Hell's Cartel

by Diarmuid Jeffreys

  The IG was to be just as susceptible to pressure at home. In its factories it struggled to come up with an appropriate response to the Nazification of working life, not least because individual plant managers had differing attitudes toward such questions as whether or not to make the Hitler salute mandatory or if collections for party funds could take place on company premises. The absence of clear-cut guidance from IG headquarters in Frankfurt (where senior executives were often so confused and divided about such things they issued conflicting instructions) caused endless hours of anxiety farther down the line as local bosses tried to decide on the wisest course to follow. Not surprisingly, therefore, they often erred on the side of safety and did what they thought the party would most want.

  The IG’s various internal newspapers are a particularly good example of how Nazi influence spread. Prior to May 1933 these papers (each plant had its own version) were full of the usual cheery and anodyne workplace stories about orders won and various individuals’ achievements. But from that point the publications began to take on an overtly political character. For example, the November 1933 issue of the Ludwigshafen Werkszeitung carried an account of a speech given by the Nazi Robert Ley—head of the German Labor Front—on the virtues of an authoritarian state that pretty much set the tone for what was to follow. The next June, a swastika began appearing on the paper’s masthead, and in early 1935 all the different dedicated plant papers were combined in one monthly, companywide journal, From Works to Works. The stated purpose, an editorial revealed, was to fulfill the “National Socialist challenge” by bringing everyone in the company closer together. But, of course, the consolidation also created a centralized vehicle for ideological indoctrination.

  The cartel’s labor relations policies had to be reconsidered, too. With the old trade unions replaced by the Nazi Factory Cell Organization and the German Labor Front, management had to work out its responses to the issues these organizations began raising over pay and conditions. Was it best, for example, to accede to local party requests that workers be allowed paid time off to attend rallies or paramilitary training sessions? To say yes would be to relinquish yet another slice of managerial control. To say no risked alienating Nazi activists who might have powerful friends. More often than not, managerial control lost out.

  Sometimes the regime’s interference took on a more surreal form. In April 1933 the IG was ordered to conduct full-scale air raid exercises at Ludwigshafen and Leverkusen. As Germany wasn’t at war with anyone at the time these events struck many employees as a little odd, but true to form, Hans Kühne at Leverkusen encouraged everyone to play along and not make too much of them.

  The IG was also wrestling with scientific questions. In August 1933 Hermann Göring banned the use of animals in experiments, a somewhat ironic directive given Göring’s well-known love of hunting. The ban was a matter of the utmost concern to the IG’s pharmaceutical and pharmacological departments. Bayer scientists had been using animals in the laboratory since the end of the nineteenth century (Heinrich Dreser, for example, had tested aspirin on rats, frogs, goldfish, and guinea pigs before he was satisfied it was safe for human use) and the practice was now an integral part of preparing drugs for the market. A prohibition against it threatened to bring much of this work to a standstill, and the IG’s chief pharmacist, Heinrich Hörlein—Nazi Party member though he was to become—felt compelled to campaign publicly against it. He was eventually able to get the ban partially lifted but not before the Nazi press had thoroughly enjoyed itself by publishing cartoons portraying evil “Jewish scientists” torturing animals to prepare noxious substances for sale to good Aryan folk.

  Gradually, however, the concern’s anxieties about how to deal with the new regime began to fade. Insulated to a large extent from the brutality, discrimination, and general disenfranchisement that was the daily lot of Jews, socialists, Communists, and other enemies of the state, the Vorstand and the Aufsichtsrat took note instead of the perceptible improvements in the IG’s balance sheet. The company’s main aim, after all, was to make money and the figures were definitely getting more robust. By the end of 1933, the IG had paid off a lot of debt, increased its workforce by over 15 percent, and started spending on R & D again. More importantly, it had worked out ways of responding to pressure on exports caused by foreign disquiet over the Jewish boycott (Max Ilgner’s efforts, combined with heavily increased overseas advertising for IG goods, were yielding results), and it had posted a net profit of around 65 million marks, up 32 percent on the previous year. Even the company’s shares were on the rise.

  It is questionable, of course, how much of this improvement was due to the new government’s economic policies—namely, to reduce some taxes on industry, increase spending on armaments, and push ahead with make-work schemes (which that autumn saw 300,000 of the unemployed put to work building Autobahnen). The settlement of Germany’s reparations problem a year earlier and the gradually recovering global economy were probably far more significant to IG Farben’s profitability in 1933 than anything the Nazis had yet managed to accomplish. Indeed, given that the concern had made substantial political donations to various Nazi funds that year—some 4.5 million reichsmarks in total—it might be said that the party had so far gained more from the IG than the other way around. But calm, albeit of a poisonous sort, had returned, and to businessmen deeply concerned by the threat of continuing chaos that stability was priceless.

