Hell's Cartel

by Diarmuid Jeffreys

  It was a telling point. The Allies reacted to the German attack of April 22 with outrage and disgust, but Fritz Haber had opened the floodgates. Over the following days, Sir John French’s furious demand that “immediate steps be taken to supply similar means of the most effective kind for use by our troops” was echoed by newspapers in Paris and London denouncing the way that Germany’s domination of synthetic dyestuff production had left the Allied armies vulnerable to gas attack and calling for retaliation in kind. In the event, the Allies’ first response to Ypres was more conventional. One morning in late May 1915, the French air force bombed the BASF plant at Ludwigshafen. Aerial military technology was quite primitive and the material damage was light but there were some casualties among the workforce.* Later that summer, however, the British, led by the chemist J. B. S. Haldane, established a secret chemical weapons research station at Porton Down and began producing their own poison gases. The French soon established similar facilities, and by the end of the year the Allies were deploying chemical weapons as frequently as the Germans. Some twenty-two different chemical agents were eventually developed during World War I, including mustard gas, arsenicals, and phosgene, and as time went by these became ever more sophisticated and deadly; one form of phosgene, developed by Haber and manufactured by BASF, could even penetrate gas masks.

  Inevitably, the Allies justified their own use of these gases on the grounds that the Germans had used them first and that the laws of war allowed them to retaliate. They also claimed that the overall superiority of German chemistry had given the enemy a head start; they were only struggling to catch up. The German chemists had no such defense. After the first Ypres attack, Haber was downcast, but not because he felt he had crossed a moral Rubicon. His disappointment came from frustration that the breakthrough hadn’t been supported by sufficient numbers of troops to make it stick. In later years he would counter any ethical questions with the argument that to be injured or killed by gas was no worse, and in some cases better, than being blown up and mutilated by high explosives or shot and killed by a machine gun bullet. He insisted he had merely been doing his patriotic duty.* After the war the Allies tried briefly to bring him to trial as a war criminal, but Haber grew a beard and hid in Switzerland for a few months until the fuss had died down. Eventually he came back to Germany, where he was able to pick up his work as a scientist and play a leading role in the reconstruction of his country’s chemical industry. In late 1918 (to the fury of many in the French and British scientific communities) he was awarded the Nobel Prize for his discovery of synthetic ammonia—an honor he accepted as his due.

  Of course, as we now know, Germany could have prosecuted the war without the poison gas program. For on May 1, 1915, right on schedule, Carl Bosch was able to tell delighted War Ministry officials that he had succeeded against all odds in mass-producing synthetic nitric acid. The kaiser’s army would be able to carry on fighting, its guns free at last of their fatal dependence on Chilean saltpeter. Bosch was lionized throughout Germany as a national hero, and millions of young men who might otherwise have lived were condemned to a premature death—something he would recall with great sadness in later years.

  But the overall significance of both the synthetic nitrate program and the development of poison gas weapons lay in the fact that they brought the German chemical industry right into a mutually dependent relationship with the state. Dye companies, which just a generation earlier had prided themselves as much on their commercial independence as on their scientific acumen and aggressive business skills, had evolved into massive entities that, for the moment at least, were umbilically tied to Germany’s political and military establishment and, increasingly, financially supported by government loans and contracts. With Bosch’s technical brilliance having ensured that the war would continue for some years, these links would only multiply, forming a pattern of collaboration that would be recalled and reactivated many years later. At a time when the country felt in great national peril and in the absence of a buoyant export market, it is perhaps understandable why this degree of cooperation was thought necessary. But habits acquired under such stressful and demanding circumstances wouldn’t easily be broken in the difficult times ahead. The German chemical industry was beginning to swim in very dangerous waters.

