by Joseph Borkin and Charles A. Welsh

extracted from 'Germany's Master Plan - The Story Of Industrial Offensive'

1943

No better insight into the German strategy of economic war could be contrived than the history of Interessen Gemeinschaft Farbenindustrie Aktiengesell-schaft, commonly known as I.G.*

* Community of Interest of Dye Industries, Incorporated.
 

The record of I.G. in the twentieth century is a recital of Germany's attempt to use scientific achievements to control the world.

I.G.'s commercial peacetime monopolies have been the support for its services to Ger- man militarism. I.G. has never foregone an opportunity to turn a pretty penny in a business sense, however, if Germany's interest permitted. Time after time financial profit has been subordinated by I.G. to nationalistic aims. While I.G. may prefer to gain its own ends and enhance the power and wealth of Germany by economic means, it has consistently abetted and given force to purely military plans. The audit of I.G.'s contributions to Germany's martial designs is long.

The antecedents of I.G. reach far back into the industrial revolution of the nineteenth century, specifically into those developments which resulted in the establishment of the coal tar chemical industry. The history of coal tar chemicals is in itself one of the most fascinating phases of nineteenth-century industrial development.

In 1856 in the course of his experiments with coal tar, theretofore regarded as an interesting but essentially useless material, a young English chemist, William Henry Perkin, found that it could be transformed into a synthetic aniline dye. This discovery was to bring Perkin (later Sir William) world-wide acclaim.

The glory of a major scientific contribution belongs to Perkin and to England, but Germany usurped the gain. At the time of his discovery Perkin was only 18, still a student of the famous Professor Hofmann at the Royal College in London. Perkin had started out, strangely enough, to prepare artificial quinine. He wound up with a delicate purple solution called mauveine, which was to give name to the Mauve Decade, and to color the future military and industrial history of the world.

Perkin himself understood the profound and revolutionary nature of his findings, but the mentally stuffy industrialists of Victorian England failed to grasp their significance. Exhibiting a complacency which would repeatedly imperil the British Empire as the future un-folded, neither the Government nor British capital supported Perkin's struggles to found a coal tar industry. In time this lack of insight so exasperated Perkin that he reproached them for the dalliance and lack of imagination which cost them the industry.

Had Perkin's genius and patriotism been given the recognition it merited, England could have become the leader of the organic chemical industry. What is more, there might have been no I.G., and without I.G. Germany could not, twice within a generation, have filled the vials of wrath and hurled their Prussic acid in the face of the world. What might have been was not to be. Perkin's brilliance could not compensate for the dilettante attitude of the universities toward chemical research or the dullness of official and financial minds.

If England was not sufficiently prompt and alert to change, Germany immediately seized on Perkin's discovery. Within a few short years the parent firms of I. G. Farben had been established, and their grip on the dye-stuffs industry made secure. German chemists entered upon a perfect frenzy of research. Perkin's own teacher, Hofmann, returned to Germany and helped found the new laboratories.

When Perkin's next contribution to the industry, the preparation of an equivalent for natural red dye (madder), was announced and patented, he found that Dr. Caro of the Badische Anilin Works had been before him. Perkin's patent was dated June 26, 1869, Caro's had been issued June 25. The processes were somewhat different, but the Germans had won a major research victory symbolizing their capture of the initiative in the field, which they never lost.

Because of Germany's "patent" system in those early years, there were no barriers to the foundation of the industry. The well-financed organizations formed between 1856 and 1880 expended huge sums on research and chemical facilities. As early as the end of the Franco-Prussian War, the ancestors of I. G. Farben were all strong "going" concerns. Once under way, the establishment of the German patent system of 1877 placed in their hands a shield and a spear. German patents in the hands of German industry have been a branch of Ger- man arms since that time.

The names of the firms which were eventually to become the I.G. are worth noting, for their trademarks have carried the banner of German economic imperialism to every land.

These firms are:

• Badische Anilin & Soda Fabrik, of Ludwigshafen

• Farbenfabriken vorm. Friedrich Bayer & Co., of Leverkusen

• Farbwerke vorm. Meister Lucius and Bruening, of Hoechst am Main

• Aktiengesellschaft fur Anilinfabrikaten, of Berlin

• Leopold Cassela & Co., m.b.H., of Frankfurt

• Kalle & Co., A. G., of Biebrick.*

* See Appendix.

