1936-03-04 — Page 3

THE

CHEMICAL FIRM AS

HONGKONG AND JARDINE

COMPANY-MENTIONED AT ARMS INQUIRY

"It seems," remarked Sir Philip Gibbs at the Arms Inquiry last month, "that there are two different sides to Imperial Chemical Industries—-one for fertilising the fruits of the earth, the other for producing materials capable of blasting those fruits off the face of the earth.”

After the Royal Commission had heard Sir Harry McGowan, chairman of L.C.I., Sir Philip said:

"You say there is a widespread fallacy that I.C.I, is essentially an armament firm, and you 'lay considerable stress on the smallness of your profit, but is not that like the answer given by the unfortunate lady who put in a plea that her unwanted child was only a little one?”

Alluding to evidence given at the American inquiry, Sir Philip remarked that it seemed “LC.Í. acted the part of Dr. Jekyll and Mr. Hyde" in China.

"FALLACIOUS

IMPRESSION"

Imperial Chemical Industries, in their evidence submitted by Sir Harry McGowan, emphasised that there was a widespread but utterly) fallacious impression that they armaments were essentially an firm engaged to a large extent in the production of war materials. Proportion of total profits attribut- ahle to munitions averaged 14 perf cent, over the past. five years.

Referring to its utility to the State, 1.C.I. stressed that, while not to any material extent engaged during

in the manufacture of mili

times

of duets, it had great potentiali

tary

REASONS FOR SECRECY

Before evidence was taken Sir John Eldon Bankes, chairman of the Commission, referred to the letter quoted below.

The Commission, he said. only agreed to a private hearing when the matter was one affecting national defence and Government preparations for an emergency, or when the character of the evidence might be injurious 10 the business interests of a parti cular party.

Mr. Mitchell agreed that two of the documents which had been marked "Confidential" referred to those exhibited in the inquiry in the United States of America.

HONGKONG TELEGRAPH. WEDNESDAY, MARCH 4, 1936.

"JEKYLL AND HYDE"

SIR PHILIP GIBBS

Sir

in the Paraguay-Bolivia war. Mr. J. A., Spender asked if Harry would have any objections to

Government nominee on the Fested Supervisory Board. CONVERTIBLE

CHEMICALS

Sir Harry said that he would.

mug

He

| thought industry was quite competent

to look after its own business.

Mr. Spender: You don't think a Government nomince on the Board would be a sailsfactory way of assur. ing the public that everything all right-No.

was

exported to warring nations or poten. Dame Rachel Crowdy asked if 1.C.1.

tial warring nations commercial pro- duce which could be easily converted

into war material,

Dame

"SPY AGENT FOR 12

COMPANIES".

cer-i

You have arangements with. Lain feats of one sort or another in many countries of the world, includ Ing Germany and Spain; have I your permission to mention these firms?- Yes, do.

EXPLOSIVES

RING DENIAL

Sir Philip: I think these rather vague charges made against your firm are really due to a sort of anxiety in the public mind because they Int agine, rightly or wrongly, that you are in control of a a widespread organisation of chemical firms which can instantly get to work to create explosives in any part of the world where there happens to be a spot of trouble-I don't agree with that dic finition for a moment.

an

-Allegation

If that meant that I.C.I. were trying to create peace in the Far East

Sir Harry, said that that was not the job of a company. LC.I. knew that thero was certain business in the offing, and were endeavouring to get it for this country.

They did not stimulate orders from the Chinese Government or any other party.

Sir Philip asked, "You were en- deavouring to get business with Japan, but it was difficult to do so because of the Japanese making their own munitions, but you did deal in cer- tain specialities?

These presumably were for the invasion of Manchukuo, and at the same time you were supplying the Chinese with the same materials of war in order to defend Manchukuo, "It is this system of private sales broad that has aroused such criticism. By it an aggressive ration is supplied with weapons, and at the same time

defending nation is supplied with similar weapons for defence and there- by increasing the quantity and quality of the world's explosives." NO SPECIAL

Sir Phillp, naked Sir Harry a num- ber of questions regarding 1.C.I.'s agreement with the international arm- ament firm Du Pont de Nemours and particularly with regard to agreement, relating to Germany.

Mr. John Rogers, another I.C.I. director, anid to Sir Philip that. behalf of the firm, he could deny any suggestion that 1.C.I. and Du Pont's had appointed an agent to bring Ger mary within their world selling arof private manufacture were stopped rangenients. WHY AGENTS

IN CHINA?

on

Sir Phillp said be wondered why the firm had appointed the Jardine Engineering Corporation agents in China when LC.I had an office in

Shanghai.

He wondered niso whether there the minds of the directors as to the was any kind of delicate feeling in Sir Harry said that chlorine was impropriety or inadvisability of selling powder and explosives in some parts "It is not reasonable," commented exported to forelgit countries for com-of China and material for agriculture Sir John Eldon Bankes, "that you mercial purposes. resources for their manufacture.

Rachel Crowdy asked if this in other parts, Although much of its equipment should ask us to treat as confidential

pro-documents which have already been would be done even if a country had Sir Philip said it seemed that by the was designed for commercial

been theclared an aggressor, as was arrangement between the I.C.I. and clitets, it could be readily converted to published in full in America. other pacs.

Mr. Mitchell said that he saw no the case with Italy and Japan; and Du Pont they were able to make pro-

needed, its by Under modern conditions of war,fenson why they should not be pub- also whether a licence was the J.C.I state that it would be im-lished.

Sir Harry McGowan informed the those easily convertible chemicals. possible for any first-class nation to

extensive, Commission that only two males agroc-NAMES OF FIRMS defend itself without an highly-skilled and perfectly equipped ments came within the ambit of mili

such chemical industry

1.2.1.ary supplies. offered.

DR

"It was explained that phenol which was obtained as a by-product from gasworks, was used in large quantitles

1908

in the production of synthetic resins.

It was a purely accidental circum-

in time of war.

from the Board of Trade for exporting of the wing explosives in any part

KEPT SECRET Sir John: There seems to be an Sir Harry said that no licence was impression that if you or any other required, and that there had not been English company desire to evade the a noticeable increnas in the

to of exports to countries where there icensing regulations, or destro cover up the real destination of some had been wars.

of your products, it is necesanry that

amount

Dame Rachel asked Sir Harry if it you should have an exlating agree-were his opinion that it was an easy stance that its derivative, plcricment with some foreign Government. thing for a firm to avoid an embarge acid, could he used as an explosire it is quite as easy, I take it, to evade to-day by the arrangements they had

he law without some previous agree with each other.

Bir Harry: Of course, it could bo What applied to phenol could be ment as with one?

Mr. Mitchell: I should say it is done, but I do not think it would be said of other organic substances.

With so much to be achieved in the afer.

extraordinarily easy. It would be field of organte chemistry, in humani- Sir Harry McGowan, replying to posable but not probable. tarian and remunerative industrial Professor Gutteridge, said that only Dame, Rachol: You don't think directions, it was obvious that theme of the subsidiary companies which that is a danger?-It may be, of company would not be prepared to was in Canada manufactured cannon. course. waste time and money on poison gases and other lethal substances.

It was well known that chlorine was used in the early days of the war for gas attacks. It had not to be over- looked that chlorine, apart from its Important role in peaceful pursuits, afforded in the form of bleaching pow der the only efficient means of decon~| tamination after a mustard gas at-

tack.

Consequently it was a defensive weapon of the highest value, not only to the military, but possibly also to the civilian population..

Mustard gas was not produced by the I.C.L nor was any other lethal gas for offensive purposes

There was a long standing instruc

within the company that they tion should not do so except at the direct request of the Government.

ere was also a feeling, Judging There by correspondence at the American Inquiry, that because of the objec tions to the policy of the Nanking Government by certain of Provinces, it would have been

the dif-

ficult to conduct a military business

at Shanghai.

Sir Philip: Under the present licensing system, you do try to get the biggest ordera possible from any part of the work." These orders are likely to matorialise in those parts most troubled by the fear of war?

Sir Harry: Yes.

Sir Philip: You do not hesitate as good business men to promote these ordera 7-Emphatically yes we do, "TRYING TO SOLVE

FAR EASTERN QUESTION" Sir Harry read a letter written to She was asking further questions Professor Gutteridge: It has when the chaleman temarked, "It is a South American representative been suggested that one way, of always possible to commit a crimo. lating to an order in which it was evading Government regulations

that Later Sir Philip Gibbs. asked: emphasised'

tho I.C.I. were in to pass on to some company of Why is it you desire to keep secret anxious to avold foreign countries that kind an order which they will

and confidential the names of cer- having supplies of explosives need- execute.

tal firms with whom

you have lessly. been dealing. Sie Harry McGowan: I think that is a commercial practice.

Sir Harry: It cannot be done. JARDINE ENGINEERING

COMPANY

Dame Rachel Crowdy asked Sir Harry about the Jardine Engineer,į ing Corporation, a company acting as LCL agents in the Far East, and she said that they were also azonts for Vickers, and it had been: -written of them: "This IN

established company in the military

AN

"Do you work direct with this concern, or do Vickers set as your Ilaison officer?" she asked,

Sir Harry: Direct with Jardine,

Alluding to one letter, which aald: “I.C.I. are trying to solve the Far Eastern question," Sir Philip asked

WITNESSES' PROTEST AGAINST SECRECY

ATTACK ON I.C.I.