  * * *

  FEW PEOPLE EPITOMIZED the strengthening links between the chemical industry and the military more than Carl Duisberg. The war was a turning point for Bayer’s ebullient boss. As fiercely patriotic as Fritz Haber and as ambitious for his business as the keenest of the kaiser’s generals was for success on the battlefield, he both identified with his country’s war effort and took advantage of the unique opportunities for profit and growth that it had to offer.

  Arguably, Duisberg had little choice. The war had curtailed much of Bayer’s overseas expansion. Exports were interrupted, patents held in enemy countries were declared invalid, assets were frozen, and valuable trademarks were abruptly rescinded. In 1915, for example, the British government declared that the aspirin trade name was no longer Bayer’s exclusive preserve and that anyone could now make and market the drug under that name. Other Allied governments followed suit, and in Melbourne, Australia, a clever young chemist called George Nicholas came up with a new brand called Aspro, which was soon one of the many versions of the drug competing for an export market that Bayer had once called its own. International dye sales, the company’s other staple, also fell through the floor—as they did for every other German producer—and although there was some consolation in the fact that the United States was still neutral, the Royal Navy blockade made any meaningful transatlantic trade almost impossible. Production facilities were falling idle and revenue was shrinking. For the company to survive the war, new customers had to be found.

  Duisberg looked to his own country for ways to plug the gap. If the conflict was becoming, as many people were calling it, the “Chemists’ War,” then surely there should be opportunities aplenty in providing matériel for Germany’s armed forces. He approached the authorities through influential and well-connected friends such as Gustav Krupp, the armaments manufacturer, and was welcomed with open arms. During the spring of 1915 government orders began to flow Bayer’s way, not just for obvious products such as dye for service uniforms, medicines for the army’s military hospitals, and paints for its trucks and guns but also for new types of explosives, poison gases, and intermediate chemicals. Indeed, the flood of orders became so strong that Duisberg was soon moved to write to Major Max Bauer at the War Ministry: “You should see what things look like here in Leverkusen, how the whole factory is turned upside down and reorganized so that it produces almost nothing but military contracts.… As the father and creator of this work, you would derive great pleasure.”

  Nevertheless, Duisberg knew that the long-term future was more problematic. After Ypres, British and French politicians had started channeling massive public subsidies toward their local chemical industries, and Bayer’s previously feeble foreign sparring partners were now heavily engaged in research and development.* Even the United States, still officially adrift from events in Europe, had realized that German superiority in chemistry could one day cost it dear, and its government was encouraging businesses such as DuPont (one of America’s biggest domestic chemical producers) to catch up. Duisberg had always been contemptuous of the way Germany’s rivals undervalued science, but he recognized that their academic institutions were perfectly capable of turning out first-rate industrial scientists if there was enough demand for their expertise. He was under few illusions as to the effect these developments would have on his country’s postwar economy. Whatever the outcome of the conflict, it seemed certain that Bayer and the other German chemical firms were going to face a huge increase in competition.

  In these circumstances, the hitherto unachievable suddenly seemed possible. Chemical businesses that had once been bitter enemies were being compelled by the exigencies of war to work more closely together, to share
technologies and trade secrets that had previously been fiercely guarded. Bayer and Agfa, for example, had been assisting BASF with Carl Bosch’s nitric acid program at Oppau, independent companies such as Griesheim Elektron and Weiler-ter-Meer were working much more closely with the Hoechst-Cassella-Kalle confederation than had been envisaged at the time of its creation in 1904, and this group, in turn, was sharing work and know-how with the BASF-Agfa-Bayer Dreibund. Watching these various relationships flourish, Duisberg became ever more convinced that his old idea of a full union of all the groups was no pipe dream but a sensible, realizable objective. It would give the industry the critical mass it needed to withstand the international competitive pressures of the future.