These concerns in time became known as the "Big Six" and were from their inception primarily responsible for the amazing growth of the German chemical industry.

Germany's economic might was "built out of a sandbox" by her chemical and metallurgical industries, and the Big Six were the principal artificers of the gigantic structure. The methodical but almost frenetic determination which inspired German research did not observe any scruples in "borrowing" inventions from other countries.

As Perkin told the story to Lord Exmouth:

He went so far as to say that, for years before he left the business, he and other English chemists had entirely abandoned attempts to patent their discoveries in Berlin.

 

He had found, by sad experience, that whenever he sent over an application for a patent on a new dyestuff, or new chemical compound of importance, the German Patent Office would at once call in, for consultation, the leading German chemists who were interested in that line of work.

 

He would get request after request for more and more detailed information about every part of the process; and then, when they had got from him every bit of information that they could, they would grant the patent to some one of his German competitors...²

The attitude taken by the German chemical concerns toward the industries of other nations reflected the same chauvinistic inspiration that underlay her political and military views:

an overweening ambition to acquire a "place in the sun," driven by a transcendental assumption of the predestined supremacy of German Kultur.

While this psychological motivation may have been mystical and even irrational, the commercial relations of the Big Six exhibit a completely realistic "trading philosophy" in the course of their transactions with other countries and in the adaptability of their management to domestic political and social changes.

Rapid growth, increasing economic power, and a tendency to carry industrial integration both vertically and horizontally to its limits favored the Big Six in their single-minded pursuit of world-monopoly in the organic chemical field. After it was too late, England realized that it had lost the coal tar industry.

The British Government became aware that the German economic offensive had been mounted, and that the citadel of Eng-land's historic industrial leadership had been surrounded. That the tactics of I.G. today are an extension of the early practices of its forebears is witnessed by the statements of Joseph Chamberlain in 1883 and Lloyd George in 1907.

Chamberlain, speaking in support of the proposed compulsory licensing of patents in Great Britain, said:

It has been pointed out especially in an interesting memorial presented on behalf of the chemical industry that under the present law it would have been possible, for instance, for the German inventor of the hot blast furnace, if he had chosen to refuse a license in England, to have destroyed almost the whole iron industry of this country and to carry the business bodily over to Germany.

 

Although that did not happen in the case of the hot blast industry, it had actually happened in the manufacture of artificial colors connected with the coal products, and the whole of that had gone to Germany because the patentees would not grant a license in this country.

In commenting on this, Lawrence Langner, a "well-known authority on International Patent Law, says:

In other words, the first British compulsory license law was directed against the practice of the Germans in taking out patents on the chemical industry in Eng- land and using those patents to kill the British chemical industry.

Lloyd George reiterated Chamberlain's view in 1907, in discussing prospective revision of British patent law, stating that:

Big foreign syndicates have one very effective way of destroying British industry. They first of all apply for patents on a very considerable scale. They suggest every possible combination, for instance, in chemicals, which human ingenuity can possibly think of.

 

These combinations the syndicates have not tried themselves. They are not in operation, say, in Germany or else-where, but the syndicates put them in their patents in obscure and vague terms so as to cover any possible invention that may be discovered afterward in this country.

In 1904 one of the decisive events of modern economic history transpired almost unnoticed. Dr. Carl Duisberg, one of Germany's foremost chemists, later Chairman of the Board of I. G. Farben, prepared a special report in which he proposed the complete unification of the Big Six into an Interessengemeinschaft.

The three largest firms, Badische, Bayer, and Berlin, immediately entered into the first I.G. in 1904. Shortly afterward, Hoechst, Kalle, and Cassela formed a separate cartel.

Mutual competition was eliminated, and technical experience and resources were pooled, with the result that the German twins had attained an almost absolute monopoly in the organic dyestuffs, pharmaceutical, explosive, and synthetic chemical industries of the world. Within a few years the two groups were fully united, and in 1916, when the Weiler ter Meer and the Griesheim Elektron companies were brought in, I. G. Farben's internal integration was complete.

From 1904 to 1914, I.G. made every effort to overcome Germany's dependence on foreign sources of supply.

