The Times: German War Planning

From Our Special Correspondent NUREMBERG, JULY 29

An American military tribunal to-day acquitted the principal directors of I.G. Farbenindustrie, Germany's vast chemical combine, on charges of having planned and waged aggressive war, after a trial ...   more »

The Times

Future Of German Cartels

FROM OUR OWN CORRESPONDENT WASHINGTON, Oct. 21 Simultaneously with the news from Germany that United States army engineers will demolish three large munition plants of I.G. Farbenindustrie and five other industrial establishments in the ...   more »

The Times: German Dye Trust

From Our Frankfurt Correspondent

Final recommendations by allied experts appointed to regroup the vast and diversified I.G. Farben complex have now been prepared for the High Commission, and anxious German shareholders whose holdings have been frozen since the war hope that a final decision will be announced soon. The recommendations are that the greater parts of the three large groups-one in the Ruhr,, one in the Frankfurt area, and one at Ludwigshafen, in the French zone-which formed the basis of the first chemical merger in 1925 should again operate independently, and that from the remaining Farben interests in west Germany about six minor com- panies should be formed. On at least. two points British and American officials i have failed to agree and the decision now rests with the High Commissioners. The full description of the Farben organization reads: " Community of Interests of the Dyestuffs Industry Share Company," and it was indeed a community of interests, perhaps the most diversified Europe has known. In 1939 it was by far the largest business organization in Ger- many, and it stiU represents to-day the most important German industrial activi-, ties after the manufacture of iron and steel and the mining of coal. Its products touch l the ordinary citizen closely and give con- stant promise of new articles for use in the home. A random list of Farben productsl would include dyestuffs for textiles andI for many other materials; pharma-| ceuticals such as aspirin and other familiar l names; nitrogen compounds, includingl fertilizers; films and other photographic supplies; plastics; synthetic rubber; syn- 1 thetic fuels, including petrol and oil; arti- I ficial silk and fibies ; insecticides; sera and! vaccines; light metals; synthetic gems and perfumes; and compressed gases. Rubber and fuels have been prohibited by the allies, but these prohibitions are not likely l to last much longer. COMPANIES ABROAD In 1925 there were eight large chemical concerns in Germany, including the Bayer group, centred on Leverkusen, in the Ruhr; the Farbwerke, centred on Hoechst, outside Frankfurt; the Badischel Anilin- and Soda-Fabrik, centred on Ludwigshafen; the Agfa (Aktiengesell schaft fur Anilinfabrikation) film i and photography company in Berlin; and others. These had built up their l names since the 1860s, but to eliminatel competition and reduce costs a merger was I decided upon. A managing board of the i new corporation was formed, and, with its roots in west Germany, rapidly extended its interests. Up to 1939 it acquired new] properties in east Germany, and alsol formed' a vast number of companies abroad, so that out of 890 companies about half-though by no means half of the capital-were outside Germany During the war Farben expanded into Poland and France, and when the war ended 56 per cent. of the Farben assets were in territory occupied by the Russians. These companies became a total loss. to German shareholders, either because they had been destroyed or because they were% taken as reparations or made into Soviet or east German agencies. The shareholders, most of whom are in west Germany, use the considerable reduction already sustained by the Farben empire as a further argu- ment against " atomization " of their surviving interests. EMPHASIS ON EXPORTS In 1944 therefore I.G. Farben extended from Paris to Poland, enjoyed a gross annual sale of between 2,500m. and 3,000m. Reichsmarks, declared an annual dividend of 6 per cent (the maximum allowed by the Nazis) and had fixed assets of about 2,O00m. Reichsmarks. The cor- poration concentrated largely on exports, and in the 1930s found markets all over the world, but it did not, the shareholders maintain, share proportionately in the internal boom based on German rearma- ment. In 1938 its share of total German exports of all kinds stood at 8.6 per cent., and of chemical exports alone at 57 per cent. It claimed then nearly one-fifth of the world's chemical exports. By the end of the war it employed nearly 200,000 people, a figure, it must be assumed, which does not include the slave labour used at two places. Use of slave labour was one of the only two charges sustained against some of the Farben directors when they were brought into court at Nuremberg. The indictment had named waging war, mass extermina- tion, plunder and spoliation, and use of slave labour. Five men out of 23 were convicted because this labour was used at a rubber factory at Auschwitz and at a coal mine in Silesia which supplied this factory, and nine men were convicted of spoliation in Poland, Norway, and France. None of the sentences exceeded eight years' imprisonment, and through good conduct reductions all the men sentenced are now free. The allies' first move in 1945 was to appoint a control officer in each of the four zones to administer Farben properties, and in the western zones the officers are still carrying out this task, the three together forming a tripartite control office with headquarters in Frankfurt. These officials were appointed under Control Council law No. 9, which also ordered that each Far- ben unit should be independent and that all trading in shares should cease. The Germans have complained justifiably that a similar edict was not issued in the case of shares in heavy industries, and the only reason for the distinctiofl which suggests itself is that the heavy hand of the Rus- sians did not fall on iron and steel affairs as it did on I.G. Farben. As time passed the Russians went their own way and disposed of assets in their zone without consulting the other Powers. In the western zones the administration of Farben properties did not correspond on all points. The French left the group at Liudwigshafen more or less intact; the British allowed some latitude in maintain- ing what the Germrans call natural econo- mic entities " and in leaving practical management to the Germans; the Anieri- cans wished to separate all the plants down to the smallest. The difference between the British and American approach explains the alternative policies now facing the High Commission. ALLEED POWERS Since the Federal Government was formed the allies have continued to reserve control over decartelization, and full authority over Farben is now invested in them through law No. 35, dated last August, which echoed Control Council law No. 9. It had a sumnary sound at this stage of developments in Germany, in that it annulled all the rights of former boards of Farben companies, and gave the High Comjmission power to ktransfer or dispose of assets, reorganize companies, and cancel existing contracts. The Ger- mans responded sbarply with the criticisms that there was no guarantee that new com- panies would be established able to face world competition; that no time limit was set to allied control; and that about 300,000 shareholders would continue to depend on allied good wilL The High Commission then gave the assurance that the intention was to form economically sound and independent companies, and to distribute the securities in those companies among present shareholders. The Germans have not opposed the prin- ciple of deconcentration, but have objected to some separation plans, and have not agreed among themselves in all cases. They agree that the larger units should now stand separately, but the shareholders would prefer to see the fate of the smaller units left in abeyance. The essential difference between British and American views has arisen from the American objective-even though this has now been somewhat modified-to break the complex into as small parts as possible and the British preference for allowing most of the Bayer group in the British zone to continue as an entity. The fac- tories at Ludwigshafen and Oppau, in the French zone, have attracted comparatively little notice, except when the disastrous explosion took place at Ludwigshafen in 1948. No one has seriously doubted that they should remain intact, and the French therefore have not been ts concerned in the controversy as the other two allies. Their vote, however, will be important in the High Commission. CHIEF ISSUES When it was seen that the control officers could not agree on fundamental principles British, American, and French experts were called in to advise on the future com- position of the companies. Their joint compromise report has met with objec- tions from the west German G3vernment and from British officials, on two major points and on one or two minor ones. The chief issues centre on recommendations that an Agfa plant for making photo- graphic films and paper inside the Lever- kusen group should be detached and joined to an Agfa camera factory in Munich; and that synthetic fibre plants at Dormagen, in the Leverkuseu group, at Rottweil, in the French zone, and at Bobingen, near Augsburg, in the American zone, should be joined together. The Government is against this fusiop of the fibre plants and estimates it woil1d cost 30m. marks. Its objection has British support. Similarly, it is argued that it would be unnecessary to sever the film plant from Leverkusen, where it has been developed. - The nine principal units proposed by the experts are: the three groups at Lever- kusen, Hoechst, and Ludwigshafen; the synthetic fibre group; the Agfa combina- tion; the Casella factory; the Titan plant at Leverkusen which manufactures the basis for paint and is under half American and half German ownership; the chemical works at Hitlls, in the British zone, which made synthetic rubber among other, pro- ducts; and the chlorine and plastics plant at Rheinfelden, in the French zone. Recommendations are also made on four other plants, among them one at Duisburg, in the Ruhr, which is dominant in the manufacture of sulphuric acid. A question also to be settled by the High Commission, is who is to choose the new boards and how far pre- vious managers are to be allowed to con- tinue in office. The British tendency has been to rely on men already doing the job, while the Americans have sought to make a clean sweep. Bevond this again is the prospect, amounting almost to a certainty, that voices will be heard demanding that the new principle of co-determination for labour proposed-but not yet finally accepted-for the iron and steel industries should also apply in the chemical industry. Finally, when all has been settled, it is possible that the validity of changes of ownership directed by Occupation Powers and not by shareholders will be challenged in the international court. Such a chal- lenge might undo much that has been done in the past six years, but with so many more rivers to cross closer at hand this one may be left until it is reached. GERMAN DYE TRUST RECOMMENDATIONS ON DEGREE OF DISPERSAL