Wall Street and the Rise of Hitler (6 page)

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CHAPTER TWO: The Empire of I.G. Farben

The aim of this work is the building up o.[ a tight organ izatton for armament
in the I.G. which could be inserted without difficulty in the existing
organization of the I.G. and the individual plants. In the case of war, I.G. will
be treated by the authorities concerned with armament questions as one big
plant which, in its task for the armament, as far as it is possible to do so from
the technical point of view, will regulate itself without any organizational
influence from outside (the work in this direction was in principle agreed upon
with the Ministry of War
Wehrwirtschaftsant)
and from this office with the
Ministry of Economy. To the field of the work of the
Vermittlungsstelle W

belongs, besides the organizational set-up and long-range planning, the
continuous collaboration with regard to the armament and technical questions

with the authorities of the Reich and with the plants of the I.G.
12

Unfortunately the files of the
Vermittlungsstelle
offices were destroyed prior to the end of the war, although it is known from other sources that from 1934 onwards a complex network of transactions evolved between I.G. and the Wehrmacht. In 1934 I. G. Farben began to mobilize for war, and each I.G. plant prepared its war production plans and submitted the plans to the Ministries of War and Economics. By 1935-6 war games were

being held at I.G. Farben plants and wartime technical procedures rehearsed.13
These war games were described by Dr. Struss, head of the Secretariat of I.G.'s Technical Committee:
It is true that since 1934 or 1935, soon after the establishment of the
Vermittlungsstelle W
in the different works, theoretical war plant games had
been arranged to examine how the effect of bombing on certain factories would
materialize. It was particularly taken into consideration what would happen if
100- or 500-kilogram bombs would fall on a certain factory and what would be
the result of it. It is also right that the word
Kriegsspiele
was used for it.

The
Kriegsspiele
were prepared by Mr. Ritter and Dr. Eckell, later on partly by
Dr. yon Brunning by personal order on Dr. Krauch's own initiative or by order
of the Air Force, it is not known to me. The tasks were partly given by the
Vermittlung-sstelle W
and partly by officers of the Air Force. A number of
officers of all groups of the Wehrmacht (Navy, Air Force, and Army)
participated in these
Kriegsspiele.

The places which were hit by bombs were marked in a map of the plant so that
it could be ascertained which parts of the plant were damaged, for example a
gas meter or an important pipe line. As soon as the raid finished, the
management of the plant ascertained the damages and reported which part of
the plant had to stop working; they further reported what time would be
required in order to repair the damages. In a following meeting the
consequences of the
Kriegsspiele
were described and it was ascertained that in
the case of Leuna [plant] the damages involved were considerably high;
especially it was found out that alterations of the pipe lines were to be made at
considerable cost.
14

Consequently, throughout the 1930s I. G. Farben did more than just comply with orders http://reformed-theology.org/html/books/wall_street/chapter_02.htm (7 of 15) [8/4/2001 9:44:10 PM]

CHAPTER TWO: The Empire of I.G. Farben

from the Nazi regime. Farben was an initiator and operator for the Nazi plans for world conquest. Farben acted as a research and intelligence organization for the German Army and voluntarily initiated Wehrmacht projects. In fact the Army only rarely had to approach Farben; it is estimated that about 40 to 50 percent of Farben projects for the Army were initiated by Farben itself. In brief, in the words of Dr, von Schnitzler:
Thus, in acting as it had done, I.G. contracted a great responsibility and
constituted a substantial aid in the chemical domain and decisive help to
Hitler's foreign policy, which led to war and to the ruin of Germany. Thus, I
must conclude that I.G. is largely responsible for Hitler's policy,
Polishing I. G. Farben's Public Image

This miserable picture of pre-war military preparation was known abroad and had to be sold

— or disguised — to the American public in order to facilitate Wall Street fund-raising and technical assistance on behalf of I. G. Farben in the United States. A prominent New York public relations firm was chosen for the job of selling the I.G. Farben combine to America.

The most notable public relations firm in the late 1920s and 1930s was Ivy Lee & T.J. Ross of New York. Ivy Lee had previously undertaken a public relations campaign for the Rockefellers, to spruce up the Rockefeller name among the American public. The firm had also produced a syncophantic book entitled
USSR,
undertaking the same clean-up task for the Soviet Union — even while Soviet labor camps were in full blast in the late 20s and early 30s.

From 1929 onwards Ivy Lee became public relations counsel for I. G. Farben in the United States. In 1934 Ivy Lee presented testimony to the House Un-American Activities

Committee on this work for Farben.15 Lee testified that I.G. Farben was affiliated with the

American Farben firm and "The American I.G. is a holding company with directors such people as Edsel Ford, Walter Teagle, one of the officers of the City Bank .... " Lee explained that he was paid $25,000 per year under a contract made with Max Ilgner of I.G. Farben. His job was to counter criticism levelled at I.G. Farben within the United States. The advice given by Ivy Lee to Farben on this problem was acceptable enough:
In the first place, I have told them that they could never in the world get the
American people reconciled to their treatment of the Jews: that that was just
foreign to the American mentality and could never be justified in the American
public opinion, and there was no use trying.

In the second place, anything that savored of Nazi propaganda in this country
was a mistake and ought not to be under. taken. Our people regard it as
meddling with American affairs, and it was bad business.
16

The initial payment of $4,500 to Ivy Lee under this contract was made by Hermann Schmitz, chairman of I.G. Farben in Germany. It was deposited in the New York Trust Company under the name of I. G. Chemic (or the "Swiss I.G.," as Ivy Lee termed it).

However, the second and major payment of $14,450 was made by William von Rath of the American I.G. and also deposited by Ivy Lee in New York Trust Company, for the credit of http://reformed-theology.org/html/books/wall_street/chapter_02.htm (8 of 15) [8/4/2001 9:44:10 PM]

CHAPTER TWO: The Empire of I.G. Farben

his personal account. (The firm account was at the Chase Bank.) This point about the origin of the funds is 'important when we consider the identity of directors of American I.G., because payment by American I.G. meant that the bulk of the Nazi propaganda funds were not of German origin.
They were American funds earned in the U.S. and under control of
American directors, although used for Nazi propaganda in the United States.

In other words, most of the Nazi propaganda funds handled by Ivy Lee were
not
imported from Germany.

The use to which these American funds were put was brought out under questioning by the House Un-American Activities Committee:

Mr. DICKSTEIN. As I understand you, you testified that you received no propaganda at all, and that you had nothing to do with the distribution of propaganda in this country?

Mr. LEE. I did not testify I received none Mr. Dickstein.

Mr. DICKSTEIN. I will eliminate that part of the question, then.

Mr. LEE. I testified that I disseminated none whatever.

Mr. DICKSTEIN. Have you received or has your firm received any propaganda literature from Germany at any time?

Mr. LEE. Yes, sir.

Mr. DICKSTEIN. And when was that?

Mr. LEE. Oh, we have received — it is a question of what you call propaganda.

We have received an immense amount of literature.

Mr. DICKSTEIN. You do not know what that literature was and what it contained?

Mr. LEE. We have received books and pamphlets and newspaper clippings and documents, world without end.

Mr. DICKSTEIN. I assume someone in your office would go over them and see what they were?

Mr. LEE. Yes, sir.

Mr. DICKSTEIN. And then after you found out what they were, I assume you kept copies of them?

Mr. LEE. In some cases, yes: and in some, no. A great many of them, of course, were in German, and I had what my son sent me. He said they were interesting and significant, and those I had translated or excerpts of them made.
17

Finally, Ivy Lee employed Burnham Carter to study American new paper reports on http://reformed-theology.org/html/books/wall_street/chapter_02.htm (9 of 15) [8/4/2001 9:44:10 PM]

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Germany and prepare suitable pro-Nazi replies. It should be noted that this German literature was not Farben literature, it was official Hitler literature: Mr. DICKSTEIN. In other words, you receive this material that deals with German conditions today: You examine it and you advise them. It has nothing to do with the German Government, although the material, the literature, is official literature of the Hitler regime. That is correct, is it not?

