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Treatment of I.G. Farben Plants by the Four Allies in Their Zones of Occupation

As the Second World War entered its final stages, a debate was held within the US government on the merits of dismantling the entire German arms industry and, in particular I.G. Farben after the end of the war. The US military government on July 5, 1945, ordered the confiscation of all I.G. properties within its zone of occupation, the firing of the concern management, and the suspension of all shareholder rights. These US measures were first confirmed by the Allied Control Council in late November 1945, with the following stipulations: Production plant and assets would be used for reparations. Plant that was exclusively for military use would be destroyed. Ownership rights in remaining plants and assets would be split up and all cartel relationships thereby extinguished. Research and production would be put under the control of the occupation authorities. The implementation of these aims, however, as with that of all other aspects of the Potsdam Agreement, differed greatly between the four zones of occupation.


At the end of the war, 15 of I.G. Farben’s enterprises were found in the Soviet Occupation Zone or the Soviet sector of Berlin. These were valued at 520 million RM and thus represented 26.7 percent of I.G. Farben assets as a whole. The Soviet military administration turned most of these enterprises (including the Leuna plant, the Schkopau Buna plant and the works in Bitterfeld, Wolfen and Eilenburg) into Soviet joint stock companies (Sowjetische Aktiengesellschaften, SAG) designed to produce for reparations. Therefore no limits were placed on production at these factories, except insofar as parts of a plant were dismantled, as at Bitterfeld, and shipped to the Soviet Union outright. Despite this, production was not hampered in the middle term. Even at Bitterfeld, the output in 1948 was already higher than it had been in 1936, and by 1951 had exceeded the wartime peak year of 1944. After the conclusion of reparations to the Soviet Union in 1953, the SAGs  were given over to the German Democratic Republic and converted into GDR state property organized as state-owned enterprises (Volkseigene Betriebe, VEB).


The policy adopted in the French occupation zone starting in July 1945 aimed at the most complete possible control of the chemicals industry. The policy’s effects were felt most strongly at the badly damaged plants in Ludwigshafen and Oppau. Management positions at these plants were occupied by French experts. But the French occupation authorities also were mainly concerned with resuming full production, again in part to derive reparations, but also to acquire the technological know-how for the French economy and to supply France with German chemical products. The French control officers worked with former leading I.G. managers, such as management board members Otto Ambros and Carl Wurster, to advance production for export. Both of these men were charged in the Nuremberg I.G. Farben trial, but only Ambros was convicted and sentenced to eight years imprisonment (the longest term for any of the defendants). By mid-1948 chemicals production in the French zone of occupation had returned to 91 percent of pre-war levels.


The British occupation authorities first officially confiscated the I.G. plants in their zone only in November 1945, but retained the Bayer complex (with plants in Leverkusen, Uerdingen, Dormagen, and Elberfeld) as a single unit. The I.G. plant managers were allowed to stay on, among them Ulrich Haberland, director of the Leverkusen plant, who served the British occupation as an adviser for export business. The making of chemicals for warfare and explosives was suspended, but the British occupation authorities pursued the aim of raising exports of chemical products from their zone as a means of helping to defray costs of the occupation. Insofar as it seemed necessary to that purpose, the early production limits imposed on the chemicals industry by the British Control Group were loosened up.


How to deal with I.G. Farben was a controversial matter within the US military administration already in 1945. The Finance Division under Colonel Bernard Bernstein advocated the strategy of “industrial disarmament” formulated by Henry Morgenthau Jr., which aimed for a complete destruction of the German arms industry and the key industries associated with it. This was opposed by the Economics Division under investment banker William H. Draper, who sought to build good relationships with the former business elites of the Nazi regime and hoped to maintain Germany as a strong economic power in the cold war that was now beginning. Their advocate, Robert Murphy, was a close adviser to General Dwight D. Eisenhower, and then also to the military governor, Lucius D. Clay. On September 12, 1945, Clay relieved Bernstein of his duties and ordered the Finance Division as it had stood until then to be dissolved. Thus was the direction set for further dealings with I.G. Farben: the company would be deconcentrated, but it would not be liquidated. Starting in January 1946, all matters involving I.G. Farben were delegated to a newly created Decartelization Branch under the command of James Stewart Martin. His job was to draft guidelines for a law to decartelize major industries in all four occupation zones, which would also ultimately govern the decartelization of I.G. Farben. During this period, all of the 55 I.G. plants located within the American zone continued operations and were given preference in assignments of transport and energy resources. While the top I.G. managers were arrested and awaited the Nuremberg trial against I.G. Farben, all of the old plant managements were fully reestablished.

(MN/PEH; transl. NL)


[pdf] Peer Heinelt_The Decartelization and Postwar History of IG Farbenindustrie AG



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