The Hanna Industrial Complex: Part II The Humphrey Establishment
B., E.D.
The first article of the troe-part wiu on the Hl , industry eompalex (soe IACIA Nuslettr, YAyJune 1968) described how Hnn Mining CepnW, the result of the coup overtlovig Goulart in 196, acquired...
...Hnna and reconsolidated its portfolio with the operating properties of Hanna Mining to form the present company...
...Such is clear from the numerous interlocks between the companies they control...
...Mines Iron Cre, Brazl) K[E TO INTLAOC S Onerhip ---- business Tie S Chart in May-Jmune Newsletter for HNa Operations in aail CQCPANHIA MINEA DE ALB 0O (Mines Bau:te, Bazil) EPLRACICNES EPLITCIONES MINIRAS IZ.ATL (Mines Nickol, Gutail) I-5As president of Consolidation Coal, George Love revitalized the depressed industry by mechanizing mines on an unprecedented scale, introducing in particular the efficient strip shovel which leveled whole mountains at less cost than hauling coal from underground...
...In so doing, the company avoided the profit losses suffered during the Depression by the steel giants because of their dependence on the heavy steel products needed by the most slumped industries of all - railroads, shipyards and construction...
...whioh acquired Hnna's securities portfolio...
...In 1965, Consolidation Coal tunned the financial world by announcing a forthcoming merger with Continental Oil.* According to the announcement, Consolidation Coal agreed to exchange the bulk of its mining properties for 2 million shares of Continental Oil stock to be distributed among its stockholders - that is, primarily among the members of the Humphrey Establishment who hold a majority of Consolidation Coal shares...
...Hanna Company was unable, as the Humphreys had hoped, to qualify for the tax advantages by the Investment Company Act because over half its securities were invested in companies it controlled...
...The nna-Mellon alliance is further cemented by other business ties...
...Humphrey gave Ernest T. Weir, Weirton Steel's founder and head, a 50% interest in the new company (National Steel) as well as the position of board chairman...
...PubliUtilitites Fortnightly, Oct...
...And recently, Hanna Mining Co...
...May 31, 1958, "Humphrey Gets Back at the Company Helm...
...Hanna a large bloc of stock in one of the two major coal producers of that time: Consolidation Coal, a company with extensive holdings in the rich Fairmont coal fields of West Virginia...
...10, 1967 and Sept...
...It will further show how the political connections of the Humphreys were crucial in securing Hanna's control over Brazills major iron ore reserves...
...The third installment of this three-part series will show how the Hanna industrial oomplea (the Humphrey Establishment) functions as an imortant financial base of Midwestern Republican politics...
...Nations Business, January 1967, "Uniting for Strength...
...Similarly, the two steel companies needed a reliable source of iron ore supply because most previously independent iron ore mines were now under tho control of its steel competitors...
...Mellon-controlled) and a vicepresident and governor of T. Mellon & Sons, sits on the board of Consolidation Coal...
...B ines + Known to be Dee.ed * Relationship to .A...
...But he did so at terrible cost by turning acres of beautiful country into heaps of dirt and impoverishing thousands of workers by putting them out of jobs...
...2 Weirton Steel, now a division of National Steel, is to this day one of the few steel plants not organized by the AFL-CIO.Both the Weir and Iumphrey families continue to occupy the top executive positions of National Steel...
...anna's board by the Humphreys for a brief period between 1960 and 1965 to help it reorganize the firm into an investment company...
...The oees of Hhnna Mining Co...
...Weir remained board chairman until 1957 when Humphrey, returning from his post as Eisenhowerts Secretary of the Treasury, replaced him...
...itizens who are making the decisions which so definitely affect the deelopment of the ralian oonos . nTs a tiolo will ttenpt to answe this question in part by raminin the powerful Clevelandr-bsed industrial oeaplax of dhioh Hanns Mining Co...
...N.W...
...8 World War II Plane Sra ble Qee Mer in Guerrilla Ations ......................................- 9 English Ingiage Radio Coverage of Letin AnerLean Ns...
...The merger brought Hanna interests into close alliance with those of the Mellons...
...is the nucleus, and the men who control and reap, through their Large stockholdinga, eat profits from its operations...
