Wall Street and the Rise of Hitler (5 page)

I. G. Farben is of peculiar interest in the formation of the Nazi state because Farben directors materially helped. Hitler and the Nazis to power in 1933. We have photographic evidence (see page 60) that I.G. Farben contributed 400,000 RM to Hitler's political "slush fund." It was this secret fund which financed the Nazi seizure of control in March 1933.

Many years earlier Farben had obtained Wall Street funds for the 1925 cartelization and expansion in Germany and $30 million for American I. G. in 1929, and had Wall Street directors on the Farben board. It has to be noted that these funds were raised and directors appointed years before Hitler was promoted as the German dictator.

The Economic Power of I. G. Farben

Qualified observers have argued that Germany could not have gone to war in 1939 without I. G. Farben. Between 1927 and the beginning of World War II, I.G. Farben doubled in size, an expansion made possible in great part by American technical assistance and by American bond issues, such as the one for $30 million offered by National City Bank. By 1939 I. G.

acquired a participation and managerial influence in some 380 other German firms and over 500 foreign firms. The Farben empire owned its own coal mines, its own electric power plants, iron and steel units, banks, research units, and numerous commercial enterprises.

There were over 2,000 cartel agreements between I. G. and foreign firms — including Standard Oil of New Jersey, DuPont, Alcoa, Dow Chemical, and others in the United States, The full story of I,G, Farben and its world-wide ae-tivities before World War II can never be known, as key German records were destroyed in 1945 in anticipation of Allied victory.

However, one post-war investigation by the U.S, War Department concluded that:
Without I. G.'s immense productive facilities, its intense re. search, and vast
international affiliations, Germany's prosecution of the war would have been
unthinkable and impossible; Farben not only directed its energies toward
arming Germany, but concentrated on weakening her intended victims, and this
double-barreled attempt to expand the German industrial potential for war and
to restrict that of the rest of the world was not conceived and executed "in the
normal course of business." The proof is overwhelming that I. G. Farben
officials had full prior knowledge of Germany's plan for world conquest and of
each specific aggressive act later undertaken ....
3

Directors of Farben firms
(i.e.,
the "I. G. Farben officials" referred to in the investigation) included not only Germans but also prominent American financiers. This 1945 U.S. War Department report concluded that I.G.'s assignment from Hitler in the prewar period was to make Germany self-sufficient in rubber, gasoline, lubricating oils, magnesium, fibers, tanning agents, fats, and explosives. To fulfill this critical assignment, vast sums were spent by I.G. on processes to extract these war materials from indigenous German raw materials -

in particular the plentiful German coal resources. Where these processes could not be developed in Germany ,they were acquired from abroad under cartel arrangements. For example, the process for iso-octane, essential for aviation fuels, was obtained from the http://reformed-theology.org/html/books/wall_street/chapter_02.htm (2 of 15) [8/4/2001 9:44:10 PM]

CHAPTER TWO: The Empire of I.G. Farben

United States,

... in fact entirely [from] the Americans and has become known to us in detail
in its separate stages through our agreements with them [Standard Oil of New

Jersey] and is being used very extensively by us.
4

The process for manufacturing tetra-ethyl lead? essential for aviation gasoline, was obtained by I. G. Farben from the United States, and in 1939 I.G. was sold $20 million of high-grade aviation gasoline by Standard Oil of New Jersey. Even before Germany manufactured tetra-ethyl lead by the American process it was able to "borrow" 500 tons from the Ethyl Corporation. This loan of vital tetra-ethyl lead was not repaid and I.G. forfeited the $1

million security. Further, I.G. purchased large stocks of magnesium from Dow Chemical for incendiary bombs and stockpiled explosives, stabilizers, phosphorus, and cyanides from the outside world.

