AMAZING GRACE: The W.R. Grace Corporation
NACLA
2 Introduction An article in Fortune once noted that to many people in Latin America "Grace & the United States of America-and more." For over a century of operations in Latin America, the W.R....
...Paper mills were first established at Paramonga where they were coordinated with the sugar refining processes...
...Barron's, November 4, 1974...
...New York Times, December 9, 1972...
...Grace opened trading posts in Russia, China, India and throughout Europe...
...The up-grading of petroleum and natural gas hydrocarbons into a variety of chemicals and final products is divided roughly into three stages...
...But the growth in the size of enterprises, the concentration and centralization of capital led to the appearance and to the prevalence of the collective-capitalist form of property...
...7 Peruvian Times, May6,1960,1...
...negotiators were pushing for at least $200 million and Peruvian officials said that company claims had originally totalled about $300 million.26 In quantitative terms, however, the arrangement met the criteria which Nixon and Flannigan had formulated in order to normalize relations with Peru...
...Sold Imaco, an importing company, to Peruvian interests...
...agricultural products the following year...
...From South America, Grace shifted its investments increasingly towards the Caribbean, Europe and the United States...
...In some countries, such as Peru, Grace faced the competition of cheaper Japanese textile imports which cut into its profits as early as 1947...
...These merchant houses were family owned and controlled with branch offices, often headed by family members as in the case of the Three Graces, located in the world's major ports...
...Chemical fertilizers had become essential to Third World food production due to the policies of U.S...
...Thus in the 1960's, AIFLD programs for this union and others included heavy doses of political education, courses in collective bargaining and community organizing...
...Skouras, a Greek shipping tycoon, merged the new purchase with his Mediterranean-oriented Prudential Lines to form the Prudential-Grace Lines, Inc., whose ships continue to operate the routes between the10 United States, Latin America and Europe...
...Grace owned and supplied every essential service, including company housing, schools, food and clothing stores, churches, etc...
...The company also owned a facility which produced various kinds of packaging materials (i.e...
...Later it came to represent not only the United States but, just as importantly, the multinational corporation...
...NO EXIT Politically, the military government that took power in 1968 based its popular mandate to a large extent on nationalist sentiment...
...On the other hand the bank is forced to sink an increasing share of its funds in industry...
...We are therefore against the system in Trinidad which can only result in the perpetuation of the status quo...
...1970...
...In the end, both companies sold their shares to the now-predominant Latin American carrier: the Houston-based Braniff International corporation...
...Grace Spins a New Trade: Textiles Grace's investments in Peruvian textile production paralleled those in sugar production in two respects...
...An evaluation of Grace's confrontation with the Velasco regime and how it compared with the experiences of other U.S...
...It also turned to the other major source of investment capital: credit...
...efforts to increase productivity at the Cartavio complex by installing time-clocks resulted in a three and a half week strike by 2000 workers...
...Corco, as well as the other petrochemical producers, promised that the industry, particularly in its final stages, would be an important source of employment for the Puerto Rican people...
...Of the first, J. Peter Grace had to concede that "the oils were too big a club to crash...
...Wall Street Journal, November 27, 1972...
...By the end of the period, Peru's aggregate national debt surpassed 42 million pounds sterling...
...Grace Company has always represented more than just the country it comes from...
...Do you want to join this type of STRIKE HAPPY UNION...
...EAST NIAGARA STREET *010 TO ALL AIAOLD, o PtYZES * TONAWANOA...
...The result was neither industrialization nor rapid capital accumulation but "industrial infanticide" and dependent capitalism...
...Equally important to Grace's bargaining power was the nature of its operations...
...This is clear in the case of Grace and his sugar plantations in Peru...
...In addition the U.S...
...Mechanized textile production has been historically linked to the development of capitalism in most in- dustrialized countries...
...Its main report was issued in 1963, written by Felix Larkin, chairman of W. R. Grace...
...Nevertheless, textile production in Peru was still highly underdeveloped owing to the huge amount of cotton and woolen imports from England in the nineteenth century...
...Workers' struggles pushed wages up and federal legislation embodied in the Federal Fair Labor Standards Act of 1974 mandated equalization of wage scales in Puerto Rico with U.S...
...Grace made $15 million on the deal, not bad for an initial investment of only $,500,000.45 B. Banking In banking, too, profits from the Grace National Bank could not compete with those now flowing in from the chemical industry...
...And Grace, once again, finds it possible to visit his operations in Latin America where he is now greeted by bearhugs from his shop stewards rather than rocks and curses.74 The Grace Foundation: Bedrock of Reaction Shortly before J. Peter Grace donated "Grace Hall" to Notre Dame University, Father Hesburgh, the University's president, remarked that Grace "personitied, to a remarkable degree, the genius of America's business and industrial leadership as well as the concern and compassion of the American people for those less fortunate than themselves at home and abroad...
...This proportional shift of U.S...
...The Grace report's second major recommendation called for more public aid to Latin America...
...Bollinger, The Rise of United States Influence, 127a...
...imperialism...
...This shift began in the early 1950's when W. R. Grace acquired two moderate-sized chemical companies and within only a decade it was completely transformed...
...Comparative income figures lor (..race underscore these cstinmates...
...firms in Peru...
...Thus, the company that was to become a hated symbol of foreign penetration and relentless exploitation, throughout Latin America, reaped its first and fastest profits in Peru...
...sugar, paper wrappers...
...Statistics obtained from W. R. Grace & Co., Fertilizer and Food Production: World Trends to 1900 (New York, 1974...
...In the area of Grace's industrial holdings...
...Congress...
...Within each of these sectors, Grace was often the dominant force in production and/or marketing, amidst a field of smaller competitors...
...blueblooded, ultra-wealthy, gilt-edged corporate "aristocracy," the Irish Catholic Graces had risen considerably from their *The Chemical Bank of New York and Bunge Borne Investments...
...Wall Street Journal, February 7, 1969...
...scared you are the better you play...
...The new capital onslaught was seeking higher rates of return in capital intensive sectors of production-those sectors requiring advanced technology, a large capital outlay, and fewer workers...
...It also demonstrates in a very concrete fashion that workers can have better living conditions within the framework of a free, democratic and capitalistic society...
...corporations was rapidly being filled by Japanese and European investors...
...What attracted Grace and other firms to the island was the "investment climate" which Puerto Rico offered U.S...
...Furthermore, Grace profits from the Lines had been somewhat inflated given that they received the benefits of protective regulations and federal subsidies since the passage of the Merchant Marine Act in 1936...
...5 7 The Grace report had two central recommendations...
...Grace's narrow focus in the banking field became a weakness rather than the strength it once had been...
...government figures...
...By 1970, the company had agreed to sell its majority interest in Lima's largest telephone company to the government and to reinvest the proceeds in the construction ofa new Sheraton Hotel in Lima...
...In those countries, textile production flourished under protective tariff barriers, serving as a base for capital accumulation and further industrial expansion...
...7. David Joslin, A Century of Banking in Latin America (London: Oxford University Press, 1963), 19...
...median up until 1973.33 These low production costs translated the Hatco Division's 1970 deficit into a profit in 1971, the first year its Puerto Rican subsidiary, Oxochem, was fully operating...
...It bought Barilla, the world's largest produce of pasta, in Italy...
...The statistic for Puerto Rico was taken from "The Ferre Family...
...industry's depression but also brought huge superprofits when fertilizer prices jumped after 1973...
...It was led by the National Joint Action Committee and spread from the student movement to the major unions and the unemployed...
...Puerto Rican workers were paid only a third of what their counterparts on the mainland received and the head of the IDC asserted in 1965 that U.S...
...S. Menshikov, Millionaires and Managers (Moscow: Progress Publishers, 1969), 281...
...In others, the negotiation process was seemingly endless and broke down repeatedly...
...Clearly this legislation, which has encountered little congressional opposition, will open the way for U.S...
...NACLA's Latin America and Empire Report, Vol...
...Leaflet distributed by W. R Grace & Co...
...The Evolution," 13...
...before a U.S...
...The Earl of Donoughmore headed the Committee of Peruvian Bondholders...
...It does not, however, mark any tendency for corporations to separate themselves from banks...
...In 1972, the two firms jointly invested over $24 million in a Colombian paper mill...
...in- vestments to both Latin America and Europe have in- creased, but those going to Europe have increased at a much faster rate until they finally surpassed the Latin American investments in the mid-1960's.40 Beyond the elements of personality and business leadership-which are obviously of great importanct to an individual corporation and may, in fact, determine if dividends are to be paid-- are a series of fundamental factors which underlie the development of capitalism itself...
...2 5 When Grace entered textile production in Peru, mill production was already half a century old, having been initiated by the British in the mid-1800's...
...Bollinger, The Rise of United States Influence, 40...
...On the Grace plantations a wage labor force was obtained through "sheer impressment on the part of labor contractors or by a system of engancho (literally "to hook") whereby Indians were given cash advances for wages and thereby drawn into a type of debt peonage...
...The second section will examine the post-1968 confrontation between Grace and the Peruvian regime, focusing on the company's negotiating tactics and its attempts to gain the support of the U.S...
...properties...
...He left his Peruvian operations under the able charge of a younger brother, Michael, who, it seems, was even more adept at commercial expansion than William...
...Relations between the corporation and its labor force must also be brought up to date...
...Yet with these monopoly contracts, the primary orientation of trade to England and the utter dependence on the guano trade, the Peruvian economy was fundamentally weak...
...or at one time were, part of the Grace Corporation...
...54 As we will see, Grace, to continue the analogy, is doing everything possible to make sure he doesn't end up on the cross...
...In Peru, he found a wealth of unexplored possibilities for money-making, and quickly exploited them to the fullest (see article No...
...In 1959 Grace acquired a small fertilizer mixing operation in Puerto Rico and an important fertilizer plant in Trinidad...
...Larkin later became the President of Grace and the Washington representative, John Moore, was appointed U.S...
...Joseph Grace's move into banking was very characteristic of a trend which had developed in the last third of the nineteenth century...
...Proposals for Action Now...
...44 The sale of Panagra was a different matter...
...GRACE AND THE FINANCIAL OLIGARCHY Grace's chemical mergers were therefore part of a generalized trend...
...Grace belonged to only one man, and not to an entire corporate structure...
...This image, no doubt, was engendered by countless ads in business publications and newspapers which stressed the "Grace Line" ships, offering the latest in luxury cruises to South America, and little was said of Grace's growing investments in mining, textiles or other products...
