DEGUSSA IN THE NATIONAL SOCIALIST ERA

One of the reasons for commissioning Peter Hayes, Professor of Modern History and Holocaust Studies at the Northwestern University in Chicago, was his award-winning book about I.G. Farbenindustrie in the Third Reich ("Industry and Ideology. IG Farben in the Nazi Era", Cambridge University Press, 1987. New edition with a new foreword 2001). Degussa contractually assured Professor Hayes that it would exert no influence on his research, would withhold no archive documents whatsoever and would allow all serious academics access to these once the work was completed. Professor Hayes retains copyright over his work. The book entitled “From Cooperation to Complicity. Degussa in the Third Reich” is not an official company publication but rather the result of research work carried out with complete academic independence by a renowned American historian.

The History before 1933

The Deutsche Gold- und Silber-Scheideanstalt vormals Roessler (German Gold and Silver Refinery, formerly Roessler, after 1980 known as Degussa AG for short), was founded as a joint stock company in Frankfurt am Main in January 1873. It quickly established itself as a successful company in the field of precious metals, and in producing and distributing chemical products. With the company specializing mainly in the manufacture of intermediates, its name remained largely unknown among consumers until the decade of the 20th century. When all foreign investments disappeared after the end of the World War, the German Gold and Silver Refinery lost much of its value. In 1930 Ernst Busemann, a businessman of great experience, was appointed to the newly established post of Chairman of the Management Board of Degussa.

Under his leadership, which lasted until 1939, proceeds were increasingly invested in tangible assets, facilities were expanded, investments increased and new companies acquired. As a result of this corporate policy, Degussa survived inflation and the world economic crisis largely unscathed. Despite everything, however, the company remained vulnerable, a situation that became especially evident when it was obliged to enlist the participation of I.G. Farbenindustrie AG in some of its projects (e.g. Degesch, Österreichische Chemische Werke). At the beginning of the 1930s I.G. Farben was a powerful, potentially overwhelming competitor. Moreover, it took until 1934 before Degussa succeeded in significantly reducing its massive dependence on its major corporate client, the Henkel Company. This Dusseldorf-based company used to purchase large quantities of sodium perborate, the detergent additive.

Of even greater significance, however, was the establishment of a “controlled market economy” by the National Socialists from 1933 on, with the objectives of the government defined as "aryanization" autarchy and armament. Those in charge at Degussa believed they had to circumvent these directives if the company was to carry on operating successfully.

The Company, the NSDAP and the Regime

When the national socialists came to power in January 1933, none of the nine Degussa Management Board members was a member of the NSDAP. At the middle management level there were, however, definitely some party members. The members of the Management Board and Supervisory Board did not take the party particularly seriously at. Nevertheless, as their primary objective was for Degussa to continue to grow, they attempted to gradually come to terms with the new government. In this they were following the motto that Ernst Busemann, the Chairman of the Management Board, had stated in 1937: “There’s no point in swimming against the current.”

A part of the arrangement was that a member of the Management Board should officially join the party. The choice fell on Hermann Schlosser, who had been a soldier in the World War and since then, as many of his generation, held a romanticized version of fighting on the front line, duty and loyalty. However, Schlosser’s application to join the NSDAP was rejected in 1933, as he was a freemason. Only when he became Chairman of the Management Board of Degussa in 1939, after Busemann’s death, did the party accept him by way of an amnesty. The political attitude of those who led Degussa between 1933 and 1945 ranged from that of upper middle class conservatives through to dyed-in-the-wool national socialists, some of whom were among the to join the party.

The six Jewish members of the Supervisory Board were given the choice in 1933 of leaving straightaway or stepping down once their term of office had expired. The last, Richard Merton, Supervisory Board Chairman of the Metallgesellschaft, left in 1938. Moreover, some of those in charge at Degussa made every effort to continue to employ Jewish staff. With the radicalization of NS policy in 1938 this was no longer possible.

This commitment on behalf of Jews was primarily personally motivated, and not politically so. Those in charge of Degussa knew that they could pursue the company’s interests provided they made allowances for state priorities. The cooperation between Degussa and representatives of the government proved largely, but not always, unproblematic.

With tactical foresight and its readiness to cooperate, but also as a result of some fortuitous coincidences, Degussa succeeded in avoiding the indirect control that the NSDAP was striving to achieve through party members at management and employee levels.

