The Riddle of the Rhine:
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Victor LeFebure >> The Riddle of the Rhine:
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CHAPTER IX
GERMAN CHEMICAL POLICY
The preceding account of chemical warfare leaves the impression of a
successful Allied struggle against persistently unfavourable circumstances.
We were constantly compelled to accelerate to attain the pace set by
the enemy. There were exceptions, undoubtedly, but in the main Germany
kept ahead in the chemical struggle.
So far, in examining the root of our troubles, we have been content
to refer to the existence of the I.G., to describe its chemical
warfare activities, and to indicate, briefly, its unique power to
produce large quantities of organic chemical products at short notice.
The close connection between the German dye industry and chemical
warfare is now well recognised in official circles, and, to some extent,
by the general public. Its belated exposure was almost entirely
due to the facts revealed by the Inter-Allied Mission to the German
chemical factories some months after the Armistice.
But the situation thus revealed was not created in a day, nor by chance.
Indeed, one of the military features of industrial chemical development
in the I.G. has already been traced to pre-war activities.
I refer to the Haber process for the production of synthetic ammonia.
It would be short-sighted policy to accept the set of conditions against
which we struggled, and to explain them in terms of the I.G., without
looking more closely into the pre-war activities of this organisation.
Such an examination may reveal the basic forces which determined
our inferior position in chemical warfare at the outbreak of war.
It is true that we can explain away our inferiority by referring
to the German breach of faith, which automatically created conditions
for which we were unprepared. This is a comfortable solution.
But had chemical warfare been a strongly developed and accepted method of war
before the outbreak of hostilities, would we then have been prepared?
The records of the past, before April, 1915, must be consulted to answer
this question. We may find that our position is due to more than a mere
negative attitude, to more than our simple neglect of the organic
chemical industry. It maybe that there were forces which definitely
exploited this national characteristic to our disadvantage.
The pre-war policy and activities of the I.G. must be examined from
this point of view. In no country has such an investigation been
more complete than in America, and official statements have been issued
by the American Alien Property Custodian[1] which throw a flood of light
on the pre-war activities of the constituent branches of the I.G. They
conclusively reveal the existence of a carefully directed German chemical
policy making for world domination in the organic chemical industry,
which greatly hampered the military effectiveness of other countries,
and directly strengthened the military resources of Germany. On broad lines,
the pre-war and war activities of the I.G. produced the same result
as an attempt to strangle the economic life of possible opponents,
enfeebling their resistance to the subsequent delivery of a hammer blow
designed to take maximum advantage of the situation thus created.
Twenty years or more under the regime of a forceful economic policy,
not without its sinister aspects, prepared the ground by weakening us
in the concentrated chemical warfare which, ensued. The success of this
policy manoeuvred us into such a position that we barely escaped defeat
under the hammer blows of German chemical aggression. This, in fact,
appears to have been the German conception of modern war in its relation
to industry, and American reports have shown that it was carried through
with typical thoroughness by familiar German methods.
[1] _Alien Property Custodian Report_, Washington.
Government Printing Office, 1919.
Origin of German Chemical Monopolies.--The completeness of our organic
chemical deficiencies, and the thorough way in which we had failed
to develop organic chemical industries, creates such a sharp impression,
when thrown into relief by the outbreak of war, that we are led to
inquire into the methods by which these monopolies were established.
Let us admit, without any further delay, that Germany owed the origin
and assertion of these monopolies in part to her scientific development,
fostered by a vigorous policy of applying scientific research
to industrial enterprise. So far as her success depended upon
such factors, it merits our unqualified admiration and envy.
But stimulating these developments was a very definite general
and commercial policy which requires close examination.
German Chemical Commercial Policy;--Evidence of the
U.S.A. Alien Property Custodian.--Giving every credit to German
initiative and thoroughness in the application of science to industry,
we are still prompted to inquire how this monopoly came to be so complete.
We can rely on more than mere rumour, when examining the commercial methods
of the great I.G. The American Alien Property Custodian, Mr. Mitchell Palmer,
and, later, Mr. Francis P. Garvan, had occasion and opportunity to make
minute examination of the German dye agencies in America in connection
with general investigations on the reorganisation of alien property.