  When he raised the matter with his peers in July 1915, they reacted with much the same indifference they had shown back in 1903. After all, many of them reasoned, the war must soon end in a victory for the fatherland and then, bolstered by the economic advantages they would have gained, Germany’s chemical firms would easily reestablish their global supremacy. But twelve months later, when the British army at the Somme began displaying its astonishing capacity to sustain losses and an apparently inexhaustible reserve of fresh troops and new armaments, a quick German victory no longer seemed so certain. Resistance to Duisberg’s proposals began to dissipate amid the recognition that the Allies would probably have the time to improve their own chemical industries to the point where they could pose a serious competitive threat. Something had to be done to guard against this possibility. Although a complete fusion was still out of the question (Bosch, for one, was reluctant to accept that the profits of BASF’s new ammonia business should be split with anyone else), there was general agreement that a sort of half merger could be to everyone’s benefit. After much discussion among the parties a new body was created, the Interessen Gemeinschaft der Deutschen Teefarbenindustrie (Community of Interests of the German Dye Industry), with a mandate to establish a common approach to such issues as pricing and supply, research, patents, legal affairs, and insurance, cooperation on the latter taking the form of a joint insurance fund. Some things were left out of the deal—the businesses would retain their commercial identities and much financial autonomy, and BASF’s ammonia profits would be shared just with its old partners in the Dreibund, and then only gradually—but it was the first time that the major powers in the German chemical industry had agreed to work together as a single entity. In late August 1916, Bayer, BASF, Agfa, Hoechst, Kalle, and Cassella, along with the smaller Griesheim Elektron and Weiler-ter-Meer, finally became willing collaborators rather than all-out rivals. The complete IG Farben cartel was still some way off, but its shape was beginning to emerge.

  Flushed with this remarkable success—a testament to his extraordinary determination to never let a good idea die—Duisberg went on to exercise his growing influence on the national stage. On September 9, along with fellow industrialist Gustav Krupp, he was called to a private conference with the two men who had just been made responsible for Germany’s war effort, the new chief of the high command, Field Marshal Paul von Hindenburg, and his most senior lieutenant, General Erich von Ludendorff. The meeting was arranged by Major Max Bauer and took place on board the supreme commander’s train on the German-Belgian border, to the accompaniment of distant artillery explosions. Hindenburg had been appointed after his predecessor, General Falkenhayn, was made a scapegoat for the Germany army’s setbacks on the Somme that summer. Although a major attack had been expected, the high command had been completely taken aback by the sheer mass of men and armaments that the enemy had at its disposal. If Germany was to continue to defend itself against such massive onslaughts, let alone go on to win the war, it would have to match the enemy’s offensive capacity. Hindenburg explained to Duisberg and Krupp how he intended to reach this goal. Fresh drafts of men were to be called up and a significantly expanded munitions program was to be announced—more cannon, more shells, more machine guns, and a big increase in poison gas and chemical products. There would be no shortage of government money to pay for these new armaments—the stakes were too high for financial prudence to become an issue—but, as the country’s leading industrialists, Duisberg and Krupp were expected to play their part to bring the plan to fruition.

  Although the two businessmen were flattered by Hindenburg’s attentions and pleased by the boost his program would give to their industries, they were both realists. They explained to the field marshal that there was no point embarking on a gigantic munitions push without a sufficiently large workforce to carry it through. The army was clearly going to soak up more and more men. Their fathers, wives, and daughters could in some cases replace them in the factories, but there was already a critical labor shortage, and in Germany alone there simply weren’t enough of these substitute workers to raise production to the necessary level. If the high command wanted such a substantial increase in weapons production it would have to consider some controversial measures.

  The following week, Max Bauer called thirty-nine of Germany’s most important manufacturers to the War Ministry to thrash out the workforce problem and achieve a wider consensus on what had to be done. Again Duisberg dominated the discussion. To murmurs of agreement from his peers, he described the woeful state of the labor market and the difficulty of replenishing it from German sources alone. Wages were escalating, yet productivity was falling. Things were reaching crisis point and everyone knew there was only one solution. The occupied territories would have to be tapped for workers.