...February 3, 1968, "National Puts on its own Stamp...
...OF SAN FRLNCSCO 80I INTEATIONAL NICKEL ( ~ CO...
...George Love rose to the presidency of Consolidation Coal in 1945, after successfully engineering the third merger - with the Mellon-owned Pittsburgh Coal Company, the second of the two largest U.S...
...The deal arranged by G.M...
...This block of Continental Oil stock exchanged for Consolidation Coal properties constitutes a significant enough percentage (5%) of all outstanding shares to assure Hnna interests a prominent voice in policymaking and at least one seat on Continental's board (filled in 1966 by George Love...
...3 While board chairman of both Consolidation Coal and Chrysler, Love was the only major U.S...
...The founder of the Hnnarm family dynasty, arous Alono Hanna, while a Republican sentor frm CQio, engineered Moinley's rise to preinenoe in the Republican Party and secred his nomination for the president in 1896...
...Love subsequently merged his Union Collieries into Consolidation Coal, thus thoroughly intertwining the Love family fortunes with those of Hanna...
...1 Yanqui...
...4 The cause of the startling merger of such a good profitmaker lies in the development of a technology which promises, in the near future, to transform coal into oil at comercially feasible costs...
...January 2, 1962, "Ore Leader Looks Overseas to Grow...
...George Love likewise acts as the main spokesman for Hanna interests to the Mellons through his directorship of Mellon National Bank and Trust Company...
...George ove used the large cash reserves generated by twenty years of Consolidation Coal profits to acquire a controlling interest in the third largest automobile company in the United States - Chrysler Corporation...
...During the management crisis, Love emerged as the strong man on the board...
...J. Richardson Dilworth, senior financial advisor to the Rockefeller family, board chairman of Rockefeller Center Inc., and a director of Chase Manhattan ank, was placed on Chrysler's board by George Love to help restore investor confidence in the company's stock...
...Weir, the archetype of the rugged individualist, was famous for his ontneptuous resistance to the attempts by U.S...
...10-2The descendants of M.A...
...Hanna's coal mine into potentially profitable coal companies that were running at a loss...
...and ALCOA have incorporated a joint venture to develop a high grade bauxite deposit in Minas Gerais, rail.HOSTAKE MIING CO...
...steel company, National Steel (which supplies 7.3% of the market), and the largest U.S...
...soft coal company, Consolidation Coal (which supplies 10% of the market...
...September 1962, "Coal Muan at Chrysler...
...The Mellons have at least three representatives on the boards of Hanna-controlled companies, two of whom represent their holdings in Consolidation Coal: George W Wkoff, a director of Gulf Oil and ALCQA (both Mellon-controlled) and Mello itionaIBank and Trust Co., sits on the boards of Hanna Mining Co...
...The merger deal does not include the transference of Consolidation Coal's holdings of Chrysler stock to Continental Oil's portfolio...
...Steel to buy him out and for his ruthlessness in preventing the unionization of his workers.2 George R. Fink, founder and head of Great lakes Steel, received 25% of the stock and assumed National's presidency...
...III I-7company operations to Townsend but, as chaiuan of the board,3 made all major policy and financial decisions...
...In 1960, M.A...
...These shares will be distributed among Consolidation Coal stockholders (again, members of the Humphrey Establishment), thus assuring them continued control of Chrysler...
...National Steel geared its product specifically to the needs of automobile manufacturers, spesializing in the light, flat-rolled sheets which provided the main structural component of autos (and tin cans...
...Minimum contribution for 1-yr...
...The reorganization of Hannat assets into too separate conThe NACLA NEVSLETTER is published ten times a year by the North Amerioan Congress on Latin America...
...He was able to do so because the market value of Chrysler stock had plummeted to an all-time low as a result of a management crisis precipitated by two events: 1) the drop in Chrysler's share of the automobile market from 27% in 1950 to 9.4% in 1962...
...1 M.A...
...Aside from ho, Who, Poorts Redister of Corporations, Directors nd Eoeutives, Moody's Industrial Manual, Current Btoph and annual reports of corporations, the following provided most of the documentation for the above article: The Basie Papers of George M Humphrey, 1953-57, Western Reserve Historical Society, Cleveland, Ohio...