  * * *

  IN THE MIDST of the upswing in its fortunes, one part of Farben’s empire still gave cause for concern: Leuna, the home of IG’s synthetic fuel program, was continuing to lose money. The tariff protection measures against natural petroleum that Bosch had extracted from the Brüning government back in 1931 had provided a temporary respite, but to many in the company the project was still a costly white elephant that should be abandoned. To avoid that fate, Bosch knew that something more substantial was needed. His meeting with Hitler in May, despite its explosive ending, had given him strong grounds for supposing that a Nazi government committed to self-sufficiency would provide the necessary guarantees. He still had to find a way, however, to turn that expression of interest into tangible support.

  The strain on Bosch was increased by the fact that the IG’s monopoly on synthetic fuel had recently come under challenge. During the latter years of the Depression, coal producers in the Ruhr, looking for ways to boost their dwindling sales, had become interested in the prospect that synthetic fuel might be made from the by-products of coke, using a procedure known as the Fischer-Tropp process. Bosch had long been aware that this method might one day prove more competitive than the IG’s own technique, but because the company was so heavily committed to the Bergius process, he chose not to pursue the alternative. Now Bosch began hearing reports that the coal magnates were considering going into production for themselves. The concern moved quickly to minimize the threat, offering the Ruhr producers assistance in adapting the IG’s own hydrogenation process for man-made fuel, as well as more advantageous terms of access to the German Nitrogen Syndicate (some mine owners had also tried branching out into nitrogen manufacture only to be undercut in pricing by this IG-dominated association). These bribes brought the coal industry “inside the tent” and ensured its support for the overtures the IG was making to the government for financial assistance, but they also intensified the pressure on Bosch to deliver some genuine gains.

  In June 1933 Bosch stepped up his efforts by contributing to a twenty-page paper authored mainly by his lieutenant Carl Krauch, the head of Sparte I. Written with ministers, civil servants, and the military firmly in mind, “The German Fuel Economy” spelled out the stark choices facing the country. Germany already imported about 75 percent of its fuel. If demand continued to grow (all those new autobahns would undoubtedly mean more thirsty cars), its dependence on foreign supplies would only increase. This dangerous situation could be avoided by expanding the IG’s synthetic fuel production to the point where it could meet most of German
y’s needs, but doing so would require massive levels of capital investment—far beyond anything that the company and its shareholders could be expected to risk on their own. The only solution, therefore, was for the state to underwrite the costs of the increase in production capacity and guarantee a minimum price for the finished product.

  Yet again Max Ilgner was to prove instrumental, ensuring that this document found its way onto the right desks in Berlin. For some years he had been consolidating friendships in the Reichswehr’s Weapons Office (responsible for arms procurement), especially with Georg Thomas, a bright young lieutenant colonel on the commercial liaison staff whom he had kept informed about the IG’s development of synthetic raw materials like oil and rubber. As a result, Thomas had become something of a convert to the notion that autarky—or economic self-sufficiency—was of great strategic importance, and he had written several confidential memoranda to his superiors recommending that the armed forces should consider supporting the IG’s work. Now that evangelism bore fruit. Shortly after the Nazis came to power in 1933, Hermann Göring, in his new role as minister of aviation, had been ordered by Hitler to begin covertly building up an illegal military air force—in direct contravention of the terms of the Versailles Treaty.* To keep this black Luftwaffe secret it would obviously be necessary, among other things, to arrange for dependable supplies of aviation fuel that didn’t appear on the sales manifests of overseas oil companies. Informed of the problem, the army’s Weapons Office had passed on Thomas’s memos to state secretary General Erhard Milch, Göring’s deputy in the Aviation Ministry, and in August 1933 Milch got in touch with Carl Krauch to explore the potential of the IG’s project.

  The general’s most immediate concern was whether synthetic oil was suitable for conversion into a high-octane aviation product. Krauch assured him it was and furthermore that it could be made into vital engine lubricants, too. When Milch asked whether synthetic oil could be produced in sufficient quantities, Krauch arranged to send him a copy of “The German Fuel Economy.” Milch read the paper through and discussed its conclusions with the head of the Weapons Office, General von Bockelberg (and his eager subordinate Lieutenant Colonel Georg Thomas). Convinced of the merits, Milch proposed that both armed services should work together to persuade the Economics Ministry to grant financial assistance to the IG. The cartel had independently been lobbying Gottfried Feder, an undersecretary at the Economics Ministry, for subventions, but it had encountered resistance. Feder had favored stockpiling imported natural petroleum (international oil prices were especially low at the time) and increasing Germany’s capacity to refine crude oil, on the grounds that these measures were considerably cheaper than subsidizing Leuna. He even won Hitler’s support for his proposals but backed down when the army and the air force joined ranks with the IG.

  The result was a groundbreaking agreement known as the Benzinvertrag (gasoline contract), which was signed in Berlin on December 14, 1933. In exchange for the IG’s promise to raise production at Leuna to 350,000 tons per year by 1935, the Reich agreed to buy all of the factory’s output that could not be sold on the open market. It also guaranteed a ten-year price that corresponded to the costs of production (including taxes), with a return of 5 percent interest on the IG’s investment. Any profits above that amount would go to the government.

