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Its opponents argued that it represented an unbearable burden on I.G.’s finances, which already were strained by the weakened economy. Although 300 million marks had been poured into the project, the process was still not ready for commercial exploitation. 2 The cost of the synthetic gas, they pointed out, was forty to fifty pfennigs a liter, whereas the world price of natural gasoline was only about seven pfennigs. 3 The project was drowning in its own economics.
He was,
But Bosch was too formidable a figure in the affairs of I.G. In the end, the managing board voted to accept the Ter Meer recommendation. Bosch’s hydrogenation project once again was saved. Not long after this, Bergius and Bosch were awarded the Nobel Prize for chemistry “in recognition of their contributions to the invention and development of chemical high-pressure methods.” 5 Bosch was the first engineer to be so honored.
His image as a national hero grew even brighter.
I.G. was cartooned as “Isidore G. Farber,” a grotesque caricature of Shylock, and “I. G. Moloch,” an ugly reference to the Canaanite god to whom children were sacrificed.
In June 1931, Gattineau wrote his old professor on behalf of I.G.:
He hoped the professor could use his influence with the Nazis to stop the publication of articles characterizing Farben as an instrument of international Jewish finance. I.G., Gattineau pointed out, was already being attacked by the Social Democrats and by the Communists: “Therefore it is really not necessary for the National Socialists to follow the same line.”
The leadership of I.G. was composed of Christian, self-made men who had worked their way up from small-time merchants, engineers, and scientists.
Gattineau met with some success in mitigating the attack on I.G. in the Nazi press. At the end of 1931 Bosch put him in charge of I.G.’s press center in Berlin, a more strategic place from which to deal with the Nazi hierarchy.
Gattineau once again called on Haushofer and asked him to arrange such a meeting. Haushofer obliged, and Hitler’s secretary, Rudolf Hess, set it for early November in Munich just before the election. 8 When Hitler arrived for his meeting with Buetefisch and Gattineau, he was obviously very tired—too tired, the I.G. men feared, to understand so complex a matter as the hydrogenation of coal into oil. However, Hitler already knew all about the process and was eager to discuss it.
Before the meeting ended, Hitler had outlined a program under which he planned to make Germany self-sufficient in oil with the help of I.G. Farbenindustrie. World War I had taught him that Germany’s dearth of raw materials had rendered the British blockade a decisive weapon leading to Germany’s defeat.
By a program of self-sufficiency he was determined to change Germany from a country deficient in natural raw materials into a self-sufficient military power. Hitler assured the I.G. visitors that their company could depend on his support, both financial and political. Gattineau and Buetefisch, elated by Hitler’s response, reported back to Bosch. After hearing the entire story of the extraordinary meeting, Bosch remarked, “The man is more sensible than I thought.” 11
In the November 6 election a few days later, the Nazis suffered a decisive setback. They lost 34 seats in the Reichstag, slipping to 196; the Communists, on the other hand, gained 11 seats and now had a total of 100. German industrialists and financiers, more terrified by the Communist advance than by the Nazi setback, came to Hitler’s support at this critical moment. In fact, thirty-eight of them did so publicly 12--including such powerful figures as Schacht and Baron von Schroeder from banking; Cuno from the North German Lloyd Lines; Krupp, Voegler, and Thyssen from steel; and Siemens and Robert Bosch (Carl Bosch’s uncle) from electrical engineering and manufacturing; but no I.G. personnel.
Carl Bosch was not yet ready to make a public commitment. Hindenburg was unmoved by this coalition of financial and industrial strength. He chose General Kurt von Schleicher instead. But Schleicher was unable to establish a stable government. Finally, on January 30, Hindenburg capitulated and appointed Hitler chancellor. However, Hitler’s hold on the office was tenuous. Another Reichstag election was scheduled for March 5.
His presence had a powerful effect on the business community of Germany. I.G., after all, was the country’s largest corporation. Schacht announced that he expected to raise three million marks from the assembled businessmen for Hitler’s election campaign. 13
At the direction of Bosch, Schnitzler pledged 400,000 marks, by far the largest single donation. 14 I.G.’s support of Hitler was now official. In the March 5 election, the Nazis fared better than they had in the previous election. They gained 5.5 million votes—not enough to give them a majority of the seats in the Reichstag but enough to maintain Hitler as chancellor of a coalition government.