...Time, July 5, 1963, "Corporations, Coal Cars and Love...
...Fortune, October 1957, "tMllsop of National Steel...
...Hanna Co...
...Bankers Trust Comny (New York finance, seventh largest U.S...
...Consolidation Coal realized a paper profit of $114 million on the block of Chrysler stock it acquired between 1958 and 1965...
...Humphrey himself assumed the chairmanship in 1947, while George Love served as executive vice-president...
...businessman to chair two major companies in widely separated fields...
...The first of the three major mergers which resulted in the present company, took place in 1929 between one of Hnna's mines and a bordering mine owned by the Love family firm, Union Collieries...
...Hnmm founded and gave his name to the proersor of the Hama Mining Copay - MlA...
...Pearson, a vice-president and governor of T. Mellon & Sons, sits on the board of Hanna Mining Company...
...He took charge of selecting a new president, Lynn Townsend, and of reorganizing the company so that it could regain its traditional share of the automobile market...
...and Consolidation Coal...
...Goorge M. Humphrey formed Consolidation Coal, the giant of the U.S...
...Humphrey arranged for M.A, Hnna to turn over its mine to the Loves in exchange for an equity interest in Union Collieries and a seat on Union's board which Humphrey himself filled...
...Steel (Morgan controlled...
...13, 1967...
...Love, who was serving as a director of National Steel, Chryslerts major steel supplier (which provides up to 40% of its needs), Joined the Chrysler board in 1958...
...Hanna aquired the remaining 25% of the stock and Humphrey placed himself in the office of executive committee chairman while remaining president at Hanna...
...In so doing, Love demonstrated that coal mining was again a profitable investment for large companies with enough capital to automate...
...The hart on page 6 focuses upon the four family dynasties (the Hnnae, hpHrqws, Weirs and oaves) which fn the crue of vhat the business press calls the Humphrey Otablisl mt...
...New York Times dispatches for Nov...
...OF CANADA *ST...
...The second merger took place in 1942 when National City Bank (a predecessor of First National City Bank of New York) offered M.A...
...panies failed, however, to achieve its objective...
...October 14, 1961, "M.A...
...In 1885, M.A...
...Forbes, November 1, 1965, "Where do the Humphreys go from Here...
...Business Week, June 2, 1957, "Humphrey Back in Steel...
...His shrewd merger strategy created a highly efficient profitmaker out of a depressed industry fragmented into inefficient and unprofitable family companies...
...The first article of the troe-part wiu on the Hl , industry eompalex (soe IACIA Nuslettr, YAyJune 1968) described how Hnn Mining CepnW, the result of the coup overtlovig Goulart in 196, acquired ontrol ove the worlds riohst ir ore deposit in the state of Minas Geais, BLail...
...Hanna, as one of the few remaining independent iron ore producers, needed Weirton and Great akes steel works as guaranteed markets for its ore...
...The Mellon National Bank and rust Co., for instance, owns a small interest (.786%) in the Hannadominated National City Bank of Cleveland...
...The stock held in National City's trust deparbaent formerly belonged to the Rockefellers who disposed of it at a large loss...
...The new M.A...
...Love left day-to-day HANNA INTERLOCKS WITH EASTERN FINANCIAL GROUPS MeLlons (Pittsburgh finance) - see page 3 Rockefellers (Nw York finance) - John J. McCloy, former board chairman of Chase Manhattan Bank and now a partner of Milbank, Tweed, Hadley & McCloy (a leading Rockefellerassociated law firm) was Hanna Mining Company's counsel in Brazil at the time of the 1964 coup...
...A rucial question thefore becomes who spoeiffially re the ultimate benefioiries of such a shift - who, that is, are the U.S...
...In later years, as the company's ownership broadened through new stock flotations, Hannats interest became dominant...
...With the new influx of capital from the stock flotation, Hmphrey (as president, 1929-52 and as board chairman, 1958-61) carried out an aggressive policy of expansion, through mergers, and streamlining, by unloading unprofitable assets...
...Love's policies were so successful in restoring investor confidence that the market value of Chrysler stock soared...
...The stock for which it had payed $87 million was, as of 1965, worth $201 million...
...subscription: $5 In This Issue: The Hanm Indutrial CompleS: Part II The Hlphrr Itabahllaent...