"Aryanization"

Cooperation with the national socialists included “aryanization“, meaning the acquisition or transfer of Jewish property to “purely German” companies and people. Degussa took over ten companies (seven in Germany, three in the so-called Protectorate of Bohemia and Moravia), three holdings, acquired four extensive blocks of shares, ten parcels of real estate in Frankfurt, Cologne, Hamburg, Berlin, Vienna and Prague, and lastly purchased a confiscated patent in August 1944. The companies that were “aryanized” early on included the pharmaceutical company Chemisch-Pharmazeutische Werke Bad Homburg AG, Frankfurt, Degea AG, Berlin, which later operated under the name of Auergesellschaft, and the Bonn-based company Dr. L.C. Marquart. Among the parcels of real estate that became the property of Degussa between 1934 and 1936 were three that were annexed owing to their direct proximity to the then headquarters of the company in Frankfurt.

Different phases in the acquisitions can be identified: Degussa carried out the initial “aryanizations” largely without exercising substantial pressure. The sellers, mostly business partners of long standing, initiated contact in spring 1933, after they had been maneuvered into a hopeless position through repressive measures on the part of the state and the NSDAP. Degussa subsequently offered prices that Peter Hayes describes as commercially “fair” for the period 1933 to 1937. Permission was obtained from the district committee for the "aryanized" company Dr. L.C. Marquart to continue to employ Jewish staff since their expertise was in demand.

However, according to Professor Hayes from 1938 on acquisitions also started to be made by Degussa in an “almost callous manner, with consideration for the company’s own interests”. Overall, however, the key factor concerning the “aryanization“ is less whether and when the representatives of Degussa applied their own pressure, but much more that they readily profited from anti-Jewish measures.

Armament and Autarchy

The economic upswing of the Third Reich was based after 1935 primarily on the two pillars of armament and autarchy. The latter was intended to make Germany largely independent of imports. From 1938 on Degussa was, as were many other companies, firmly integrated into the national socialist economic system, and its managers had only very limited room for independent decision making. The regime controlled them through a combination of pressure and incentives. It supported production, used state funds to create selling markets and steered resources. The state substantially restricted the Degussa management’s room to maneuver – the production of active carbon black is a particularly telling example of this. This substance was a main component of hard-wearing rubber tires, and thus of great interest to the national socialists as the product could assist their efforts to achieve autarchy.

To expand its product range, Degussa acquired a small flaming soot factory in Kalscheuren near Cologne in 1932. At the urging of the Reich's Economic Ministry, attempts were made to manufacture an active gas black in order to compete with USA which dominated this sector. They managed to do this in 1934 and it proved a commercial success. The state attempted immediately thereafter to specify how far and in what manner this business area should grow. Even though Degussa was primarily not interested in strengthening its gas black segment or joining a tire industry consortium, the managers were obliged to follow. Degussa’s products were very versatile in their uses – for armament production as well. Sodium metal, for example, was an intermediate product for manufacturing aircraft fuel. Acetone cyanohydrin was required in the production of PLEXIGLAS, which the Darmstadt-based firm of Röhm & Haas had developed and which was used to build aircraft cockpits.

Auergesellschaft, Berlin, which was “aryanized” by Degussa in 1934, came to be even more heavily dependent. Back during the World War this manufacturer of gas masks had been accepting military contracts and had further intensified the connection after 1933. Auer came into conflict with its Frankfurt-based parent company owing to its monostructural alignment to the armaments sector. Ultimately, the demands of the four-year plan led to Degussa and I.G. Farbenindustrie AG, as well as many other companies, being short of cash by the end of the thirties. Increasingly massive investments demanded by the regime caused profits to dwindle.

Precious Metals for the Reich

When the national socialists came to power, Degussa’s precious metals business was sluggish due to the foreign exchange controls that were subsequently introduced. As it was nigh on impossible to convert the Reichsmark, and because the Reichsbank was stockpiling gold, Degussa’s refineries operated well below capacity until 1938. This changed towards the end of the year with the so-called “precious metals campaign”. After the pogrom night of November 9, 1938, the Reich government decided to confiscate all the gold, silver and platinum owned by the Jewish population. It was supposed to serve as “atonement money” (Sühnegeld) for the damage caused during the so-called Reichskristallnacht (the night of broken glass). Jews had to hand in their precious metal at state-run pawnshops.

Technically speaking they received compensation, but this was paid into frozen accounts that the trustee, the Reich, confiscated, as soon as the former owner emigrated or was deported. From the pawnshops the precious metal went to the refineries. These processed and refined the metals, and sent the corresponding weight in ingots after deducting a refining fee and a small profit to the Reichsbank, or they delivered the metals to other companies as instructed by the regime. Since Degussa was the biggest precious metals refinery in Germany, it was able to offer the Reichsbank better terms than all the others, and received numerous refining contracts.

