Trading with the enemy

Discussion in 'General' started by Robert-w, Feb 14, 2020.

  1. Robert-w

    Robert-w Well-Known Member

    Globalisation is not new and in both world wars there were multinational companies with plants on both sides and/or with licence/patent agreements with companies on the other side. In WW1 there were quite formal arrangements to deal with this and I wonder if the same rules applied in WW2.

    In WW1 German Maxim machine guns were built under licence from Vickers Maxim and many British fuses were based on German patents. Similarly Pfalz built aircraft under licence from Morane and some Italian aircraft similarly used Albatross designs. In such cases escrow accounts were opened in Swiss banks and payments made into these. No withdrawals were allowed until the war was over. Companies that had plants on both sides included Daimler and Whitehead

    In WW2 Dunlop had tyre plants in Britain France and Germany. Indeed they had an exclusive contract to supply the Gestapo with whitewall tyres (not something that featured in post war company literature) and the German factory was pumping out tyres for the German armed forces until the USAAF flattened it on the last Sunday of the war. Daimler was again working on both sides. The escape kit used on British submarines was made using some licensed technology from a German company. Now obviously the plants on either side would have little choice but support the war economy but the answer I'm looking for is how was the finance organised?
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  2. Lindele

    Lindele formerly HA96

    Interesting question, but I believe this is a question for bankers and stock brokers.
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  3. Tolbooth

    Tolbooth Patron Patron

    In America there was The Office of Alien Property Custodian during both world wars to "assume control and dispose of enemy-owned property in the United States and its possessions". I would imagine the UK had something similar.
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  4. CL1

    CL1 116th LAA and 92nd (Loyals) LAA,Royal Artillery Patron

    a bit of info here

    What American investments made abroad during the war were largely in the Western Hemisphere. Although investments in Canada and Latin America grew from $4.9 billion in 1940 to $5.6 billion in 1946, investments in Europe declined from $1.4 billion in 1940 to $1 billion in 1946. In Africa and the Middle East they remained steady at about $200 million for each of these years, while in the rest of the world they declined from $500 million in 1940 to $400 million in 1946.
    During the war a number of major multinational corporations engaged in the production of strategic materials, such as oil and synthetic rubber, were accused in congressional hearings and on the floor of Congress of having conspired with the enemy before the war. In particular, the oil and petrochemical industries were charged with exchanging trade secrets in chemicals with the chemical giant I. G. Farben and other German firms deemed instruments of Nazi policy in return for trade secrets in oil refining. Civil and criminal actions were even brought against a number of these companies, the most notable being against Exxon, which in 1929 had signed an agreement with Farben recognizing its "preferred position" in chemicals in return for Farben's recognition of Exxon's "preferred position" in oil and natural gas. The two giant corporations also pledged close cooperation in their respective enterprises.

    World war ii - Multinational Corporations
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  5. Trackfrower

    Trackfrower Member

    Ford and GM (Opel) were happily building vehicles in Germany in WW2
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  6. Dave55

    Dave55 Atlanta, USA Patron

    They were building vehicles but were they really happy? They weren't getting paid in real money during the war, were they? Ford was also building in France, using the smallest V8 they had.

    The 144ci Aquilon engine used by Ford France and later Simca
    A 136 cu in (2.2 L) V8-74[18] version was introduced in the United States in 1937. With 2.6 by 3.2 in (66 by 81 mm) bore and stroke and 6.6:1 compression,[2] the engine was rated 60 hp (45 kW) and 94 lb⋅ft (127 N⋅m).[18] The designation changed again in 1939, to V8-922A, but the specifications remained the same.[18] It was produced in Europe in 1935 and 1936, and was used in the many standard Ford vehicles based on the car platform of the era. It was not very popular with U.S. buyers who were used to the 85 hp (63 kW) cars. Redesignated V8-82A in 1938, V8-922A in 1939, and V8-022A in 1940, compression, power, and torque remained unchanged.[18] The engine was very popular as a powerplant for midget race cars after World War II. This engine is most commonly referred to as the "60 horse" flathead, or the V8-60.[2] It was replaced by the 226 straight-6 in the 1941 Fords, though it would continue to be used after the war in the French Ford Vedette and the British Ford Pilot.

