The Corporate Management of I.G. Farben and the Nazi Regime’s Preparation for War
At the NSDAP party conference of September 1936 in Nuremberg, Hitler announced the Four-Year Plan, which declared the goal of making the Wehrmacht and the German economy “fit for war” by 1940. Hitler himself had issued a secret memorandum on August 26, 1936, in which he specified his armaments goals at a greater level of detail than had been made public. Hitler foresaw that Germany should prepare for war within four years by synchronizing military and economic expansion, and by accelerating the development and production of synthetic raw materials and Buna. Many of the ideas and planning targets of Hitler’s secret memorandum were based on earlier drafts by Carl Krauch, the I.G. Farben board member who had taken a position as an adviser to Hermann Göring starting in 1935. Following the public announcement of the Four-Year Plan in September 1936, Hitler issued a “Führer Decree” appointing Göring as the “Trustee of the Four-Year Plan,” giving him extensive authorities compared to all other agencies of the Reich. This was the first step in creating a coordinating body for the rearmament program, which foresaw a variety of measures: agencies to secure foreign currency; assuring food supply; planning labor deployments; and reining in the renewed threat of inflation by way of a price controls bureau.
The German Reich was in an economically precarious situation. With exports in sharp decline and high costs in foreign currencies for raw materials exports, the Reich faced a crisis in current account balances. This prompted the creation in October 1936 of an Agency for German Raw and Processed Materials, which combined a variety of specialized authorities and staffs who worked on the problem of replacing raw materials with synthetic equivalents. Carl Krauch and a team from I.G. Farben soon arrived to take over the new agency’s research and development wing. The corporation’s investment and development plans could now be harmonized with the Nazi government’s plans for autarky and preparations for war. I.G. Farben provided assessments of technological potentials and production capacities, and sought a perfect fit with the Reich’s war preparations targets (for development, quality and quantity) in the sectors of munitions, chemical weapons, rayons, light metals, fuels and oils, plastics and synthetic rubber.
I.G. Farben sales had been hit hard by Germany’s continuing export difficulties. The company therefore at first lobbied the Reich for a restoration of German industry’s international networks; but since this was not achievable, Georg von Schnitzler and Max Ilgner proposed to Göring, on August 19, 1937, that “German industrial investments aimed at the creation of economic autarky be shifted to the industrialization of underdeveloped countries, so as to gain these countries as buyers of German exports.”[1] This initiative was also rejected, although I.G. Farben later did find a way to acquire a new “international network” by taking over companies in the occupied territories during the Second World War.
The continuing current accounts crisis and the German Reich’s increasingly aggressive foreign policy made I.G. Farben and its synthetic materials programs increasingly prominent. Things came to a head in the summer of 1938, when Göring appointed Krauch as a direct deputy and as “General Plenipotentiary for Special Questions of Chemicals Production.” From that point on, I.G. Farben managers were dealing directly with government officials who themselves were I.G. Farben managers. Given sabbaticals so that they could serve the government, the latter nevertheless remained on the corporation’s payroll.
I.G. Farben’s militarized raw materials operations worked on the agency side with the department led by Carl Krauch in his capacity as the “General Plenipotentiary for Special Questions of Chemicals Production,” which was responsible within these central functional sectors of the armaments effort for assigning distributions of labor, building materials (iron, steel, cement, etc.), electrical power, machines, and process engineering capacities. The survey data on these resources was supplied by the Office for Economic Expansion, which by December 1939 had advanced to a full state agency with Krauch again named as its head by Göring. After the death of Carl Bosch in 1940, Krauch also took over as the chairman of the I.G. Farben board of directors, thus resuming his active role at the head of the corporation while continuing to direct state agencies. The Reich government and I.G. Farben were increasingly intertwined.
I.G. Farben made use of Nazi foreign policy and its associated concept of a “nationality policy.” Most of I.G. Farben’s representatives abroad worked hand in hand with the NSDAP’s foreign organizations. To assure a complete collaboration, I.G. Farben specified that its foreign branches be staffed exclusively with “gentlemen […] who have committed themselves to represent National Socialist Germanity.”[2] At the same time, the sales division founded a number of front companies on behalf of the Abwehr, the military’s intelligence arm. The company also set up its own private intelligence-gathering offices at a number of its foreign branches.
In the ensuing years, even as the German Reich’s war effort was forced to go on the defensive, Krauch remained among the Nazi dictatorship’s most important military-industrial technocrats, always capable of simultaneously serving the interests both of I.G. Farben (profit maximization and product expansion) and of the “central planning” bodies of the Armaments Ministry. In this way, I.G. Farben came to control the resource base for the German war effort (outside of iron and steel) and at the same time served as a driving force in the Reich’s military research and development programs.
Like no other German corporation, I.G. Farben was fully integrated into the staff, the institutions and the techno-industrial structures of German armaments programs in the Second World War.
(GK; transl. NL; based on: Karl Heinz Roth: Die I.G. Farbenindustrie AG von 1933 bis 1939)