  In November 1916, as a direct consequence of Duisberg’s remarks, the kaiser’s troops began deportations from occupied Belgium—in essence, the start of a slave labor program. In under a month, more than sixty thousand men were taken from their homes and workplaces at gunpoint and loaded onto trains for transport to factories and mines in the Reich. The abrupt brutality of the move and the widely reported outpouring of grief from families that accompanied it attracted almost universal condemnation around the world. The U.S. government was one of several neutral powers to complain, cabling Berlin to formally declare its “greatest concern and regret” and that the action was “in contravention of all precedents and of those humane principles of international practice which have long been accepted and followed by civilized nations in their treatment of non-combatants.” By the spring of the following year, the extraordinary vehemence of such protests—and the steadfast refusal of many of the Belgians to be persuaded by threats and bribes to actually do the work expected of them—brought the program to a close and most of the deportees were allowed home. But it was by no means the only act of forced labor. In late 1916, for example, hundreds of Russian prisoners of war were drafted to work for BASF at Oppau, Ludwigshafen, and Leuna, the company’s new nitrate factory on the Saale River, and thousands more were added as the war went on. These moves remained controversial and problematic. At Ludwigshafen, managers became so infuriated by the “insubordination” of POWs and their loud complaints about their poor treatment and inedible food they introduced a “strict regimen” to restore discipline. What this meant in practice for the unhappy Russians can only be guessed at.

  In the meantime, the labor shortage forced up production costs because of the enhanced bargaining power it gave German workers and trade unions. At the industrialists’ meeting in Berlin, Duisberg had advised the government to combat this trend by introducing harsh regulations against excessive wage demands and strikes, warning that otherwise more price rises were inevitable. The idea that he and his associates might meet some of this burden themselves from the swollen profits brought in by war work was never an option. In fact, on the one occasion the authorities tried to propose such an arrangement, Duisberg took active steps to frustrate them. In 1916, General Wilhelm Groener was appointed by General Ludendorff to run a new office in the War Ministry that was charged with reducing inflation in the procurement economy. Influenced by one of his aides, Captain Richard Merton, Groener proposed to his superiors that any price increases on war mater
ials be absorbed directly by the industrial community. When Duisberg heard that this measure was being given serious consideration he mobilized his fellow industrialists into petitioning the authorities for Groener’s removal. It was a measure of the Bayer boss’s growing influence—and the German government’s reliance on his industry’s products—that the general and his “interfering” aide were quickly called up for frontline service.*

  It is hard to figure how Duisberg found the time for such activities. He had fingers in a great many pies—as a semiofficial spokesperson for the nation’s chemical industry and as chairman of its new Interessen Gemeinschaft, to name but two—and of course he still had his normal day-to-day responsibilities as the head of Bayer. Yet somehow he seemed to be everywhere, one minute calling a meeting of his peers at the Düsseldorf Industrial Club, the next racing back to Leverkusen to oversee production and egg his staff on to ever-greater efforts.

  But Duisberg wasn’t able to control everything. Throughout the war, one corner of his empire remained beyond his influence. Unable to shape events directly he could only watch with mounting frustration as others made costly mistakes. Thousands of miles away across the Atlantic, Bayer’s most important American assets were slipping out of his grasp.

  * * *

  WHEN FIGHTING BROKE out in Europe the most immediate consequence for America was the disruption to commerce. Germany and the United States were still at peace, and according to various international preconflict treaties aimed at preserving sea traffic between non-belligerents, trade—at least of goods that were not directly related to the war effort—was perfectly legal and allowed to continue uninterrupted. But although Britain had been a signatory to those agreements, the moment it became clear that the war was going to last longer than expected, London unilaterally announced that all Germany-bound material was liable to embargo. Initially, only German ships had been targeted by the Royal Navy but soon U.S. craft were also being stopped and searched, their cargoes impounded as contraband and the vessels ordered to turn back for home.