Mr. TOLAND. Let me show you-Have you finished? I am sorry. I didn't mean to shut you off. I am sorry. Mr. MARCUS. We have a responsibility, and we had a responsibility. We knew that the Germans had moved into France. Our country at that time was under a neutrality proclamation. At any time a stockholder might inveigh against us for not properly taking care of the property of the company, and for us it was a very trying question and for that purpose we had Mr. O'Hanrahan stay on the job in Paris in our office in Paris-for the purpose of guarding our interests. It may appear at this date that that was for the purpose of helping Germans in the light of what has happened since, but that is hindsight, so far as we are concerned. In 1940 it was our duty as officers to guard that interest. I think we have done it. Mr. TOLAND. Well, now that you have made that statement let me show you the documents. I show you a cablegram from Bosch dated the 6th of July 1940, addressed to yourself, and ask you if you recall receiving it? Mr. MARCUS. Yes, I recall this. Mr. TOLAND. And I show you a cablegram dated July 8, signed by you and Stanton, to Robert Bosch, and ask you if you recall sending that or causing it to be sent? Mr. MARCUS. Yes; and I want to make a statement respecting this. Mr. TOLAND. Let me offer it first, and then you can make the statement. The CHAIRMAN. Read them, and then let him make the statement. Mr. TOLAND. The first is addressed to the witness, Mr. Charles Marcus, dated July 6, 1940, and it says: If you find it desirable that your associated French companies discuss with us such questions of business policy which are of mutual interest we should be glad to cooperate. We believe that some of the major problems arising from the new economic alinement under progress may be more advantageously handled if we aim at common stand. Amblard and your other friends might contact us directly or through O'Hanrahan unless you prefer that we approach them. Best regards. Then it is signed "Magnetbosch," which I assume is the cable word for the Bosch Co. Mr. MARCUS. That is right. Mr. TOLAND. The reply by the witness, signed by him and Stanton, was to Bosch, July 8: Cable received. We have been unable to contact our associates and would therefore prefer that you discuss with O'Hanrahan, Boetto Mr. MARCUS (interposing). That is the name of the manager. Mr. TOLAND (continuing): Or Amblard to whom contents your cable have been transmitted. I offer these in evidence. Regards. (The cablegrams were received in evidence and marked "Exhibits Nos. 142 and 143," respectively.) Mr. TOLAND. Any statement with regard to the cable that you have to make, go ahead and make it. Mr. MARCUS. It was obviously a trying position for us in respect to our relationship with these French companies. From that cable onward a great deal of correspondence came to us, even via the American Bosch Co., asking us to engage in a deal, the ultimate purpose of which was a desire on the part of Bosch in Germany, who owned a French subsidiary to which I have referred, the Lavalette Bosch Co., to engage with and make a combination with our Ducellier associates of which Mr. Amblard is the chief, for the purpose of taking care of the rehabilitation of equipment carried by truck, such as starting, lighting, and ignition. The Bosch Co. had been competing through its French subsidiary with the Ducellier Co., and up to the time of the fall of France they were competitors in every sense of the word. When Germany gained the ascendancy over France it was obvious to us that it would be to the interest of the German Bosch Co. to extend that control, and that control found one of our companies standing in the way. They tried, therefore, amicably with us to try to get our assent. To date that assent has not been given. What we have done, however, and because we were then getting royalties from Germany, was to refer them constantly to our French associate. Mr. TOLAND. You said you had not been receiving royalties? Mr. MARCUS. I said "because we had been receiving royalties." We were caught, therefore, between a desire to maintain the income of our company as it had been, and not to give the answer which we knew the German company wanted from us respecting Ducellier. Mr. TOLAND. I will come to that later. The CHAIRMAN. Let him go ahead and finish his statement. Mr. MARCUS. They tried to put us in the position so that we would be the ones to give assent to the deal. They knew that our voice would be a rather strong voice in the councils of the French companies. We had been working with our French associates for years. On our part we did not want to see this thing happen, but there was nothing we could do about it. My best advice at the present moment is that such an arrangement has been made, but I repeat, not with our consent. Mr. TOLAND. Isn't it a fact, now that you have made this long statement about things that I had planned to take in order, that your French companies, in connection with the arrangements that you made with Robert Bosch, have been making material for the German Army and the German Government? Mr. MARCUS. We cannot answer that question any more thanMr. TOLAND (interposing). Let me see if I can't refresh your recollection. Isn't it a fact that on August 14, 1940, Mr. O'Hanrahan reported to you or to your company that Robert Bosch was planning to purchase from Air Equipment a quantity of starters, gears for starters, power-brake compressors, and deicers, and that thereafter Mr. Dipper, who is a Bosch representative; is he not?