The preparation for the first "Chemists' War" in those ten years was carried on with characteristic Teutonic thoroughness. The chemical industry was welded into a huge arsenal. The economic structures of the countries which stood in Germany's way were corroded by systematic infiltration of I.G.'s chemical patents.

Germany in 1904 was dependent on Chilean deposits for the nitrates used in fertilizers and explosives. The outbreak of the war was delayed several years until I.G. had perfected the Haber process for artificially fixing nitrogen. Literally, I.G, plucked enough nitrates from the air to feed German farms and cannon.

No sooner had war begun than the High Command cast about for a new and secret weapon with which to surprise the Allies. I.G. placed in the hands of the Kaiser's legions one of the most terrible of all implements of war: poison gas, the use of which was suggested by the same Professor Haber who had solved the nitrate problem.

Major Victor Lefebure, British Liaison Officer between Britain and its Allies on Chemical Warfare, reported on the preliminary research on gas at the Kaiser Wilhelm Institute as follows:

... There is evidence that the Kaiser Wilhelm Institute and the physico-chemical institute near by were employed for this purpose as early as August, 1914. Reliable authority exists for the statement that soon after this date they were working with cacodyl oxide and phosgene, both well known before the war for their very poisonous nature, for use, it was believed, in hand grenades. Our quotations are from a statement by a neutral then working at the Institute.

"We could hear the tests that Professor Haber was carrying out at the back of the Institute, with the military authorities, who in their steel-grey cars came to Haber's Institute every morning."

"The work was pushed day and night, and many times I saw activity in the building at eleven o'clock in the evening. It was common knowledge that Haber was pushing these men as hard as he could."

Sachur was Professor Haber's assistant.

"One morning there was a violent explosion in the room in which most of this war work was carried out. The room was instantly filled with dense clouds of arsenic oxide."

"The janitors began to clear the room by a hose and discovered Professor Sachur."

He was very badly hurt and died soon after.

"After that accident I believe the work on cacodyl oxide and phosgene was suspended and I believe that work was carried out on chlorine or chlorine com-pounds."

"There were seven or eight men working in the Institute on these problems, but we heard nothing more until Haber went to the Battle or Ypres."

It should be pointed out that the dyestuff plants required no "conversion" either to the manufacture of gases or explosives. The basic and intermediate dyes are in themselves the direct sources of numerous military products.

These efforts by I.G. were not so widely advertised as those of Krupp, but were even more important, for without them Krupp's cannon would have been useless.

Ludendorff, Chief of the German General Staff:

... supplements our information by telling us how he discussed the supply of war material with Herr Duisberg and Herr Krupp von Bohlen in Hal-bach, "whom I had asked to join the train" in the autumn of 1916. The former was the Chairman of the I.G., the great dye combine.

Even today we do not know exactly when I.G. produced the new type of T.N.T. which was used in German shells. Germany lacked aluminum for metal alloys and thermite bombs. I.G. brought forth magnesium. If Germany finally succumbed, it was not for want of anything that I.G. could do.

The force which I.G. added to the German drive was given even greater impetus by the economic weakness of the Allies. Not only had I.G. fortified Germany against blockade, but I.G.'s control of patents and "know-how" made it almost impossible for England or the United States to build and operate the chemical plants they needed so desperately in the World War. In common with other German international concerns, I.G. representatives had for many years conducted the most complete industrial intelligence service then extant.

The invaluable knowledge thus accumulated was analyzed both by the German Government and by a central industrial bureau. This mass of data, which included geographic surveys, plant blueprints, working methods, and every conceivable fact which might be relevant, was the original basis of geopolitical science. The I.G. Sekretariat in Berlin has been, since its formation, a clearing house for the observations of its representatives, and undoubtedly possesses a quantity of such data existing nowhere else on earth.

The value of I.G. to Germany in 1914-18 is summarized by Major Lefebure in "The Riddle of the Rhine" in prophetic language:

On broad lines, the pre-war and war activities of the I.G. produced the same result as an attempt to strangle the economic life of possible opponents, enfeebling their resistance to the subsequent delivery of a hammer blow designed to take maximum advantage of the situation thus created. Twenty years or more under the regime of a forceful economic policy, not without its sinister aspects, prepared the ground by weakening us in the concentrated chemical warfare which ensued.