...3 0 Together with its closest competitor, the old British firm of Duncan Fox and Co., Grace controlled 81 percent of textile production in Peru in 1936.31 Rounding Out the Empire: Grace As Mr...
...chemical sales totalled only $700 million (1937), but by 1950 they had passed the $3 billion mark...
...Finally, he pushed Grace into Chile, establishing a company in the port city of Valparaiso.5 A third brother, John, left Ireland for San Francisco to form J. W. Grace and Co., which supplied his brothers' firms with lumber and other products from the West Coast of the United States...
...In 1961, he had written his own "alliance for progress" program entitled, "It Is Not Too Late in Latin America...
...Unlike most other chemicals, synthetic ammonia requires just one additional stage to process the gases released by oil drilling...
...And, secondly, investments in mechanized textile production had important repercussions on class development in Peru, spreading capitalist relations of production in the country while intensifying the country's dependence on the industrialized metropoles...
...crop production by onethird or more...
...By incorporating four plantations into one, Paramonga soon grew to more than 17,000 acres...
...To maintain their position in the world market and circumvent the oil quota restrictions, Grace along with other U.S...
...In the late fifties, the company had made a multi-million dollar blunder by initiating a costly freight service from Chicago via the St...
...which was shared with the owners of the Vitarte cotton mill (British) and the owners of the La Victoria mill (Peruvian...
...The profitability of fertilizers had thus attracted many oil companies out to make a quick killing...
...Phtalic anhydride is another component of01 plasticizers used by Grace's Hatco Division...
...2 6 Grace entered the Peruvian textile industry in 1903 by purchasing a one-third interest in the Inca Cotton Mill Co., Ltd...
...1 7 Grace held a tight rein on its shipping network by simultaneously controlling terminal facilities, docks, tugboats and storehouses in most of the ports where Grace ships put in...
...The government of Velasco Alvarado was intent on carrying out substantial retbrms in the country's social structure and on changing the nature of Peru's traditional dependence on foreign capital...
...Joseph Grace joined the board of directors of the National City Bank of New York in 1907...
...His efforts finally paid off In 1976...
...6 The center of the Graces' business operations at the time was in commerce and finance, which they guided through the mechanism of the merchant house...
...19, 1974...
...Company officials immediately began an intensive lobby in Washington to enlist the muscle of the U.S...
...3 3 Under Joseph Grace the firm expanded its entrance into the field of finance on two levels: indirectly, through a directorship in the National City Bank of New York and directly, through the creation of the Grace National Bank...
...In the first place, the investments helped initiate and then consolidate the denationalization of a heretofore Peruvian industry...
...V. CONCLUSION Expansion is a central drive of the capitalist system as a14 whole and of each individual capitalist within it...
...A directorship in the bank allowed this descendent of a Peruvian guano shipper to rub elbows with such scions of U.S...
...Grace has kept right in step with expansion plans, an- nouncing an additional investment of $25 million in its Oxochem subsidiary and the construction of a $50 million plant to produce phthalic anhydride...
...tax money be funneled into the Latin American economies.59 David Rockefeller's minority report to COMAP underscored the tensions between the two families, both of whom had important interests in Latin America...
...and Ronald Radosh, American Labor and United States Foreign Policy (New York: Random House), 1969...
...31 The profitability of Grace's Trinidad subsidiary can be judged from the terms of the recent 15-year contract signed between Grace and the government for the supply of natural gas...
...and, Burbach...
...Within five years, the debt had been repaid and Peru began to borrow afresh and in earnest...
...It's always been in the back of my mind," says J. Peter, "that if my father (Joseph), who was much more conservative than I am, almost went broke, then I have to be terribly careful...
...In addition, the new agrarian policy emphasized the transformation of the large agro-industrial complexes, primarily owned and operated by foreigners, into state-owned and worker-controlled cooperatives...
...In Europe, panicky holders of Peruvian bonds quickly formed national committees to insure the honoring of their debts...
...Perhaps in an ironic twist...
...PUERTO RICO: PROFIT ISLAND U.S.A...
...The $150 million deal was divided into two separate parcels: I ) a direct payment by the Peruvian government to the U.S...
...Most Peruvian guano went to England where it fertilized British turnips, stimulating the growth of a number of rich landowners in the process...
...The organizational structures of capital which predominated in the most advanced capitalist countries also underwent important modifications...
...When Lenin wrote of imperialism as the highest stage of capitalism, he noted that it was characterized by the export of capital rather than goods from advanced capitalist areas to less developed regions...
...The law clearly ear-marked the nine largest sugar and cotton-producing estates on the Coast as targets for expropriation...
...William stayed on, however, taking a position with one of Callao's largest commercial houses, a ship chandlery.* By 1854 Grace was a full partner in the firm which specialized in supplying the ships engaged in Peru's booming guano trade...
...Lenin then concluded that this "merging or coalescence of the banks with industry is the history of the rise of finance capital...
...It soon established an expanded trading network, shifted its focus from Great Britain to the United States, and sought financial connections in order to expand its capital base...
...This spree in chemicals continued until 1972...
...Textile investments had also declined...
...In the summer of 1970, the Velasco government decreed a new Industrial Law, designed to accelerate the country's industrialization process under tighter state auspices...
...A 1945 U.S...
...3 7 The foundation for this rapid growth was laid at the inception of "Operation Bootstrap...
...Federal Reserve Bank of Chicago, "Fertilizer Outlook," Business Conditions, May 1975, pp...
...Sugar production implied both qualitative and quantitative changes in the relations of production in Peru: qualitative, because capital was being introduced into production, whereas before it was exclusively centered in distribution (i.e...
...1961 64...
...The "Grace Lines" was a major shipper from the United States to Latin America and "Panagra" was one of the most important air carriers serving Central and South America...
...The new project figures were obtained from the Oil & Gas Journal, March 17, IWS1975...
...And, finally, labor militancy had also cut into Grace Line profits...
...The historical role of W.R...
...Those areas which were particularly affected included the production of raw materials, commercial agriculture and early manufacturing...
...and began to build the first of his Santa freighters.l6 When the Panama Canal opened two years later, a Grace ship christened the northbound passage...
...and New York Times, April 24,1970...
...government was involved from the outset in overseeing and trying to manipulate the environment in which negotiations between the companies and the Peruvian government took place...
...The sketchy data on Grace points, nevertheless, to five dominant interest groupings...
...Numerous workers at Grace plants in Latin America are trained in AIFLD seminars and many are brought to the Institute's school in Front Royal, Virginia for advanced courses...
...Grace withstood the 1960's slump, got a shot in the arm from the 1970's "ripoff" and now ranks among the top seven producers in a field of 100 accounting for more than 5 percent of U.S...
...Menshikov, op...
...1 The colonization scheme failed, the workers dispersed, and James returned to Ireland...
...Grain Arsenal," NACLA's Latin America A Empire Report, Vol...
...it helped to bring more and more new workers into the process of capitalist exploitation...
...What's more, its "Operation Bootstrap" was ideally conceived to provide U.S...
...Insurance companies hold 42 percent of its obligations and only seven of these control 34 percent...
...Finally, and of particular importance to the petrochemical industry, was the freedom to pollute at will out of reach of the U.S...
...Panagra, the Grace Lines, the bank: We ought to have medals on those...
...In addition, expansion has led J. Peter Grace personally to play more of an active role in defense of his interests and the interests of his class...
...GRACE: THE RECURRING HISTORY Such confrontations are not foreign to Grace's history...
...It was within this context that the Peruvian government turned its attention to the agricultural sector in the summer of 1969...
...Thus, it was the English merchant house which oversaw that trade and profited from it...
...Fundamentally, workers are driven into the wage labor relationship, through expropriation of their own means of production (their land, craft industries, etc...
...I haveabsolutely nothing but joy and pleasure at the list of divestments," he chortled in 1972...
...J. Peter Grace prompted a major reorganization of the company's industrial base and financial structure...
...NACLA...
...Business Week, October 13, 1975, Wall Street Journal, January 9, 1976.derscore these estimates...
...But in the same propaganda paper they claim that only the Auto Workers Union can get for you "a vage increase, decent fringe benefit and job security...
...In the 1940's the U.S...
...This position was strengthened in the 1870's through their handling of the Peruvian foreign debt...
...Grace expanded into mining, food processing, industrial production, trading, banking and finance...
...Peruvian Times, Oct...
...The tremendous rate of population growth, is...
...2 2 Grace's dispute with Peru was not originally within the scope of the Green mission, since bilateral discussions between Grace and the Peruvian government had not been formally terminated...
...Conversion of natural gas into ethylene and then into polyethylene represents a 28 fold upgrading of the raw material stock...
...Such has been the growth of its agrichemical investments in the area that Grace now relies on the Caribbean for 49 percent of its ammonia output and 35 percent of its urea production...
...hegemony within the capitalist world in the face of the deepening crisis in the U.S...
...I'm paid for one thing-to increase the earnings per share of stock and to increase the company's market price per share as rapidly as possible...
...2 9 Both countries had high unemployment rates and, therefore, a cheap labor force...
...l he Nixon administration was clearly reviewing its general policy toward the military regime it had (deemed so dangerous in 1968 and was reluctant to accept the pressure tactics proposed by Grace...
...The stench of Cartavio's public toilets (the only ones for many residents) is quite unbelievable...
...The second option required buyers with cash on hand, an unlikely possibility in a country which promised an uncertain future to foreign investors and whose bourgeoisie was embryonic to say the least...
...Management and technical personnel, on the other hand, lived in comfortable, modern facilities and had separate recreational and educational services...
...Between 1972 and 1974 Grace sank $200 million into small oil and coal companies to secure independent sources of supply...
...Finally, however, when negotiations completely broke down and the disputed properties were formally nationalized, the company had no choice but to put its fate in the hands of the U.S...
...By 1974 this figure had dropped to a meager 4 percent...
...Clearly, Grace has undergone many changes since World War 11...
...But in his report, Grace recommended that approximtely $2.5 billion per year, as opposed to $1 billion, of U.S...
...BUSINESS U.S...
...Furthermore, by creating a legal entity, W. R. Grace and Co., it protected the Grace family members from personal liability for the company's debts...
...The Migration of British Capital to 1875 (New York: Alfred Knopf, 1927...
...Their needs and operations were compatible...
...22 More than shipping or commercial importing/exporting, sugar production helped spread capitalist relations of production in the Peruvian countryside...
...H. TURNING THE CORNER: GRACE EXPANDS INTO THE TWENTIETH CENTURY By the 1880's Grace was one of the top three merchant houses in Peru, a prime government creditor, a booming shipper and freight contractor, the owner of railroads and an important public works contractor...
...For those who can find jobs in or around the industry, there remains the problem of surviving the air and water contamination...
...Burgess and Harbison, Casa Grace, 3. 37...
...By the end of the nineteenth century, Grace was investing directly in production-mines, mills and plantations-and producing commodities as well as trading them...
...The second article discusses the company's most recent expansion into the chemical industry, particularly in Puerto Rico and Trinidad, and examines the alliances which made that expansion possible...
...A thorough evaluation of the nationalization of Grace properties in Peru...
...Grace was one of the first to take advantage of Trinidad's new foreign investment legislation...
...Estimate made on the basis of information obtained from W. R. Grace & Co., Notice of Annual Meeting of Shareholders and Proxy Statement, May 9, 1975...
...Grace Company began as a transportation and trading company, shuttling merchandise and passengers between Great Britain, the West coast of Latin America and the United States...
...Grace formed the Cartavio Sugar Company in 1891 which, in less than 30 years, had expanded three-told and become Peru's second-largest sugar producer...
...William's father, James, was a large Irish landowner, and he had arranged for these workers to farm a friend's estate located between Lima and its port city of Callao...
...As a result of its new chemical ventures Grace was brought to the forefront of U.S...
...and Leland Hamilton Jenks...
...In fact, Grace's decision to invest in chemicals, a highly capital-intensive industry, forced it to rely ever more on new sources of capital...
...Congress was less prepared to adopt the new conciliatory line of the Nixon Administration toward Per6...
...developments here, it is important to examine the growth of the Grace Company within this context rather than isolating it from the major trends which shaped the development of capitalism as a whole...
...hegemony was increasing...
...Sold Peruvian real estate, including "Lima House," the former Grace corporate headquarters.31 NOTES I. AMAZING GRACE: THE STORY OF THE W.R...
...Grace's shift into chemicals at mid-century offers a clear illustration of how these two variables influence the direction of corporate growth...
...economic policy for Latin America...
...1 he failure of Grace's strong-arm tactics forced the company to seriously reassess its approach to bilateral negotiations Aith the Peruvian government...
...16,.1974 24...
...J. Peter Grace13 "IN GRACE NO ONE NEEDS A UNION PARTNER IN HIS PAY ENVELOPE...
...Finance, June 1966...
...Central to the commission's conclusions was a new agricultural policy which would give U.S...
...Halfa dozen U.S...
...1, February 1975, p. 9 and 19...
...At the same time, Grace initiated a divestment process (see Chart) designed to pre-empt any further doses of nationalism...
...Political Thesisot the Puerto Rican Socialist Party: The Socialist Alternative," NACLA's Latin America Empire Report, Vol...
...Some of Grace's advocates attribute the changes to J. Peter's dynamic insights into the corporate world, while others simply chalk it up to what they call his "bizarre personality" and leave it at that...
...government, the largest supplier of fertilizer "aid," reduced its assistance by two-thirds...
...Paul Baran,The Political Economy of Growth (New York: Prometheus, 1960), 174...
...In the earliest stage of imperialism, as we have seen, foreign capital tended to concentrate in the commercial and financial sectors of less developed countries...
...While it is not our intent to analyze the laws governing the development of capitalism, we can describe in the most general terms the nature of these changes, particularly as they relate to the export of capital from the more advanced capitalist countries to the peripheral areas...
...These chemical facilities were expanded into the area of plastic compounds (i.e...
...33, El Diarna, April 23, 1970...
...Economic and political conditions in Peru indicated that the developmlentalist approach of the military regime was something that U.S...
...Grace was soon processing coffee in Colombia, cacao in Ecuador and importing and exporting throughout Latin America...
...In testimony before the House Agriculture Committee, J.P...
...Although Prime Minister Williams survived this first real opposition to his rule, he took steps to bolster his image by promising to nationalize part of foreign-owned companies...
...companies operating in Trinidad were enjoying profits 30 to 40 percent higher than in the United States due to lower wages...
...royalty payments and other company assets held in Peruvian banks...
...The chemical companies, only too pleased to serve a guaranteed market, operated the plants for the government and later purchased them at bargain rates as "war surplus...
...By mid-19th century, merchant houses, including the Graces, expanded by adding banking functions to their overall operations, serving as promoters and clearing houses for government and private loans, establishing credit systems and, occasionally, even issuing currency...
...Factories which gather together greater numbers of" workers replace smaller workshops...
...And even if these investments would appear to be mere childsplay in light of the present day domain of Grace, they were of critical importance in maintaining the company solvent when sugar and other products crashed on the commodities market in 1921...
...In Peru, the AIFLD Union Programs were directed at unions involved in organizing sugar and cotton workers...
...sugar quota allocation to Peru at this time could produce a disturbing reaction prejudicial to those U.S...
...Grace's investments in banking and finance rounded out his empire before World War II...
...The British had banned the "coolie" trade to Peru in 1874, but Grace attempted to get around the British embargo by "re-exporting coolies left over from United States railroad gangs" to Peru...
...In this period, Grace was both selling and buying in the paper industry...
...sugar properties...
...NACLA's Latin America & Empire Report, Vol...
...however, over sugar sanctions and other forms of economic blackmail...
...Grace added air service to its transport network in 1928 with the creation of Panagra Airways, a joint venture with Pan American...
...penetration...
...Few other corporations have managed such a transformation in their total structure...
...Forbes, September 1, 1972...
...J. Peter could find little fault with these principles...
...Dec.3,1971...
...In 1965, Grace company leatlets-some even printed on Grace stationery-were handed out to the Airmold Products workers in Tonawanda, New York, in order to discourage workers from joining the United Auto Workers' Union...
...war ships in the Pacific two months to reach Cuba...
...Grace was one of the founding fathers of AIFLD in 1961, and since then has served as chairman of the board, fundraiser in the business community, personal contributor, and a faithful mouthpiece for AIFLD principles...
...now Ingersoll-Rand) which produced mining equipment for Latin American operations...
...Corco has, however, failed to keep this promise...
...percent...
...9 Peru sold more securities in England during the 1840-1880 period than any other Latin American country...
...The AIFLD," he stressed, "urges cooperation between labor and management and an end to class struggle...
...The fact that niany investors had learned to live with the new regime and more importantly, the fact that the limits of the so-called Revolution were much clearer by 1971 had had its effects upon U.S...
...Grace's interests in shipping, begun upon his arrival in Peru, expanded for the next seventy-five years...
...Food as a foreign policy weapon and U.S...
...1 4 The terms of compensation spelled out a clear message: foreign investment still had an important role to play in Peru, but no longer on its own terms...
...But by conversion to a petrochemical it can boost the sales price per lb...
...Treasury of $76 million which would be distributed to the companies % ith legitimate claims by the Slate Department...
...4 1 A...
...See case studies of IPC in Peru by Adalberlo J. Pinelo, The Multinational Corperations as a Force in Latin American Politics (New York: Praeger Publishers 1973) and George M Ingram...
...Income from its agrichemical division jumped from $6.9 million in 1970 to $87 million in 1975 and from 10 percent to 45 percent of the company's total income...
...and 2) the release of $74 million in blocked remittances...
...Chemistry, in fact, is a great yeasty force at the center of the economy, creating new industries and recreating old ones, and working changes on all sides...
...In the decade of the 1960's, the company reinvested about S75 million in sugar and paper production, including $35 million in a new paper processing facility alone...
...government in settling the dispute...
...ITT was a case in point...
...Series 7792 Treaties and Other International Acts...
...corporations...
...And to ensure an appropriate climate for compromise, the United States gave its long-delayed approval for an InterAmerican Development Bank loan to Peru ($12.3 million) and a World Bank loan of $27.6 million...
...Thomas Moorehead, an executive of Beker Industries, a major fertilizer concern, was equally explicit: "You might say we're gouging the poor, but we're also generating funds to build the additional capacity that will be needed in the next five or ten years...
...In the sixties, longshoremen struck the Lines in Venezuela and the United States...
...Said Geddes Granger, the leader of the National Joint Action Committee: Our movement is working towards the day when each black person will be able to get a lair deal, be he of African or East Indian descent, will be able to feel that he has a stake in the future of our society...
...But J. Peter Grace, with characteristic humility, plays down his own role in this transformation...
...firm...
...By this time, however, Phase IV had put a clamp on prices and the industryhad to turn to the Nixon Administration to resurrect it through a new agricultural policy...
...to challenge British hegemony in Latin America, finally adding some bite to the bark of the Monroe Doctrine...
...Moreover, developments in the chemical industry itself were a critical factor in the company's later success...
...Forbes, September 1, 1972, 27...
...It is not clear, however, how much of this stock the bank actually votes...
...fertilizer corporations have moved quickly to extend their hold over available raw materials abroad...
...When I became president of the company in 1945," he said, "these businesses...
...companies in Peru had arrived at sonic kind of accord w ith the Peruvian government, the stalemate in bilateral discussions experienced by Grace was by no means unique...
...Of course you know no union ever pays for cheese benefits - only the company can provide them...
...Under monopoly conditions, the drive to expand is not lessened, but rather takes a new direction...
...The company continued to expand its plant capacity until the late 1960's when a glut in the market brought on a fierce price war...
...The report exposed an in- teresting rift between the Graces and the Rockefellers who presented a minority report written by David Rockefeller...
...So, in 1969 the Grace Lines was sold to Spyros P. Skouras for $42 million in cash...
...domestic prices in return for a 50-50 joint venture with the government in the new plant...
...New processes were developed to produce synthetic rubber, explosives, textiles and fertilizer...
...The Grace Bank specialized in two areas: trust services, both corporate and individual, and a foreign division which concentrated on transactions in Latin America...
...Stephen Abrecht and Barbara Durr24 III...
...The American Council for Emigres in the Professions, Inc., a society for the promotion of reactionary Cuban exiles, received funds in 1%5 and 1%6...
...The Corco complex, along with other projects that embodied ihe Bootstrap philosophy have turned out to be prodigious generators of profit and pollution, and scarce contributors to the Puerto Rican job market...
...2 8 By the mid-1930's Grace controlled the two largest textile plants in Chile: Tejidos Caupolicdn, the largest cotton textile plant, and Fdbrica de Patios Bellavista, the largest textile fabrics manufacturer, not to mention a smaller firm in Vifia del Mar and the Fdbrica de Patios "Las Tres Pascuales...
