulton: “But you did not convey the understanding of how you were making it to the German company?”

Mr. Farish: “The I.G. Company? I think as this case came along at this date we did not. I will have to consult Mr. Howard to answer that more accurately.”

Mr. Fulton: “Mr. Howard, can you answer that?”

Mr. Howard: “So far as I know, the Germans never knew anything of our synthetic Toluol development.”

Mr. Fulton: “Were you not obliged under your agreement to deliver information on that?”

Mr. Howard: “The exchange of information had ceased before this Toluol development reached an advanced stage.”

Mr Fulton: “Had you given them information on the intermediate stages?”

Mr. Howard: “So far as I know, we gave them no information whatever concerning our development of synthetic Toluol at any time.”

Mr. Fulton: “And you would have known if you had, since that was in your department?”

Mr. Howard: “I believe I would have, sir.”

Mr. Fulton: “Now, with respect to Toluol, were you restricted by your agreement with I.G. Farben as to the ability to make it as a major product? In other words, was it a produce that you had a right to make and to license the making of?”

Mr. Howard: “Addressing me?”

Mr. Fulton: “Yes.”

Mr. Howard: “That was a question which was difficult to decide under the contract, and we didn’t worry about it at all. Whatever the contract meant, we had been asked to do this by the Army and we did it.”

Mr. Fulton: “Did your attorney ever give you an opinion that under the contract you had signed you had no right to do that - Mr. Loofbourow, I believe?”

Mr. Howard: “What that question was raised, I believe the legal answer to it given by our attorneys was that we had no right to produce Toluol directly by the I.G. process, but we could produce under the I.G. process a Toluol rich distillate, and from that Toluol rich distillate it was our right to make anything we pleased without any regard to any I.G. contract. That is the way the matter was handled practically.”

Senator Connally: “May I ask you a question, then?”

Mr. Howard: “Yes, Senator.”

Senator Connally: “I understood you to say, regardless of your obligation, you gave it to the Army and Navy. The Standard Oil is responsible for its obligations, I imagine, is it not?”

Mr. Howard: “Yes, sir.”

Senator Connally: “I mean if you violated your contract to I.G. Farben Co., Farben itself, suffering damaged, could recover them from Standard Oil, but in the meantime you were willing to take that risk in order to make that available to the Army and Navy.”

Mr. Howard: “Senator, yes, sir; we did it in that matter, and in Mr. Farish’s statement you will see we did it in many other matters. No such matter was settled with reference to any contract we had with anybody else.

Senator Connally: “Under the present law if you hadn’t done it the Government could have taken it away from you anyway, couldn’t it?”

This is getting interesting, isn’t it? Does it appear to you that the executives from Standard Oil are giving the answers they think the Senate Committee wants to hear? Does it seem that the Senators are beginning to think this way too by their questions? More on this Senate Committee looking into the dealings between Standard Oil and the German company, I.G. Farbenindustrie in KTB #158.