Hell's Cartel

by Diarmuid Jeffreys

  What the chemical industry is today is evident from the fact that it, above all, has succeeded in securing national independence in raw materials, an accomplishment that previously had frequently been considered impossible. The value of chemistry to the German national economy cannot be expressed in terms of money, anymore than can the price of a glass of water to a person who needs it urgently for the preservation of his life.

  Without Hitler’s rearmament programs, however, there would have been far fewer IG products to sell. Synthetic oil and other materials had gone into full-scale production only because the government was prepared to subsidize them for strategic reasons; indeed some 40 percent of the IG’s sales increases between 1936 and 1939 came from five areas of production directly stimulated by the Four-Year Plan: nitrates for explosives, fuel, metals, buna, and plastics.

  At Nuremberg many years later the origins and dual-use potential of some of these products would became the focus of heated debate, with prosecution and defense citing numerous examples to prove that the IG’s motives had been either deliberately militaristic or merely opportunistic. Thus the court was variously invited to consider that the fuel which drove a bus, for example, could also with some adjustment be made to power tanks and Stuka bombers, or that buna could be used in military vehicles as easily as in civilian automobiles, or that ersatz fiber could be turned into uniforms, or that the methanol found in shaving lotion was an essential component of military antifreeze.

  But interesting though these debates were, they were always going to be of less significance than two rather more straightforward, and unarguable, propositions—namely, that in the three years prior to World War II the IG proved more than willing to provide the expanding Nazi military machine with the materials it needed and that without the concern’s synthetic chemistry Germany would have been unable to fight for long. Because whether its science was the chicken or the egg, IG Farben was clearly indispensable to the Führer’s plans from 1936 onward, and the company’s leading executives, with very few exceptions, were content that this should be so and collaborated without reservation. With barely a demur, and certainly no resignations out of principle, they provided Hitler’s government with economic intelligence on Nazi Germany’s future enemies, while conspiring to deny those enemies the synthetic resources they would need to defend themselves; they acceded enthusiastically to the regime’s demands for more output and more factories, often building secret plants that produced exclusively military materials; they embraced the regime’s Aryanization program with a lack of protest that was truly shaming, given the IG’s previous tradition of employing Jews; and they joined the Nazi Party in increasing numbers until only a few brave skeptics were left.

  At Nuremberg the defendants argued that many of their actions were of peaceful, commercial intent, or, at most, designed for their nation’s defense, and that they were often acting under duress; but there is no gainsaying that they were happy to take the money they were offered and raised no discernible moral or practical objections to where it was coming from. Had the IG’s managers found the courage to oppose doing business with the Nazis in the late 1930s, or had they been even marginally less compliant, Hitler would have struggled to get his war machine moving. Instead, their cooperation drove the machine forward, as the cartel’s own Georg von Schnitzler was eventually forced to acknowledge: “IG took on a great responsibility and gave, in the chemical sector, substantial and even decisive aid for Hitler’s foreign policy which led to war and the ruination of Germany.… I must conclude that IG is largely responsible for the policies of Hitler.”

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  HAVING GAMBLED SUCCESSFULLY that the reoccupation of the Rhineland would be unopposed by Britain and France, Hitler proceeded in 1936 to cement alliances that would allow him to consolidate Germany’s gains and prepare the way for his next forays on the European stage. Thus Mussolini’s Italy was drawn into an axis that was defined as much by the need of the two countries for foreign friends (Italy having fallen foul of the League of Nations over its invasion of Abyssinia) as by their common political philosophy and mutual hatred of Bolshevism. This association was soon extended to include imperial Japan, whose expansionist foreign policy had already involved it in a savage conflict in China.