...The standard mechanism chosen by Peruvian governments for servicing its debts was to offer foreign merchantbankers a monopoly over the export of guano in return for assuming the debt...
...BOOTSTRAP BY-PRODUCTS: UNEMPLOYMENT, MIGRATION AND POLLUTION "Operation Bootstrap" was heralded as the solution to Puerto Rico's unemployment problem...
...If it were to maintain its important position in the twentieth, it would have to modify its organizational structures and economic activities...
...Its tax exemption extended for 15yearsand the average wage in the industry was only two-thirds of the U.S...
...Just as in Trinidad, Grace's new subsidiary had a notable effect on the company's profit picture...
...The merchant house structure was the organizational form most suited to the needs of commercial capitalism as it developed prior to and during the nineteenth century...
...Casa Grace," Fortune...
...petrochemical firms intensified their international expansion, mostly in Europe and the Caribbean...
...A reporter at Grace's two largest sugar plantations in Peru...
...Sold 40 percent interest In Minera Alianza, a metal mine, to Peruvians...
...economy...
...Accordingly, Butz turned on the spigot...
...1918), 57...
...Most of these high-level positions (75 percent) were filled by foreigners...
...foreign investment in the world...
...began to emerge as an enterprise rooted directly in the productive sector...
...The following March, the Peruvian government delegated a commission to evaluate Grace's offer and to report its findings to Peruvian negotiators within 120 days...
...In its final form, the legislation left the coastal situation untouched...
...capitalism and the dynamics of its development...
...0-196024-15-6 ISSN No...
...31, 1969...
...James R. Green, a former foreign service officer in Latin America and a senior vice-president of Manufacturer's Hanover Trust, was appointed as special negotiator...
...6 9 AIFLD was also eminently suited to serve as a subtle intelligence gathering network due to its position inside LatinAmerican labor movements...
...Of the latter two possibilities, both of which were booming, Grace settled on chemicals...
...Jerome Levinson and Juan de Onis, The Alliance That Lost Its Way (Chicago: Quadrangle, 1970), 159...
...New York Times, April 5, 1970...
...As monopolization increases in both production and finance, there is a tendency for both monopolized sectors to merge and coalesce.34 While we cannot enter into a fuller discussion of either of these *in 1920 the Lincoln National Bank merged into the Irving Trust Company...
...By the 1950's, Grace produced over 100,000 tons of refined sugar per year, 75 percent of the refined sugar produced in Peru and nearly one-fifth of Peru's total sugar production...
...The company called in the police and a violent battle broke out in which three workers were killed and sixteen injured...
...Corco's core facilities would produce the basic aromatics and olefins while others, either singly or in joint ventures with Corco, would develop the intermediate stage of production...
...2. W. M. Mathew, "Peru and the British Guano Market, 1840-1870," Economic History Review, Second Series, Vol...
...Puerto Rico is not as well endowed in natural resources as Trinidad...
...representatives at the international lending agencies to veto any new credits to countries which had not compensated satisfactorily for expropriated U.S...
...In fact, however, the agreement was no more than a paper compromise because the two parties could not settle on a valuation of the properties involved...
...Department of State, Settlement of Certain Claims...
...by its many friends in Latin America...
...And, in 1965, the BGLA expanded into the Council for Latin America, also led by Rockefeller but now representing more than 225 companies, approximately 85 percent of all U.S...
...Grace underwent an organizational restructuring at the turn of the century...
...Over the last three decades, both countries, the former a colony of the United States and the latter of Great Britain until 1962, have established special programs for U.S...
...As early as 1824-25 the English held nearly 17 million pounds sterling in Latin American bonds...
...SmDubewitfm: $10 pr yew for lad1wdmals ($1S for two yeas), $16 p yew for aSa-WoIt liastutlom ($80 for two yam...
...lo ensure its position within the industry, Grace, like other chemical companies, has also seen the need to integrate vertically to insure access to the raw materials for its operations...
...While the Guatemalan and Bolivian insurrections of 1944 and 1952 respectively, had aroused the apprehension of many U.S...
...businesses, it still remains a fact that the majority of U.S...
...It still depends on its foreign subsidiaries for 40 percent of its pretax profits...
...Intermediate companies multiply these basic elements into hundreds of chemicals which are used in the processing stage...
...6 8 And finally, deny class struggle by arranging a "consensus" between management and labor based on enforcing a higher productivity for labor...
...And I say to you, there must be change...
...Briefly, in the dependent areas the movement of capital into the productive sector accelerated the development and spread of capitalist relations of production...
...Here, however, we will look at divestment, Grace's shedding of its old empire, and the decision to enter the consumer products market...
...In 1927 Grace purchased Paramonga, its second sugar estate...
...As Puerto Rico lacked the essential energy resources, a petroleum refining industry had to be created from scratch using imported crude...
...For example, the Foundation, whose officers are generally directors at W. R. Grace, has given AIFLD over $100,000 since 1%2...
...Fred Hirsch, An Analysis of Our AFL-CIO Role in Latin America (San Jose, California: np), 1974...
...Foods were packaged in Grace paper, shipped in Grace boxes, on Grace transport lines, to be sold at retail outlets again run by Grace...
...As described in the tax returns of the Grace Foundation, the Citizens Committee was supposed to educate the public about Cuban affairs...
...Grace, however, was not satisfied with either the pace or the direction of the negotiations and began to rally other forces to exert pressure on the regime...
...It purchased 2/3 control of a small mining enterprise, 20 percent Interest in a very large copper-lead-zinc mine, and full ownership in a recently developed copper and tin deposit...
...The next article in this Report will examine the major aspects of Grace's movement towards chemicals and its related branches...
...And, an anti-trust suit blocked Grace from selling its half of the line to Pan Am...
...The Pitcairns brought in Pittsburgh Plate Glass, the Peerlesses joined with Peerless Chemicals, Inc...
...Bollinger, The Rise of United States Influence, 116...
...Letter from Thomas Fowler (Vice President of Latin America Group, W. R Grace & Co...
...J. Peter Grace, It Is Not Too Late in Latin America: Proposals for Action Now (New York: W.R...
...3 4 The early 1970's turn-around in fertilizers produced the intended effect of rapid expansion by U.S...
...trade, the Graces had become one of Peru's major merchant houses during the late 1860's...
...By the time the first of Grace's holdings were taken over, relations between the Peruvian government and foreign capital had already become highly strained...
...2. Charles T. Goodsell, American Corporations and Perevian Politics (Cambridge, Mass.: Harvard University Press, 1974), 47...
...7, October 1975...
...Large corporations replace smaller merchants houses and family-run businesses...
...Peter Grace)l In 1945 J. Peter Grace's dilemma was not so much whether to branch out into a new industry, but which in- dustry to choose and whether the required capital would be forthcoming...
...The government approached Grace in early 1971 with a proposal to take over 51 percent of its fertilizer operation...
...Thus Grace maintained a cautious attitude toward natural resource investments until the "oil crisis" forced the company into a third round of' cz,11, acquisitions...
...The long, complex negotiations between Michael Grace and Peru resulted in the Grace-Aranibar contract of 1887* which cancelled Peru's debts contracted between 1869 and 1872 but only in exchange for several of Peru's mines, its railways and its guano...
...If all its basic and processindustry ramifications were rolled into one, they would account for at least 20 percent of the total national product...
...Although it has successfully maintained a small interest in Libyan oil since 1956, it suffered a $2 million loss from its brief 52 percent ownership of Cosden Petroleum Corporation between 1960 and 1963...
...ce tleet, on both sea and air, served to unite the re in the first half of the twentieth century, with Ways playing the leading role...
...They had come to expect the unchallenged flow of profits from their Latin American operations...
...3 2 Unable to put down the rebellion the government received immediate support from the United States and Great Britain who feared another Cuba in the Caribbean...
...As its reformist-nationalist character came to the fore, more and more companies were drawn into open confrontation with the regime...
...Breaking Up Is Hard To Do: Grace Unloads Its Old Empire Quetsion,: Was there any sorrow about giving up some of these (older Latin American investments...
...The Peruvian government responded to Washington's pressure tactics by expelling the U.S...
...Incorporation was important since it insured the smooth passage of the empire from W. R. to his son...
...2, 289 300...
...Although Trinidad has since moved up to the status of a neo-colony...
...William RussellGrace came for both reasons...
...On the eve of Latin American independence, George Canning, England's foreign minister, boasted, "Spanish America is free, and if we don't mismanage our affairs, she is English...
...capital to maintain a foothold in Peru became apparent...
...Flick took over the empire after his father's death and tried on several occasions to arrange join ventures with Grace...
...Senate, 79th Congress, 2d session, Document 206, pp...
...With respect to the labor movement, Grace's efforts to promote the ideology of labor-management harmony have already been discussed in relation to AIFLD...
...Their investments in finance and ship building soon gave them an important level of control over these commercial activities...
...Above all, we have to act together as Americans defending our interests abroad...
...excluding the oil companies Shell and Texaco...
...In 1950 Robert T1...
...In fact, company representatives now respond to inquiries about Grace's world-wide operations by resolutely declaring that "Latin America is a thing of the past...
...Citizens for a Free Cuba" is perhaps the most suspect group to have received funding from Grace...
...67...
...A mere 17 of these institutions held a total of 12.5 percent of all its common stock...
...But Grace is now confronted by new contradictions...
...6. Fortune, August 1963...
...2 5 Some countries tried to make up for this sudden scarcity with additional food imports, but Nixon's New Economic Policy had sent world food prices sky high...
...In 1960 William Keeler...
...6, No...
...4 9 Profit margins could not match the level of the chemical industry, however, and Grace began to sell off his textile mills in both Peru and Chile in the 1960's...
...There was no doubt that U.S...
...should concentrate its economic-aid program," he wrote...
...Food production levels that will keep pace with a growing population in the future will require even greater utilization of fertilizer materials...
...Yet after thirty years, the industrialization plans of the EDA have resulted in the migration of two million Puerto Ricans (40 percent of the population) to the United States, left many others unemployed, destroyed the country's agricultural base and polluted its environment...
...As in the Alliance, J. Peter Grace had an important role to play in AIFLD...
...Grace had marketing expertise and coal and oil reserves which were attractive to the German concern...
...When Grace went into fertilizers, the industry was at the peak of a tremendous boom...
...First, it sought to strengthen the capitalist sector in Latin America, strongly tied to U.S...
...omplaining that "there just isn't room today for a small bank," J. Peter sold Grace's 80 percent share of the bank to Marine Midland Trust of New York in 1965 for $36 million worth of Marine Midland stock and Grace was given a directorship in Marine Midland...
...ONWARD CHRISTIAN SOLDIERS: GRACE MARCHES INTO THE POLITICAL ARENA For more than 100 years the Graces, from William Russell to J. Peter, have guided their company from country to country and from investment to investment in search of higher profits...
...Most often, British citizens made the long journey for one of two reasons: to oversee British loans and/or establish British businesses, or to escape the harsh economic crisis and periodic famines which shook England and Ireland throughout the nineteenth century...
...2 6 To meet these production levels, it is estimated that the United States will have to import one-third to one-half of its nitrogen fertilizer within the next ten years...
...31 and 52 3. 11...
...At the turn of the century, U.S...
...5 and 6 and Anibal Quilano, Nationalism and Capitalism in Peru, New York: Monthly Review, 1971...
...Most of this expansion was financed by the U.S...
...interests.1'4 Thus many foreign firms had become resigned to greater state control over investment policies and direct state participation...
...August II, 1970...
...capitalism, the Graces were able to avoid the disastrous consequences of Peru's defeat in the war, a loss which crushed most of the Peruvian commercial bourgeoisie...
...agriculture, while it still uses little fertilizer per acre relative to other advanced capitalist economies, is rapidly increasing its consumption of fertilizer over and above the available supply of domestic raw materials...
...56 The first major response to the challenges presented by the Cuban Revolution and the new economic conditions of the sixties came in March 1961 with the Kennedy Administration's formulation of the Alliance for Progress program...
...James P. Freeborn, Vice-President in charge of Grace's Latin American operations, denounced the industrial investment scheme and expressed the company's decisive disinterest in making any new commitments in Peru:28 Not only do we obviously have no motivation to invest further in Peruvian industry, but on the contrary are obliged to disinvest, so the use of agrarian reform bonds for industrial investment hardly appears practical...
...They were the roots of Grace's trans- formation into a huge petrochemical conglomerate and will continue to be the guiding forces behind its future growth...
...social ladder through a series of business partnerships and marriages...
...Whereas in the beginning, some expected, a full scale socialist revolution, it gradually became apparent that the goveir-nient was attempting a restructuring of the economy in which foreign capital would continue to play an important role...
...trade and shipping...
...Grace's properties had a current value of $26 million in 1969 and a replacement value of $46.7 million...
...GRACEFULLY BRIDGING THE GENERATION GAP: J. PETER TAKES OVER Petrochemicals, beer, newsprinting, processed food, nuclear fuel, chocolate, plastics, pasta, restaurants, fer- tilizers, women's clothes, sporting goods, paper mills, toy stores, chemical warfare agents, mining, shoes, real estate...
...investors...
...domination of the Caribbean are fundamental to Grace's current mode of operation...
...When Grace began searching for acquisitions, the chemical industry had just experienced its most explosive decade of growth and presented seemingly limitless possibilities...
...If anything, it was actually late in joining the many nonchemical companies entering the...
...government...
...What's more, according to a study carried out by the Interfaith Center on Corporate Responsibility, underdeveloped countries depend on U.S...
...foreign investments from Latin America to Europe has been a notable feature of the Post-World War II era and deserves the attention of a separate study...
...The company also set up a plant to produce commercial paints and resins...
...Bollinger, The Rise of United States' Influence, 144...
...It has been my view from the start that the company must attract investors in the United States and Europe in order to have, as the fundamental force of its dividend-paying ability, operation in these areas...
...Grace and the Peruvian Bondholders By virtue of their dominance of the Peruvian-U.S...
...capitalism with a major offshore industrial subsidiary to the mainland and U.S...
...banks would lend $150 million to the Peruvian government over a ten-year period.25 "IThe compensation olttred by Peru in the package deal was less than many U.S...
...he third component was financing...
...Consequently, the decision to issue common stock was made in 1949...
...It1...
...9 (November 1974...
...Ibid...
...4 By 1860 Grace, now worth more than $180,000, virtually had taken over the ship chandlery firm and he began to ship consignments of guano himself...
...As previously stated, this source of cheap raw materials saved the day for Grace's fertilizer division when the 1960's slump hit the U.S...
...Other government corporations offered low interest loans and even equity investment, occasionally supplying foreign corporations with 90 percent of their capital to set up their local subsidiary...
...Grace fought back by modernizing its outdated equipment and encouraging the Peruvian government to erect tariff barriers against the Japanese...
...The Grace Foundation, incorporated in 1961, is not as important as the Rockefeller or Ford Foundation, but then again, J. Peter Grace is not as important as David Rockefeller or Henry Ford Ill...
...Heinz...
...Karl Marx, Capital, Vol...
...4 3 While sales and revenues from shipping rose from $84 to $94 million between 1956 and 1968, sales and revenues from chemicals soared from $171 to $800 million in the same period...
...Grace began to invest in sugar, paper and textile production, mining, and some industrial activity as well as entering the field of commercial banking...
...Above all, though, it was clear that shipping, in J. Peter's...
...Fishmeal, used as a high protein feed for livestock, became one of Peru's most Important export industries during a boom In the 1960's...
...Capital moved from the commercial sector into the sector of direct production...
...Yepes del Castillo, Peru: 1820-1920, 138...
...Senate study of 238 basic industrial chemicals found that 102 were produced entirely by four or fewer companies...
...Ibid., 132 132a...
...This process can only be expected to accelerate in the future as capitalism passes from one crisis to the next, generating an ever-sharpening class struggle throughout the capitalist world...
...Nobody's got the world by the tail...
...w4 time left to live and advised him to leave Peru for a healthier climate...
...83 percent of the country's arable land was owned by less than one per cent of the total number of landowners.1 3 The Agrarian Reform Law promulgated by the military regime promised radical changes in both land distribution and the organization of production...
...In the early fifties, there was a steady stream of new blood...
...Direct U.S...
...Consequently the Government was forced to back down and watch its cheap natural gas nurture Grace's record protits...
...India, for example, dropped its fertilizer consumption by 25 to 30 percent in 1974 and more than doubled its dollar imports of U.S...
...1 5 In 1912 Joseph Grace founded the Atlantic and Pacific Steamship Co...
...during the 50's and 60's...
...The package deal had a price-tag of $70 million...
...This shift in operations also implied a radical change in Grace's presence in Latin America...
...capitalism...
...Grace's Chemical Reaction L- I INTRODUCTION When J. Peter Grace took the helm of the family company in 1945, it appeared that Grace was in an excellent position to take advantage of a new era of rapid growth and international expansion for U.S...
...Although investments amount to over $1.6 billion in 50 plants, the industry employs only 7,700 workers...
...The new Industrial Law, for example, while restricting profit remittances abroad, granted ample tax incentives to companies willing to reinvest their profits in Peruvian industry...
...1971 Sold 2/3 interest in Minsur, a copper and tin mine, to Luis Banchera, Peruvian fishing magnate...
...Corco, the fourth and largest complex, combined the investments of nine established petrochemical firms, including W. R. Grace...
...Grace had considered three options for diversification: the petroleum, electronics and chemical industries...
...This is most clearly seen with petrochemicals...
...investments in Latin America were shifting away from Grace's historical field of in- volvement into more capital intensive manufacturing operations...
...and First National City Bank participated through W. R. Grace...
...2. Wall Street Journal, April 2, 1975...
...The Municipal Assembly of Guayanilla and the Mayor of Penuelas, both towns located near the Corco complex, charged in official complaints in 1972 that residents' health was being attected...
...As the capitalist accumulates more capital and as technology advances, the size of the unit of capitalist production increases...
...2) Paper, Boxes, and Packaging Materials During the 1930's, Grace developed a new process for making paper out of bagasse, a sugarcane byproduct...
...Both aspects of Grace's response to the new regime, adamant demands for compensation and divestment, were intensified as the course of the so-called Revolution proceeded to affect new sectors of the economy and new segments of the Grace domain...
...3 3 This coalition of British, U.S...
...2 3 Comparative income figures for Grace unLOUSY FLICKS FROM THE PAST On January 9, 1976 W. R. Grace announced that it had completed the sale of 12 percent of its stock, valued at $104 million, to the Friedrick Flick Group of West Germany, a family holding company with interests In chemicals, steel, paper, machinery and automobiles...
...the State Departnient had decided to "defer" invocation of the Hickenlooper Amendment and in 1971, a State Department otlicial testified against the Grace amendment, reflecting the position of the U.S...
...corporations to increase their profits, by reducing real wages and eliminating expensive pollution controls...
...The fertilizer plant loomed large among the new foreign investments in Trinidad, as it represented approximately 46 percent of all operations set up by 1962 under the "pioneer" investment laws (i.e...
...The first three consist of the families-the original Grace and Phipps interests, as well as the Flick group of Germany which acquired 12 percent of' Grace's stock in 1975(See box...
...Civil War was symbolic of a much larger trend...
...I he Peruvian government hod agreed to supply the cash that Grace had been pressing for and Grace in turn had agreed to accept government bonds and to participate in a partnership with the Peruvian government...
...Journal of Commerce, May 19, 1972...
...and, often forcibly moved to areas of capitalist employment...
...The Peruvian government officially took charge of these sugar operations in February, 1970 and announced its valuation of the properties at $10.1 million...
...Business Week, September 3, 1960...
...3 6 Very little is known about the bank's early years and the use of its capital to finance W. R. Grace Co...
...And, as Amazing Grace is swept away on the tide of that struggle, he will be (Irowned out by workers singing a different tune--Solidarity Forever...
...Nevertheless, it is important to note that the initial process through which workers came to sell their labor-power in return for a wage was marked by force and coercion, not the "desire" of the workers to "earn money...
...What's more, pouring money into a country that was politically and economically unstable was clearly risky business...
...Still, as difficult as it may have been, J. Peter managed to keep a stiff upper lip while casting off' the corporate traditions...
...Carelton Beals, Latin America: World in Revolution (New York: Abelard Schuman, 1963), 34...
...By 1974 Grace had over 32 million shares of common stock outstanding, valued at $851 million and distributed among 54,000 stockholders...
...In short, Grace was symbolic of foreign capitalist penetration of Latin America...
...government...
...Ibid., 46...
...Growing popular opposition, sparked by rampant inflation, continued unemployment and environmental pollution, threatened to stall the expansion of the industry and shelved plans for a huge superport equipped to service the largest tankers bringing oil from the Middle East...
...oil and petrochemical companies have become the dominant investors in the area...
...The sugar harvested from the company's vast plantations on the coast went into the production of candies and rum, as well as raw sugar exports to the United States...
...The petrochemical companies seized upon this bargain and the massive flow of investments which followed deepened the exploitation of these countries, tying their economies more closely to U.S...
...Working hand-in-hand, U.S...
...Chase Manhattan Bank, the head Rockefeller bank, also holds 700,000 shares of Grace common stock in its trust department...
...chemical manufacturers...
...The Alliance for Profit We need to understand that today the choice in Latin Amirica is between democracy and Communism...
...in talking of pollution problems...
...Although J.Peter snorts that the GraceCorporation is not a conglomerate ("Whatever the hell that is"), operations in 45 states and 38 countries and an enormous list of sub- sidiaries surely marks W. R. Grace as one of the more company-hungry corporations around...
...Miami Herald, Feb.20,1974...
...Unidas Vitarte, Victoria, Inca S.A., three remaining textile mills, to Peruvians...
...PRELUDE TO INTERVENTION Trinidad more than any other Third World country has become absolutely vital to Grace's growth...
...Grace's interests seem to have been sacrificed for those of the other companies and for the general objective of restoring the investment climate in Peru...
...Curtailed Casa Grace merchandising operations in Peru, Chile and Colombia...
...6 7 AIFLD operates on three principles...
...Cerro proudly announced that it expected to receive a total of between 75 and 80 million dollars froni both parcels...
...But the parallel stops there, for the Seaway actually lengthened rather than shortened Grace's trips to Latin America...
...Both represented essential elements of U.S...
...But with the industry hitting rock bottom worldwide, Grace was not about to give up its trump card and jeopardize its survival in agrichemicals...
...The Graces were able to bolster their position in Peru at a time when that country was suffering both a drastic decline in its major revenue-earning export (guano), as well as long its critical nitrate fields in the War of the Pacific (1879-1884) and when the nascent Peruvian commercial-speculative bourgeoisie was being crushed in the process...
...Fundraising and AFL-CIO Impact Projects Prepared for Board of Trustees Meeting, September 14, 1965...
...New York Times, April 5, 1970...
...Grace quickly entered the second category...
...In 1%968, Grace was not only the only company vulnerable to the threat of nationalization, nor was it the only one ultimately affected...
...COMAP's tasks were tied to the first goal--developing and bolstering capitalist growth...
...4 According to the Peruvian Times, April 12, 1969, Grace lost $8.5 million in 1967 and 1968 due to currency devaluations in Peru, Brazil and Chile...
...The frenzied growth of petrochemical operations was slowed by the onset of the so-called energy crisis...
...Business Week, June 13, 1964...
...inferior in quality...
...Estimate made on the basis of information drawn from the Wall Street Journal, April 2,1975...
...AIFLD, "Notes to Estimated Budget, 1966...
...Through the EDA and the IDC the governments offered 100 percent tax exemption for extended periods of time (10 years in Trinidad, 10 to 17 years in Puerto Rico...
...It also began manufacturing other fertilizer products such as urea, ammonium and sulfuric acid, and spread its tentacles to other Caribbean islands including Aruba (Netherlands Antilles) and Jamaica...
...4 7 Finally, in late 1972, Grace sold the majority of its stock in Marine Midland back to that bank, absorbing a book loss of $20 million after taxes...
...Peru was forced to suspend all payments on its foreign debt...
...Grace, "A Consensus in Action," 8. 71...
...4 3 The continued super-profitability of these U.S...
...It had avoided the credit market and its long-term debt amounted to barely $3 million...
...corporations benefitted greatly from the investment incentives offered by Operation Bootstrap, the Puerto Rican colonial government could not protect them either from international developments or from the rising resistance of the Puerto Rican working class...
...I he need for a break-through in the deadlocked negotiations was attended to directly by the Executive Branch...
...Have you purchased a tennis racket from Herman's Sporting Goods in New York City or a toy at FAO Schwartz...
...Both objectives will face a major challenge from the militant trade union movement, particularly the United Workers Movement, and the independence forces, led by the Puerto Rican Socialist Party and other progressive organizations...
...For when William Russell Grace fled famine in Ireland, back in 1832, his search for money and adventure led him straight to the shores of South America...
...This interest was filtered through local producers's associations, with powerful lobbying skills and leverage at the national level...
...Ibid...
...25, No...
...desires...
...the company %as to receive a 51 per cent cash down payment with the balance to be paid over a ten-year period...
...Grace & Co...
...l Pulp and Paper, August 17,1968, 27...
...in countries that show the greatest inclination to adopt measures to improve the investment climate, and withhold aid from others until satisfactory performance has been demonstrated...
...2 0 The fertilizer industry had a large stake in this strategy and was well represented in its implementation...
...Puerto Rico set up "Operation Bootstrap" in 1948 and Trinidad passed the Aid to Pioneer Industries Ordinance in 1950...
...I'm always scared...
...Grace is one of the few companies to have passed through all three of these stages and it is for this reason, as well as for its importance in Latin America, that we have chosen Grace as the focus of this Report...
...Business Week, June 8, 1974...
...GRACE AIRMOLO PRODUCTS * AREA CODE 710e *a.411e 330...
...Transportation One of Grace's longest-lived and most well-known investments was in the field of transportation...
...They belong to what is known as the Consumer Products and Services Division at Grace...
...corporations...
...government which pumped $3 billion into chemical plants to supply the war effort...
...But in the short run, this strategy gave the capitalists a period of grace...
...Best's Market Guide: Corporate Bonds-Insurance Company PortfolIos, 1975...
...2 1 The W. R. Grace Company, in a pamphlet on fertilizer production, cited the old argument that the ability to meet future demand is based on high profits in the industry...
...ceases to belong to the industrialists who employ it...
...The W.R...
...1973...
...government excluded them from the oil import quota system established in 1959...
...finance capitalism...
...Through the Seaway a trip between Chicago and Venezuela took--80 days whereas the normal trip between New York and Venezuela took only 20 days (plus a few days to get freight overland from Chicago): chalk up a $2.1 million loss through miscalculation to the Grace Lines...
...Department of Commerce...
...wrappers, boxes, tubes...
...govern- ment's synthetic rubber program during World War II...
...Thus, until the end of World War 1, textiles occupied the second place in terms of Peruvian imports...
...By 1945, while still not full-fledged members of the U.S...
...According to company calculations...
...quickly came to dominate trade and finance in Latin America, while others, including the Barings and Barclays, became the merchant-bankers of the British Empire...
...5 3 Unlike chemicals, which is the foundation of Grace's present growth, the Consumer Group serves an additional purpose--quick cash...
...1 8 Grace's acquisition of Cartavio in the late nineteenth century is a vivid example of the denationalization process which occurred in the Peruvian economy at the turn of the century...
...This production flow highlights two important structural aspects of the industry...
...The Graces' separate branches in England, Latin America and, the United States worked in coordination to move products between the East and West coasts of the United States and Europe, with essential stops at Callao on both trips in order to deposit manufactured goods and pick up guano and other raw materials...
...government was encouraging this trend by simultaneously launching an anti-trust suit against DuPont, the largest chemical corporation, and by selling some of its "war surplus" plants to newcomers...
...While most chandlers worked out of Callao, Grace discovered he could beat the competition by loading a barge with supplies and towing it directly to the Chincha Islands...
...They have been aided by boards of directors, timely business alliances and opportune financial links...
...New York Times, September 15, 1963...
...The relatively good positions of these two companies in the ranking of the chemical industry gave Grace a firm foundation on which to build...
...The man who...
...Environmental pollution is a problem because there are so many of us...
...6 0 Thus, while both reports encouraged private investment in Latin America, Rockefeller, more than Grace, took a hard line on denying aid to those countries which "persisted in policies which discourage private investment...
...the executive vice president of Phillips Petroleum, ex plained his company's expansion into petroctfemicals on the basis of higher returns: "Crude liquid hydrocarbons (oil and natural gas) are generally priced in the vicinity of Ic per lb...
...By 1959 the U.S...
...In addition three family groupings, whose interests are closely intertwined with investment companies and banks, controlled approximately 20 percent of the stock...
...From Grace Company Leaflet to Their Workers workers to help increase their company's business and to improve productivity so that they can gain more from an expanding business...
...And these friendships were not limited to social engagements...
...war production levels had doubled and the future prospects for markets and raw materials looked bright...
...But a look at their work shows that misinformation, unsubstantiated assertions and undocumented scare stories formed the bulk of the Committee's production...
...Lawrence Seaway in order to ship goods to Venezuela...
...Peter Klaren, La formacion de las haciendas arucareras y los origenes del APRA (Lima: Moncloa Campodonico, 1970), 23 41...
...1969 Sold Vencedor, Peruvian paint and resins facility, to Millmaster Onyx, a U.S...
...Moreover, supplies of cheap domestic natural gas were plentiful...
...Grace's operations were responsible for almost all of Peru's paper and cardboard output...
...Tlhe bank had never seriously competed for small accounts or consumer loans...
...corporations and Puerto Rico's bourgeoisie tied high employment rates and "development" to massive inputs of foreign capital and technology...
...4 0 This capital/labor ratio is not expected to change as current expansion is still concentrated in the capital intensive in- termediate stage and the chemicals are shipped to the United States for processing into consumer items and industrial goods...
...The corporation as a whole was carrying a substantial debt and Grace wanted hard cash and a quick escape route if the tide of nationalism continued to rise...
...Reod-4m postage paid at New York, N.3 I. Amazing Grace L AN EMPIRE BUILT ON BIRD SHIT Throughout much of the nineteenth century, British capital dominated Latin America, given England's role as the world's most advanced capitalist country...
...Rqckefeller stressed that the problem was not in the amount of U.S...
...We cannot and indeed will not allow our black people to be further dehumanized...
...First, divide the working class by attempting to create a unionized...
...Puerte Rice: Profit Island, U.S.A., a public relations brochure published in 1974 by the colonial government of Puerto Rico, and Trinidad and Tobago: the Making of a Nation, published in 1962 by the British Information Services, an agency of the British government...
...and its repercussions on the company's global structure, requires an examination of the factors leading to the military government's attack on foreign capital and Grace, as a case in point...
...set the stage for a sharp, prolonged conflict with the "Peruvian Revolution...
...5 Most of this investment was channelled into the most capital-intensive sectors of Grace's operations, particularly chemicals...
...Needless to say, the economy as a whole sutlered the consequences: a growing balance of payments deficit, the stagnation of indigenous industrial growth...
...NACLA-East Grace Project ISBN No...