  Carl Bosch’s relief when he was invited to put his name to this deal must have been beyond measure. For the best part of eight years he had nurtured a dream that one day the IG’s synthetic fuel program, based on technology that he had been instrumental in developing, would be in a position to free Germany from its dependence on foreign oil. He had fought many battles and faced many hurdles in pursuit of this goal and on several occasions he had been thrown into deep depression by the reverses he’d encountered. Now at long last his dream was turning into reality. His beloved Leuna was safe and, with sales of licenses to other producers interested in the synthetic fuel process bound to follow (any such royalties lay outside the terms of the Benzinvertrag), it looked set to be hugely profitable, too. At that moment, with such an extraordinary prize secured, it is doubtful if he gave the political implications of the deal much thought.

  From now on the IG’s fate and fortunes would be inextricably tied to those of the Third Reich. The future was not yet visible but the cartel had in essence committed to providing Hitler with the means to launch the most devastating conflict in human history. The agreement Bosch had signed was far more than the fulfillment of his long-held ambitions. It was also a pivotal moment in a sequence of events that would lead inexorably to the blitzkrieg, to Stalingrad, and to the gas chambers at Auschwitz. Many years later the U.S. Army’s General Telford Taylor would accuse IG Farben’s bosses of making World War II possible, of being “the magicians who made the nightmare of Mein Kampf come true.” On that interpretation at least, the magicians had just cast their first spell.

  8

  FROM LONG KNIVES TO THE FOUR-YEAR PLAN

  The surroundings were not intended to be especially welcoming, of course, but to someone accustomed to the perks and privileges usually accorded to an executive at one of the world’s largest companies, the bleak accommodation of a Gestapo prison cell must have come as a particular shock. If Heinrich Gattineau’s racing mind gave him any peace at all that night, then it is possible he spent some of the time reviewing the circumstances that had brought him to such a place. But he would have spent a great deal longer in communion with his God. A man in fear of imminent execution is unlikely to waste too much energy on anything other than prayers for a reprieve.

  He wouldn’t have been the only one praying. On June 30, 1934, hundreds of previously faithful Nazi adherents discovered that their loyalty counted for less in the new Germany than Adolf Hitler’s determination to prove that he was its only master.

  The Röhm purge—or the Night of the Long Knives, as it came to be known—took place at the end of an extraordinarily tumultuous period in German history. In little over a year Hitler had destroyed the democratic Weimar Republic and replaced it with his personal dictatorship. In the process he had smashed all the political parties but his own, suppressed the trade unions, abolished freedom of speech, stifled the independence of the courts, driven the Jews out of most areas of public and professional life, and placed the economic, political, and cultural framework of an entire nation under the suffocating influence of a corrupt and repressive ideology. Astonishingly, however, he continued to retain the approval of the German people, winning overwhelming popular support (95 percent) in a plebiscite held on November 12, 1933, for his decision to withdraw Germany from the League of Nations, and a 92 percent share of the votes in an election for the Reichstag—albeit for a single-party Nazi slate—that was held on the same day.

  Nevertheless, Hitler’s consolidation of power was incomplete: he had not yet secured the support of the army, the one unifying national body of the previous era that had remained outside his direct control. He had tried wooing its senior officer corps with promotions, promises of rearmament, and ingratiating gestures of respect to their titular head, Field Marshal von Hindenburg (who, though now senescent and virtually powerless, was still clinging on to the office of president). But it was clear that he hadn’t yet done enough to win over the generals completely. This worried the Führer greatly. He was acutely aware that the old reactionary forces represented by Kurt von Schleicher and Franz von Papen continued to lurk in the shadows and had lost none of their appetite for intrigue.* If they were ever able to stir up trouble in the armed forces, especially by playing on the mutual jealousy and resentment felt by the Reichswehr and the Nazi Party’s powerful paramilitary wing, the SA, there was a very strong possibility they could mount a plot against him.

  To compound the problem, the SA was becoming restless. Having spent the previous year brutalizing the party’s left-wing opponents and the Jews, the brownshirts were now making noises about the need for a “second revolution” to curb the prerogatives of the old Junker
classes. Ernst Röhm, their piratical, headstrong, and homosexual leader, had long been one of Hitler’s most devoted supporters—and perhaps the closest thing he ever had to an intimate friend—but as the ranks of the Sturmabteilung had swollen to over two and half million, Röhm’s ambitions had become correspondingly grandiose. Once a Nazi government had been secured, the SA chief made it plain that he would not be satisfied with a sinecure in Hitler’s cabinet. He wanted to reorganize the military, to place his brownshirts at the head of a vast new People’s Army into which the Reichswehr, denuded of its stuffy, anachronistic officer corps (which Röhm despised unreservedly), would be totally absorbed.

  The military establishment recoiled in horror at this idea. Disgusted by the gossip that was circulating about corruption, drunkenness, and sexual depravity within Röhm’s circle and worried that his flamboyant posturing might draw foreign attention to the army’s plans for clandestine rearmament, the generals quietly made it clear to Hitler that if he wanted their support the SA and its plebeian generalissimo would have to be suppressed; in the process, they found common cause with two of Hitler’s other lieutenants, Reichstag president Hermann Göring and SS leader Heinrich Himmler, who both loathed Röhm as a dangerous rival.