  In the meantime, Spain had also attracted the Führer’s attention. The outbreak of civil war in July 1936, between the left-wing Republican government and General Franco’s fascist Nationalist movement, had all the elements of a dress rehearsal for the greater clash between the era’s two dominant ideologies that many now saw as inevitable. Hitler was naturally predisposed to support the Nationalists, not least because he believed an extended conflict would increase tensions in the Mediterranean and move Italy (which also supported the Spanish rebels) closer toward Germany and farther away from Britain and France—as indeed happened. But it also gave him an ideal opportunity to test some of the blitzkrieg tactics that Germany’s military strategists had been developing. In defiance of an international noninvolvement agreement among the European powers (which Soviet Russia also ignored), Germany and Italy sent planes, tanks, troops, and technical “advisers” to the Nationalists in considerable numbers—along with the Condor Legion, an air force unit that became infamous for its bombing of the Spanish town of Guernica.*

  In these circumstances, the IG’s executives can hardly have needed the stimulus of Hermann Göring’s martial speech at the Prussenhaus in December 1936 to appreciate the seriousness of the government’s drive for rearmament. Nonetheless, after years of patiently lobbying authorities for subventions and concessions, they must have been taken aback at the speed with which the Four-Year Plan began to affect their business. As 1937 got under way the concern came under intense pressure to increase its productive capacity to meet the regime’s demands.

  Carl Krauch—who still attended IG Vorstand meetings and retained leadership of Sparte I—was the principal conduit for this pressure. Göring had made him responsible for ensuring that Germany reached self-sufficiency in more than two dozen key products, from fuel and rubber to sulphur, phosphates, nonprecious metals, resins, and textiles, and since the IG was the major producer of most of these materials, he naturally directed the government’s orders and investment back to his old firm. By February 1937 his office had commissioned more than RM 500 million worth of special projects and was anticipating investing RM 8 billion more—a significant part of which was destined for areas in which the IG had a special interest.

  But Krauch’s role went far beyond merely allocating funds and identifying likely suppliers. He also took it upon himself to gauge whether the Four-Year Plan was setting its targets high enough, clashing repeatedly with his immediate superior, Colonel Fritz Löb, who though formally responsible was out of his depth when it came to assessing the Wehrmacht’s likely needs and industry’s ability to meet them. The troubled relationship between the two dated back to 1935 and the early days of the raw materials commission (Göring’s first attempt at stimulating synthetics production), when Krauch had gone behind Löb’s back to quadruple the size of an IG contract for buna from fifty to two hundred tons a month. Once the Four-Year Plan was up and running, Krauch called a meeting of IG managers and army ordnance officials (to which he didn’t invite Löb), where it was decided to increase the IG Farben buna contract to a thousand tons a month—an order that was pushed through over Löb’s objections. The two clashed again early the following year when Krauch managed to win Göring’s approval for a second IG buna plant, at Hüls (by now Schkopau was producing its maximum capacity of two thousand tons a month), despite the colonel’s insistence that it was unnecessary.

  This pattern was repeated several times as Krauch sought to raise production levels for a variety of different commodities. In December 1937, for example, Paul Körner, Göring’s state secretary in the Office of the Four-Year Plan, asked him to review some estimates for synthetic fuel production that Colonel Löb had submitted for synthetic fuel. Krauch, immediately seeing th
at they had been set far too low to meet the military’s targets, revised them. To Löb’s considerable fury, Körner passed the new estimates on to Göring. A few months later the same thing happened when Krauch scrutinized his superior’s estimates for explosives. His dual role within the IG meant he was better placed than anyone else to know whether the concern was making enough synthetic nitrate to hit the targets set by Löb, and he could see quite clearly that the necessary production capacity didn’t exist. Yet again he passed his concerns on to Körner, who raised them directly with Göring. The latter was so disturbed he called his bickering subordinates to a conference at Karinhall, his palatial country estate.

  Krauch was at his most formidable in such situations. With years of committee experience at the IG behind him, he was easily able to demonstrate his mastery of the figures and demolish his rival’s projections. Göring was deeply impressed and Krauch left the meeting with a license to reexamine all of Löb’s estimates. The result was the Krauch Plan, a systematic revision of Germany’s productive capacity for strategic raw materials coupled with a new program for achieving the desired objectives. In the summer of 1938 Göring made Krauch plenipotentiary general for special questions of chemical production and gave him complete responsibility (which, remarkably, included authority over army ordnance) for putting the plans into effect. In less than two years Carl Krauch had evolved from part-time government adviser to become the most important industrial figure in Germany’s war preparations.

