Silesian-American Corporation
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Silesian-American Corporation, SACO – was a holding company for Giesche Spolka Akcyjna (Giesche Corporation), operating in Upper Silesia, Poland during interwar times. Silesian-American held 100% of Giesche Spolka Akcyjna stock. SACO was established in Delaware in 1926 and was owned by Silesian Holding Company: 51% of common stock and 58,33% of preferred stock. The remaining 49% of common and 41,67% of preferred stock went to Giesche’s Erben, a German corporation (full name: Bergwerksgesellschaft Georg von Giesche's Erben) – in return for the entire capital stock of Giesche Spolka Akcyjna.
Previously Giesche’s Erben was a sole owner of Giesche Spolka Akcyjna. Silesian Holding Company was owned by Anaconda Copper Mining (65%) and the remainder originally by W. Averell Harriman, and then by Harriman or close affiliates and associates. SACO gave substantial loans to Giesche’s Erben, too. The funds for take-over and loan purposes were obtained by selling $15,000,000 collateral trust sinking fund bonds maturing August 1, 1941.
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[edit] WWII
During WWII, when Nazi army invaded Poland, German military commissar took the control of Giesche Spolka Akcyjna. SACO was thus deprived of all income from the Spolka properties and was unable to pay dividends on its outstanding bonds. With the approach of August 1, 1941, the maturity date of the bonds, the company had only about half a million dollars in cash. Accordingly it filed a petition for reorganization under Chapter X of the Bankruptcy Act.
[edit] Repatriation scheme
Owners and leading managers of Bergwerksgesellschaft Georg von Giesche's Erben could not reconcile themselves to the deprivation of Giesche Spolka Akcyjna, which was bought by Americans in 1926. Eduard Schulte, Giesche’s Erben General Manager, set up a plan of regaining control on Polish corporation, which was called repatriation scheme.
Schulte had close relations with a group of Swiss bankers. Just before war he established a subsidiary of Giesche’s Erben in Switzerland, called Non Ferrum (full name Non Ferrum Gesellschaft zur Finanzierung von Unternehmungen des Bergbaus und der Industrie der Nichteisenmetalle) and transferred Erben’s stock of SACO to that new company.
In 1941 the Swiss bank LaRoche, acting jointly with Schulte, established another company in Switzerland, Ikap (Internationale Kapitalanlegen Gesellschaft). Schulte convinced Harriman and Cornelius Kelley (president of Anaconda Copper) to sell their shares in Silesian Holding Company to Ikap. Unfortunately Swiss paper work held matters up beyond June 14, 1941, when the US Presidential freezing order was extended to Switzerland. This subjected the transactions to United States Treasury Department scrutiny and approval. As it was obvious that the stock was to be held for the benefit of enemy (a German corporation Bergwerksgesellschaft Georg von Giesche's Erben), the application to the Treasury Department for permission to make the necessary transfers was refused on July 26, 1941. Two later applications (of August and December) were also refused. Moreover, in November 1942, Alien Property Custodian, acting under Trading with the Enemy Act, vested German owned shares in Silesian-American Corporation.
Order No. 370: Silesian-American Corp. Executed November 17, 1942, signed by Leo T. Crowley, Alien Prop. Custodian: “Two blocks of stock - 98,000 shares of common and 50,000 shares of preferred stock in the Silesian-American, a Delaware corporation [are being confiscated]. The stock, prior to August 31, 1939, stood in the stock book of Silesian in the name of Non Ferrum, Zurich, Switzerland, a Swiss corporation, which held the stock for the benefit of Bergwerksgesellschaft Georg von Giesche's Erben, a German corporation”. This was the final nail in the “coffin” of great Eduard Schulte’s repatriation scheme.
[edit] The post-war times
Before Silesian-American was finally dissolved, it took part in several legal proceedings in the 50’s, mainly raised by its bondholders.
[edit] Sources
United States Court of Appeals Second Circuit, Dec. 26, 1950. CONWAY v. SILESIAN-AMERICAN CORP. (which may be found at [1] )
Sixteenth Annual Report of the Securities and Exchange Commission, Fiscal Year Ended June 30,1950, United States Government Printing Office, Washington: 1950 (which may be found at [2] )
U.S. Supreme Court Dec. 8, 1947 SILESIAN AMERICAN CORPORATION V. CLARK (which may be found at [3] )
United States Court of Appeals Second Circuit April 13, 1953 CONWAY v. UNION BANK OF SWITZERLAND (which may be found at [4] )
United States Court of Appeals Second Circuit, Second Circuit. July 3, 1946 SILESIAN-AMERICAN CORPORATION et al. v. MARKHAM, Alien Property Custodian (which may be found at [5] )
United States Court of Appeals Second Circuit Dec. 6, 1956 SCRIBNER & Miller v. Francis CONWAY, Trustee of Silesian-American Corporation (which may be found at [6] )
Time Magazine Jun. 14, 1926 ([7] )
Also a lot of Polish language sources, concerning mainly the history of Silesian industry, the history of Katowice and its districts, web pages of particular Polish coal mines. For example: [8] [9]
The book “Secrets of Upper Silesian Corporations” by Jerzy Jaros – in Polish („Tajemnice górnośląskich koncernów” Śląski Instytut Naukowy, Katowice 1983)