Before Bosch could proceed further Hitler roared, “Then we’ll work a hundred years without physics and chemistry!” When Bosch tried to pursue the subject, Hitler rang for his adjutant and announced, with calculated insult, “The Geheimrat wishes to leave.” 15
Although Hitler did not let the episode interfere with his support of I.G.’s synthetic oil project, he never again would appear in the same room with Bosch. On one occasion, Hitler arrived at a meeting, saw Bosch sitting on the platform, and abruptly left.
Thereafter Bosch’s associates were careful to keep the two men apart. Bosch was undeterred by Hitler’s hostility. He continued his campaign in defense of Jewish scientists in Germany. In April he learned that Fritz Haber had been forced to resign his position as a professor at Berlin University despite the fact that Haber was a convert to Christianity and one of Germany’s most revered scientists. Bosch tried to organize a movement among non-Jewish Nobel Prize winners to resist the Nazi persecution but with very little success.
The great physicist Max Planck, who was no anti-Nazi and whose eminence was sufficient to gain him an audience with Hitler, pleaded in vain with the Fuehrer to reverse the expulsion of Haber. Hitler’s response was so violent that it was some time before Planck recovered emotionally. Another of the Nobel laureates exclaimed in fear and despair, “We cannot draw our swords for the Jews!” 16
Haber left Germany, but a few months later he decided to return. On his way back, he met Hermann Schmitz in Switzerland; Schmitz urged him to stay out of Germany, pointing out that the Nazi terror should not be underestimated. A miserable Haber never set foot in Germany again. A broken man, he died in Basel in January 1934. Germans were not permitted to mourn his passing.
He sent a personal invitation to leading scientists and educators, I.G. executives, and government officials who had had some relationship with Haber. When the Nazi minister of education learned that some of his subordinates had been invited, he forbade their participation:
Over 500 people packed the hall, many from I.G., as well as Haber’s military friends. His professional colleagues, however, were more cautious and a number did not come. Max Planck, despite his experience with Hitler, did attend and although he opened the meeting with a Nazi salute he paid tribute to the “German scholar and German soldier, Fritz Haber.” 18 I.G. itself continued to be harassed by some of the lesser figures in the Nazi hierarchy.
He specifically referred to I.G.’s synthetic oil development at Leuna, noting that when “substitutes for foreign raw materials can be developed only through very expensive processes, these must be supported by Army Ordnance.” Technologically and financially, Thomas’s thinking was the unconventional kind that I.G. appreciated. Thomas was still on the economic staff of Army Ordnance with the rank of lieutenant colonel when the Nazis came to power. There could be little doubt that Ilgner was an effective emissary for I.G.
For example, by June 1933 I.G. had become involved with the Third Reich in one of the most secret enterprises in Germany—the building up of an illegal military air force, a direct violation of the Versailles treaty. A special independent finance office was created by an extraordinary joint decree of the Finance, War, and Aviation ministries for the “secret purposes of military aviation [emphasis in original].” This finance office was placed under the sole control of Hermann Goering, minister of aviation, “who alone will authorize acceptance of deposits and payments.”
So secret was this decree that knowledge of its existence was limited to a small circle of the highest military and Nazi officials. Included in this select group was Max Ilgner, who was among the very few to receive an official copy of this highly classified document. 21
It was not long after the secret decree to finance the Black Luftwaffe was promulgated that Carl Krauch received a visit from General Erhard Milch, state secretary of the Aviation Ministry and Goering’s right-hand man. (Although Milch’s father was Jewish, his mother, an Aryan, had signed an affidavit that she had borne her son out of wedlock to an Aryan. And Goering, who did not take anti-Semitism seriously when his own interests were concerned, had given Milch his protection, declaring, “I myself decide who is a Jew and who is not, and that’s all there is to it.”)
