No Honey, No Flies

The custody of alien property was a $500,000,000 responsibility in World War I. This time it is a $7,000,000,000 responsibility. Nobody has yet been ap pointed to handle it. But last week Henry Morgenthau made a long reach for the job.

First, by virtue of a special executive order, he took over the much-mooted Dutch and Swiss shares (97%) of General Aniline & Film Corp., whose top officers he had already purged (TIME, Jan. 26). The remaining officers professed to be de lighted. "It's a pleasure to be working for Uncle Sam," cried Vice President Hugh S. Williamson. Three days later, Uncle Sam Morgenthau told his press conference that, as he interpreted the executive order, there would be no single Alien Property Custodian in this war. But the Treasury would act as custodian, via the interdepartmental (Treasury, Justice, State) committee that has been handling frozen funds. His alien property powers, insisted Henry the Morgue, were "not given to me as temporary."

This interpretation was received with cool silence in the Justice Department, which has been feuding quietly with Treasury over alien property. Justice's representative on the frozen funds committee is Leo Crowley; and the President has begged Crowley to take over the whole job (though he never got around to giving him an executive order). White-haired Bache lor Crowley is a busy man: he is not only Chairman of FDIC, but of huge Standard Gas & Electric, and a director or officer of eight or ten other firms. Nonetheless, he told the President he would be Alien Property Custodian too provided it were set up as an independent agency.

From the sorry history of World War I's Alien Property Custodians, he is a brave man who would touch the job in this war with a ten-foot pole. Between 1917 and 1934 (when the office was incorporated into the Justice Department) there were six custodians. Three were accused in the courts and in Congress of shocking dishonesties; one (Thomas Woodnutt Miller, President Harding's friend) went to jail.

This time the stake is 14 times as large. Not only is the Custodian an enormous dispenser of patronage, with real-money corporate jobs in his control, but he can sell the corporations, some of them very juicy. Plenty of businessmen have already besieged the Treasury with bids for seized or suspect stock. But last week Henry Morgenthau enunciated a new policy: alien properties are not for sale, will be retained and controlled by the Government. "If there's no honey, there will be no flies," said he sagely-adding that, after this war, the President could count these properties among his blue chips at the peace table.

So far, Henry Morgenthau has only Aniline's $60,000,000 assets in his ample pants pocket. As more & more companies are taken over-and there will be plenty* -his problems will multiply and the jockeying for his "not temporary" job will multiply too. Last week he himself knew his fight for the job was not finished. "I suppose it's like everything else," he said, "if we do it satisfactorily it will stay here and if we don't the President will give it to somebody else."

*Most likely second victim: drug manufacturer Schering Corp. (sulfa drugs, hormones, antishock vaccines), Swiss-controlled since Hermann Goring ordered its German parent to sell its U.S. stock interest five years ago. Month ago, the Treasury stripped Schering of eight top executives; last week Schering got a new Treasury-approved vice president and director: Gerald E. Donovan of Schroder Rockefeller & Co.

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