When the Jews were subject to plunder in the areas occupied by Germany between 1940 and 1945, Degussa also proved useful to the regime in its capacity as one of the most significant precious metals processors. In this respect the company took a totally profit-oriented approach, and those in charge paid no attention to the origin of the precious metals. Degussa’s Berlin refinery received direct shipments of gold from teeth from the Lodz ghetto. To all intents and purposes the delivery and processing of dental gold was nothing unusual, as this was one of the refinery’s business areas. However, deliveries sometimes arrived in a condition that left no doubt where they had originated. Nevertheless, for many deliveries the metal arrived in an already molten state in order to prevent theft during transport.

Whether the company’s top management knew the origin of the precious metals cannot be shown beyond doubt from the existing documentation. In view of the extensive destruction of documents in spring 1945, it may be assumed that top-ranking employees of the Berlin metals department knew about it. When Degussa participated in plundering from Jews it was not only to make quick profits. It was more the case that it expected follow-on contracts and was presumably afraid of sanctions that might ensue if it refused. Consequently it acted in line with the premise: “If we don’t do it, someone else will“.

Because Degussa did not refuse, it benefited from one particular refining contract that was far bigger than any of the previous ones. This contract began in 1940 after the victories in the west, and involved the plundered public and private precious metal stocks from the occupied countries such as Belgium, France and all the states in Eastern Europe that were occupied by German troops. The whole issue of precious metals forms the content of a further study that Degussa has commissioned: The economic historian Dr. Ralf Banken, Cologne/Frankfurt, examines the Third Reich’s foreign exchange control mechanisms, and in particular illustrates the role of Degussa in this as the largest precious metals refinery. The findings of this investigation are scheduled for publication in 2005.

Forced Labor

Between 1939 and 1944, Degussa employed civilian workers, prisoners of war and also detainees from ghettos and concentration camps as forced laborers. They were to a large extent procured and assigned by public agencies. In return a large part of these workers’ salaries had to be paid to these agencies. The background was always the same: Owing to the war, ever greater quantities of production were needed, while at the same time the shortage of German workers due to conscription was becoming increasingly acute. Though Degussa as well tried to employ women instead of the forced laborers, they were not allowed to undertake any hazardous work. Since more than a half of all German women were in paid employment, the government prevented further recruitment as they feared for morale at home and on the front. In addition, the use of female workers who were not sufficiently technically trained impacted negatively on the quality of the products. Moreover, costs rose – not least of all as a result of the large amount of overtime that was decreed.

As Peter Hayes establishes, the forced laborers – mostly Polish or French prisoners of war – were not much cheaper for Degussa than regular skilled workers. Costs involved included obtaining accommodation, maintenance and also guarding the laborers. The single genuine “advantage” was the fact that there were no social security contributions to pay. Generally speaking, the number of forced laborers allocated was not constant but fluctuated – at times quite heavily, since contingents of workers could also be withdrawn again. From 1942 on, the bulk of forced laborers in Germany were made up of Russian prisoners of war or those deported from the East. The state earned money from them, as it impounded more than a half of what were nevertheless very low earnings. In the case of what were referred to as Eastern laborers a special deduction was made on top of this.

In Degussa’s main factories, forced laborers were employed to the same extent as in most German industrial companies. In the smaller Degussa plants, their ratio to the total number of employees was somewhat higher. In 1943, approximately one quarter of the employees of Degussa consisted of forced laborers, while in 1944 they accounted for as much as one third and more. Nevertheless, the number of workers allocated was still too low to meet Degussa’s needs – counter to all expectations, the overall number was limited. And Degussa frequently received fewer workers than it requested because it did not count as one of those companies that could demonstrate that its production was critical for the war effort.

Nor could the shortfall be offset by increasing the working week to 60 hours for all employees. In 1943 Degussa’s works managers expressed their dissatisfaction that the forced laborers were increasingly given insight into engineering processes and secret operating procedures. However, Degussa’s management, as with other companies, was obliged to ignore these considerations in favor of securing military economic production. The end of the Armed Forces’ victories meant at the same time fewer deported persons as laborers, and additional numbers of forced laborers. Many of those already recruited by force from the West – French, Belgians, Dutch – fled over the borders whenever the opportunity arose.

The treatment of the forced laborers was very much dependent on the ranking their nationality had in the NS racial ideology. Initially, many were given accommodation at inns or boarding houses, thereafter increasingly in camps. After the defeat of the German Armed Forces at Stalingrad in the winter of 1943 the situation changed significantly for the worse for all forced laborers. Their camps became more like prisons, with curfews and disciplinary measures. The situation became even worse for those recruited from the ghettos or concentration camps.