-- Mr. MARCUS. Yes. Mr. TOLAND. A German, negotiated with Mr. O'Hanrahan and the Bendix French manufacturers for ever-increasing orders of various instruments and accessories? And isn't it a fact that on the 27th day of March 1941, Air Equipment had orders from Mr. Dipper for 15,000 sets of aviation gears and 2,000 sets of Diesel engine gears, and didn't he make the statement to your company that those orders were because of Ned O'Hanrahan's relations with Robert Bosch? Mr. MARCUS. We are confusing two issues, sir. Mr. TOLAND. I am asking you; isn't what I said a fact? Mr. MARCUS. But it is an extraneous fact, and not related to the question that went before. Mr. TOLAND. Whether it is extraneous let me show you the documents. These may refresh your recollection. You look all these documents over, and see if what I have asked you isn't a fact. Mr. MARCUS. I would like to ask a question in between, if I may. We have been on the subject of Amblard and the Ducellier Co. and the Lavalette Bosch. This question, in connection with Air Equipment, is true, and it is another company and a subject not related to that one. Mr. TOLAND. No; but I mean Mr. MARCUS (interposing). It is my understanding that you wanted to follow up the question of Amblard, Ducellier, and the Lavalette Bosch Co. Mr. TOLAND. And now I am going into this subject. Mr. MAAS. Do you want to make any comment before you finish with that subject? Do you feel it is misrepresented? Mr. MARCUs. I do. Mr. MAAS. I suggest, Mr. Chairman, that he should be permitted to finish his statement. Mr. MARCUS. I concluded my statement by saying that to date no such permission had been granted by us as they wanted, as was evidenced in the letter read prior to this, and I understood counsel to say "I will now follow it up because you are leaping ahead of my story and my questions." Mr. TOLAND. That was other companies. Mr. MARCUS. Therefore, if it is clear that it is another subject, I have nothing further to say. Mr. TOLAND. But we are going into the other deal that was negotiated between you and your other company but didn't consummate. Mr. MARCUS. Not by us. We had knowledge of it and we were powerless to do anything, and as far as these are concerned, I am certain that it is correct that the Air Equipment Co., under duress, had to make stuff for the Germans, because in common with anyone else who reads the papers, we do know that all French companies are so doing. Mr. TOLAND. Would you look at those, please, and then I would like to offer them. Mr. MARCUS. I have seen these. Mr. TOLAND. I would like to offer them in evidence. (Communications of September 4, 1940; September 6, 1940; September 12, 1940; October 24, 1940; February 27, 1941; and March 27, 1941, comprising 13 pages, were. received in evidence, marked "Exhibit No. 144" and are printed in the appendix of this volume.) Mr. TOLAND. Now, Mr. Marcus, isn't it a fact that your company has received, through Morgan & Co., royalties from the French companies on at least one occasion since the fall of France? Mr. MARCUS. I think we have, sir. I have a record of it here, to which I might refer. Mr. TOLAND. In fact I would like, if you have the record of all the royalties that you have received, in addition to the one I put in this morning, to have you now give it to my assistant, and we will put it in the record. (Statement of royalties was received in evidence, marked "Exhibit No. 145" and is printed in the appendix of this volume.) Mr. TOLAND. Isn't it a fact, Mr. Marcus, that the contract provisions whereby you had agreed that you would not ship into Franceafter the fall of France the French companies were manufacturing instruments and accessories for Robert Bosch-the restricted agreements, were swept aside and your company agreed to remove the export provisions from its French contracts and permitted French companies to ship to Robert Bosch in Germany? Mr. MARCUs. I don't know as to that. Mr. TOLAND. Do you have any recollection thereafter that as a result of this Robert Bosch proposed to your company that the total royalty payments which Robert Bosch would make to Bendix would be increased to $50,000 a quarter from $35,000 a quarter, and that your company consented? Mr. MARCUS. Yes, I recall their increasing the royalty. Mr. TOLAND. I show you this communication of March 27, 1941, and ask you if you have any recollection of seeing it? It is