Their revelations truly merit the term, showing remarkably clearly
the unity of conception, determination of purpose, and co-operation
with the German Government which characterised the policy of the I.G.
Pre-war American Situation.--Let us briefly consider the relevant
aspects of the pre-war American situation. According to fairly
well-known facts, confirmed by the reports of the two American officials
mentioned above, the American pre-war organic chemical industry
consisted of little more than a series of small assembling plants.
Although enormous supplies of coal-tar products were available,
yet the dye intermediates derived from them were not made in America,
but imported from Germany. After various attempts to establish
the dye industry, it seemed, at one time, about 1880,
to have definitely taken root, but, within the space of five years,
there were only four dye producing establishments remaining.
German Price-cutting;--Salicylic Acid.--In every instance the manufacture
was almost immediately brought to an end by German price-cutting.
The same source reveals the direct and indirect methods used by
Germany to prevent, at all costs, the development of an independent
organic chemical industry. There are many pointed examples of
the direct method, and we will glance at the case of salicylic acid.
This is a very important chemical, used not only for certain important
drugs but also as in intermediate for dyes and photographic chemicals.
In 1903 the United States possessed five manufacturers of this product.
In ten years' time three of these had failed, and one of the survivors
was a mere branch of a German house. During this fatal ten years,
the product was being sold in that country at a price twenty-five per cent.
lower than in Germany. The manipulation of the prices of the other products
of the German monopoly enabled them, by such methods, to maintain it.
Many other examples, including such important products as bromine,
oxalic acid, and aniline, could be quoted to show the results of the German
price-cutting policy. The direct significance of bromine for chemical
warfare must be borne in mind.
Full Line Forcing.--Besides directly attacking the production
of raw materials and intermediates, the Germans used an indirect
method which has been described as "full line forcing."
They were the sole producers of certain specialities, such as
alizarine colours, anthracene colours, and synthetic indigo.
These were indispensable to the textile manufacturers,
and by refusing to supply them, except to houses which
would buy their other supplies from German manufacturers,
the latter could squeeze out home producers of simple dyes,
however efficient their production.
Bribery and Corruption;--German Patent Policy.--The dyeing
industry was peculiarly susceptible to corruption.
It was so simple for the head dyer of a mill to show
a partiality for dyes from any particular source of supply.
The American Alien Property Custodian very frankly tells us[1]: "The
methods of the great German houses in carrying on their business
in this country were from the first honeycombed with corruption.
Bribery of dyers was carried on almost universally on a large
scale. . . . So extensive was this corruption that I came across
only one American consumer that had escaped its ill effects."
Such were hardly the methods of decent commercial competition,
although it appears that the strong patriotic sense of the German
was able to justify, in his own eyes, what might be regarded
as reprehensible methods. This is not a question of bringing
up old reproaches, but merely of coldly examining facts.
We have already referred to their patent policy, whereby thousands
of patents were taken out, the only value of many of them,
being to cramp the productive initiative of possible rivals.
Professor Stieglitz explains how the German patents were useless
in developing large scale manufacture. "The patent protects
the product, but does not reveal the method." Sir William Pope
has also brought out this point, showing how the Germans use
thousands of bogus patents to protect their chemical industry.
He tells us,[1b] "In fact, some German patents are drawn
up for the purpose of discouraging investigation by more
practical methods; thus, any one who attempted to repeat
the method for manufacturing a dyestuff protected by Salzman &
Kruger in the German patent No. 12,096 would be pretty certain
to kill himself during the operation."
[1] _Alien Property Custodian Report_, 1919, p. 34.
[1b] _Science and the Nation_. A. C. Seward, F.R.S. Cambridge
University Press, 1917.
Propaganda and Information;--Espionage; Activities of
the Dye Agencies.--But another method which was used in this
commercial offensive, to which we must draw further attention,
dealt with propaganda and information. In his comprehensive report,
the American Men Property Custodian examines a number of large
industries and reveals how the German interest in these industries
through their American ramifications were active, "sowing the seeds
of German propaganda," and collecting information, both commercial
and military, for the use of the German Government and its agents.