Degussa used forced laborers from ghettos and concentration camps in four factories in the east of the Reich: In the factories of the “aryanized” Auergesellschaft in Oranienburg and Guben, and on the building sites of the new factories in Fürstenberg/Oder and Gleiwitz in Upper Silesia. The start of construction at the two latter factories was considerably delayed in 1941 because there were no foreign workers let alone regular workers from whose ranks a construction team could be assembled. So the project heads gave their agreement to use people from concentration camps or ghettos.

The laborers on the Fürstenberg building site came from the Lodz ghetto and were under the supervision of the SS. Degussa paid the SS not just for the care and maintenance of the laborers but also for their accommodation, the infrastructure and the guards. Owing to these costs and the fact that the factory was never completed, no profit was generated. In the case of Auergesellschaft, information about the use of forced laborers is sparse because shortly after the Red Army marched into Berlin large numbers of files were destroyed. What is clear is that the forced laborers coming from the East lived in very poor conditions and some of them died in the factory. Others died during the heavy air raids on Berlin in 1945.

In Gleiwitz, where Jewish men and women from Auschwitz were used, the difficult outside work also claimed victims. At the end of 1944, Gleiwitz became an external camp of Auschwitz. On the one hand this involved guarding the workers more intensively, but on the other hand it did answer the hope of the works manager that the workers could be supplied with food better – at lease for the time being. After that, however, deportation loomed for those who performed unqualified work.

Peter Hayes comes to the conclusion that Degussa did not use forced laborers, especially Jewish concentration camp detainees, because they were cheap. There were no other workers available and the company did not want to oppose the demands of the Reich to constantly boost production quantities.

Degesch and Zyklon B

The pesticide Zyklon B was used between 1939 and 1945 primarily for gassing military accommodation and supplies, uniforms, vehicles and ships, or for pest control in forced laborers’ barracks. At the same time, however, the SS misused 1 percent of the manufactured quantities of this substance to kill approximately one million people.

Hydrocyanic acid, the main ingredient of Zyklon B and better known as prussic acid, was used for the time towards the end of the 19th century to gas vermin. During the World War, TASCH, the Technische Ausschuss für Schädlingsbekämpfung, (Technical Committee for Pest Control) was founded under the auspices of the War Ministry. This committee developed a prussic acid gas which was intended for use on the front, especially to destroy the overwhelming numbers of lice which were causing serious illness. The Deutsche Gesellschaft für Schädlingsbekämpfung m.b.H. (Degesch), Frankfurt, emerged in 1919 out of TASCH, which worked with Degussa’s procedures and those of others. Besides Degussa, there were initially many other firms involved in this company, which by 1922 had sold their stakes to Degussa. In the same year, Degesch acquired a process developed by its Managing Director, Walter Heerdt, by which the highly poisonous gas Cyclon (an acronym for the main ingredients cyanogen and chlorine compounds) was enclosed in tiny cotton wool-like balls. As soon as these came into contact with air, the end product Zyklon B was created.

By 1936, the Dessauer Werke für Zucker und Chemische Industrie was the only manufacturer of this pesticide. The prussic acid required came from Dessauer Schlempe GmbH, which extracted the highly poisonous substance from the waste produced when processing sugar beet (Schlempe). Besides the inventor of the process, Julius Bueb, Dessauer Werke and Degussa also had shares in Schlempe GmbH. The stabilizer for the gas came from I.G. Farbenindustrie AG’s Uerdingen-based plant, while Schering supplied a warning ingredient. Degussa bought the finished product from Dessauer Werke, and from 1936 on from Kaliwerke in the Czech town of Kolin as well, before selling it on to Degesch.

Degesch underwent internal restructuring back in 1925. To cut costs, Degesch awarded the distribution and usage rights to Zyklon B to two companies: One was the recently founded Heerdt & Lingler GmbH (Heli), Frankfurt, while the other was Tesch & Stabenow GmbH (Testa), Hamburg. Degesch had shares in both companies (in 1942 it sold its stake in Testa, which had long been striving for independence). The two distribution companies divided up the market between them, with the Elbe as the boundary. Moreover, Testa was the exclusive supplier for the German military and the SS. Degesch was the interface between Dessau and the distribution companies, and acted as a clearinghouse. Its income came from the sales and dividends from the representative agencies, from foreign licenses and from direct exports.

To thwart the competition in the pest control market, Degussa had to sell Degesch shares in 1930 und 1931 to I.G. Farbenindustrie AG (42.5 percent) and to the Essen-based company Th. Goldschmidt AG (15 percent). Degesch now distributed a wide range of pesticides, its managing directors continued to come from Degussa, which from this point on until the end of the war held a minority stake of 42.5 percent. