[1] Alien Property Custodian's Report, 1919.
"At the time of the formation of this enormous organisation the capitalisation of each of the principal component companies was largely increased. Hochst, Badische, and Bayer each increased their capitalisation by 36,000,000 marks, bringing the capital of each up to 90,000,000 marks." "Berlin increased its capital from 19,800,000 to 33,000,000 marks. Other increases brought the total nominal capital of the group to over 383,000,000 marks. For many years a large part of the enormous profits of these concerns has been put back into the works with the result indicated by the stock quotations. The real capitalisation is thus much greater than this nominal figure. In fact, it is estimated that the actual investment in the works comprising the cartel is not less than $400,000,000. It cannot be doubted that this enormous engine of commercial warfare has been created expressly for the expected war after the war, and that it is intended to undertake still more efficiently and on a larger scale the various methods by which German attacks upon all competition were carried on."
Two additional features must be indicated. A policy to which we have referred was most actively followed, aiming at complete independence and self-sufficiency in all matters relevant to production, especially regarding raw materials. We mention later how the war has strengthened the strong prewar position of the I.G. in heavy chemicals needed as raw materials for the intermediates and finished dyes.
Recent information reveals a further widening of their basis of operation, including a strong hold on the electro-chemical industry and on the new synthetic processes from carbide, for acetic acid and the other products normally obtained by wood distillation. Again, the policy of the I.G. appears to have moved towards more complete unity since the war. Exchanges of directing personnel and of capital amongst the branches have been recorded for which the term "cartel" is no longer a fair description. In addition, considerable increases in capital have occurred which not only reveal the vision and activity of the I.G. but which indicate its close contact with the German Government. With such an organisation in existence and with the complete liaison which had developed between the directors and the German Government for other purposes than chemical warfare, and in agreement with the paternal policy adopted by the latter towards this chemical industry, production became simplicity itself.
War Production by the I.G.—Let us, therefore, examine in some detail the actual production of war gases and chemicals by the I.G. In order to obtain an idea regarding case of production, we will later make a comparison with the magnitude and rapidity of that of the Allies.
From the point of view of this statement, there are two main classes of production, that in which the majority of the steps involved were actual processes employed for the manufacture of some dye, pharmaceutical or other chemical product, and, in the second place, that in which no such coincidence occurred, but in which the general technique developed, and the varieties of existing plant covered the needs of the case. Without stretching the point, every war chemical employed came easily under one of these two categories. In order to assist the less technical reader, we will consider the production of the chief war chemicals in the order in which they appeared against us on the front.
Chlorine.—This important raw material, used in a variety of operations, notably for the production of indigo and sulphur black, two highly important dyes, was produced along the Rhine before the war to the extent of nearly forty tons a day. The only serious expansion required for war was an increase of already existing plant at the large factory of Ludwigshaven. The following table of production illustrates the point:
CHLORINE (METRIC TONS PER DAY)
1914 1918
Leverkusen 20 20
Hochst 4 8
Ludwigshafen 13 35
—— ——
Total 37 63
Chlorine was important, nor only as a raw material for most of the known chemical warfare products, but also, in the liquid form, for cloud attack. Owing to the development of protection, the use of liquid chlorine for the latter purpose became obsolete.
Phosgene.—This was produced in considerable quantity before the war at Leverkusen and Ludwigshafen, leading to many exceedingly important dyes, amongst the most commonly used at present being the brilliant acid fast cotton scarlets so largely used in England. More expansion of plant was necessitated. At Leverkusen the existing plant can produce at least thirty tons a month, and we learn "the plant remains intact ready for use." At Ludwigshafen the capacity was considerably higher, amounting to 600 tons per month. As production was commenced before the war, there were no difficulties in developing the process, expansion alone being necessary.