• U.S.

CARTELS: I.G. Farben Comeback

2 minute read

Germany’s I. G. Farben chemical combine, which was broken into twelve separate companies by the Western allies, has made a surprising comeback. The allied group controlling the onetime Farben companies reported that the separate companies are doing almost as much business as the combine did before the war. They grossed $550 million in 1951, v. $650 million in 1938; they turned a “fair” profit, as against a $130 million loss in the three years up to 1948. This week the allies turned the companies back to the original Farben stockholders, and authorized public trading in the stock. The companies are going so well, said the allied group, that dividends may be resumed next year.

The biggest Farben offshoots are the Bayer, Basf (short for Badische Anilinund Sodafabrik) and Hoechst companies, which account for 95% of the total business. All have paid for their postwar reconstruction out of profits, plus some $8,000,000 in ECA loans. All made their big comebacks under the guidance of I. G. Farben oldtimers, many of whom were once staunch Nazis. Typical is the Bayer company, biggest of the group, which suffered $40 million in war damages, emerged from the war with run-down and obsolescent equipment. Like other Farben units, Bayer lost its export markets, which once accounted for about 50% of its sales, when Farben’s central sales agency was abolished by the allies. Now the war damage has been repaired, new machinery added, and export business boosted to 34% of gross. In the last two years, Bayer sales have jumped 70%, to $165 million.

The allied decision to turn back Farben’s successors to their original owners is a milestone along the road of German recovery. Is it also a detour leading back to the cartel, with all its restrictive agreements? The danger is great; since wartime, Farben companies have shown a marked hankering for reunion. A few years ago, Farben companies in the U.S. zone were split into 42 different units. They have since merged into twelve. Furthermore, no one doubts that the Big Three Farben successors would like nothing better than to rejoin forces, and drag in the others. What may stop them is a proposed West German antitrust law. Said one allied official: “We have assurance from the [West German] federal government that the status quo of the successor companies will be retained for three years. That should give the present setup time to crystallize. One can just hope it won’t come unstuck.”

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