Sir Harry said that if the aystem

Governments would simply put down their own plant for their own re quirements.

Sir Philip said that he was making no special attack on I.C.J., but merely analysing the system.

Bir Philip Gibba questioned Sir Harry McGowan about the association

of Imperial Chemical Industries with Vickers in China, and Sir Harry said: prejudicial to someone?" "Do you suggest this association was

I think it might be Sir Philip: interpreted as being rather danger- ous. I feel myself it is a little dangerous to the world that enormous privato combinations should get together to exploit the needs of the world."

Sir Harry McGowan: I object to

the word exploit..

Sir Philip: All right. I withdraw that word. You do not feel there is some kind of danger attached 7--None at all.

Sir Philip naked Sir Harry if he was responsible for the personal and moral character of I.C.I. agents. Sir Harry: I am afraid not, "'SPY" AS AGENT FOR

12 COMPANIES

Sir Philip referred to one man and said, "Do you know that he was un International spy; that he had acted 69 agent for twelve different com- panies; that he was used by the Ger- mam to mine the Dardanelles and Heligoland and that he was working in close association with Von Papen in the United States before the end of the war?"

of 10.1.

Another representative replied that the man was never ngent for 1.C.I, but was appointed by Du Ponts,

Another question naked was what was the agreement between I.C.I. and German companies.

Mr. Rodgers said that there was a technical association, but definitely none of a military character, The Commission adjourned.

Route To El Dorado?

State-owned factories alone would

Signed by persons who have the British company, though contrary Mystery. Ruins Which May never be quite capable of meeting the slemands of this country and of the Dame Rachel then asked about given evidence before.the Arms to the national interest?

(4) Solicitation for Orders.-It. is

Be Milestones Empira in the event of a great war. arrangements concerning the export Commission, a letter by the claimed that, so far aa Messrs. Vickers

Much greater benefit and security of explosives to China, and Sir Harry National Peace Council, refers to are concerned, there is no

general An ancient gold route through could be obtained from the establish said that it was always done on the Messrs. Vickers' unpublished practice of soliciting for orders for the ment of a permanent supervisory; authority of the Narking Govým- {

urmament material. Only where it Africa is claimed to have been body to co-ordinate private manufac ment.

la definitely known that the Govern- found by a Southern Rhodesian ture and provide auxiliary help in At Berlin the Government had #1 After expressing the view that ment is in the market for a certain prospector. factories where the demand was likely purchasing commission. Only once "relevant information which concerns type of material, and where the agent Mr. A. Macneilage, who has had to be in excess of the capacity of were they allowed to make one ship- major issues and does not affect of the private concerns.

send representatives,

CHANCES FOR

CORRUPTION

Sir Harry McGowan said that the suggested supervisory body would be

a kind of shadow Ministry of Muni-

answers to questions.

ment direct 'to"Canion, and that was national security should be published," the company o_recommends, does 41 years' experience of prospect--

or

the letter suggests the following ques-Messis, Vickers admitted, however, Just returned Home from a six. otherwise, abroading in the colony, and who has.

|

on the authority of a letter from the Chinese Embassy in London. HONGKONG

tochnical

tions for further examination;

It

CONSIGNMENTS.

to

a great extent eliminated in commission being

Is admitted that competition haslon basis an onto

interior from there.

(1) National Armament lungs that the agents are paid on a commies. months' expedition in the south- practice. the western part of Southern Rhodesia, been

upon has put forward a remarkable the agents theory.

to

Consignments were never sent to the iron and steel trade, and that, for orders actually tions.

Hongkong to be forwarded to the supplice of armour plate, competitive have to inform the firm when they He states that from the Zim A further statement was put in on

tendering no longer exists. Is the ex-learn that the Government of that babwe Ruins along a line drawn behalf of the company in reply to Sir Harry and other officials of the isting governmental costing system an country is considering or has decided south-enat to Sofais on the Por questions which the Commission had I.C.I. were questioned by Sir Ken adequate guarantee for the taxpayer

mako purchases." Solicitation for put to them as to subsidiary com- noth Les on the point of conscription (A similar question will, we bekove, orders is surely inherent in this sys-tuguese coast there is a chain of :panies under their control.

Jarise later in con

ruins each a day's march apart. with aircraft tem

(6) Stimulation of Demand for These, he propounds, are the re- munitionsextion

Is cinimed Armament Armaments-It

that mains of resting-places, some of

Sir Harry had 'replied to the ninej questions put by the Commission, but gave certain Information condition that it was not mado public.

on

"Any military requirement, such as we supply," Sir Harry had stated, “is

open to public tender, and over

12

agents can afford it or favour the

tles for bribory and corruption.

of workers.