Quoting again from this report, "In many of the large German-owned
companies taken over by the Alien Property Custodian, after investigation
it was found that espionage was one of the chief functions.
Every scrap of information of commercial or military value
to Germany was carefully gathered by the representatives of these
concerns in this country and quickly forwarded to the home office
in Germany. The German agents were particularly keen on gathering
information that would be helpful to Germany's commercial warfare.
Once in Germany, this information was carefully card-indexed
for the use of the manufacturers. Bulletins of commercial
information were also prepared and placed at their disposal.
In Germany, the collection of all commercial information is under
a bureau which is controlled and financed by the great German banks,
such as the Dresdner, Disconto, and Reichs Bank." This statement
is not mere generalisation, but is backed by innumerable examples.
Thus we find a light railway equipment manufacturer, a projectile company,
a wireless company, various magneto companies, insurance companies,
and German shipping companies, all engaged in spreading propaganda,
acquiring information, and influencing public opinion in favour
of Germany. But, undoubtedly more important than any of these,
and taking a leading part in the general scheme, was the German
dye organisation. The American publications make this quite clear.
Mr. Garvan goes so far as to say: "As long as you were supplied
by the big six (_i.e_. the I.G.), your business had no secret unknown
to Berlin. In Berlin you will find the card index system which
recites every fact connected with each and every one of your sources
which can be of any possible value to your rivals over there."
Referring to assistance rendered by various American and Allied
departments, including Military, Naval, and War Trade Intelligence,
we learn from the same sources: "All these bodies worked in close
co-operation and their mutual assistance was of inestimable value.
Information derived from these sources demonstrated that the chemical
industry was a natural centre for espionage and that this had been
true long before we entered the war--indeed, before the war began.
The relation between the German Government and the great German
chemical houses was so close that representatives of the industry
were naturally almost direct representatives of the Government,
and their work in this country gave them unequalled opportunities
for examining our industries from within."
With the outbreak of war, this organisation became more clearly defined.
It was, perhaps, difficult before the war to know where to draw the line
between purely commercial and actual governmental German activities.
The outbreak of war left no room for doubt. The German dye agencies became,
at once, the active agents of their Government in various schemes,
the nature of which we shall outline, and their "information" functions
became very definitely describable as espionage.
Manoeuvring Raw Materials.--In the first place, the Alien Property Custodian
found unexampled, evidence of a definite German scheme to corner and divert
certain important war materials destined for the Allies.
Chemical Exchange Association;--Doctor Albert's Letter.--Many such plots
could be quoted, but we will limit ourselves to one,[1] chosen because on its
stage move the chief figures of this espionage system. This case has been
described under the name of the "Chemical Exchange Association," and is much
more fitted for the pen of a Conan Doyle. The move appears to have been
initiated by Dr. Albert, the financial adviser of the German Government
in America, in collaboration with von Bernstorff. Its purpose was to
corner the immediate supplies of American phenol in order to prevent its
manufacture into high explosives, including the well-known picric acid.
The outbreak of war instantly stopped the entry of phenol into the country.
Further, this product was not manufactured there to any extent before.
Large supplies were required for the production of synthetic resins,
for the gramophone industry, This led to the development of a phenol industry
by the Edison works, and there appeared, automatically, a phenol surplus.
Dr. Albert, aware of the probable fate of this surplus as raw material
for allied munitions, determined to seize it for the German Government,
and he did this through Dr. Hugo Schweitzer, one of the most prominent
members of the American agency of the great Bayer works. In June, 1915,
Dr. Schweitzer contracted with the selling agents of the Edison Co.
for the entire surplus of phenol available for sale, offering a large cash
security which was furnished by Dr. Albert. A lapse of a week witnessed
another contract with the Heyden Chemical Works, a branch of the German house,
by which this phenol was purchased for conversion into salicylic acid and
other products. To avoid exposing the nature of the deal, Dr. Schweitzer
registered as the "Chemical Exchange Association." The profits amounted to
nearly a million dollars, half of which belonged to Dr. Schweitzer. This, we
are told, went immediately to the German Government. As a suitable
climax to such a venture, a dinner was given at the Hotel Astor by
Dr. Schweitzer in honour of Dr. Albert, and is described as a typical
gathering of the most active German propagandists in the country.