Milch had been referred to Krauch as the
expert in I.G. who could be relied on to give the most accurate
report on Germany’s liquid fuel capability. Primarily, Milch was
interested in learning whether I.G.’s synthetic oil was suitable for
aviation gasoline. Krauch assured him that it was.
The next day Milch showed Krauch’s memorandum to the Army Ordnance Chief, Major General von Bockelberg, and his aide, Lieutenant Colonel Georg Thomas. 23 He told them that the Air Ministry backed Krauch’s four-year plan and suggested “a joint energetic approach.” The army officers concurred.
He may have hated what Hitler stood for but he had little doubt that the commitment of the Fuehrer to I.G.’s synthetic oil project was genuine. Only I.G. could provide Hitler with oil self-sufficiency.
On December 14, 1933, Bosch and Schmitz on behalf of I.G., as well as representatives of the Third Reich, with the personal approval of Hitler signed the formal agreement. By the terms of the contract I.G. was to expand the synthetic oil installation at Leuna so that in four years, by the end of 1937, it could produce 300,000 to 350,000 tons annually. The Reich, in return, pledged to guarantee a price corresponding to the cost of production, including a five percent interest on invested capital and generous depreciation, and to take measures to assure the sale of all synthetic oil not sold by I.G. through its own outlets. 26
The agreement was a monumental technological achievement in modern
power politics. It was now only a matter of time before I.G. would
provide Hitler’s Germany with total independence from foreign oil, a
matter of profound diplomatic and military significance. Never again
would Bosch have to worry about funds for his beloved project. And
only after the U.S. Eighth Air Force bombed I.G.’s synthetic oil
plants into rubble in April and May 1944 did Hitler have to worry
about oil.
The military added another objection; none of the available synthetic rubbers appeared satisfactory for military use, and depending on future breakthroughs was too risky. In fact, between 1931 and 1932 I.G. had virtually suspended its Buna program as the bottom dropped out of the natural rubber market. With it disappeared any prospect for making Buna competitive. When Hitler came to power I.G.’s Buna operation was minimal. But shortly Hitler’s plans for the future of Germany began to breathe new life into the project. In late 1933, at about the time that the synthetic oil pact was concluded, representatives of Army Ordnance and the Ministry of Economics approached I.G. to resume its work on Buna.
However, mere encouragement was not enough for Bosch. Without the guarantee of a sufficient subsidy he feared a repeat of the financial difficulties that had beset the synthetic oil project. To move forward, solid government support was essential. Specifically, Bosch wanted the government to insure that commercial tire companies would provide “effective cooperation” in manufacturing test tires out of Buna. In addition, he demanded that at least 1000 to 2000 Buna tires be tested on military and other government owned vehicles. In a memorandum to the interested government agencies I.G. stated its attitude quite bluntly: “Before we resume our efforts on a large scale, it is necessary that the government decide whether it is sufficiently interested in the manufacture of synthetic rubber in Germany to be prepared to support the project in [this] manner.” 27
It was still early in the Third Reich and neither Army Ordnance nor the Ministry of Economics understood the depth of Hitler’s devotion to military self-sufficiency. When they refused to accede to Bosch’s demands, the Buna project continued in relative limbo. In the fall of 1934, troubled by the lagging synthetic rubber production, Hitler personally took an interest in the matter. He appointed his own economic adviser, Wilhelm Keppler, as the plenipotentiary for raw materials and synthetics with the specific responsibility for synthetics. This placed Keppler in conflict with Hjalmar Schacht, who as acting head of the Ministry of Economics had official responsibility for “mobilization for economic warfare.”