    In 1952 Ford France (who called this engine the Aquilon) created a somewhat bored out version displacing 2,355 cc (143.7 cu in). Production was taken over by Simca in 1954 who began installing it in their Simca Vedette in 1955. Simca then transferred the Aquilon production line to Simca do Brasil, where it was kept in production until 1969 (the company was known as Chrysler Brazil from July 1967).[19] Simca do Brasil introduced a 2,432 cc (148.4 cu in) version in May 1962 but the real surprise was the 2.5-litre Emi-Sul of April 1966. This engine has overhead valves and hemispherical combustion chambers; it produced 140 PS (103 kW; 138 hp) in its most powerful version.[1

    Ford flathead V8 engine - Wikipedia

    Good read:

    IBM and the Holocaust - Wikipedia
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  7. Ewen Scott

    Ewen Scott Well-Known Member

    I looked at the Ford corporate structure recently while researching Merlin production.

    Ford of Britain had its own stock market listing on the London Stock Exchange, with Ford USA holding 60% of the shares. Ford of Britain was run by an appointee of Henry Ford, Sir Percival Perry, but he had substantial autonomy in running the business. Basically so long as it was making good profits he was left to get on with the job.

    So while Henry refused to build Merlin engines under licence in the USA (Packard got the contract) because he didn’t want to be seen supporting the war in Europe, Ford of Britain had already taken on a shadow factory in Trafford Park, Manchester to build Merlins. Then about 1938 Henry did a deal with Harry Ferguson to build Ferguson tractors in the USA. Ford of Britain however said no to manufacturing those tractors in Britain, although it did agree to market some from the USA. Not many people got to say no to Henry!

    Ford of Britain in turn owned all the Ford business interests in Europe and the Middle East. Those interests included Ford of Germany.

    Now how those subsidiaries were controlled in wartime I have yet to figure out. But English law must have played a bigger part than US law given the London SE listing.
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  8. ceolredmonger

    ceolredmonger Member

    Sweden was the conduit for unavoidable products. High end technical equipment, e.g. Leica cameras for war correspondents, until British factories copied them.
  9. Sheldrake

    Sheldrake The Mayor of London's latest dress code

    The Swedish firm of Bofors designed an AA gun that was used by many combatants. The US government decided to build copies based on technical drawings and specifications handed over by the Dutch. They had previously been impressed by a demonstration, but dismissed the design as too expensive having made an arithmetic error applying the conversion from dollars to krona the opposite way.

    The Swedes sued and eventually under the Kennedy regime, the US paid Bofors. This has been posted before somewhere.
  10. Harry Ree

    Harry Ree Very Senior Member

    I would think that on the outbreak of war such as the Great War and the Second World War, belligerents would requisition the assets and investments held of each other, irrespective of the parent ownership.These assets would be used for purposes of supporting the war economy and adversely affecting theirs.Another interest in British eyes was in foreign ownership and understanding the risk to intelligence that this posed

    As regards electricity, In the 1930s some Italians gained ownership of 5 electricity undertakings under a single holding company.As the shadow of war evolved in 1938,the Government and MI5 began to consider the foreign ownership of such a vital industry as electricity supply and the possibility of strategic information on electricity supply and munition factories being passed on to the Germans from sources such as these.However nothing was effected until the Italians were about to enter the war.

    The chairman of the holding company was one Count Giuseppi Volvi de Misurata who was recognised as a member of the Fascist Grand Council and Mussolini's organiser of Italian Industries.Other directors were Count Cesare Cicogna,another member of the Italian Fascist Party and Marchese Bernado Patrizi,the so called Inspector of the Fasci in Great Britain and Ireland.With the Italians about to enter the war,less than a fortnight later, on 28 May 1940,the Government instructed the Electricity Commissioners,under emergency wartime powers,to requisition the holding company,sack the Italians and replace the management with British managers.The undertakings then carried on trading as before.The Italians were likely to have been interned.
  11. Dave55

    Dave55 Atlanta, USA Patron

    A Look Back at the 1903 Springfield

    The main issues with the 1892 Krag-Jorgenson were its magazine and the inability to use pre-loaded stripper clips to recharge it. Too, the .30-40 Krag cartridge lacked the trajectory and punch of the 7 x 57 mm Mauser. The Springfield Armory began working on a new bolt-action rifle at the turn of the century. It is said that imitation is the sincerest form of flattery, and Springfield must have been very impressed with the ’98 Mauser because the rifle it developed and began manufacturing in 1903 incorporated many of the Mauser’s features—so many, in fact, that the United States government had to pay Mauser some $3 million for patent infringement, despite the Springfield’s use of a two-piece firing pin to attempt to avoid the patent infringement.
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