Professor Gutteridge said the| question of variation in wages was

and

Ho knew

of

(2) International a very sore point during the war. Linga-It is stated that "Vickers. Mesurs. Vickers do not in any case them somni-fortified camps, which and ita subsidiaries and associat stimulate a demand for armaments were once used in the transporta- of men-soldiers-who

of gold from the ancient were working in a temperature of os are not members of an internation- which would not athewise exist. Istion 100 degrees attending to furnaces al atmaments ring, neither do they this consistent with the firm's record workings of Rhodesia to the const

Zimbabwe, in his opiniona was in France, while their mates at control any foreign companies watso- as regards the building of the Japan- home were getting £10 a week on over by shareholding, by nominations ese and Chinese navies before the war the chlof town and centre, where

the arming of the Chinese provincial | munitions.

of directors, or by agreements." Can If the British soldier had not been this claim be reconciled with such governments after the war, the male gold from all parts of Rhodesia method there are but few opportuni- the magnificent man he was he would agreements as that between Messrs. recent years; and the arming

of aircraft Japan and to China in ported by slaves along the route was collected before being trans- Vickers and the Electric Boat Co.,l We are not going to

to claim that' Hot have stood for this, sold the Pro- and with correspondence arising out South American States, particularly to Sofala, where it was loaded on

fessor.

to ships. never has any of our agents passed Sir Kenneth Lee: If such a thing this agreement, which has been Beliyla and Paraguay after 1928 7 on some of his commission..

On his recent expedition Mr. (6) Expansion of Arms Produc to by previous witnessez be- "We do not know nor da

as conscription of workers happened fore the Commission? Can it be tion in War-time.--What answers Macnellage was equipped with a WO ap-it could not be said of anyone that reconelled with the firm's agreements apart from summary rejection would geological map of the country, and prove or consent, but the average rate they were desirous of war. Every with Remingtons, Colts, Schneider, Messrs. Vickers (and other firms con with a comprehensive report by of commission paid proves that there body would be on the same footing. Fotore, Skoda, Kruppe, etc., which are corned defend the present system) two prominent geologists. Past is but littlo scopo for irregularities." It would mean that the managing listed on page 32 of the evidenca sub- make to the detailed arguments of the site of the Birchenough Bridge said that no mustard gas or other in store for them.

Sir Harry, replying to the chairman, directors and workers know what was mitted by the Union of Doniocratic several vares, privato armament he pegged a claim at an ancient lathal gases had beon produced by

Control (Similar

vist the existence of a Existi agreements tham since the war. There had been I cannot. Imagine any managing alree- () Investments in Foreign Armation in time of war? the letter aro: found deposits of gold and tung

Sir Harry McGowan (interposing); in the chemical industry.)

Industry would not really feellitate working, which he thinks was rapid expansion of armament produc- probably in use 8,000 years ago. no export.

tor doing his best to stimulato war

Further afield,at Moroswo, he. "None of our research people," he for his own financial benefit.

menis Firms.It is admitted that The signatories of said, "Is busy on poison gases for use

Monte. Sir Kenneth asked if IC.I. sub shares in foreign armament firms Forster, M. Corbett Ashby Gerald mile and pegged two clahms, day,

Vickers

sers have large holdings of G. Addison, G. Allison, W. Arnold-sten over an area of half a square in war.

acribed to any of the so-called though these holdings do not amount Bailey, J. D. Bernal Fenner Brock CANNON FACTORY--

| patriotic socialios." IN CANADA BA

Mr. Macnallago is convinced It was stated, amid laughter, that to controlling share except in one way Hilda Clark, Nell Hunter, that this part of

caso. What is the reason for theso Marley, Kingsley Martin, John Parker,

Southern Sir John Eldon Bankos thon ques for life membership of the Air Lea character of normal investment? Do W. H. Thompson, R. Mckinnon Wood, ing many ancient mines has no some years ago they subscribed $10 investments, which are hardly of the Harr, Polls Thontan H. S. Brett, Rhodeain, which, although contain tioned Sir Harry and the other repre-gue of the British Empire, and that not the holdings mean that an increase Dorothy Woodman... ; nèntatives of Imperial Chemical was the lotto,

miniug activity to-day, will see Industries regarding the confidential Other LC.I, representatives slated bow in Spain or other armamente in danes at previous sittings of the Commining of gold, copper, silver, of foreign armaments, eg,, submar-

"All those persons have given evl- considerable exploitation" in the schedule which had boon put in, that they did not supply both sides Japan, may be directly, profitable, to misionaripotay

tungston, and--Jend.

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