...and 2) a 1960 stockholder's suit against president Newburg, accusing him of illegally profiting from his interest in a major supplier of Chrysler parts...
...Hanna Recasts its Shape...
...Cabots (Boston finance) - Paul C. Cabot, board chairman of the family firm, State Street Investment Corporation, was placed on M.A...
...Huphrey was the key strategist in reorganizing the firm into a public corporation in 1927 after it had suffered severe losses...
...became Hanna Mining as the result of corporate reorganiations in 1960 and 1965...
...Hanna Mining Company has retained controlling interests in both concerns, owning 22% of National Steel's and 19% of Consolidation Coal's common stocks...
...anns Company divided its assets into tee new ompanioe: 1) a closed-end imestment company (the nations largest) - M.A...
...HaUn not yet detezmind...
...A.B...
...van Buskirk, a director of the Koppers Co...
...The Great lakes Steel plant in Detroit - the only one there at the tine - assured National Steel access to one of the most rapidly developing steel markets which the ossified steel giants tended to overlook - the automobile industry...
...rn- July 15, 1966, "National Steel...
...in ing this oonoeesion to develop the lucrative mineral deposit is one illutration of how the loeou of polititl-mnomdi deisios on the use of railian resouees shifted decisively from hail to the United States aftAr the coup...
...National Steel was formed in 1929 by consolidating several Hnna iron ore properties with Weirton Steel of West Virginia and Great lakes Steel of Detroit...
...13, 1966, "Coal and Oil Unite on New Ehergy Approach...
...Hanna Mining has a small (0.74%) interest in Bankers Trust.I HMtr iFRICIS fid & DIYID Brothers .__ WEIR Widorwed + The Humphery Establishment Hou - MMMP - Io - Wmr Dn1SS KEY TO INTLOCIS - - - Kinship - Diretorship or Offiae...
...Sil t Indiana Dairman Fnd Fun 8 and Mucho Profit in Boli1ia...
...commercial bank) - William H. Moore, board chairman of Bankers Trust Company, is married to Fanny HMnna and is a director of Hanna Mining Company...
...coal industry, by merging M.A...
...October 16, 1965, "Consol, Hanna Selloffs Stun Street...
...nna and their spouses retain large interests in Hanna Mining Company and hold several seats on its board (see )hart, but are not its major policy makers...
...24, 1965, Dec...
...Chase Manhattan Bank, along with the Union Commerce Bank of Cleveland, is the Registrar of Hanna Mining Company...
...JOHN DtEL REr MINING CO...
...NOTE: There is no ascertainable relationship between George Humphrey and the Hubert Humphrey family...
...In 1965, therefore, the hmphreys liquidated M.A...
...Hnna Co...
...Rather, the key architect of the industrial empire which grew out of the original company was George M. Humphrey, who oined the firm a a partner in 1920 after serving as its counsel for two years...
...Neither mine as making a profit so Frank Love, head of Union Collieries, and his nephew George Love, proposed a oint operation to Humphrey...
...producers...
...Millsop, Weir's chief associate and husband of Weir's brother's widow, took over the position...
...January 1958, "Moore of Bankers Trust...
...When Humphrey retired in 1961, T.E...
...All three firms combined assets to resist forced incorporation into the large steel trusts controlled by Wall Street finance - Bethlehem Steel (Rockefeller controlled) and U.S...
...Using Hanna iron ore and coal properties as a base, fmuphrey also organized what has become the fifth largest U.S...
...With the purchase, Hnna gained a controlling interest in the company and placed its own men in top executive positions...
...The current president is George A. Simpson, 1Iillsop's son-in-law who, before his maniage, was a partner in the prestigious Wall Street firm, Cleary, Gottlieb, Steen and Hamilton...
...Bankers Trust is, along with National City Bank of Cleveland, Transfer Agent for anna Mining Company...
...Hanna Cmpanyl - a rl family holding oncern compoeed of iron ore mines in the Mesabi Range (Miohig), Great Iakes shipping fleets and Pennylvania eal mines...
...and 2) an operating company controlled by the investment company - Hnna Mining Company -- which took over H te nnasminin and shipping properties...
Vol. 2 • July 1968 • No. 4
