By Wm Garrett Cothran
Conspiracies and history seem to go hand in hand.
Lurking in the shadows behind every fact, there is the “real history” of an event. Yet while most conspiracies tend to be laughable in how much control a group would have had to have or how perfectly a plan would have had to worked, examining one does allow a person to sit back and see an event and learn new things around it.
If one is an American, some of the biggest conspiracy theories revolve around the 35th President of the United States: John F. Kennedy. We all know the history behind his assassination in Dallas: Open top limousine, lone sniper in the text book depository, Jackie in that pink outfit, “back and to the left”, and a secret service man leaping onto the limo and keeping everyone’s heads down.
Want to know the real history?
Well, not the real history, but rather a "theory" to the assassination which fits into a conspiracy theorists world-view. One starts by glancing at the conspiracy theories around JFK on more reputable websites, then gets inevitably drawn into the seemingly endless swamp of online conspiracies around JFK. If you listen to some, JFK was killed by the New Orleans mafia, because Robert Kennedy (then Attorney General) was cracking down on them. Others allege JFK was killed by the CIA, using a sniper upon the grassy knoll. Or there is the theory that JFK was actually killed by a poison dart shot from a custom-made weapon held by “The Umbrella Man,” and the shots were just decoys. Vice President Lyndon B. Johnson did it, or Israel did it, or even Jackie-O did it!
The one theory that is the most plausible (at least to this author) is that Oswald did shoot twice, but a secret service agent holding an AR-15 in the car behind JFK's limousine accidentally fired his own firearm. (This particular conspiracy is interesting insofar that any coverup is about protecting a secret service agent from being “the man who shot the President.”)
Now ,these may seem silly, but in reading up on the entire affair, one may learn about "Executive Order 11110" - and how what really killed JFK was an attempt by the Rothschilds and the Federal Reserve to maintain total control over the US economy!
(Fair warning: if one does read up on said theory they will get the very clear implication that one is expected to replace Rothschild with “international Jewish conspiracy.” Making this an example of the sadly all-too-common antisemitic garbage you see all too often).
However, upon reading this you may also notice something called the “Great Salad Oil Swindle.”
(Some research on the subject refers to it as a scandal but swindle just sounds better. Apologies).
We had to go through these conspiracy theories and all the bunk above just so we can get to the main focus of this article, which is a seldom talked about event in US history which was overshadowed by the assassination of JFK. Before getting into the details, and also speculating the impact on history had things not occurred as they had, some context is required: In 1963 Allied Crude Vegetable Oil lost $150 million in seemingly two days. Adjusted for inflation, that would be $1.2 billion dollars in 2019. While living in the shadow of the Great Financial Crash, losing a billion dollars might not seem that high, you should still try to keep that number in mind.
Anthony “Tino” De Angelis was a con-man. He put on a good show as a businessman but he was always seemingly doing a con of some kind. Oh, the companies were real... but the products never were. In his teens in the 1930s, Tino worked in the New York City fish yards, and even managed over 200 employees before finishing high school. In 1946, President Truman passed the National School Lunch Program, and Tino saw a way to make money. He had learned through his business contacts, that the US government would take almost anything offered it to fill the national mandates for school lunches.
So Tino went out and bought up the Adolph Gobel Company via loans and investors ,and quickly set about overcharging the US government for meat to the sum of $34,000 ($448,705 in 2019). What brought Adolph Gobel down was not overcharging - which a quick glance at the program showed this was common until the second term of President Eisenhower – but that fact that Tino shipped over 2 million pounds of uninspected meat. It has to be said that this did not lead to any recorded issues amongst the school children, but it quickly made the federal government move Adolph Gobel from being a “primary” supplier to merely an “emergency supplier.”
As a result, by 1953 Adolph Gobel, had gone bankrupt. Nevertheless, Tino had already made enough of a profit to allow him to form the Allied Crude Vegetable Oil Refining Corporation, along with and three other corporations, by 1955. Unfortunately, these were also based on Tino deciding on a new con to make money.