In 1939, out of 43 major products manufactured by I.G., 28 were of "primary concern" to the German armed forces. Farben's ultimate control of the German war economy, acquired during the 1920s and 1930s with Wall Street assistance, can best be assessed by examining the percentage of German war material output produced by Farben plants in 1945. Farben at that time produced 100 percent of German synthetic rubber, 95 percent of German poison gas (including all the Zyklon B gas used in the concentration camps), 90 percent of German plastics, 88 percent of German magnesium, 84 percent of German explosives, 70 percent of German gunpowder, 46 percent of German high octane (aviation) gasoline, and 33 percent of German synthetic gasoline.
5
(See Chart 2-1 and Table 2-1.)
Table 2-1: German Army (Wehrmacht) Dependence on I.G.

Farben Production (1943):

Percent Produced

Total German

by

Product

Production

I.G. Farben

Synthetic Rubber

118,600 tons

100

Methanol

251,000 tons

100

Lubricating Oil

60,000 tons

100

Dyestuffs

31,670 tons

98

Poison Gas

—

95

Nickel

2,000 tons

95

Plastics

57,000 tons

90

Magnesium

27,400 tons

88

Explosives

221,000 tons

84

Gunpowder

210,000 tons

70

High Octane

(Aviation)

650,000 tons

46

Gasoline

Sulfuric Acid

707,000 tons

35

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CHAPTER TWO: The Empire of I.G. Farben

Chart 2-1: German Army (Wehrmacht) Dependence on I.G. Farben Production (1943)

Dr. von Schnitzler, of the I.G. Farben
Aufsichsrat,
made the following pertinent statement in 1943:

It is no exaggeration to say that without the services of German chemistry
performed under the Four Year Plan the prosecution of modern war would

have been unthinkable.
6

Unfortunately, when we probe the technical origins of the more important of these military materials — quite apart from financial Support for Hitler — we find links to American industry and to American businessmen. There were numerous Farben arrangements with American firms, including cartel marketing arrangements, patent agreements, and technical exchanges as exemplified in the Standard Oil-Ethyl technology transfers mentioned above.

These arrangements were used by I.G. to advance Nazi policy abroad, to collect strategic information, and to consolidate a world-wide chemical cartel.

One of the more horrifying aspects of I.G. Farben's cartel was the invention, production, and distribution of the Zyklon B gas, used in Nazi concentration camps. Zyklon B was pure Prussic acid, a lethal poison produced by I.G. Farben Leverkusen and sold from the Bayer sales office through Degesch, an independent license holder. Sales of Zyklon B amounted to almost three-quarters of Degesch business; enough gas to kill 200 million humans was produced and sold by I.G. Farben. The Kilgore Committee report of 1942 makes it clear that the I.G. Farben directors had precise knowledge of the Nazi concentration camps and the use of I.G. chemicals. This prior knowledge becomes significant when we later consider the role of the American directors in I.G.'s American subsidiary. The 1945 interrogation of I.G.

Farben director yon Schnitzler reads:

Q. What did you do when they told you that I.G. chemicals was
[sic]
being used to kill, to murder people held in concentration camps?

A. I was horrified.

Q. Did you do anything about it?

A. I kept it for me [to myself] because it was too terrible .... I asked Muller-Cunradi is it known to you and Ambros and other directors in Auschwitz that the gases and chemicals are being used to murder people.

Q. What did he say?

A. Yes: it is known to all I.G. directors in Auschwitz.7

There was no attempt by I.G. Farben to halt production of the gases — a rather ineffective way for von Schnitzler to express any concern for human life, "because it was too terrible."

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CHAPTER TWO: The Empire of I.G. Farben

The Berlin N.W. 7 office of I.G. Farben was the key Nazi overseas espionage center. The unit operated under Farben director Max Ilgner, nephew of I.G. Farben president Hermann Schmitz. Max Ilgner and Hermann Schmitz were on the board of American I.G., with fellow directors Henry Ford of Ford Motor Company, Paul Warburg of Bank of Manhattan, and Charles E. Mitchell of the Federal Reserve Bank of New York.

At the outbreak o£ war in 1939 VOWI employees were ordered into the Wehrmacht but in fact continued to perform the same work as when nominally under I.G. Farben. One of the more prominent of these Farben intelligence workers in N.W. 7 was Prince Bernhard of the Netherlands, who joined Farben in the early 1930s after completion of an 18-month period

of service in the black-uniformed S.S.8

The U.S. arm of the VOWI intelligence network was Chemnyco, Inc. According to the War Department,

Utilizing normal business contacts Chemnyco was able to transmit to Germany
tremendous amounts of material ranging from photographs and blueprints to

detailed descriptions of whole industrial plants.
9

Chemnyco's vice president in New York was Rudolph Ilgner, an American citizen and brother of American I, G. Farben director Max Ilgner. In brief, Farben operated VOWI, the Nazi foreign intelligence operation, before World War II and the VOWI operation was associated with prominent members of the Wall Street Establishment through American I.G.

and Chemnyco.

The U.S. War Department also accused I.G. Farben and its American associates of spearheading Nazi psychological and economic warfare programs through dissemination of propaganda via Farben agents abroad, and of providing foreign exchange for this Nazi propaganda. Farben's cartel arrangements promoted Nazi economic warfare — the outstanding example being the voluntary Standard Oil of New Jersey restriction on development of synthetic rubber in the United States at the behest of I. G. Farben. As the War Department report puts it:

The story in short is that because of Standard Oil's determination to maintain
an absolute monopoly of synthetic rubber developments in the United States, it
fully accomplished I.G.'s purpose of preventing United States production by
dissuading American rubber companies from undertaking independent
research in developing synthetic rubber processes.
10

In 1945 Dr. Oskar Loehr, deputy head of the I.G. "Tea Buro," confirmed that I. G. Farben and Standard Oil of New Jersey operated a "preconceived plan" to suppress development of the synthetic rubber industry in the United States, to the advantage of the German Wehrmacht and to the disadvantage of the United States in World War II.

Dr. Loehr's testimony reads (in part) as follows:

Q. Is it true that while the delay in divulging the buna [synthetic rubber]

processes to American rubber companies was taking place, Chemnyco and Jasco were in the meantime keeping I.G. well informed in regard to synthetic http://reformed-theology.org/html/books/wall_street/chapter_02.htm (5 of 15) [8/4/2001 9:44:10 PM]

CHAPTER TWO: The Empire of I.G. Farben

rubber development in the U.S.?

A. Yes.

Q. So that at all times I.G. was fully aware of the state of the development of the American synthetic rubber industry?

A. Yes.

Q. Were you present at the Hague meeting when Mr. Howard [of Standard Oil]

went there in 1939?

A. No.

Q. Who was present?

A. Mr. Ringer, who was accompanied by Dr. Brown of Ludwigshafen. Did they tell you about the negotiations?

A. Yes, as far as they were on the buna part of it.

Q. Is it true that Mr. Howard told I.G. at this meeting that the developments in the U.S. had reached such a stage that it would no longer be possible for him to keep the information in regard to the buna processes from the American companies?

A. Mr. Ringer reported it.

Q. Was it at that meeting that for the first time Mr. Howard told I.G. the American rubber companies might have to be informed of the processes and he assured I.G. that Standard Oil would control the synthetic rubber industry in the U.S.? Is that right?

A. That is right. That is the knowledge I got through Mr. Ringer.

Q. So that in all these arrangements since the beginning of the development of the synthetic rubber industry the suppression of the synthetic rubber industry in the U.S. was part of a preconceived plan between I.G. on the one hand and Mr.

Howard of Standard Oil on the other?

A. That is a conclusion that must be drawn from the previous facts.
11

I.G. Farben was pre-war Germany's largest earner of foreign exchange, and this foreign exchange enabled Germany to purchase strategic raw materials, military equipment, and technical processes, and to finance its overseas programs of espionage, propaganda, and varied military and political activities preceding World War II. Acting on behalf of the Nazi state, Farben broadened its own horizon to a world scale which maintained close relations with the Nazi regime and the Wehrmaeht. A liaison office, the
Vermittlungsstelle W,
was established to maintain communications between I.G. Farben and the German Ministry of War: