and thereupon assumed the management of these companies by placing his representatives upon the various boards of directors.

Up to this time these establishments had naturally shown no disposition to give up their lucrative civilian trade for the purpose of serving the Government, and therefore the first change of policy under the management of the Alien Property Custodian was to put their machinery on Government work. They were forbidden to take any new orders for civilian work and directed to devote every available spindle and loom to the military needs of the United States Government under the direction of a manufacturing custodian designated by the Alien Property Custodian. In many instances changes in the machinery were required, but in a short time these mills were producing khaki-colored yarns, shirtings and Melton cloth to be worn by our soldiers in the field. Within six months the majority of their products was going into military equipment, and when the armistice was signed the output of these mills devoted to Government work averaged in excess of 80 per cent. The following figures indicate the volume of war work produced by these concerns which had been founded with German capital.

Pursuant to the authority of the "trading-with-the-enemy act" the enemy-owned stock in four of the Passaic mills was advertised for sale in December, 1918, and as a result the following sales were made:

The enemy-owned stock of the Botany Worsted Mills, amounting to 24,410 shares out of a total capital of 36,000 shares, was advertised for sale on December 2, 1918, but it was postponed to await the outcome of a suit filed in the Federal court by a stockholder to enjoin the sale. The plaintiff in this suit is no other than one Max Wilhelm Stoehr, the naturalized citizen son of Eduard Stoehr, of Leipzig, Germany, who is the founder and majority stockholder of the company.

The sale of the admitted enemy-owned stock of the Forstmann & Huffmann Co., aggregating about 32 per cent of the capital, has been deferred until after the determination of a suit filed by the Alien Property Custodian to test the validity of certain alleged stock purchases and transfers made to Julius Forstmann in the years 1915 and 1916. Among other things the Alien Property Custodian's bill in equity claims that the alleged purchases of 3,700 shares of Forstmann & Huffmann stock by Julius Forstmann from certain German stockholders, were made with the company's funds and therefore are not the property of Julius Forstmann.

Before passing from the subject of this German-founded industry centered in Passaic, N. J., it is gratifying to record that through the American management these companies not only became subscribers to more than $10,000,000 worth of Liberty bonds, but also subscribed more than $500,000 to the American Red Cross and more than $300,000 to the united war work fund.

Other well-known textile concerns which were partially or wholly controlled by German interests and now under the supervision of this office, are:

Dr. Jaeger's Sanitary Woolen System Co....

The Vigilant Mills....

Sidney Blumenthal & Co. (Inc.).

H. Loeb & Co. (Inc.).

Germania Worsted Mills____

Enemy interest. ..100 per cent. -45 per cent. Undetermined.

69 per cent.

--100 per cent.

Dresden Lace Works (Inc.).-The Dresden Lace Works (Inc.) was incorporated under the laws of the State of Connecticut in 1910, with an authorized capital of $225.000, consisting of 2,250 shares of common stock of the par value of $100. It is located at Norwalk, Fairfield County, Conn.

Previous to the incorporation, the stockholders of the company had been engaged in the manufacture of laces in Norwalk under the firm name of Dresden Lace Works. The control and direction of the business was in the hands of Georg Marwitz, of Dresden, Germany, representing the Dresden Gardinen und Spitzen Manufactur Actien Gesellschaft, a corporation organized under the laws of Germany, and located in Dresden, Germany, which was the principal owner of the stock, holding 1,248 shares. Georg Marwitz held 2 shares. The remaining 1,000 shares were held in the following manner: Richard Muller, an American citizen, of Norwalk, Conn., 700 shares, and Karl Neuhoff, an American citizen, residing in New York City, 300 shares.

The Dresden Lace Works manufacture Cluny laces and bobbinets or mosquito nettings. The manufacture of the latter began in 1917. The United States Government took practically the entire output of

this screen cloth. Under normal conditions the products of the company were sold to manufacturers of corset covers and art linen.

One thousand two hundred and fifty shares of the capital stock of the Dresden Lace Works (Inc.) were taken over by the Alien Property Custodian, as the property of the enemies above noted, in May,

1918.

The stock was sold at an adjourned public auction, held December 7, 1918, to Richard Muller, the highest bidder, who bid $100 a share.

A condition of the acceptance of Mr. Muller's bid and of the ratification of the sale to him was that the enemy stock purchased should be placed in the hands of three voting trustees for a period of five years ending February 1, 1924, and this has been duly consummated.

The Custodian also sold a contract between the Dresden Lace Works (Inc.) and the Dresdner Gardinen und Spitzen Manufactur Actien Gesellschaft, under which the German corporation was entitled to receive certain percentage of the profits on the business, to Richard Muller for the sum of $10,000.

International Textile (Inc.).—The International Textile (Inc.) is the largest manufacturer of Bermen laces in the United States. It also produces at the Bridgeport plant a considerable quantity of English or Nottingham lace. A narrow-fabric department was established in 1914, and a Levers-lace department in 1915. The concern also owns a mill at York, Pa., containing some 20 looms, which manufacture only narrow fabrics. During the war the York branch has been solely engaged in the manufacture of braid for military uniforms.

This business was established in Bridgeport, Conn., in July, 1909, as a branch of Alb. & E. Henkels, a partnership of Langerfeld, Germany, said to be one of the largest, if not the largest lace manufacturer in the world. It had also a branch in Piuerolo, Italy, which has been taken over by the Italian Government. The name Henkels has a distinct value in the trade.

Alb. & E. Henkels, the partnership, originally consisting of Albert Henkels of Langerfeld, the father of Max Henkels, who established the business in the United States, and E. Henkels, a brother of Albert E. Henkels is said to have withdrawn from the partnership in 1904, Max Henkels thereupon becoming a partner in his place. Albert Henkels, the father of Max and the founder and head of the German concern, died in 1910. Max Henkels and his brother Albert inherited their father's share in Alb. & E. Henkels of Langerfeld, so that today the German concern is owned by Max Henkels of Bridgeport, Conn., and his brother Albert of Langerfeld, Germany.

On March 8, 1918, Alb. & E. Henkels filed a report reciting that there was no enemy interests in the concern, but on June 18, 1918,

following an investigation by the Alien Property Custodian, 2,298 shares of stock in the International Textile (Inc.), standing in the name of H. Albert Phillips, were taken over as the property of the German partnership.

These 2,298 shares of stock were sold by the Alien Property Custodian at public auction February 15, 1919, for the sum of $1,200,000. Cotton, cotton waste, silk, velvet and kindred concerns, the enemy interest in which has been taken over by the Alien Property Custodian include the following:

CHAPTER IX.

TRANSATLANTIC TRUST CO.

An interesting combination of finance and politics was disclosed when I undertook an investigation into the affairs of Transatlantic Trust Co. This trust company was organized under the laws of the State of New York, and its history indicates that, when organized, it was designed to meet a rather serious condition of affairs existing in New York, e-pecially in connection with the transmission of money by immigrants. Immigrants had been solicited by scores of so-called brokers and ticket agents and bankers, and instances were numerous of losses occurring either through plain dishonesty or lack of business experience.

When this trust company was organized an appeal was made to a number of Americans of good financial and business standing to join in the organization of the bank in order to furnish a source or means of money transmission which would be conducted honestly and would avoid the scandals theretofore existing, and help to drive out the dishonest or the careless broker or agent. The gentlemen thus solicited went into the proposition, and it is due to them to say that the bank was at all times conducted in its banking operations with honesty and efficiency; and that they were unaware of any misuse of the company's organization.

My office found that the trust company had been organized by three large banks in Hungary, and that these three banks had made a combination with the Royal Hungarian Postal Savings Bank, which in effect provided that Transatlantic Trust Co. alone would be recog nized by the Hungarian officials as authorized to make money transmissions through the Hungarian postal system.

The effect of this arrangement was that the Transatlantic Trust Co., with the aid of the postal authorities, could pay over money directly to the remittee and get a receipt which would be forwarded to the remitter in America. No other money transmitter in America had this privilege, and the competitors of the Transatlantic Trust Co. complained bitterly of the situation, but without avail.

In due course, I demanded the stock in this company owned by the Hungary banks and put my representatives in control of the bank. Because the bank dealt with an ignorant class of depositors, it was necessary to proceed cautiously with the reorganization and with the