addressed to Mr. Hunt. Mr. MARCUS. I do know of this letter. (The letter was received in evidence, marked "Exhibit No. 146" and is printed in the appendix of this volume.) This letter takes cognizance by the Bosch Co. that due to the fact that the French companies were not able to pay to us for goods which they manufactured in France-and now I will put in a parenthesis for the benefit of the question-and that we did know, but we didn't do it by consent (we knew it about the same as anyone would know) that they must have been manufacturing for the Germans, the royalty was increased by Bosch to us, and the reason is obvious. However, that question was gone into by us a bit further, and I beg your leave to read to you a letter responsive to our request in writing to the State Department, which letter I won't take your time to read, but merely the response from the Department of State. It is addressed to Mr. Stanton. At my request I went as well to Washington with Mr. Stanton: DEAR MR. STANTON: I acknowledge the receipt of your letter of June 10, 1941 relative to royalty payments received from the Robert Bosch A. G. by the Bendix Aviation Corporation. Your courtesy in submitting this detailed statement of the financial transactions between the Bendix Aviation Corporation and the Robert Bosch A. G. is appreciated. At the time of your conversation with officers of this Department there was no Federal statute or order of which this Department is aware which would prohibit the acceptance of payments from Germany. That is signed by Mr. Paul T. Culbertson, Assistant Chief, Division of European Affairs, and the date is July 3, 1941. Mr. TOLAND. Do you want to put that in the record, Mr. Marcus? Mr. MARCUS. I would prefer to, with your permission. (The letter as read was received in evidence and marked "exhibit No. 147".) (The letter to the State Department from F. A. Stanton was received in evidence, marked "Exhibit No. 148" and is printed in the appendix of this volume.) Mr. TOLAND. I think earlier you discussed, and if I am not correct you so state, the Construction Lavalette and the negotiations between that company and Ducellier. Didn't you refer to that when I went into the new subject? 70533-42-vol. 2- -5 Mr. MARCUS. Yes, sir. Mr. TOLAND. To show that when I made that statement there was no misrepresentation, and to show that I intended to follow it up later, isn't it a fact that in the fall of 1940 Robert Bosch, through its affiliated company in France known as Attelier de Construction Lavalette, and one of the Bendix Franch companies, Ducellier, commenced negotiations toward effecting a division of products which they would manufacture? Mr. MARCUS. We have knowledge of it. Mr. TOLAND. Isn't it a fact that on the 24th day of January 1941, your Mr. O'Hanrahan, with Mr. Dipper, who is the German representative of Bosch, was active in carrying on negotiations and submitted a draft of an agreement between Ducellier and Lavalette to Bendix for their approval? Mr. MARCUS. That is right. Mr. TOLAND. I show it to you and ask you if you recall receiving it. Mr. MARCUS. It was received by us. Mr. TOLAND. And I show you a memorandum report from O'Hanrahan to Mr. Cowan, Paris, dated January 24, 1941, and ask you if you have any recollection of seeing that. Mr. MARCUS. This one I don't know. It is not signed. It probably is a memorandum that perhaps Mr. Stanton or someone else must be familiar with. Mr. TOLAND. Aren't Mr. O'Hanrahan's intitials on the top of the page? Mr. MARCUS. E. O. H.:F. A. S. but it seems to be a memo thatMr. TOLAND (interposing). I would like to offer those in evidence. (Document entitled "Draft of Heads of Agreement," was received in evidence, marked "Exhibit No. 149" and is printed in the appendix of this volume.) (Document dated Paris, January 24, 1941, headed "Memorandum to Mr. Cowan," was received in evidence, marked "Exhibit No. 150" and is printed in the appendix of this volume.) Mr. TOLAND. Isn't it a fact that in connection with that proposed agreement your company informed the War Department of the proposed agreement and declared that it did not require Bendix' approval, when in fact it did require your approval? Mr. MARCUS. I won't say to this date that I know whether it did. or not. Personally Mr. TOLAND (interposing). Did you make, or did anybody in your company make, a statement to the War Department regarding the proposed agreement, and make a statement that it did not require Bendix' approval? Mr. MARCUS. I don't know. If they did, however, and I am sure that it must have been submitted to the War Department in common with all documents of that nature, that supports my view or thought that we wanted to be strictly away from it, and I am fairly certain. that we so notified the War Department as well. Who did that I don't know, however. Mr. TOLAND. Now, Mr. Marcus, have you finished? Do you know Mr. Wild? Mr. MARCUS. There are two Mr. Wilds. Mr. TOLAND. Of the American Bosch Corporation. |