Axis of Corporate Evil!

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.
Few but people living in its vicinity knew what or where Hog Island was for many months, and fewer knew what the American International Corporation was. Perhaps fewer ever found out, despite three major government investigations in the next three years. But by the spring of 1918, a great deal was widely known at least about the former. Hog Island turned out to be a sizable piece of land between Philadelphia and Chester, just south of what was known then as League island, with a frontage along the Delaware River. How much of it became the property of the AIC was variously indicated; one source stated it to be 700 acres, another 846 acres, still another extended this to 946 acres, and a round figure of a thousand acres was used in still other descriptions for two decades or more.
Whatever the extent, Hog Island can be described charitably as a swamp. It was a stretch of soft, muddy land, a few bits of it a few feet above water and with much of the river front footage under water. Some parts were described in the early days when work began there as grassy and bushcovered, though its sodden nature eventually required wooden roads for the many motor vehicles which brought in labor and supplies, laid down board by board. This land was assessed by the State of Pennsylvania at $ 100 an acre, and the highest price paid for land in adjoining areas was $500 an acre. More on this subject will be developed later.
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.
Thereafter the AIC drifted to the rear of the newspapers, and its tireless program of absorption of existing companies and its international projects in several countries on three continents drew attention mainly from professional investors. And the latter were hard to suppress once the news of the birth of the AIC began to get around. In less than a week the National City Bank, of which Vanderlip was head, announced that it had received more applications to purchase stock of AIC than it could supply, and Christmas week of 1915, President Stone announced that all shares already had been subscribed.13
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.