So far as the decree of the Royal Dutch Government residing in London was concerned, relating to the transfer of ownership of Dutch property, Mr. Pickrell was of the opinion that—

The purchase by you of the issued common stock of the Steel Union-Sheet Piling, Inc., from the owners, who are Netherlands subjects residing in Rotterdam, the Netherlands, would not come within the purview of this decree, if you are able to prové, in accordance with the regulations promulgated by the Dutch Minister of Justice, that these shares of stock were the property on May 15, 1940, of these Netherlands subjects.

(The letter referred to was marked "Exhibit No. 513" and appears on p. 2243.)

Mr. CARTER. The president of Steel Union did not learn until June 29, 1940, that his principals had anticipated the invasion of Holland. He was informed by a cablegram from the Themis Finanz-Gesellschaft of Zug, Switzerland, that ownership of Steel Union's shares had been transferred to Themis by the Dutch owners several days before the effective date of the freezing order.

May I introduce this cablegram as an exhibit?

The CHAIRMAN. It may be received.

(The cablegram was marked "Exhibit No. 514" and appears on p. 2244.)

Mr. CARTER. Themis did not hold the shares very long. On September 27, 1940, the Swiss banking company, which was linked with the former Dutch shareholders by the fact that Hans Wolf von Goerschen was on the board of directors of each, was named in the British Statutory List. Several days later, Themis informed Mr. Barreau by cablegram that the stock had been sold to the firm of Aktiebolaget Pars of Stockholm, Sweden.

Neither the Swiss nor the Swedish firm appeared to have much concern with the newly acquired American investments. More than 6 months after the reported transfer of stock from the Swiss company to the Swedish, Mr. Barreau wrote to Themis in Zug, Switzerlandwe are enclosing herewith photostatic copy of stock certificate No. 2, covering 250 shares of capital stock of Steel Union-Sheet Piling, Inc., issued to you as per May 6, 1940, showing proper transfer and cancelation note, dated September 24, 1940.

(The letter referred to was marked "Exhibit No. 515" and appears on p. 2244.)

Mr. CARTER. At the same time, he wrote to the Swedish firm, Aktiebolaget Pars, at Stockholm, expressing surprise on learning from that company's letter of March 11

that you should not have been advised of the fact when the transfer of the 250 shares of our company from Themis to you had become legally effective.

A photostatic copy of stock certificate No. 3, issued to Atkiebolaget Pars for these shares as of September 24, 1940, 3 days before Themis was named on the British Statutory List, was enclosed to replace one that was supposedly sent to the latter part of February.

According to your instruction—

Mr. Barreau wrote

we are holding the original of this certificate in custody here at your disposal. He noted, however, that evidently someone must have neglected to inform them properly, as Themis had conjectured. A cablegram of

February 14, 1941, from Themis reported that the transfer of Steel Union's shares from Dutch to Swiss ownership and thence to the Swedish company had been

effected as per date of actual sales contracts therefore no postdating involved. It was further indicated that explanatory statements had been made in the corporation minute book. Themis was asked to inform all interested parties.

The material referred to was marked "Exhibits Nos. 516-517" and appears on p. 2244.)

Mr. CARTER. There is nothing in the various affidavits filed by Steel Union with Government agencies to suggest the period of time that elapsed between the reported changes in ownership. It was a matter of some concern to Mr. Barreau, however, that there had been a delay. More than a year after the effective date of the first stock transfer, he recalled in a letter to Attorney Pickrell it was

evident that on May 10, 1940, at the time when Executive Order 8389 was isued, the shares of this company were no longer the property of the Netherlands nationals, the stock having been sold by them to a Swiss concern on May 3, 1940. Mr. Barreau further explained:

The official transfer of the shares from the Holland owners to the Swiss owners could only be made after a proper certificate of destruction could be furnished by the former Holland owners.

The stock certificate was destroyed during the German invasion of Holland, when the office building of the former owners was completely demolished by a direct hit from a German bomber. Only after "the destruction certificate was finally secured," therefore, was the stock "officially transferred to the new Swiss owners as of the date of its actual sale, namely, May 3, 1940."

(The letter referred to was marked "Exhibit No. 518" and appears on p. 2245.)

Mr. CARTER. No information is at hand with respect to the date "when the destruction certificate was finally secured."