  The concern’s response to the huge flood of orders coming from Krauch was mixed at first. On the one hand the IG welcomed the surge in business and profits; on the other it found that working for the government involved a huge growth in bureaucracy and a remarkable degree of secrecy—both of which made the management of an already complex organization increasingly convoluted. When Carl Bosch had been in day-to-day charge, he had just about succeeded in keeping track of its affairs through the labyrinthine network of committees that held the IG together. His successor, Hermann Schmitz, found that this fragile cohesion suffered considerable strain as more factories, offices, and subsidiaries started working directly for government agencies—often under terms of the strictest confidentiality. While this lack of transparency was an inevitable consequence of dealing with military officials intent on concealing the extent of Germany’s rearmament from the outside world, it meant that the IG’s central offices in Frankfurt and Berlin were less and less able to monitor the concern’s development and keep an eye on all its output.

  Even when the central departments did manage to retain control and oversight of the production and sale processes, the complexity of the task was staggering, not least because IG products emanating from one plant were often not the finished articles but intermediates in the production stage of a range of others, which could be made in different factories by other parts of the combine, by its subsidiaries, or indeed by other manufacturers entirely. Keeping track of what was being made where and for whom called for degrees of planning and coordination that would have stretched the most efficient business—a challenge compounded by military paranoia and, as the thirties wore on, by the fact that the Reich’s boundaries were expanding and the plants dependent on the concern’s supplies were growing in number and increasingly far-flung.

  Take, for example, the synthetic nitrate, methanol, diglycol, and other intermediates and stabilizers that were essential for the manufacture of high explosives such as TNT, hexogen, and nitropenta. Krauch’s office would decide that a given month’s quota of explosives production needed to be increased and would issue a contract to the Vermittlungstelle Wehrmacht office at Berlin NW7. There, staff would allocate the production of the necessary intermediates to major IG plants at Ludwigshafen, Leverkusen, Oppau, and elsewhere. Once made, the materials would then be loaded onto barges, trucks, and trains for shipping to the factories of explosives manufacturer Dynamit AG or its subsidiaries (the DAG itself, of course, being majority-owned by the IG). DAG plants could be at any of a number of sites: Pressburg, Troisdorf, Mannheim, Hachenburg, Kummer, Schlebusch, Oberf, Schönebeck, St. Ingbert, Haslock, Gnaschwitz, Sömmerda, Braunsfeld, Fürth, Silberhutte, Empelde, Düneberg, Wurgendorf, Ferde, Saarwelligen, Vecker, Munde, Reichsweiler, Hamm, Bölitz, or Adolzfurt. These facilities might be within twenty-five miles of the intermediate-producing IG plant or several hundred miles away in Austria or Czechoslovakia. Then, of course, the finished explosives would have to be delivered back to army ordnance depots for distribution to the relevant military units. And this was just one category of products. Given that the IG produced everything from fuel for the Wehrmacht’s tanks to bottled oxygen for the Luftwaffe’s pilots—not to mention the myriad materials it made for civilian customers—it is a wonder the concern’s planning and coordination sections didn’t completely collapse under the strain. As Georg von Schnitzler would tell his interrogators after the war, “A survey of what the IG really did or did not make for the Wehrmacht became more and more a matter of guesswork.”

  As a result, individual executives came to enjoy more influence and independence than they had ever had before. This was a potentially positive development for those who were able to handle the responsibility, but it may also have led to a greater degree of militarization than the IG was required to embrace. Because managers were no longer obliged to defer government armaments contracts upwards for approval, the IG lost its ability to discriminate between projects that had at least some semblance of peaceful legitimacy (that is, for products with dual civilian-military applications) and those with an unmistakably belligerent purpose.