 

The success of this policy maneuvered us into such a position that we barely escaped defeat under the hammer blows of German chemical aggression. This in fact appears to have been the German conception of modern war in its relation to industry...

 

 

German sources tell us very little of the war activities and future significance of the I.G. A veil of secrecy seems to be cast over the whole matter, but be- hind this veil must exist an acute realization of the value of the I.G, as a trump card for the future. Krupp is uncovered, the whole world was alarmed at its meaning for war, but heard with a comfortable sense of security how Krupp was exchanging the sword for the plough. But the gigantic I.G. controls in its great hand a sword or plough for war or peace at will.

Germany lost the war, but neither by this loss nor during the period of social unrest and inflation which followed was the strength of the chemical combine vitiated. I.G. was stronger at the end of the World War than at its beginning, because the war increased the tempo of its production. While it ostensibly passed through a critical period of reorganization, it actually lost no time in surveying its future possible courses of conduct, and reforming its network of commercial contracts with the markets of the victors.

The failure of the Allies to recognize that I.G. was not disarmed was not only criticized by Lefebure but by all who had directly suffered from the war activities of I.G. This oversight, whether due to the political myopia of the Allies themselves or to the astute dissemblance of the guiding interests in I.G. Farben, had repercussions in the war to come. I.G. concealed from prying eyes what it could of its real operations.

The British Chemical Mission in March 1920 reported that:

... the German manufacturers, consisting of the powerful I.G. combination, were careful to do all in their power to hinder the work of inspection.

An American observer, Lieutenant McConnel of the United States Navy, states:

... Upon arrival at the plant the Germans displayed a polite but sullen attitude. They seemed willing to afford the opportunity of a cursory inspection, but strongly objected to a detailed examination. On the third day of the visit the writer was informed that his presence had become a source of serious objection and that if his examination were prolonged a formal complaint would be submitted to the Peace Conference.

A foreign representative of the duPont company in 1920 said:

... Disarmament is a farce while Germany retains organic chemical monopolies.

Late in 1925, the present I.G. Farbenindustrie was organized, including in its framework the preponderant bulk of German chemical companies.

At the time of its renaissance, I.G. was capitalized at well over a billion marks and became, by virtue of its enormous plant, working force, and interests, one of the greatest industrial combinations in history. The reborn I.G. launched at once upon a massive program to unify control of the German economy. Krupp, Metallgesellschaft (the metal trust, partly government-owned) and Siemens-Halske became willing brothers-in-arms, under the aegis of I.G.

I.G. was now in position to begin its penetration of the chemical, pharmaceutical, and metallurgical industries and markets of the world. In particular, I.G. sought to form connections with the industries of the United States, Great Britain, and other industrial powers, at the same time that it extended its own distributing outposts around the globe.

As stated before the Temporary National Economic Committee, the "colossal ramifications" of I.G.'s interests cannot be exhaustively indicated.

It is probable that even after the protracted investigations by students and by government which have been under- taken in recent years, not all of I.G.'s links to American industry or to South American markets have been brought to light. It is even more certain that all of its relationships outside this hemisphere have not been disclosed.

Yet we know enough of them to state that I.G. at the outbreak of war in 1939 surpassed any single industrial group in the world in its scope of influence, in the diversity and range of its interests, and in the magnitude and comprehensiveness of its affiliations.

I.G. was and is by all standards of measurement the largest corporation in Europe, and one of the largest in the world, ranking below only the insurance and utility companies, and the colossal Standard Oil (N.J.). As an industrial combine, however, it is certain that I.G. is among the handful of truly world-wide international industrial concerns.

The terms "monopoly" and "cartel" are inadequate when applied to I.G. It is an agglomeration of monopolies and an aggregation of cartels. Beyond German borders I.G. is an international monopolist and, by reason of the number and size of international cartels in which it is a leading, if not in all cases a dominant member, there is justification for adding to the descriptions commonly employed to indicate the scope of I.G.'s interests.

It is estimated that I.G. is a party to or the actual promoter of several hundred international cartels. Consequently there is sufficient excuse for coining a term which conveys a more accurate impression than monopoly or cartel. Perhaps by compounding the idea of universality and absolute control a term such as "panopoly" would be more fitting. In any case, I.G. represents the acme of pan-Germanism in the economic sphere.

