IG Farben
, (German: “Syndicate of Dyestuff-Industry Corporations”), world’s largest chemical concern, or
cartel
, from its founding in
Germany
in 1925 until its
dissolution
by the Allies after
World War II
. The IG (
Inter
ess
en
gemeinschaft,
“syndicate” or, literally, “community of interests”), partly patterned after earlier U.S. trusts, grew out of a complex merger of German manufacturers of chemicals, pharmaceuticals, and dyestuffs (
Farben
). The major members were the companies known today as
BASF Aktiengesellschaft
,
Bayer AG
,
Hoechst Aktiengesellschaft
,
Agfa-Gevaert Group
(Agfa merged with Gevaert, a Belgian company, in 1964), and
Cassella AG (from 1970 a subsidiary of Hoechst).
The movement toward association had begun in 1904, with the merger of Hoechst and Cassella?a merger that immediately prompted a rival merger by BASF and Bayer, later joined by Agfa. (This latter group was called the Dreibund, or “Triple Confederation.”) In 1916, at the height of
World War I
, the rival groups joined forces and, with the addition of other firms, formed the
Interessengemeinschaft der Deutschen Teerfarbenfabriken (“Syndicate of German Coal-Tar Dye Manufacturers”). This “little IG” was no more than a loose association: member companies remained independent, while dividing production and markets and sharing information. In 1925, after protracted legal and fiscal negotiations, the “big IG” was formed: assets of all
constituent
companies were merged, with all stock being exchanged for BASF shares; BASF, the
holding company
, changed its name to IG Farbenindustrie AG; headquarters were set up in Frankfurt; and central management was drawn from the executives of all constituent companies. (Cassella at first held out and was not absorbed by IG Farben until 1937.)
Policy-making was fused, but operations were decentralized. Regionally, production was split into five industrial zones?Upper Rhine, Middle Rhine, Lower Rhine, Middle Germany, and Berlin. In terms of vertical organization, the company’s production was split among three “technical” commissions, each governing a different range of products. Marketing was split among four sales commissions. In the course of the late 1920s and ’30s, IG Farben also became international, with trust arrangements and interests in major European countries, the
United States
, and elsewhere.
During World War II, IG Farben established a
synthetic
oil and rubber plant at
Auschwitz
in order to take advantage of slave labour; the company also conducted
drug
experiments on live inmates. After the war several company officials were convicted of war crimes (nine being found guilty of plunder and spoliation of property in occupied territory and four being found guilty of imposing
slave labour
and inhumane treatment on civilians and prisoners of war).
In 1945 IG Farben came under Allied authority; its industries (along with those of other German firms) were to be dismantled or dismembered with the stated intent “to render impossible any future threat to Germany’s neighbours or to world peace.” In the western zones of Germany, however, especially as the
Cold War
advanced, this
disposition
toward
liquidation
lessened. Eventually the Western powers and West Germans agreed to divide IG Farben into just three independent units: Hoechst, Bayer, and BASF (the first two being refounded in 1951; BASF in 1952).