Mr. LEE. Well, a good deal of the literature was not official.

Mr. DICKSTEIN. It was not I.G. literature, was it?

Mr. LEE. No; I.G. sent it to me.

Mr. DICKSTEIN. Can you show us one scrap of paper that came in here that had anything to do with the I.G.?

Mr. LEE. Oh, yes. They issue a good deal of literature. But I do not want to beg the question. There is no question whatever that under their authority I have received an immense amount of material that came from official and unofficial sources.

Mr. DICKSTEIN. Exactly. In other words, the material that was sent here by the I.G. was material spread — we would call it propaganda t by authority of the German Government. But the distinction that you make in your statement is, as I take it, that the German Government did not send it to you directly; that it was sent to you by the I.G.

Mr. LEE. Right.

Mr. DICKSTEIN. And it had nothing to do with their business relations just now.

Mr. LEE. That is correct.

The American I.G. Farben

Who were the prominent Wall Street establishment financiers who directed the activities of American I.G., the I.G. Farben affiliate in the United States promoting Nazi propaganda?

American I.G. Farben directors included some of the more prominent members of Wall Street. German interests re-entered the United States after World War I, and successfully overcame barriers designed to keep I.G. out of the American market. Neither seizure of German patents, establishment of the Chemical Foundation, nor high tariff walls were a major problem.

By 1925, General Dyestuff Corporation was established as the exclusive selling agent for products manufactured by Gasselli Dyestuff (renamed General Aniline Works, Inc., in 1929) and imported from Germany. The stock of General Aniline Works was transferred in 1929 to American I.G. Chemical Corporation and later in 1939 to General Aniline & Film http://reformed-theology.org/html/books/wall_street/chapter_02.htm (10 of 15) [8/4/2001 9:44:10 PM]

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Corporation, into which American I.G. and General Aniline Works were merged. American I.G. and its successor, General Aniline & Film, is the unit through which control of I.G.'s enterprises in the U.S. was maintained. The stock authorization of American I.G. was 3,000,000 common A

shares and 3,000,000 common B shares. In return for stock interests in General Aniline Works and Agfa-Ansco Corporation, I.G. Farben in Germany received all the B shares and 400,000 A shares. Thirty million dollars of convertible bonds were sold to the American public and guaranteed as to principal and interest by the German I.G. Farben, which received an option to purchase an additional 1,000,000 A shares.

Table 2-2: The Directors of American I.G. at 1930:

American I,G.

Director

Citizenship

Other Major Associations

Carl BOSCH

German

FORD MOTOR CO. A-G

Edsel B. FORD

U.S.

FORD MOTOR CO.

DETROIT

Max ILGNER

German

Directed I.G. FARBEN N.W.7

(INTELLIGENCE) office.

Guilty at Nuremberg War

Crimes Trials.

F. Ter MEER

German

Guilty at Nuremberg War

Crimes Trials

H.A. METZ

U.S.

Director of I.G. Farben

Germany and BANK OF

MANHATTAN (U.S.)

C.E. MITCHELL

U.S.

Director of FEDERAL

RESERVE BANK OF N.Y.

and NATIONAL CITY BANK

Herman

German

On boards of I.G. Farben

SCHMITZ

(President) (Germany)

Deutsche Bank (Germany) and

BANK FOR

INTERNATIONAL

SETTLEMENTS. Guilty at

Nuremberg War Crimes Trials.

Walter TEAGLE

U.S.

Director FEDERAL

RESERVE BANK OF NEW

YORK and STANDARD OIL

OF NEW JERSEY

W.H. yon

Naturalized Director of GERMAN

RATH

GENERAL U.S. ELECTRIC

(A.E.G.)

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CHAPTER TWO: The Empire of I.G. Farben