The following statement on ownership, filed by Steel Union's treasurer with a Government agency, is typical in conveying the impression that the transfer was made before the freezing of funds was ordered: On May 10, 1940, the time Executive Order 8389 was issued to report property interests of nationals of the Netherlands, the stockholders of the Steel UnionSheet Piling, Inc., were:

N. V. Handelmaatschappij voor Nijverheid en Commissiezaken, Rotterdam, Holland.

We received a letter dated May 6, 1940, from the firm of Themis Financial Co., Zug, Switzerland, that they had purchased the shares of this company from Handelmaatschappij voor Nijverheid en Commissiezaken, N. V., Rotterdam. The sale was subsequently confirmed by the latter firm.

On October 2, 1940, we received a cable from Themis Financial Co., that they had sold the stock to the firm of Aktiebolaget Pars of Stockholm, Sweden. This was confirmed in a letter from the Themis Financial Co. and also by a letter dated October 16, 1940, from Aktiebolaget Pars, Stockholm, stating they had purchased this stock.

(The letter referred to was marked "Exhibit No. 519" and appears on p. 2245.)

Mr. CARTER. The original Themis letter of May 6, 1940, referred to above, was not made available to the agency concerned, nor did any

such letter come to the attention of the Department of Justice during its subsequent examination of Steel Union's files.

German control of Steel Union was so successfully concealed that the company was able to obtain licenses to liquidate its foreign indebtedness. One such license, obtained

in order to effect transfers and indices of ownership, in the normal conduct of business

and to meet certain obligations, including an indebtedness to the J. Henry Schroder Banking Corporation of the sum of $88,200, the balance of an item carried on the company's books in the amount of $167,217.64.

In an action brought by one of Stahlverein creditors, Mr. Barreau testified on January 7, 1942, that he had been vice president of the Steel Union Co., Inc., one of the predecessor companies of Steel Union-Sheet Piling, Inc., but that he "could not tell" who the stockholders were. When asked whether he knew "of any transfer actually made or pending to the credit of anyone" through Steel Union-Sheet Piling, Inc., "in the sum of approximately $80,000," not only did he deny under oath any personal knowledge of such a credit, but in response to a question as to whether the company treasurer might have such knowledge, replied:

No, he does not know, because there is no transfer that went through this company.

(The document was marked "Exhibit No. 520" and appears on p. 2249.)

The CHAIRMAN. Where is Mr. Barreau now?

Mr. CARTER. It is my understanding that Mr. Barreau is residing on a farm at Sergeantville, near Trenton, N. J.

The CHAIRMAN. You don't by any chance mean a farm with a barbed wire fence around it?

Mr. CARTER. When the outbreak of the war made it necessary for Stahlunion to draw upon the American steel market to keep its Latin American agencies supplied, the German combine's United States affiliates were ready to serve.

As far back as March 1937, the president of Steel Union cabled his principals at Duesseldorf that he had visited the Middle West to see some of his old friends in the steel business and

to investigate the possibility of getting a regular source of supply, in case it seemed advisable for us to turn some of our efforts to exports during the period that the world remained at a high level for general steel products.

In a letter of March 8, 1937, he reported to the North American Division of Stahlunion-Export G. m. b. H., at Duesseldorf:

As far as sheets and plates are concerned, it is probable that from time to time we can find some tonnages available for export from the small independent mills, but I have not approached any of them except in a very general way, believing that we should work with the two larger companies to begin with. You understand there are many other steel mills. * I can and will approach if necessary, but I thought it advisable to keep the matter as quiet as possible to begin with, since a general inquiry might make the matter of such public knowledge that some of our direct competitors who represent continental interests might start doing what we propose to do with possibly unsatisfactory results.

(The document was marked "Exhibit No. 521" and appears on p. 2256.)

Mr. CARTER. Ten days later, Stahlunion Limitada of Rio de Janeiro

wrote to Steel Union in New York City that many orders had been lost because

in many instances, in spite of all efforts, we have not been able to place (orders for) the material required by us in Germany

and

From our home office, Stahlunion-Export G. m. b. H., Duesseldorf, we learn that you have offered to do business in rolling-mill products, which (orders) for reasons of quotas cannot be placed in Germany, and to handle the business and obtain for us North American material.

Dr. SCHIMMEL. Would these South American companies have been able to get steel from American companies if they had wanted to, or would some cartel limitations have prevented them?

Mr. CARTER. The cartel arrangement, I understand, was suspended during the war.

Dr. SCHIMMEL. This was before we entered the war. Wasn't that a means, after the Germans had prevented American companies from selling steel in Argentina, of using their contacts here, whom they can trust, to get some of the American steel into the Argentine under their control?

Mr. CARTER. I think that is so.

For the guidance of affiliates, Stahlunion in Duesseldorf often commented on political matters. After the capitulation of France, so promising did the future appear to the firm that it wrote as follows to Mr. Barreau on July 10, 1940:

Due to the definite failure of the English attack on Narvik, the important Swedish ore bases were preserved for us. Shipments from the Swedish harbor of Lulea or by way of central Sweden, respectively, continue in greater quantities. Besides this we have at our disposal in the iron-ore field, the Minette and other French and Luxembourg iron ores.

The development of Stahlunion has taken an upward trend, concessions which we had made to other groups have again been taken over by Stahlunion particularly since our efforts to take over the European sales of the industry on a larger scale have been increasingly successful. Quantities at our disposal for export have been increased by special allotments and we certainly assume that by the above-described fundamental change in the supply situation, the quantities for export will be further increased.

Our foreign organization remains as in the past so that with an early victorious end of the war such as all of us here expect, we will immediately be equipped again to carry on our overseas exports.

(The documents referred to were marked "Exhibit No. 522" and appear on p. 2258.)

The CHAIRMAN. Stated more simply, doesn't this seem to be an instruction to Steel Union, New York, to prepare itself to follow Germany's military conquest with business expansion?

Mr. CARTER. That would seem to be at least part of Germany's purpose.

The CHAIRMAN. That instruction was received from Germany? Mr. CARTER. Yes. The Nazi-dominated Latin-American affiliates follow a pattern of action similar to that of the parent German companies in the occupied countries. Thyssen-Lametal, the Buenos Aires agency of Stahlverein, represents the Thyssen interest of Germany that helped finance Hitler. Fritz Thyssen himself visited his South American enterprises shortly before the war, and members of his family are now established in the Argentine. With profits from sale of

steel at wartime prices, Thyssen-Lametal, through an affiliate, has erected a blast furnace and rolling mill near Buenos Aires.

The close economic ties among the various German-controlled firms in the steel, communications, and electrical industries in the Argentine, with their interlocking directorates, have placed German interests at the heart of the country's economy.

The CHAIRMAN. Those profits were produced largely on the sale of American steel in South America at wartime prices on what was really a black-market deal with American steel companies.

Mr. CARTER. One general, who became mayor of Buenos Aires under the Ramirez government, has long been associated with German inHe had resigned as the Argentine military attaché to Berlin in order to fight with the German Army in World War I. As president of Cardimex, one of the South American blinds for ThyssenLametal, he helped the German steel interests maintain their organization. The general was also made president of Soc. Electro-Metalurgicos Argentine, S. A. (S. E. M. A.), an affiliate of the great electrical firm of A. E. G., Berlin. Another Axis-dominated firm with which the general has been associated as a director is SiemensSchuckert, S. A. The services of experts from this firm and ThyssenLametal were made available without charge to Argentine Government agencies. In all, a dozen Thyssen representatives have been acting as technical advisers to the Government in Argentina.

The CHAIRMAN. I think probably as political advisers, based upon their activities there.

Mr. CARTER. The German iron and steel industry, through subsidized foreign trade, infiltration, and cartel activities, succeeded in achieving hegemony over Europe even before the outbreak of war in September 1939. Its activities through the international steel cartel and related organizations inspired both fear and resentment among sales representatives of non-German competitors, who realized too late their own helplessness.

The CHAIRMAN. Mr. Carter, does the Department of Justice have any study of German penetration into the French economy before the war?

Mr. CARTER. Yes, sir; we have rather extensive studies dealing with iron and steel.

The CHAIRMAN. Will you check to see whether such material is in such shape that we could have a hearing on it in the immediate future? I believe that German activities in South America are of the same kind as those in France which prepared it for conquest, and I think it would be wise if we had that for comparison.

Mr. CARTER. Yes, sir.

The CHAIRMAN. Please go ahead.

Mr. CARTER. The United States sales agency of Belgian Steel Works wrote to its San Francisco office on July 24, 1939:

We quite appreciate your discouragement, but, as we explained to you many times, the Germans have had the best of the Belgian wire industry.

You ask why Kirschner, Oldham, Amerlux, and Steel Union can quote better prices on Belgian netting than the Belgian manufacturers themselves.

That is simply because the four above-mentioned firms have connections with the German office. Kirschner & Oldham used to work for Kloeckner and Amerlux;