The Situation after the First World War
The end of the First World War brought further changes in the situation facing the German chemical producers. Under the Treaty of Versailles, the Entente powers were given the power to take possession of German industrial patents and expropriate German foreign properties as reparations for war damages. Among its effects on the dyestuffs industry, dyestuffs would also be supplied as reparations. The section of the treaty mandating the disarmament of Germany included a clause that, if enforced, might result in the closing of chemical factories that had participated actively in weapons production and the making of poison gases and nitrates.
Having suffered greatly from the war, France at first demanded that the plants of the “Small I.G.” combine be shut down, which presumably would have meant the end of the companies in the partnership. Carl Bosch of BASF negotiated a settlement however with Joseph Frossard, the French official charged with administering the German plants in France. They agreed that Bosch would reveal the industrial secrets of dyestuff production and the Haber-Bosch process to the French, and in exchange the German plants would be allowed to stay in operation.
None of the industrialists who invented and developed poison gas production were charged in the 1920 Leipzig War Trials of German war criminals.
In the years after the war, the German dyestuff industry faced growing competition from abroad. Companies like DuPont in the United States and Kuhlmann in France had captured large market shares. Germany’s economy was in decline, although not as dramatically at first as had been feared. Nitrate exports plunged due to the growth of production abroad and a resulting decline in demand for products made in Germany. Dyestuff production also underwent a dramatic collapse. Whereas Germany had accounted for 88 percent of world production in 1913, its share by 1924 had fallen to 46 percent.
The companies of the “Small I.G.” combine saw important changes in management. Carl Bosch became the chief executive of BASF in 1919 and his board took on younger, ambitious new managers like Hermann Schmitz, Carl Krauch and Fritz Gajewski.
The chemicals industry profited from the postwar inflation in Germany, which made its prices cheaper and thus more competitive abroad. The situation was far less kind to labor. Plant workers faced increasingly dire conditions. Their rights were limited, peacetime working hours were increased back to nine hours and the improvements in workplace conditions instituted during the war were gradually rolled back. The work was often hazardous to human health. A serious accident occurred at the BASF plant in Oppau on September 21, 1921. Poor safety measures presumably played a role in causing an explosion that killed 565 people and injured 2,000. In 1923 to 1924, the companies of the “small I.G.” carried out several waves of layoffs in the effort to cut costs.
(DOP; transl. NL; based on: Karl Heinz Roth: Die Geschichte der I.G. Farbenindustrie AG von der Gründung bis zum Ende der Weimarer Republik)