Ter Meer spoke up in behalf of I.G. Although delighted with Hitler’s directive, he thought it necessary to point out a number of factors impeding the program. The commercial tire manufacturers were not enthusiastic about synthetic rubber, especially Buna, as a tire material. He also mentioned the doubts expressed by Army Ordnance. Confronted with such negative attitudes, I.G., Ter Meer said, was reluctant to invest considerable funds and effort in the mass production of Buna. Before making such a commitment, Ter Meer needed assurances that the tire manufacturers would produce Buna tires on a large enough scale. 29
The tire manufacturers declared that it was imprudent to mass-produce Buna tires because of the staggering cost; a Buna tire cost ninety-two marks to manufacture as compared with eighteen marks for a natural rubber tire. The Army Ordnance officials were no more willing to go ahead with Buna than the tire people. Buna, they maintained, was not up to the standards required by military use. Keppler brushed aside all these objections. He reminded those in opposition that the promotion of synthetic rubber production was a pet idea of the Fuehrer and must not be delayed. 30
Army Ordnance had no choice but to engage in a series of extensive tests over the next six months. Hitler, who had a propagandistic as well as a military need for Buna, had no intention of waiting for the technical results. On September 11, 1935, at the seventh Nazi party congress at Nuremberg, he announced to the world that “the problem of producing synthetic rubber can now be regarded as definitely solved. The erection of the first factory in Germany for this purpose will be started at once.” 31
A few days later Keppler met with Ter Meer and was adamant that Hitler’s announcement meant that a Buna factory be built as quickly as possible. Ter Meer, still cautious, agreed to commit I.G. to such a project provided the financial risk was minimized. For this reason he wanted a purchase guarantee for the plant’s output from Army Ordnance. Keppler, under the pressure of Hitler’s public statement, assured Ter Meer that this posed no problem. In fact, he promised to negotiate the purchase contract with the military authorities himself.
Army Ordnance’s decision not to go
ahead with a Buna tire for military use was a serious blow to I.G.
hopes. At the same time, Schacht had no intention of helping either
I.G. or Keppler by supporting a program of civilian use for Buna.
Buna tires would be far too expensive, he argued, to produce foreign
exchange for Germany in the export market. The army’s evaluation of
its inferior quality only buttressed Schacht’s opposition. Buna
appeared to be in serious trouble.
That was all the encouragement I.G. needed. As a result of Keppler’s assurance of Hitler’s support, Bosch made the decision to build a large-scale Buna plant without waiting for a formal agreement with the government. He selected a large site in Schkopau near the high pressure equipment of Leuna and before long construction got under way. It was a bold move in the Bosch tradition.
An oil embargo, Hitler implied, held no terror for Germany 34—I.G. was performing its miracles on schedule. In the meantime, the League continued to press for an embargo. On February 22 the League’s sanction committee was convened to prepare for such an action. Mussolini declared in response that if oil sanctions were imposed Italy would leave the League of Nations and no longer consider itself bound to support Germany’s observance of the Locarno treaty. This announcement was calculated to put pressure on France, whose borders Italy was pledged to protect as a treaty signatory.
Although the League of Nations found that the Germans had committed a breach of peace, it shrank from imposing the kind of sanctions with which it was threatening Italy.
Two countries that provided much of Germany’s oil, the Soviet Union and Rumania, nevertheless did pursue sanctions of their own for a time; the U.S.S.R. stopped all oil exports and Rumania raised the price of oil sold to Germany. 35 The Soviet and Rumanian actions created a serious fuel shortage in Germany. To cope with the problem, Hitler appointed Hermann Goering fuel czar. However, before Goering had time to do much in this position, a greater opportunity presented itself to him—to become czar of the entire German economy.
This enormous delegation of power came about as the result of the strained relations between Schacht and Keppler. To end the dispute, Hitler assigned Goering the task of mediating between the two men. But by mid-March, conditions had so deteriorated that Schacht sent out a circular order to all his staff forbidding any official dealing with Keppler. Schacht took these extreme measures not simply because of his personal distaste for Keppler but principally because the outcome of the conflict would decide who was to dictate the financial and economic policies of the Third Reich and whether sound economics was to dominate Nazi policy or vice versa.
Nazi radicals like Keppler and Goebbels favored expansion of government expenditures to maintain employment and to prepare for war. Schacht, on the other hand, had become increasingly disturbed by the drain on foreign exchange caused by the rapidly accelerating military rearmament program and by his inability to control government expenditures and restrain the extravagances of the Nazi bureaucracy. He concluded that authority over foreign exchange and raw materials must be centralized in one organization headed by a leading Nazi, whose policies he could dominate.
In Schacht’s calculations, the nominal head would be a figure with enough authority in the Nazi hierarchy to be able to impose the unpopular measures he had in mind. Goering seemed to him the perfect choice for such a front. Since Goering knew nothing about economics, Schacht would be able to formulate policy. Through Goering, Schacht planned to get rid of opponents like Keppler and to assume tight control over all government expenditures.
Goering, however, was wise to what Schacht intended:
Schacht had made a major miscalculation. When Hitler, on April 27, appointed Goering economic czar with the title of commissar of raw materials and foreign exchange, the official government release made it bluntly clear that Schacht had in effect become Goering’s subordinate. By the terms of the appointment, Goering assumed authority over all the ministries on economic matters. The New York Times reported that “Colonel-General Hermann Goering in effect superseded Dr. Hjalmar Schacht today as dictator of the economic and financial policies of the Third Reich.” 37
The Times correctly divined the true meaning of the event. When Schacht learned the specific details of Goering’s appointment, he was irate. On April 29 he met with Hitler and Goering and tried to get Hitler to issue a follow-up, “explanatory” announcement that would make it clear that Schacht was not subordinate to Goering in any way. But no “clarifying” communique was issued; the original announcement was permitted to stand. 38
Goering did make one concession to Schacht. He agreed to use only a small corps of experts on his new raw materials and foreign exchange staff. He put Lieutenant Colonel Fritz Loeb, of the Air Ministry, in charge of the organization. And he asked Bosch to recommend a man from I.G. to head up research and development. Bosch chose his closest friend and confidant, Carl Krauch. 39
Krauch was the logical choice. Since the preceding September, Krauch had been chief of a new military liaison office in Berlin “to provide for systematic cooperation within the I.G. in view of the current development of military economy”—particularly in connection with such strategic raw materials in the high pressure chemical field as synthetic oil, synthetic rubber, and nitrates. 40
Second to Bosch, Krauch was Germany’s leading expert on high pressure chemistry. In fact, in some ways, he had become Bosch’s alter ego.
Soon synthetic rubber became the subject of a bitter disagreement between Schacht and Goering. Goering declared that “rubber is our weakest point,” 42 and accused Schacht of being the principal reason for this vulnerability. On May 27, at one of the first meetings of the council of ministers to discuss substitute materials, Goering, looking squarely at Schacht, asked if anyone had any objections to the production of synthetic “war raw materials.”
Schacht immediately spoke up to say that he had no objections in principle except “in cases where prices for synthetics are far beyond world-market prices so that the products cannot compete.” He then cited Buna as an example; it was so much more expensive than natural rubber that its production was thoroughly uneconomical and unwarranted. Goering interrupted to explain that it was necessary to consider the issue only “from the standpoint of waging war.” 43
Economic principles in that case had no validity. Schacht, who had become increasingly disturbed about the inflationary effects of rearmament, was unmoved and persisted in his strong opposition to Buna.
Schacht was also strongly opposed to another self-sufficiency program that Goering and his raw materials and foreign exchange staff were planning to institute—a proposal to switch from the rich Swedish iron ore to Germany’s own low-grade iron ore in the production of steel. Schacht argued that such a changeover would necessitate an extremely expensive transformation of the German steel industry’s blast furnaces. The consequent increase in the cost of German steel, he argued, would make it impossible to export. 45 According to Schacht, Germany could not afford such a loss in foreign exchange.
The plan concerned itself primarily with what Hitler regarded as Germany’s principal economic problem, the pressing need for raw materials. The definitive solution, Hitler wrote, lay in the extension of Germany’s living space in order to expand its raw material base. This would be accomplished by conquest. In the meantime, however, Germany would have to find a temporary solution within its own borders. Since Germany could not reduce its imports of food, a balance would have to be found by other means.
And those other means must not be at the expense of rearmament:
Neither was the stockpiling of raw materials the answer. No country could stockpile for more than a year of war. And the accumulation of foreign currencies did not necessarily insure the acquisition of supplies during war. Hitler pointed to the experience in World War I when Germany had large currency assets but was unable to purchase sufficient fuel, rubber, copper, and tin.
(Schacht later suggested why Hitler sided with Goering:
There was, however, more to it than that.)
Hitler’s attack on Schacht was specific. There was to be no more argument that the synthetic rubber project was premature:
Hitler pursued the attack on Schacht by ridiculing the argument of cost:
As far as Hitler was concerned,
the cost of synthetic raw materials had ceased to be a decisive
consideration.
But Blomberg refused—for good reason. He had been one of the small select group to whom Hitler had given his memorandum and he had decided to throw his lot in with Goering. In fact, Blomberg had already written to Goering, who would be the determining factor in the allocation of funds for the armed forces, requesting a forty-two percent increase in military funds for 1937. 49 Schacht pressed his opposition but it was a futile exercise.
Six weeks later, on October 18, Hitler designated Goering plenipotentiary for the four-year plan to “put the entire economy on a slate of readiness for war.” 51
In the words of the leading Nazi newspaper, the Voelkischer Beobachter,
One of Goering’s first decrees in his new position was to announce the organization for the execution of the four-year plan. Although provision was made for the participation of both Schacht and Keppler, Goering made it clear in this decree that “all persons and organizations of the Party and of the State participating in the Four-Year Plan have to obey my instructions [emphasis in original].” 53
Goering’s raw materials and foreign exchange staff was transferred to the office of the four-year plan and was given responsibility for developing a specific program of investments for the four-year plan, a matter of considerable interest to I.G. Carl Krauch continued as head of research and development with a staff made up almost entirely of I.G. men. One of these, Johannes Eckell, was put in charge of the rubber sector. 54
From now on I.G. would deal almost exclusively with Eckell in its synthetic rubber negotiations, 55 a not unpleasant prospect.
And of that share, I.G. was to receive 72.7 percent. 56 So large was I.G.’s share that the chief of the chemistry department of the Ministry of Economics remarked later, “The Four Year Plan was, in fact, an I.G. plan.”
Some companies objected to such dominance, and Schering and Merck, two pharmaceutical firms, refused to participate, fearing their operational secrets would become available to I.G. with no consequent benefit to themselves. 57 Schacht joined the opposition to I.G. If there had to be a four-year plan, it should not be an I.G. plan. He made this point as strongly as he could with Goering. Goering was still willing to try to placate Schacht since Hitler wanted to keep him on the cabinet as a symbol of “conservatism.” However, an official of the Ministry of Economics observed.
Goering was unwilling to go so far as “to make any concessions which would be to I.G.’s disadvantage.” 58
Schacht’s antagonism toward I.G. was nothing new. As early as 1933, he had tried to create a union of independent chemical companies in order to offset I.G.’s power. However, the independent companies had been afraid to challenge I.G., even with Schacht’s support. 59 Finally, Schacht took his objections to I.G.’s domination of the four-year plan directly to Hitler. 60
But Hitler had settled on his course of action; Germany must become self-sufficient in oil and rubber in eighteen months and that required the genius and facilities of I.G. Preparation for war was Hitler’s guiding light in shaping the economic policies of the Reich. To Hitler. Schacht’s demand that sound and conventional economic policies be followed was irrelevant. This became more obvious as the plans for synthetic rubber production moved ahead.
The office of raw materials and synthetics was negotiating with I.G. for a second Buna plant while Schacht and Army Ordnance were strongly opposing even the first plant. Despite such formidable opposition, Eckell advised I.G. that the “supreme authority” wanted the second plant. 61
He added that the problem of financing would be solved “over the heads” of the army and the Ministry of Economics. Schacht’s days as an influence in Nazi Germany were numbered. By the end of 1937, he had lost all his official positions, and by 1944 he was interned in a concentration camp.