In 1954, the US government set up the Food for Peace Program (said name not being official until 1961) in which surplus products were sold to Europe at a low cost in order to shore up the weak post-war economies. Setting up shop in a tank farm (petrochemical storage, not armoured vehicles), Tino seemingly had a legitimate business as he made deals with grain exporters and other agricultural companies. In truth, it seems that much of what Allied did was buy substandard (and thus not fit for US consumption) shortening and vegetable oil at market cost on credit, and then sell this on to Europe with the US government covering the market cost of the goods plus a 10% mark up. All Tino's company did was move goods around, but by 1961, he had become a major food exporter to post-War Europe. In 1960, the Allied Crude Vegetable Oil Refining Corporation made close to $37 million (it should be noted that given how Tino ran the business, this may be a massive understatement, as Tino did not like paying taxes), which was used to leverage a few loans to expand his “Tank farm” to hold more and more vegetable oil.
1961 is the year that Tino decided to “think big” and soon he was selling cotton, soybeans, and various other “scraps” that US companies did not want, but European countries needed. By 1962, Tino decided his network of suppliers and distributors was strong enough to allow him to make a play to corner the entire global soybean market. Soybeans were starting to see a spike in price, partly due to natural price variation in the markets, but this we exaggerated by Tino making a series of large scale purchases. Playing on the value of soybean oil futures, Tino then went to Wall Street and got every loan he could - and in large amounts.
What is important to note is that these loans were being used not just to buy soybean futures, but also to pay for the day-to-day operations of Allied Vegetable Oil. In hindsight, the alarm bells should be going off, as this was a clear sign not of a functional business but a scam, but one needs to recall that legally and business-wise there is nothing inherently wrong with using a loan to pay for a company’s operating costs.
The issue, though, was that Tino needed more and more money to help pay for his efforts to corner the market - so he promptly sought new investors. With the price soaring, larger companies were looking at the value of soybeans and deciding they must be a solid investment.
Tino was therefore taking out loans to buy up soybean futures and in turn selling those futures at a marked-up price to investors, before reinvesting the money to go around again. And again. And in the Fall of 1961, Tino met with American Express and the real money arrived.
Of course, American Express in the 1960s was one of the largest credit card and traveler’s check companies in the world. Every single day, Amex handled $50 million in foreign travelers’ currency alone (equivalent to $600 million in 2019), and for many businesses in the USA, Amex was the major financial institution. What is key here, is how Amex and other financial companies engaged in “Field Warehousing” - which was giving loans to businesses based on the inventory of their goods. Tino, while a brand-new customer on paper, legitimately had enough vegetable oil to make Amex write him receipts for millions of pounds of oil. Tino would then take these receipts (which, with the Amex label, made their legitimacy unquestionable) and sell them to brokers or banks for money. The receipts would then grant the purchaser ownership over the inventory.
Around the Spring of 1962, these exchanges were becoming more and more common. Tino and Allied Vegetable Oil were enjoying seemingly impossible profits and, by all accounts, was sitting on nearly all of the vegetable oil on the market. In truth, Tino was selling pieces of paper which claimed to represent vegetable oil, but actually were more and more representing simply water.
What is important to note is that Amex and other banks and brokers were not just taking Tino’s word for it. For every single transaction, someone would head over to the pristine and well-staffed Allied Vegetable Oil company and check the volume of the tanks. And, every time, the measuring stick found oil, right to the top of the tank. However, if one is at all familiar with science, it is immediately clear how Tino pulled off the scam: he simply added water to the tanks of oil. The water bulked up the volume and the oil floated on the top, conveniently accessible to the measuring stick.
As time went by, Tino made more elaborate systems to cover up his lack of oil. In one case, he set up a series of pumps and pipes to move oil from one tank to another at high speeds. Tino would ask an inspector where they wanted to go and would then distract them long enough to shift the oil around. Thus, even one month before his scheme was uncovered, nearly every single inspector found nothing to worry about with Tino’s operation.
So how did this all come crashing down? You could trace the crash back to October of 1962 when the government began to investigate the “general sales and financing” procedures of Tino. This was not actually focused on any notion that the oil Tino was selling didn't in fact exist, but rather on a suspicion that Tino was engaging in a mixture of insider trading (Tino was seeking loans from companies which were seeking to diversify their investments before said company went public with such information) and "puffery" (which according to the US Federal Trade Commission is a term frequently used to denote the "exaggerations reasonably to be expected of a seller as to the degree of quality of his product, the truth or falsity of which cannot be precisely determined").
This is interesting in hindsight because there were never any indications that Tino sought out clients and investors by anything more sophisticated than seeing whoever had the most money to loan out. As for the puffery charge? Well, that soon evolved into concerns of outright fraud when the government began to question how Tino could buy up so much vegetable oil that he apparently held more than the entire supply in the whole USA (based on Department of Agriculture figures for 1963).