  The IG’s involvement in the development and manufacture of poison gases offers a case in point. Having been so badly tarnished by the international outcry over the creation and deployment of chemical weapons in World War I, the concern might have been expected to steer clear of such projects. But, in late 1936, under the stimulus of the Four-Year Plan, the IG assumed responsibility for the production of mustard gas—which would eventually be made at Hüls, Trostberg, and Schkopau—and then went on to develop two of the world’s most dangerous substances.

  The first of these was tabun, an organic phosphorous compound that attacks the central nervous system by inhibiting muscular movement, especially in the lungs, and leads to devastating and fatal contractions. Gerald Schrader, a leading IG research chemist, had stumbled upon the compound during his work on insecticides and promptly reported the discovery to his superiors. Heinrich Hörlein, the IG’s pharmaceutical genius, immediately recognized the gas’s military potential and passed the information to army ordnance via Krauch’s office. A Colonel Rudriger, in charge of the Wehrmacht’s poisons unit, called the researcher up to Berlin to demonstrate the substance on animals and was so impressed by its lethality he asked Schrader to develop it into a weapons-grade material. Nine months later, during the course of this top-secret work, Schrader found a second and even more deadly nerve toxin. Known as sarin (its generic chemical description, isopropylmethylphosphrofluoridate, was too complicated for anyone but a chemist), it was so powerful that even the tiniest inhalation could bring about a gruesome and agonizing death. The Wehrmacht wanted this product in its arsenal, too, and was prepared to pay handsomely for it. An ambitious IG executive, Otto Ambros, assumed responsibility for the program (Ambros’s star was firmly in the ascendant) and began negotiating finances for the construction of a large production plant at Dyhernfurth in Silesia.

  Projects of this kind were the inevitable consequence of the pressure the regime was now exerting on the IG. It is possible that under more normal circumstances shareholder scrutiny might have forced the company to pause and reflect on its activities, but the Nazis had already taken steps to prevent this. In January 1937, determined to let nothing get in the way of its ability to orchestrate industry’s response to mobilization, the government had published the German Corporation Law, which removed stockholders’ rights to examine balance sheets and allowed governing boards to conceal the details of th
eir business dealings from investors—if national interests dictated these should be kept secret. In theory, of course, this provision should have increased the obligation of managers and board members to act ethically and responsibly. However, few seemed up to the challenge. Instead, as Hitler’s hold over Germany and its people strengthened, many of the country’s business leaders set their integrity aside and surrendered their companies to Nazification. Unfortunately, the IG was no exception.

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  IN 1937, after a four-year moratorium on new members, the Nazi Party opened its ranks once more. The Vorstand’s Heinrich Hörlein, Wilhelm Mann, Fritz Gajewski, and Heinrich Bütefisch were already full members, while one or two others had joined various ancillary bodies such as the SA or SS. Now almost all of the IG’s managing board signed up, including Hermann Schmitz, Georg von Schnitzler, Christian Schneider (who would shortly take over Carl Krauch’s job as head of Sparte I), Otto Ambros, Carl Lautenschläger, and Ernst Bürgin. Krauch joined, too, although in his position it would have been hard not to, and even the fastidious Fritz ter Meer condescended to send in an application, although he later claimed it wasn’t endorsed. Of the two Vorstand members who stayed out, August von Knieriem, the IG’s lawyer, eventually joined in 1942, while Paul Haefliger, the concern’s leading international dealmaker, was excluded as a Swiss citizen. A small group of nonexecutive directors on the Aufsichtsrat continued to withhold their allegiance (among them, of course, Carl Bosch, who was to demonstrate his dogged independence of spirit as late as May 1939, when he criticized the Führer in a speech in Munich).* But the supervisory body’s power to influence the concern’s day-to-day affairs, never very great in the first place, had waned considerably since the death of Duisberg and was now about to be weakened even further, challenged by the regime’s insistence on a full Jewish purge.