very ironic.
http://tmh.floonet.net/articles/hogisle.shtml The saga of Hog Island did not have its origins in a dramatic or spectacular event of any kind. It began with an unobtrusive dispatch from Washington on August 31, 1917 to the effect that "contracts for the construction of three great Government-owned ship fabricating plants were awarded today by the Emergency Fleet Corporation to the American International Corporation, the Submarine Boat Corporation, and the Merchants Shipbuilding Company, and orders were issued to exert every effort to rush the work."9
The first mentioned firm, the AIC, was identified as the one which would operate at Hog Island, and build "at least" 200 ships: Submarine Boat would be based at Port Newark, N.J. and Merchants Shipbuilding was to be located at Chester, Pa., though it was later referred to as the Bristol yard. The latter was described as "a purely private enterprise" of W. Averell Harriman and the rest of the board of directors of Merchants Shipbuilding.
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As for the American International Corporation, it is unlikely that other than a handful of the readers of the arcane pages of the financial sections of the New York newspapers could have identified it with any precision. It did not supply any known goods or services, and few seemed to know what it did throughout the period when it managed to make the front pages of the big city press of the nation, especially during the time when its Hog Island adventure was under investigation by the United States Senate Commerce Committee, and later by the Department of justice.
However, the AIC boasted of a board of directors which read like a Who's Who of American industry and finance. It had an interlocking relationship with a bewildering variety of subsidiaries and related firms, while its ties with a legion of subcontractors and materials suppliers during the Hog Island shipyard and ship construction days created such a maze that a veritable regiment of auditors never was able to lay out the situation in any clear way to the satisfaction of any students or investigators of this incredible business. Among its directors were Frank A. Vanderlip, President of the National City Bank of New York, Theodore N. Vail, 10 President of American Telephone and Telegraph, Robert Dollar and T. P. Grace, shipping line magnates, Percy A. Rockefeller, Pierre S. du Pont, J. Ogden Armour, Robert S. Lovett, William E. Corey, Otto H. Kabn, C. A. Coffin, John D. Ryan, W. S. Saunders, G. L. Tripp, A. H. Wiggin, T. A. Stillman, H. F. Herrick, Beekman Winthrop, Edward S. Webster and Charles Augustus Stone. The latter two were the main figures in the prestigious Boston engineering firm of Stone and Webster, the most famous enterprise of its kind in North America. At the beginning it was the best known construction firm associated with the AIC, with figures from both associated in the management of both over the years.11
A long look at the American International Corporation from the time of its inception until it became the driving force behind Hog Island is probably in order. The AIC was front page news in the New York Times when it was formed on November 22, 1915. The impressive collection of bankers, financiers and industrial magnates headed by Frank A. Vanderlip was announced as forming for the purposes of developing "the resources of foreign countries, " not for further investment within the USA. It continued in the front pages another day, while it drew the enthusiastic endorsement of President Wilson's Secretary of Commerce William Cox Redfield, 12 and its projects were further hailed by Charles M. Schwab, bead of Bethlehem Steel and a future head of the Wilson administration's vast shipping expansion program.
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That it would be heavily involved in shipping from the start was obvious with the purchase of a fleet of Pacific Mail vessels intended to engage in trade with Mexico and South America, the direction of these operations to be in the hands of W. R. Grace. Its only moment of ugliness in this early period occurred shortly after the announcement of its interest in the extensive Mexican and South American shipping business; the AIC was accused by Basil M. Manley in an address before the New York City Labor Forum on January 30, 1916 of "plotting" against President Wilson because of his unwillingness to order an invasion of Mexico. There were few however who saw the AIC as a factor in the expedition into Mexico six weeks later (March 15) led by General John J. Pershing, ostensibly conducted as a punitive junket against Pancho Villa, following the attack on Columbus, New Mexico by elements said to be under Villa's direction. 14
By that time the multifarious activities of the AIC were distracting attention from the corporation's alleged or real influences on foreign policy. The purchase of the Allied Machinery Corporation on March 5 was followed by the acquisition of controlling stock interest in the International Mercantile Marine Corporation April 24, and then crowned by news that it had acquired a formidable stock interest in the United Fruit Company, on May 5.
But the news in 1916 did not all concern domestic expansion. Its engineering and construction interests began to move as sensationally and as quickly. On April 1 the Times disclosed that the AIC had received a contract from the Government of Uruguay to build a national water and sewer system in that country, and two months later to the day it was revealed that it was negotiating with the Chinese government to provide the latter with a loan as a preliminary to the AIC taking on the job of building the Shantung Canal.
In the meantime the acquisition of significant enterprises at home was continuing, first with the incorporation of a new subsidiary, the Rosin and Turpentine Export Company in Georgia in July, followed two days later (July 9) with the news that the AIC had formed a sprawling subsidiary in New York City itself, the American International Terminus Company, to coordinate its railroad, steamship, warehouse and industrial terminus in that city. And to add to the delight of the stockholders, on August 23 it announced the reaping of immense profits from the rise in value of their International Mercantile Marine and United Fruit stock. In retrospect, there was little in the way of performance by an international conglomerate of 60 years later which was not familiar to the American International Corporation in 1916. In the opinion of some, the AIC was the model from which the pattern was cut.
By now the Chinese Government had applied to the AIC for the loan which was to lead to the latter's engineering firms to begin a large program of canal and railroad building there, along with other "internal improvements." By this time (August, 1916), the streamers of AIC influence were reaching to other distant parts, even though the war obviously put Europe and most of its surrounding regions out of consideration if only because of the disorder and precariousness of trying to work in an extended war zone. But even this did not stop the company from making a well-buried announcement of its sending of a "party" to Russia to study its "trade needs."15
By now the expansion of the interests of the AIC had spread in all directions, and a world war was having little effect in curtailing the formidable corporation geographically. Its officers denied reports received in US consular dispatches that the AIC had offered to make a loan to the Government of Colombia to assist large scale engineering projects, and at the end of the year there were strong hints that the firm would shortly become involved in "important development enterprises" in Argentina. 16
In the meantime it was announced that it had acquired another company, Carter, Macy & Co., a major tea importer, and early in January, 1917 it was further acknowledged that the AIC had taken action in consort with other organizing and financial companies in cooperation with the U. S. Rubber Co., "to guard the raw rubber supply." In February it became known that the AIC would cooperate with a consortium of Japanese bankers in promoting the reconstruction and improvement of the Grand Canal in China, and it was suggested almost simultaneously that despite the war raging in Eastern Europe that the AIC might get the contract for building a Russian cross-country railroad.17 Surveyors of the AIC apparently were already in China working on plans for a substantial overhaul of the Chinese railway system, but in July, 1917 the company admitted that they had been interrupted by unnamed "political disturbances" there and had been recalled, with the AIC spokesman "promising" to return to build the system when China's "political troubles" were over.
There was no political upheaval in Latin America, however, and the AIC continued its expansion there. It joined with Armour, Sulzberger and Sons Company, and other meat packers in forming the International Products Company, to invest in the South American meat business, and almost at the same time purchased the properties of the New York and Paraguay Quebracho Company, a firm apparently specializing in tropical hardwoods and their numerous by-products.
This in brief is the record of the American International Corporation from its founding to a few days after the United States entered the World War, an event which was to result in a considerable re-direction of their efforts, of which the Hog Island adventure is the main concern here.18
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