It was as a result of this deal that Dr. Albert sent Dr. Schweitzer
a memorable letter in which he praises his "breadth of highmindedness,"
and compares his work with "a military coup accomplished by an army
leader in destroying three railroad trains of forty cars containing four
and a half million pounds of explosives."
[1] _Alien Property Custodian Report_, 1919, p. 43.
Dye Agency Information System;--Dr. Albert on Chemical Warfare.--
Although a great deal has been said in America with regard to
the activities of Dr. Schweitzer and his followers, very little
has been heard on this side. Explaining the complete information
system possessed by the Germans, Mr. F. P. Garvan informs us
that the head of the system in America for years before the war
was Dr. Hugo Schweitzer, President of the Bayer Company there,
and he even quotes his secret service number given him by
the Imperial Minister of War, stating that he came to America,
became a citizen on the instruction of the German Government,
and led the espionage and propagandist movements down to the day
of his sudden death in November, 1917. The relationships between
Dr. Albert and Dr. Schweitzer, when the former was leaving for Germany
in 1917, are very illuminating. We learn from the same source
how Dr. Schweitzer received from the former nearly one and a half
million dollars, all to be spent in espionage and propaganda.
Dr. Albert, leaving Dr. Schweitzer a letter of appreciation,
to which we have referred in connection with the Chemical Exchange,
makes a very significant reference to chemical warfare.
"Of still greater and more beneficial effect is the support which you
have afforded to the purchase of bromine. We have a well-founded
hope that, with the exclusion of perhaps small quantities, we shall
be in a position to buy up the total production of the country.
Bromine, together with chloral, is used in making nitric gases,
which are of such great importance in trench warfare.
Without bromine these nitric gases are of slight effect: in connection
with bromine they are of terrible effect. Bromine is produced only
in the United States and Germany. While, therefore, the material
is on hand in satisfactory quantities for the Germans, the Allies
are entirely dependent upon importation from America." Making due
allowance for the fact that Dr. Albert was not a technical man,
this information possesses an element of truth, indeed France
was driven to the extreme of establishing a bromine industry
in the wilds of Tunis in order to counter the German attack.
The Moral Aspect.--Such facts tempt us to think hardly of these
representatives of German culture. But they were, no doubt,
fiercely patriotic Germans, and it is not difficult for us
to understand their activities after the outbreak of war.
An American, however, can hardly adopt such a lenient view, if, as has
been claimed, many of these agents were naturalised Americans,
for they were abusing the privileges and the confidence of their
adopted country. We have no wish, however, to dwell on this aspect
of the matter, and have no doubt whatever that many good Germans
could justify all these activities according to their own codes.
It would have been better not to have given this information
the light of day, were it not of some value for the future.
Report of the New York World;--German Policy Regarding Dye Supplies
to the U.S.A.--How far can the parent organisation of these
dye agencies be regarded as aware of their activities?
They were largely responsible for their inspiration.
Mr. Garvan says, "Practically all the dye salesmen were only
nominally in the employ of the branches here; all had secret
and personal contracts with the Home Office." From these facts
alone there can hardly be any doubt as to the connivance of the
home organisation. Again, on April 28, 1915, the _New York World_
printed an editorial explaining that "two large German chemical
and aniline dye concerns are reported to be establishing factories
in New Jersey, to supply American demands hither to supplied
from Germany." This statement apparently alarmed Captain Boy-Ed,
the German Naval Attache, and he communicated with Dr. Albert,
the financial representative in New York, for the establishment
of these factories would have countered the German policy
of bringing political pressure by refusing dye shipments.
Dr. Albert's reply to Boy-Ed contains the following phrase:
"With regard to the dyes, I got into touch with local experts
in order to determine what truth there is in the news.