One advantage Tino had had was that Amex had several much more time-consuming and demanding clients than Allied Vegetable Oil, and Tino was a very large customer. The Amex field warehousing operation was simple, quick, and did follow all existing due diligence processes showed Tino was doing just fine (and, while hindsight tells us the inspectors were easily fooled, do recall that the oil is stored tanks holding in 100 to 800 thousand gallons at a time). As Amex, with its worldwide reputation for quality, was happily vouching for the oil inventories, Tino gained investors from Bunge Limited, Staley, Goldman Sachs, Chase Manhattan, Procter and Gamble, Bank of America... and even the Bank of England threw four million British pounds (equivalent to nearly £70 million in 2019) at Allied Vegetable Oil. By Hallowe'en in 1963, Tino and his company were sitting on a considerable pile of cash, with investors eagerly waiting to make a profit off of their share of the vegetable oil.
By now it should be obvious what was inevitably about to occur. Tino had been issuing collateral on loans for millions upon millions of pounds of vegetable oil. Companies were handing over money freely and seemingly without limit. It came crashing down on Friday November 15th 1963, when inspectors looked into Allied’s business in more depth. Men arrived... and someone decided not use not just a measuring stick, but a bucket.
As the bucket fell in, inspectors saw the water swirl around and separate from the water. Checking two more tanks showed that all were almost full of water where there was supposed to be vegetable oil. This was reported, by phone call, at 10am.
By 11 am, the entire futures market for vegetable oil was shattered. It plunged so rapidly, that Allied Vegetable Oil would file for bankruptcy within four days, on Tuesday November 19th. But on the Friday of that week, the 22nd of November, JFK would die. And this would overshadow all of the Salad Oil Swindle.
The New York Stock Exchange, the Federal Trade Commission, multiple banks and some investment firms met the day after JFK died and mapped out a process of bailing out companies like Amex and Bank of America, while stabilizing the markets - under the cover of the grief that had stunned America, successfully cutting short what could have been a drastic “fire sale” mixed in with bank runs by investors. Some men like Warren Buffet inflated their vast fortunes by buying into Amex in this period, in effect saving the company from drastic loses, but gaining the lions share of available stock at the time. Had many investors not been as stunned as everyone else, they would probably not have succeeded in stabilising things as they did.
Now - here is where things become interesting from an alternate history perspective. JFK and Alternate History go hand in hand, but very seldom does someone focus on the economic effect of having JFK survive. What if JFK did not go to Dallas?
Well, it is very likely that the US government would have ordered the Securities and Exchange Commission to take control of the New York Stock Exchange and “fix it.” Imposing controls and management and more. Things which today are not very shocking, but at the time, it was clear that investors (from both large and small brokerage houses) used any sign of weakness as an excuse to pull out their money. If one adds in the banks which were liable to go down and US Federal Insurance for bank account holders, it was possible that the US government would need to cover $430 million ($3.6 billion in 2019) on top of either bailing out US banks or allowing $1.7 billion ($14 billion in 2019) to simply fail.
The flip side of this is that the US government may well have done nothing but trusted the businesses to handle this issue on their own. The Secretary of the Treasury at this time was one C. Douglas Dillon, who worked well with both JFK and LBJ, but had staunch Republican economic leanings. Dillon was anti-tariff and often spoke of “the need for the strong companies to thrive at expense of the weak.” Imagine such a man in any position of authority in a scenario where the USA is not mourning the death of a President, but instead one where the banks are still open, where people know companies are falling, and the scandal of Tino and Allied Vegetable Oil is not only a major news headline, but nothing exists to make people ignore it.
All of this almost happened because one man was selling water as if it were vegetable oil. It seems almost morbid to say that JFK dying saved the economy. Yet if one looks into the Salad Oil Swindle it seems like one of those moments when the nation faced a real and tangible threat to its stability. Think of the 1960s and all which occurred in that decade. Now imagine that same time period with a depression or long-term recession triggered in 1963. Does the US get into Vietnam? Does LBJ pass civil rights? Does the USA land on the moon in 1969 or do they spend the money elsewhere?
While they might seem two totally separate events, the Salad Oil Swindle and the Assassination of JFK are connected, with the latter turning the former into an easy-to-forget hiccup in US economic history. Yet, as is true with all history, asking “what if” leads to some very exciting ideas.