I.G. in 1926 was the greatest combine ever formed in Germany, and its destiny of larger significance than that of any predecessor.

The thrice-reincarnated I.G. was to become the chief advance agent of the Third Reich in the latter's pre-war machinations, not only for the pur-pose of hewing out the ultimate features of the autarchy so long sought by Germany, but to sap the economic structure of the chosen opponents.

In the Four Years' Plan promulgated in 1936, it was announced that,

"powerful factories will be built according to their urgency. We shall begin with those for armament purposes; that is most urgent. Then come factories which are in other ways needed to make the Four Years' Plan a reality.... In a world governed by reason this would not be necessary, but the world is insane."

Need it be said that the only world governed by reason, in the view of the authors of this plan, would be ruled by Germany, which has never quite comprehended why other countries were so "insane" as to be unwilling to accept such rule?

Even before the "plan" was announced, I.G. stood at attention, with six decades of service on its record, its hosts already deployed, the terrain in its arena of action already surveyed, its lines established.

Werner Brack in 1938 said,

"The trust [I.G.] is a cornerstone in Germany's plan for self-sufficiency as well as for armament."

He might well have added that its drive for world-rationalization of the industries in which it was interested fitted neatly into the new schemes of world-domination nursed by German militarism.

As the story of I.G.'s cartel agreements with American, British, and other national monopolies progresses, there is a certain awesomeness in the sheer scale of its operations. The boldness and orderliness of its management, combined with a refined subtlety and political sophistication in business negotiations, command admiration for their artistic and scientific perfection.

At the same time, it is clear that I.G.'s chief reliance was placed on the political density and financial greed of those with whom it dealt. The keenest business instincts, when not modified by industrial wisdom, can become a weakness, and on this weakness I.G. counted in nearly ail of its transactions. Canny traders of the American type were to prove almost naive when matched against the acuity and perspicacity of the exponents of I.G.'s economic philosophy.

It is not too much to say that the direction of I.G.'s policies in the years 1926-1939 was the work of genius, not burdened with ethical conscience. The coupling of economic and political insight in I.G.'s policies is clearly traceable in the fabric of cartel agreements which I.G. wove in American industry.

The web of contracts in the dyestuffs industry, the pharmaceutical industry, the oil industry, the synthetic rubber industry, the magnesium industry, and others, all promoted by I.G. with leading American concerns, affected the military preparedness and economic independence of the United States. Even today, they force us to do without materials, processes, and industries which in the normal course of competition would have been fully established at the outbreak of the war.

An outline of the actual corporate, physical, and capital structure of I.G. will indicate the basis upon which its power is erected.

Each of the Big Six companies and the other major concerns included in I.G.'s first unification in 1904, or in its reorganizations in 1916, 1919, and 1925, was in itself a merger of many, in some cases scores, of smaller companies.

Each of the Big Six was in its own right a cartel which represented not only the vertical integration of its particular phase of the chemical or metallurgical industries, but a horizontal association of smaller concerns operating in the same or closely related fields. Consequently, when we speak of I.G. it must be kept in mind that I.G. is at the same time a national cartel in its broadest sense as well as the greatest of all international cartels.

The Armistice had hardly been signed before this multiple trust undertook to expand its capital and plant.

A dispatch in the New York Times of December 1, 1919, from its Berlin correspondent, stated:

The firms composing the German dye trust have decided to increase their capital to an extent without parallel, I believe, in the history of German industry.

 

The trust, which consists of three great and four minor concerns in the industry, valued at, roughly, 15,000,000,000 marks, is extending for two reasons: It is determined to reassert German supremacy in the dye industry; in the second place, there is the question of nitrate, so important for the agricultural life of the country.

The trust is aiming at making the fatherland independent of foreign supplies and to increase production so that it will be able to export large quantities.

 

 

With this vastly increased capital the trust will at the earliest moment begin a vigorous onslaught in the markets of the world.

The value of the mark at the time of this dispatch, while still theoretically at its pre-war level, was perhaps equal to about 3c in American money. On this basis, a value of 15,000,000,000 marks would be roughly equivalent to $750,000,000. In 1926 the nominal capitalization of the new I.G. was placed at some 800,000,000 marks, and in 1929, I.G.'s annual report estimated its capitalization at more than 1,000,000,000 marks.

These figures in themselves would not entitle I.G. to the status and prestige which it occupies among the financial titans of industry. There is, however, a major qualification to such estimates. It is customary among German cartels to underestimate, rather than overestimate, capital assets in order to conceal their real size.

It is probable that the real capital assets of I.G. as they stood at the outbreak of war in 1939 were only slightly below those of Standard Oil, and were certainly greater than the resources of any other concern in the same industry.*

* Liefmaim in "Cartels, Concerns, and Trusts," places I.G.' assets ahead of the Royal Dutch Shell Oil interests.
 

Within Germany, the plants and properties of I.G. are scattered from one end of the country to the other.

I.G.'s plants are located in those very cities which have been among the primary bombing objectives of the Royal Air Force, and in all probability provide the specific targets for such raids.

The names of many of the towns in which the principal I.G. plants are located will therefore strike a familiar note to those who follow the headlines.**

**  See list in Appendix.

Although there is a good deal of geographic concentration of the I.G. plants, they are sufficiently de-centralized from both an economic and military stand-point to make the job of bombing them difficult and dangerous.

I.G.'s holdings in German and European industry have, of course, been enormously increased by military conquest, and by the unctuously legal means to which they have adhered in absorbing conquered industry. An accurate, complete catalog of I.G.'s wholly and partially owned subsidiaries cannot be given, because only the I.G. Sekretariat could provide such a list.

Various experts have called the roll, but never with final assurance. With similar reservations, the firms which I.G. is known to own, or control, are set forth in the notes below. In scanning this list, it becomes clear that I.G. is the industrial ruler of Germany. Its non-German interests bulk almost as large.

The fields of operation of I. G. Farben are so broad, the array of its products so vast, that the best-qualified investigators cannot name them all.

"Dye Industry" is a misnomer. It is true, of course, that I.G. grew out of the dye industry, but in a larger sense, its functions are as unlimited as the scientific application of physics and chemistry to raw materials. In each of the broad areas designated as a field of production there are nearly always a large number of separate products and processes involved.

In some cases, such as that of coal tar dye-stuffs, there are tens of thousands of different crude, intermediate, and finished materials which fall within the general class.

There is a quality of Faustian alchemy in the rapidity with which any development in one branch of the chemical or metallurgical industries transforms or affects all other aspects of the field. I.G. has not only taken advantage of the illimitable permutations of the chemical industry itself, but has used the forces of science to build what is probably the world's greatest system of industrial domination.

Even if I.G. were confined exclusively to the chemical industry, which it is not, the enormous possibilities within that sphere would kindle the fantasy of any writer of weird tales or horror stories. More important, however, is the fact that throughout its entire domain I.G. always has the power of choice to make products or to use processes which can benefit or injure mankind.

This duality of the industry is graphically illustrated in the testimony given by Captain O. E. Roberts, Chief of the Industrial Relations Section, Chemical Warfare Service, United States Army, before the Judiciary Committee of the United States Senate in 1922.

Speaking of the chemical industry in general, Captain Roberts said:

It is a revelation to most people to see the variety of products which this industry produces, and the fact that we may make a delightful violet perfume, or a wonderful dye, or an extremely effective medicine from such a deadly war gas as phosgene, always stirs one's imagination.

The possibilities of this industry, which may include any of the several hundred thousand known organic chemicals or of the millions which are figured as possibilities, are enough to stir anyone's imagination.

In a speech on July 9, 1921, before the House of Representatives, Honorable Caleb R. Layton of Delaware, describing the development of the chemical industry with regard to the increasing dependence of medicine on chemotherapy, said:

I venture the prophecy at this point that the time will come, and is not far distant, when the physician will be enabled to select out of a single large group of synthetical medicines possessing substantially one chief characteristic for his therapeutical use with the same meticulous facility that the essayist employs who chooses the proper synonym for the expression of his thought.

When it is recalled that I.G. produces synthetic medicines, vitamins, hormones, serums, and specifics, some of which are not even known in other countries, it is understandable that its success in opening up new markets throughout the world and in penetrating the markets of others is in part attributable to its consistent policy of trying to lead the field. Knowledge, to I.G., means power.

I.G.'s physical plant includes mines, its own rail-roads which connect with the state-owned lines, and large tracts of property around its plants and in various German cities.

The total number of employees of I.G. and its direct subsidiaries is estimated at about 350,000. It is worth recording that I.G.'s labor policies are paternalistic and, for the most part, predicated upon the native docility and tractability of the German worker.

Many of I.G.'s employees live in what, in the United States, would be called "company towns," and historically, it has been part of I.G.'s policy to adopt the type of "social reform" initiated by Bismarck. When the National Socialist Workers' Party seized the government and incorporated all German labor into an enormous company union with the state as ultimate employer, I.G.'s workers were, of course, included. In fact, I.G. personnel made up one of the first "Strength-Through-Joy" units.

The technical organization of I.G. is an intriguing topic, but it describes only corporate superstructure. I.G. as another "big business" would have little novelty.

But I.G. as a politico-economic entity, the embodiment of cameralist Germany, has the immediate importance of an additional army or a fleet. Again, no demon-theory is necessary in interpreting I.G.'s history from 1919 to 1939. I.G. is supervised by a "doctorate" whose ranks include today, as in its beginning, the scientific aristocracy of Germany.

Nearly all of I.G.'s directors are doctors of chemistry, physics, engineering, or economics. For personnel, I.G. has been able to draw upon a populace which has been trained for generations in applied science. Herbert Hoover drew attention to the fact that there were two and one-half times the number of research workers in Germany that were engaged in comparable callings in the United States in 1925.

The sequence of events must be considered in re-counting the part which I.G. played in German rearmament in the Inter-War period, beginning years before Hitler appeared.

The World War had shown up certain, weak spots in the German armor. Continuing the lines of research begun before 1914 was not enough. The difficult task of rearming would be futile, unless any new war could be started with a wider margin of advantage than in 1914. This requisite superiority required that Germany become an absolute autarchy, able to supply all of its own domestic wants.

Self-sufficiency, if complete, could withstand indefinite blockade.

On this score, I.G.'s intentions from 1919 onward are easily determined, and their fulfillment can be traced step by step. In addition to self-containment, however, Germany needed assurances that in her second gamble against the world, her former enemies would feel the grip of technological inferiority with even greater agony. I.G., whether it foresaw precisely the time and manner of the present war or not, used old and new methods to create this differential.

Patents were applied for and obtained "en masse," in every country having a patent system, but largely in Germany, England, and the United States.

But patents were the oldest and the least of I.G.'s tourniquets on the economic vigor of Germany's likely antagonists. The improved cartel device was used both to invade and to occupy strategic sectors in the economies of the then disunited nations. The cartel was I.G.'s formula for conquest.

Here, it is helpful to pass in brief review the specific utility of I.G. to the rebirth of German military prowess. I.G. had produced synthetic rubber during the World War, in relatively small amounts, but its quantity was insufficient and its quality unsatisfactory. I.G. therefore worked incessantly to make synthetic rubber on a large scale.

The famous Buna rubbers were the reward of these experiments. The Bunas are made from petroleum.* Germany had little oil. I.G. hydrogenated coal into oil, and at a single stroke made possible the mechanization of the Reichswehr.

The German Army at this very moment travels in tanks and trucks propelled by I.G.'s synthetic fuels, and shod with Buna rubber.
 

* The essential ingredient of the Bunas is butadiene, a refinery by-product. This component can also be made from alcohol or coal.

The production of new alloys and light metals by I.G. and its research colleagues, Krupp and Siemens-Halske, are the reason for the uncanny speed and dimensions of German rearmament.

New aluminum and magnesium plants, and improved processes of production, largely I.G.'s own, were ready when the time came to fabricate planes. Beryllium, tungsten carbide, and new steels were forged to be used in armor plate, shell tips, and machine tools. Since all metals are precious in Germany, I.G. produced new plastics to take their place in consumer goods, and replenish many munitions sup- plies.

From the most universal raw material of the temperate zone - wood - I.G. produced substitutes for metals, cotton, wool, explosives, fuel for vehicles, food-stuffs, medicines, and dyes. A whole new industry was developed from the chemistry of wood - a branch of science totally neglected in the United States.

Under the pressure of Allied blockade, the German disease rate had risen sharply toward the end of the World War.