According to my knowledge of things, the matter is a fake,
inasmuch as _*our factories have bound themselves orally
and by word of honour to do nothing in the present situation
which might help the United States_." As further evidence of this
definite policy, witness a letter from Consul-General Hossenfelder
to the Imperial German Chancellor, Dr. von Bethmann-Hollweg. This
letter is dated New York, March 3, 1916, and, after a detailed
examination of the economic relationships between Germany
and America, states: "Further, we should, according to my conviction,
hold ourselves absolutely passive in relation to the proposals
for the exportation of potash, chemicals, and dyestuffs,
and if the opportunity arises, make the sanction for them,
not dependent upon the consent for an exchange of articles,
but upon the abolition _en bloc_ of all hindrances to intercourse
contrary to international laws which have been instituted
by England." Further, Dr. Albert, cabling to the German Government
in April, 1916, on the export of dyestuffs, tells us:
"The hope was entertained of bringing American industries
which were solely dependent upon German deliveries of dyestuffs
into a position that they would have to insist on the importation
of dyestuffs under the conditions demanded by Germany." There can
then be no doubt that the parent organisation of the I.G. was
in close touch with the activities of its agencies.
This, then, is a brief account of the methods by which Germany created
the monopoly whose existence threatened our success in the world war.
Before leaving the question of the monopoly, let us inquire a little
more closely into its exact nature and range. Various American official
reports have revealed the desperate measures necessitated in that country
in order to meet deficiencies in vital products when the German source
of supply was removed.
Professor Stieglitz's Evidence.--Professor Stieglitz, of the University
of Chicago, giving evidence before the United States Senate, stated:[1]
[1] Hearings before the Committee on Finance, U. S. Senate, 1920.
"I have come to the conclusion that we would have saved a great deal of
suffering and a great many lives in this country, if we had had an organic
chemical industry, as they have in Germany, before we started the war."
Characterising the dye industry as the source of war chemicals,
including explosives and poison gas, he emphasises the drug question
and shows how their development depends absolutely upon the existence
of certain raw materials, and facilities for comprehensive organic
chemical research, which only find a _raison d'etre_ in the existence
of a flourishing dye industry,
Ehrlich's Discovery.--Pointing out the difficulties in developing
the manufacture of salvarsan, he explains how the process was
originally discovered by an organic chemist, Dr. Paul Ehrlich,
co-operating with a German dye company, the crude material coming
from the dye plants, the product itself strongly resembling dyes,
"containing arsenic instead of part of their nitrogen."
The great importance of this drug is brought out by another witness
before the same committee, Mr. Francis P. Garvan, who explains how,
by refusing or neglecting to ship salvarsan, Germany wanted the
United States "to starve to death" for lack of it, and he continues:
"Think what an extension of disease and that an intensification
of suffering and distress Germany was willing to impose upon
her best market in order to obtain her imperial will."
Germany had monopolised the production of the important
synthetic drugs, including the derivatives of salicylic acid,
of which aspirin had developed wide use in Allied countries.
After every household had learnt the value of German
produced aspirin, its supply was cut off at the outbreak of war.
The same disadvantages applied in the field of anaesthetics.
For a long period America had no local anaesthetics for hospital
surgical work, being compelled to use what were termed
"Bulgarian Operations," that is, operations without anaesthetics.
Professor Stieglitz claims that the lack of drugs and
anaesthetics threw back American surgery some fifty to seventy
years in civilisation.
But what of this country? We have already outlined how the outbreak
of war found us with, at the most, two or three relatively small
producing centres, which did valiant service during the war
and amply proved the importance of the dye industry by revealing
what could have been done had we been many times stronger.
Was the same German chemical policy responsible for our
pre-war position? As far as we know official investigations
have not been pursued to the same length as in America, but it
is beyond doubt that the German dye companies took every possible
step to stifle the development of our organic chemical production.
When the war broke out, our comfortable commercial contact
with the I.G. became a strangle-hold. It could not be otherwise.
Whatever the German attitude, and we could hardly expect it to
be friendly, the strangle-hold at the outbreak of war was inevitable.
But this dye menace facing our textile industries, and weakening
our power of retaliation in the chemical war, was not the only
danger from the I.G. We were in a critical position through failure
to produce other commodities than dyes.
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