Of no little significance, in 1937 all Jewish officials of I.G. were removed, including a third of the supervisory board:
The outspoken Bosch was no longer active head of I.G.; in 1935 Hermann Schmitz had become chairman of the managing board, and Bosch had assumed the relatively inactive honorary post of chairman of the supervisory board. Bosch, however, still retained the respect of a number of key figures in German national life. When Hitler issued a secret directive to the Wehrmacht to prepare for an attack on Czechoslovakia by October 1, 1938, two of Germany’s top commanders, General Walther von Brauchitsch, commander in chief of the armed forces, and General Ludwig von Beck, chief of the army, sought Bosch out as the only German industrial leader who did not fear to speak his mind.
They asked him whether German industry was ready for war. Bosch replied that industry was not ready and that a war was impracticable. Brauchitsch and Beck then asked whether Bosch would be willing to communicate this fact to the highest levels of the Third Reich. Bosch agreed to do so.
Despite Goering’s rebuff of Bosch, Krauch himself was on the rise in Goering’s office of the four-year plan. The preceding December Koerner had noticed certain disparities in the four-year plan figures prepared by General Loeb’s office of raw materials and synthetics and had checked with Krauch about the Loeb office estimates on synthetic oil production. Krauch said that Loeb’s figures were far too conservative and could not possibly answer the purposes of the four-year plan. Krauch was ready with an alternative plan that called for a crash program entailing an enormous expansion of I.G. production. Koerner submitted Krauch’s proposal to Goering.
Loeb was furious about Krauch’s criticism and Koerner dropped the matter, but he did tell Krauch to report to him personally if any discrepancies arose in the future. 65
In mid-1938 Krauch renewed his attack on Loeb’s figures. He had come across Loeb’s 1938-1939 projections for the production of synthetic gasoline, Buna, and gunpowder. “I know they are wrong,” 66 he told Koerner. He thought it would be disastrous to use these figures as the basis for making a military decision.
Who would know the production figures for nitric acid better than Krauch: despite his official position, he was still head of the I.G. division that produced almost all of Germany’s nitric acid.
It finally took place at Goering’s palatial estate, Karinhall. Koerner later recalled the dramatic discussion between Goering, Krauch, and Loeb:
After this meeting, a more confident Krauch directed his staff to revise Loeb’s program. Krauch’s plan called for greatly accelerated expansion in synthetic oil and rubber and light metals as well as explosives, gunpowder, and poison gas. In mid-July Goering gave his official sanction to this program, which came to be known as “the Krauch plan,” 69 a measure of Krauch’s growing influence and status in the war economy.
Up to this point, Army Ordnance had been in complete control of all explosives production. Under the Krauch plan, all explosives manufactured for the four-year plan would be transferred to Krauch’s control. Since General Becker of Army Ordnance would obviously object to a civilian’s securing such responsibility, Koerner suggested to Krauch that it might be good politics to pay a visit to the general.
As Koerner anticipated, Becker objected strenuously to the delegation of this authority to Krauch. He told Koerner that although he found Krauch himself “objective and cooperative,” he foresaw complete confusion if Army Ordnance and Krauch each had a production plan for explosives. In Becker’s view gunpowder was strictly a military product and control of its production should not be in the hands of civilians. 70
Krauch countered with a secret memorandum to Koerner. 71 The production of explosives, gunpowder, and poison gas was an inextricable part of the chemical industry and therefore the entire chemical sector must be under the control of a single agency with ties to industry. On August 13 Krauch followed up with what he termed the “rapid plan,” which called for even greater increases in productive capacity for these chemical military products. 72
But Army Ordnance continued its opposition to civilian domination over matters that were so clearly military. With the invasion of Czechoslovakia imminent, Goering resolved the dispute. On August 22 he put Krauch in charge of the entire chemical production of the four-year plan with the title of Plenipotentiary General for Special Questions of Chemical Production.
Making “the
four-year plan an I.G. plan” proved its worth for Germany and for
I.G. Even a partial list of the products I.G. produced for German
rearmament demonstrates clearly that I.G. was indispensable: it
produced almost all of the synthetic oil (direct and by license),
synthetic rubber, poison gases, magnesium, lubricating oil,
explosives, methanol, sera, plasticizers, dyestuffs, nickel, and
thousands of other items necessary for the German war machine.
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