I.G. compounded vitamins and sulpha drugs to remove this danger in the future. If Germany was to regain her lost colonies, geopolitical analysis indicated that fighting would have to take place in the tropics. The quinine of Java was far away, and German troops would risk jungle fevers. I.G.'s answer to this prospect was atabrine - better than natural quinine for the quick cure of a sick soldier.

Lest it be thought that the relation between I.G.'s research and German aspirations is coincidental, the story of "Bayer 205" must be told. The number 205, like 606, stands at the pinnacle of a tireless series of experiments. Bayer 205 is a complex synthetic hydro-carbon. It was first announced by I.G. in 1920 that Bayer 205, rechristened "Germanin," was a cure for the dread sleeping sickness which the tsetse fly scattered over Africa.

Sleeping sickness prevented the complete exploitation of Africa's wealth by the white race.

By indirect channels, I.G. made an offer to the British Government - the secret of Germanin in exchange for the return of Germany's lost colonies.

I.G.'s adroitness is evident in the report published in the British Medical Journal in 1922:

A curious illustration of the German desire, not unnatural in itself, to regain the tropical colonies lost by the folly of the rulers of the German Empire, is afforded by a discussion which took place at a meeting of the German Association of Tropical Medicine at Hamburg.

 

The Times correspondent in Hamburg reports that one of the speakers said that,

"Bayer 205 is the key to tropical Africa, and consequently the key to all the colonies. The German Government must, therefore, be required to safeguard this discovery for Germany. Its value is such that any privilege of a share in it granted to other nations must be made conditional upon the restoration to Germany of her colonial empire."

While no action by the British Government was ever made public, and no official explanation ever given, I.G.'s "bargain" was obviously not accepted.

As it later turned out, Germanin was not so effective in human sleeping sickness as in mice or in test-tubes charged with the causal parasite. But the motif of the episode ties into and connects the pattern and purpose of I.G. research. Political control of Africa could not be bought, but I.G. could still get economic colonies not only in Africa, but elsewhere.

Whatever Germany needed, and modern science could make, I.G. obtained for Germany, and tried to keep from others.

The combined effect of I.G. discovery and I.G. cartel restriction on the development of other countries has only to be set forth to assume its true proportions. Every time some government official or industrial executive speaks of a scarcity of chemicals or metals, the chances are abundant that somewhere along the line there was an international cartel, and that the letters I.G. are inscribed on a supporting contract.

Although the internal organization of I.G. is an exciting subject, it is in the sphere of international industry that I.G.'s policies and practices assume their most sinister mask. The list of affiliations, associations, contractual agreements, and international cartels in which I.G. is either the promoter or at least a principal party reads like a bluebook of world industry.

I.G. had cartel agreements:

• with Standard Oil of New Jersey

• with Aluminum Company of America

• with Dow Chemical Company

• with E.I. duPont de Nemours

• with Monsanto Chemical Company

• with Pennsylvania Salt Co.

• with Rohm & Haas

• with Plaskon Corporation

• with Hercules Powder Company

• with Remington Arms

• with the Unyte Company

• and with numerous other American companies which will be referred to later

I.G.'s cartel agreements with Imperial Chemical Industries, with Norwegian, Dutch, French, Belgian, Italian, Spanish, and Polish concerns were, until the outbreak of the war, a true society of nations, industrially speaking.

In the Far East, I.G. was one of the principal sponsors of the Japanese chemical industry, forming an Axis which existed long before its political counterpart. It is interesting to note, however, that as early as the first World War, products were sold in the Australian market which bore the legend "Made in Germany," followed by a Japanese trademark.

Even greater weight must be attached to I.G.'s policies in this war than in the last. I.G.'s plans for post-war reconstruction are already provided for in its agreements with non-German concerns. Reports from France and the other occupied countries of Europe indicate that I.G.'s own staff has followed in the wake of Hitler's armies for the purpose of acquiring outright ownership of the entire European chemical industry.

Inasmuch as superficially legal methods are used by I.G. in its acquisitions, as in the case of the Etablissement Kuhlmann, the French chemical company, I.G. apparently hopes to win its own war even though Hitler loses.

In the case of American industry, I.G.'s foresight provided for a modus vivendi during the war and a settlement of claims afterward. American industry has been victimized twice.

Will it be victimized in the future by the resumption of the same enticing "collaboration" in joint world-monopoly or by the "settlements" anticipated by I.G.?