...Within four years, the company could hope to obtain $26 million in forced compensation.17 Conflicting interests were at play...
...Roger Burbach, "The Evolution of Imperial Institutions: The Chilean Ex perience," unpublished mss., 12...
...Grace, with ownership of over 40,000 acres of Peru's most fertile lands, was high on the list of foreign holdings ripe for nationalization...
...7 The company subsequently brought in Cuban exiles trained in the art of brutal exploitation at Grace's paper operations in pre-revolutionary Cuba...
...investors with an opportunity to expand their operations and profits in Latin America at the expense of U.S...
...found "the workers' sections of Cartavio and Paramonga distressingly dirty and crowded...
...It also severely restricted the development of a dynamic industrial bourgeoisie within the country...
...Nevertheless, for Grace to expand it needed to change...
...Mining is the only area of investment where Grace still maintains an interest in Peru today...
...In this sense, then, William Grace's relocation to New York at the close of the U.S...
...To maintain their monopoly over chemical fertilizers and to insure lasting supplies for U.S...
...In addition to its debt holding, First National City Bank has traditionally been considered Grace's head bank and shares with Grace a long history of interlocking directorships.1 4 Finally the Rockefeller empire maintains a direct influence in the company through the participation of Metropolitan Life.1 5 While this summary does not provide an in depth analysis of Grace's controlling interests, it does point to those forces (except for Flick) which were instrumental in the major switch in company policy in the early 1950's...
...The American Institute for Free Labor Development (AIFLD) sought to undercut the workers' response to the Alliance by attempting to control and modify the level of class struggle in Latin America...
...The Structure of American Industry (New York: Macmillan, 1961), p. 235...
...By the late 1950's, when 90 percent of the petrochemical output of the capitalist world was supplied by U.S...
...Secondly, the U.S...
...All these firms are...
...In the 1960's, Grace controlled 20 per cent of total sugar production, over 50 per cent of sugar refining and nearly 90 per cent of total paper production...
...Wall Street Journal, Feb,249, 1974...
...Roll over, William Russell, here comes the Grace of the seventies, its feet firmly planted in the chemical industry and a finger stuck in every consumer pie...
...18...
...they quickly dominated most of the incipient industrial activity...
...By August 1975 a presidential Ad-Hoc Advisory Group on Puerto Rico had recommended changes (now embodied in legislation before the U.S...
...We were better off than most of the other fertilizer makers" vice-president George Blackwood stated in 1969, "largely because of our big Trinidad ammonia plant's low production costs, our worldwide tanker distribution system and our East coast terminals...
...industry after the war...
...Second, fight labor militancy by fighting militant workers, "prevent Communist infiltration and where it already exists, get rid of it...
...The rebellion was crushed and a wave of repression was unleashed against the working class and unemployed...
...corporate world, propelled it into one of the "premier industries" of the U.S...
...The first article in this Report provides an historical overview of the company, discussing its beginnings in Peru, its expansion into new areas of investment in the twentieth century and its most recent acquisitions in the area of consumer goods and services...
...Sept...
...2 0 While an antendment to the Sugar Act was eventually passed...
...C. Sugar, Textiles, Paper Grace's empire in sugar and textiles began to shrink in the sixties although it continued to expand in the paper industry...
...I (Moscow: Progress Publishers), S55...
...Moneybags Transportation, sugar and textiles stood at the heart of the Grace empire by the end of the 1930's...
...Grace, in a cahoots with its oligarchical chums, took an active interest in political and economic developments within the country...
...The Graces and the Rockefellers represented two of the most important U.S...
...While the U.S...
...The second stage of imperialism, then, is characterized by foreign control of the basic productive resources of countries at a lower stage of development...
...The petrochemical industry began building pressure for a reform in the oil quota system and Puerto Rico became the sacrificial lamb...
...12 The struggle inside COMAP between Grace and Rockefeller is notable because it did not seem to be based on serious political differences...
...Despite their importance, both were sold in the sixties, although for different reasons...
...Andean Times, March 1, 1974...
...6 (December 1935), 158...
...7 Later the mergers of Deway and Almy and Davison provided the key management who still run most of Grace's chemical operations...
...Its tax exemptions and cheap labor force made for low cost production...
...2 4 "lhe skyrocketing prices, combined with a shortage in supply of fertilizers due to the industry's slump, wrought havoc in the T hird World...
...1 6 W.R...
...These were the cost differences that not only spelled Grace's survival during the U.S...
...Falling profits and the threat of nationalization menaced the company's very survival...
...7 In the nineteenth century, English commerce, backed up by English naval power, dominated international trade...
...Moreover, with the implementation of new reform decrees in 1973, additional U.S...
...Perhaps they meant "investment climate," for Grace soon moved to New York where he founded W. R. Grace and Company and lived for another 39 years...
...The largest mpany serving the West coast of Latin America, a major shipper of Latin American raw materials Vnnn ndrIrat Lm u- aA-.nn (Vr- . I- - panded to nitrates, sugar, copper, tin and other commodities...
...In Trinidad we have a black Government which is not working in the interest of the people, for they strive to perpetuate a system of capitalism, a system which serves to provide huge profits for the foreign firms like the Royal Bank of Canada, Alcan or Texaco Trinidad...
...crop land used fertilizer at the time, 1 9 the world consumption of fertilizer was increasing annually at 8.2...
...National Catholic Reporter (September 1969), 1. 76...
...Puerto Rico's total dependence on imported oil became a liability with the price rise for crude oil...
...IX, No...
...Ibid., 12...
...That's why I try hard...
...6 4 To combat this menace, Grace apparently believed that words spoke louder than deeds...
...More pertinent to the purpose of this article are two other aspects of Grace's global reach: first, its role as a fertilizer company in the context of the world-wide food crisis and, second, its thrust into the Caribbean in the search of cheap raw materials...
...The Graces sought to strengthen their claim to these holdings by linking them into a settlement with Peru's European bondholders...
...The retail dealers and distributors took advantage of the shortage to rip-off the farmers in this country, and the producers sold to countries like India and Brazil at inflated prices...
...The labor component of Grace's production process proved more difficult to re- structure than the capital component...
...The18 lion's share, over a quarter, is owed to Metropolitan Life, the largest insurance company in the United States.12 Finally, a commercial bank, the First National City Bank of New York, was reported in 1975 to hold an additional bloc of 7 percent of Grace's debt.13 Such concentrated holdings of the company's debt and stock explain not only the degree to which Grace has merged with banking capital and the dynamics behind its new growth, but they point also to a new coalition of interests which have established control over the company and make major policy decisions...
...In fact, the Rockefeller's pre-eminent position was soon apparent to all...
...Then you have helped ring the cash register of the W. R. Grace Corporation...
...cit., pg...
...when the Peruvian government protested the payment froni the lump sum of $22 million to Exxon Corporation in compensation for the IPC nationalization...
...T tng 28...
...and competition makes the immanent laws of capitalist production to be felt by each individual capitalist...
...In the highlands, landowners whose properties had already been forcefully seized by the peasants were compensated, while the remaining properties were left intact...
...Acquiring these companies in the early 1950's immediately placed Grace among the top 15 chemical companies in the United States...
...Ihus by December 1971, Grace and the Velasco government had hammered out an outline agreement for the gradual sale of Grace's remaining industrial assets and for compensation of the expropriated land holdings...
...19 The Peruvian producers had vanished...
...The company also rubbed shoulders with Peru's reactionary oligarchy...
...Ihe development of the W. R. Grace Company has closely followed this model of growth...
...Miami Herald, March 22, 1971...
...183 and 192, as quoted in Alfred E. Kahn, "The Chemical Industry," in Walter Adams (ed...
...fertilizer producer...
...l0 Grace's "coalescence" with financial institutions is most clearly demonstrated through the concentrated holdings of its stock and debt by the banks...
...We all contribute to the problem in one way or another and the efforts of all of us are needed if we are to solve the problem...
...Most of these efforts were part of Grace's plan to reduce the overhead costs of obligations it had contracted over years of building and maintaining these company towns...
...For more on AIFLD, see Susanne Jonas, "Trade Union Imperialism in the Dominican Republic," NACLA's Latin America Empire Report, Vol...
...congressional committee reviewing the Sugar Act Peruvian Times, April 30.1971,46...
...5 1 Thus, by 1972, J. Peter Grace had fundamentally altered the company created by this grandfather and father...
...Finally, in the third phase, underway in the early decades of the twentieth century and dominant by the end of the Second N orld War, foreign capital sought investments in the industrial sector of dependent countries...
...1 (April 1970),112.114...
...Although only one tenth of U.S...
...The Wall Street Journal, August 22, 1969 14...
...Many of the Foundation's annual gifts of more than half a million dollars a year go to Catholic charities and institutions ranging from wellestablished universities to such groups as the American Council for the International Promotion of Democracy Under God, Inc., which received $20,000 in 1%5.76 Other gifts are mostly overtly political...
...We will also look at the financial interests that control Grace as well as its role in the Caribbean, specifically in Trinidad and Puerto Rico...
...Grace's role as the second largest industrial employer in Peru was a primary aspect of the company's conspicuous and pervasive presence in the country...
...On the other hand, Grace, in partnership with International Paper...
...Grace and the Peruvians hIad finally agreed on something...
...Quarterly Bulletin of the Council for Latin America, Vol...
...company...
...The following article will discuss Grace's links with the banks and its other sources of capital at greater length...
...The first encouraged more U.S...
...In its mid-century survey, Fortune marveled over this "premier industry of the United States": (The chemical industry) now feeds all sixty-eight industrial divisions of the U.S...
...minimum standards by January 1, 1976, wiping out the cost differential which might have attracted new investments for the final labor intensive processing stage of petrochemical production...
...Grace also began to change the focus of its economic activities toward the end of the nineteenth century...
...taxpayers and the Latin American working class...
...The young Flick struck up a friendship with J. Peter Grace which later had Important economic ramifications...
...Years later, Grace would also acquire the Victoria mill...
...Grace accomplished this in the chemical industry not by major technological innovations but by using its capital resources to acquire smaller technology-rich firms...
...The conception of the Corco complex was to construct a self-contained stream of production from oil refining to the manufacturing of a whole gamut of consumer items for export...
...government and corporations...
...Rather, the dispute appeared to be much more centered on the question of who had hegemony in setting U.S...
...The apperance of the joint stock (or corporate) form reflects the evolution of private capitalist property from its individual form to its "collective capitalist" form...
...Corco, Summary Report, Annual Meeting of Stockholders in San Juan, P.R., April 28...
...Source: Fortune, November 1955 and September 15, 1968...
...corporations with severe im- plications for the Puerto Rican people...
...Limitations of Dependency: An Historian's View and Case Stuty, Boletin de Esfudios Latinoamericanos y del Caribe, No...
...2 8 THE CARIBBEAN CLIMATE GROWS PROFITS FOR U.S...
...conglomerate with sales of $3.4 billion in 1974...
...The only major exception to the financial blockade of Pet`6 until 1973 came in the form of U.S...
...government had financed extensive research and had built ten plants at a cost of $250 million to produce synthetic ammonia, a by-product of natural gas used to make nitrate explosives as well as nitrogen fertilizer...
...All we ask is that you keep an open mind and give us a fair period of' time in which to prove to you what the union already knows-IN GRACE NO ONE NEEDS A UNION PARTNER IN HIS PAY ENVELOPE...
...In addition 19 percent of the work force remains underemployed...
...Utilizing food as a weapon of U.S...
...During World War II, Flick continued to produce for Nazi Germany, taking over foreign properties and using slave labor in his factories...
...The Petrochemical Opportunity in Puerto Rico, published by the EDA, January 1975...
...business community in Peru...
...Both mechanisms are, in reality, indications of major developments within capitalism itself...
...In the final section of this article we will example J. Peter Grace's political activities in the 1960's, concentrating on his participation in the Alliance for Progress, the American Institute for Free Labor Development (AIFLD), and the Grace Foundation...
...New investment projects in the petrochemical industry jumped from 2 in 1974 to 12 in 1975 topped by the sudden take-over of Corco's $800 million assets by a small but aggressive Texas oil company, Tesoro Petroleum Corporation...
...In 1974 Grace began construction of a new fertilizer plant in Trinidad, valued at $80 million...
...And, since it operated in many areas characterized by pre-capitalist modes of production...
...Special loopholes were opened in the quota system in 1965 by presidential proclamation and within ten years four huge petrochemical complexes had sprawled all over the island...
...The same year the IDC was established Grace acquired a 49 percent interest in Federation Chemicals Ltd...
...Casa Grace," Fortune, 157, and Eugene W Burgess and Frederick H. Harbison, Casa Grace in Peru (Washington, D.C...
...was nearing the close of its second major period...
...needs.* The shortage of cheap domestic raw materials can be traced back to a general supply problem faced by the whole petrochemical industry in the early sixties...
...New contracts were being signed with the oil29 companies, investment rules were being revised in the mining sector and the vacuum left by several U.S...
...158 (Washington, D.C.: Government Printing Office...
...A complete picture, however, is not available as the bourgeoisie has taken great pains to throw a veil of secrecy over the details of corporate control...
...The latter failed to generate much en- thusiasm among workers living on subsistence wages...
...NACLA's Latin America & Empire Report, Vol...
...Sweetening the Empire: Grace and Peruvian Sugar In 1882, W. R. Grace received 5,800 acres of sugar fields as payment for a debt contracted by one Peruvian landowner who, like many of his peers, was crushed by the War of the Pacific and the Chilean invasion of the coastal sugar estates in Peru...
...One minute they tell you what a great and successful company W. . 1. Grace is * AND WE AGUI...
...refusing to accept Nelson Rockefeller's "goodwill mission" in Peru and continuing state intervention of foreign interests.1227 CASA GRACE IN PERU Investments in the Post War Period 1) Manufacturing Grace purchased controlling interest in a flour mill in the late 1940's and subsequently developed facilities for the production of various candies, biscuits, crackers, etc...
...The latter, known as the 'joint-stock' or 'corporate' form, grew up as a means which gigantically accelerated the accumulation of capital...
...Prior to World War II, U.S...
...As the company expanded, Peru remained the center of its hemispheric operations...
...The United Nation's Food and Agriculture Organization estimated that the loss of production in the 43 poorest countries of the world was equivalent to 2.7 million tons of grain, the margin between subsistence and starvation...
...imperialism could tolerate...
...6 3 Paralleling Kennedy's program ideologically and programatically, "It Is Not Too Late" set out Grace's personal attack against the spectre of "Kremlin-guided international communism," which swoops down on the poverty-stricken masses of Latin America, leading them down the road to "ultimate slavery...
...east coast capitalists had no competitive edge on British shipping to the Pacific ports of Latin America, since ships from both countries had to make the time-consuming trip around Cape Horn...
...firms, Grace had become the ninth largest of the U.S...
...Vice president W. R. Grace & Co...
...investments in Peru., was undertaking a careful review of the whole operating framework for investment disputes...
...W. R. Grace & Co., Fertilizer and Food Production...
...To tap both the equity and credit markets Grace had to rely on large financial institutions...
...While there were no ready made solutions to Grace's problems, the company was by no means ready to let its vast holdings in Peru go down the drain...
...W. R. Grace & Co., Annual Report 1969...
...foreign investments in the Caribbean have traditionally been asociated with sugar, tobacco, coffee and other crops which grow in the hot Caribbean climate...
...As bor Grace's landholdings, the company was to receive governnent bonds in return for its land...
...Both of these options had their drawbacks...
...Grace had sunk large amounts of capital into its Peruvian operations...
...The bonds could be redeemed for cash, however, if the amount were matched by new company funds and if the total were reinvested in industrial projects approved by the government...
...They have participated directly in the political arena, serving as elected officials,* as members of key policy commissions of the government, as well as helping to develop and promote governmental institutions supporting their position...
...Its hundred-year history has been marked by constant changes in both its economic and its organizational structures...
...were 100 percent of our business...
...Many of these larger trends are reflected in the development of the Grace empire both in the United States and abroad...
...the investment will probably not be realized unless prices produce returns sufficiently attractive for investors to put their money into the fertilizer industry...
...The in- vestment totalled $35 million and Grace exported the output to its Hatco Division in the United States for the manufacturing of plasticizers...
...The Grace company's near-bust at that time provided eight-year old i. Peter Grace, the company's future president, with his first business lesson...
...The Peruvian government began to settle an old 1.8 million pounds sterling debt with British bondholders in 1848 with profits reaped from the guano trade...
...Yanqui Dollar (New York: NACLA, 1971), 12 13...
...Goodsell, 136 137...
...While we are not prepared to enter into this debate, we are clear that capital in general has been shifting both the type and location of its investment since World War II, and that the question is much larger than why any one executive moves his or her investments from one place to another...
...3, No...
...3 9 The petrochemical industry is probably the most typical deterrent to the availability of more jobs...
...In the past 35 years J. Peter Grace has divested almost every trademark business from the com- pany's past while developing a far-reaching chemical-based conglomerate...
...capitalists sought a means to swing the balance in their favor...
...sparked by the technological innovations of World War II...
...as did Grace's joint interests in the Pacific Mail Steamship Co...
...Grace's efforts to coopt union leadership and de-politicize the character of labor struggles failed to eliminate serious and prolonged labor conflicts...
...There was a big rip-off last year," said Robert J. Eastman of Blyth Eastman Dillon and Co., a Wall Street brokerage firm...
...government had threatened what amounted to a full economic blockade, its actual tactics were characterized by what Anibal Quijano has described as...
...some of which may be detrimental to some U.S...
...It also suggested creating new loan programs and extending the previous government loan programs (such as the food-aid PLA80 program) to include loans made through private channels...
...In 1954 Grace began construction on its first fertilizer plant...
...From the 1971-72 levels, synthetic ammonia prices soared 1000 percent by 1975, phosphate chemicals followed with an 800 percent rise and phosphate rock jumped 470 percent...
...Goodsell, American Corporations and Peruvian Politics...
...small, multiple, unpainted and without running water...
...But there was doubt about what this meant for Grace as the nature of these new investments was fundamentally different from what characterized most of Grace's traditional holdings...
...Finally, Grace has increasingly centered its investments in capitalintensive industry...
...The first oil refineries were opened in the mid-1950's by Gulf Oil and the Commonwealth Oil Refining Corporation (Corco...
...Casa Grace," Fortbne...
...Since the beginning of 1975 there has been constant speculation in the Puerto Rican press about the imminent discovery of rich oil and natural gas reserves on the island and within its territorial waters...
...It hardly stood as a monument for the "concern and compassion" of U.S...
...V. I. Lenin, Imperialism (Peking: Foreign Language Press, 1970), pp...
...An influx of new blood and capital were the genesis of Grace's rising star...
...Yet, as before, the restless development of capitalism left the Graces no time to rest on their blue-chip laurels...
...In April, 1971, Grace moved beyond the bargaining table to the U.S...
...The ability of the SNA to shape government policy to its needs was a constant deterrent to agrarian reform in the pre-1968 period...
...Most countries were tbforced to cut back their fertilizer consumption yet pay more for what they got...
...Finally, in the third article, we examine some aspects of Grace's recent history in Peru, concentrating on the company's reaction to the nationalization of its property by the Peruvian government...
...In reality, however, the company's practice was abysmal...
...News & World Report, February 25, 1963...
...Industrial capital tends to merge with finance capital and soon banks and other financial institutions come to play a dominant role in the economy...
...By mniid-1973, the Nixon administration, eager to restore conditions for successful U.S...
...Flick has important chemicals interests, including 84 percent of Dynamit Nobel, a company with annual sales of $800 million...
...With independence came British loans, limited investments in mining, and immigrants...
...Grace prized its new acquisition because it was one of the few places in the world where natural gas was available close to a deep water port...
...But I don't think personal feelings ought to enter business decisions...
...8. See 0. C. M Platt, Latin America and British Trade, 106&1914 (New York Harper and Row, 1973...
...The vast majority of new U.S...
...citizens "for those less fortunate than themselves at home and abroad," although it was precisely the type of monument Grace wanted to erect...
...In its early years, as a representative of British capital, Grace was the archetype of the family-run commercial trading house...
...While Grace's interests represented an extremely high level of capitalist integration within the Peruvian context, the company's Peruvian operations had certain anachronistic features when seen in the context of Grace's world-wide operations.What's more, the company was facing some serious problems in Peru...
...enterprises continue to operate successfully...
...The third stage is the manufacture of the thousands of plastic, rubber, paint, textile, fertilizer and other goods with which we are all familiar...
...While Grace allowed the land to sit idle for the next nine years, this was an important turning point in his operations, for it marked Grace's formal entry into a sector of direct production...
...imperialism and the twentieth century multinational corporation...
...I'm always scared...
...Journal of Latin American Studies, Vol...
...In 1945, 90 percent of the company's profits came from Latin American operations, including shipping...
...1