INDUSTRIAL COLOSSUS

Otago Daily Times, Issue 26027, 15 December 1945, Page 8

INDUSTRIAL COLOSSUS

I. G. FARBEN’S RAMIFICATIONS GENERAL EISENHOWER’S REPORT Dynamite, a new German law, and four-Power action by the Allied Control Council of Germany have been recommended by General Eisenhower as the means of smashing the I. G. Farbenindustrie, Germany’s greatest producer of munitions, whose part in developing poison gas which was tested on human beings has been the subject of cabled report. This great organisation’s global tentacles ramified with the growth of Nazi power until it exerted influence in every important nation, including the United States, Great Britain, and the Soviet Union.

General Eisenhower in a report issued in October dealt with the origins of the greatest chemical industry in the world, and described how its schemers had followed close behind the Invading German armies early in the war, swallowing up the big industries of the conquered nations. The big German industry piled up assets of 6,000,000,000 reichsmarks and operated, with varying degrees of power, in more than 2000 cartels, many of whose complex foreign lines can be traced, General Eisenhower declared, by only a few persons in the world. To-day Farben’s central management, as pictured by the American Military Governor, is “ in a state of complete and utter disorganisation.” Many of its plants have been destroyed or damaged by Allied air power, sixteen of its key personnel are imprisoned and many of the Nazi executives have fled or have been discharged. Nevertheless, the I. G. Farbenindustrie remains, General Eisenhower reported, one of the greatest combines in the world and must be completely dissolved as one means of assuring world peace. He made the following concrete recommendations for action by the United States, Great 'Britain, the Soviet Union, and France: — (a) Seizure of possession of the Farbenindustrie plants or assets in other zones. (b) Passage of a law or decree ratifying or confirming seizure action heretofore taken. This law or decree should authorise the “ vesting ” of legal title to the I. G. Farbenindustrie plants and assets in Germany in the Allied Control Council or in a board designated by it to accomplish the objectives of seizure. (The eventual breakup of the I. G. Farbenindustrie will require authority to deal with legal title to seized properties.) (c) Investigation of the I. G. Farbenindustrie activities in various fields, such as scientific research, technological processes, business, financial and other economic arrangements, including cartels and patents, affiliated companies and participations, and relations with the German Government and the N az j p ar ty. (d) Accomplishment of ultimate objectives of the Allied- Control Council in respect to the I. G. Farbenindustrie, including:— (1) Making plants or other assets available for reparations. (2) Destruction of plants used exclusively for war-making purposes. * <8) Break-up of monopoly by dispersion of ownership of remaining plants and other assets. (4) Termination of interests in cartels. (5) Control of research. The Farben company participated or “ sub-participated ” in 613 corporations, including 173 in foreign countries, according to the report. Methods Described One of its techniques was described as follows: — . . . “ I. G. acquired substantial interests in other concerns both in Germany and abroad. . . . Frequently these_ acquisitions were accomplished In great secrecy. ‘ Cloaking transactions ’ were the rule, so that I. G.’s true ownership and the value of its holdings could be concealed. “ Many transactions were arranged for purposes of tax avoidance. Foreign transactions were often so completely masked that actual knowledge of their real nature may be possessed to-day by only a few persons.” Included in the 6,000,000,000 marks of assets. General Eisenhower said, were “ hidden reserves ” totalling 1,789,000,000“ reichsmarks. Among foreign stockholders in the vast German industrial empire Americans ranked fourth.. The following tabulation shpws foreign shareholding in millions of marks in the first column

and the percentage of total stock capital in the second column:—

After having shown a breakdown of Farben’s participation in German and other European corporations, the report said: “ The question of I. G.’s ownership and control, direct or indirect, of such important concerns as General Anilines Film Corporation, U.S.A., I. G. Chemie of Basle, Switzerland, and Deutsche Laenderbank, German, is not within the purview of this report.” War Production Shown The German military machine’s dependence on the I. G. Farbenindustrie production was shown in terms of the following percentages of German’s total production of highest priority materials for 1943:—Synthetic rubber, 100; methanol, 100; sera, 100; lubricating oil, 100; poisonous gases, 95; nickel, 95; plasticisers, 92; organic intermediates, 90; plastics, 90; magnesium, 88; explosives, 84; nitrogen. 75; solvents, 75; gunpowder, 70; calcium carbide, 61; X-ray film, 50-60; pharmaceuticals. 55; insecticides and fungicides, 55; synthetic resins, 53; chlorine, 46; high-octane gasoline, 46; compressed gases, 45; sulphuric acid, 35; synthetic gasoline, 33; .spun rayon (1939), 28; artificial silk (1938), 24; gasoline totai, 23; aluminium, 8. A complete description of the I. G. Farbenindustrie’s cartel activities, reported General Eisenhower, would have to include the explosives field, “ where I. G. by agreements with 1.C.1. (Imperial Chemical Industries of Great Britain) and du Pont divided the world markets in industrial explosives, the pharmaceutical, photographic, and synthetic fiber fields and the series of agreements with Standard Oil (New Jersey), and Shell, providing for the pooling of technical information and patent rights on hydrogenation and hydrocarbon synthesis (whereby synthetic fuels, rubber and fatty acids can be made from coal, crude oil, and natural gas) and the collateral division of fields of agreements between I. G. and Standard, whereby Standard agreed to stay ,put of the chemicals business. Pacts With U.S. Firms After it had discussed the cartel agencies the report made the following comment on the I. G. Farbenindustrie’s international ramifications, including those in the Soviet Union: ‘‘Most of the chemical cartel agencies described above had relations also with foreign competitors. Thus the German caustic soda syndicate had an agreement with Solvay and Cie (Belgium) and 1.C.1. dividing world markets. The German caustic potash syndicate (in which one Czechoslovak firm had a small quota) had a price agreement with substantially all European manufacturers and made a yearly payment to Sojuspromexport, the Russian export agency, to induce it to desist from sales outside Russia; and in as much as the United States production was insufficient even for the domestic market and the Japanese ceased to export this product after the beginning of the war with China, the combine completely controlled the international market. “In carbonate of potash there were export agreements with Czech, French, Italian, and Austrian producers, and it was understood that the United States producers would not sell in Europe so long as European producers exported to the United States only in limited quantities and at the going United States prices.”

General Eisenhower said that he had seized virtually all of the known Farben plants, but that these comprised only 9 per cent, of all the I. G. Farbenindustrie holdings in Germany. In leading up to the necessity for fourPower action, General Eisenhower made this statement: “It would obviously not accomplish United States objectives if the 9 per cent, of plant properties located in the United States zone were dispersed into small units, while the remainder, lying in the other zones, were ignored."

Switzerland .. .. 24.3 3.57 England 19.9 2.93 The Netherlands 7.4 1.09 United States .. .. 4.6 0.71 Spain 3.1 0.46 Czechoslovakia .. .. 3.0 0.44 Belgium-Luxemburg 1.0 0.15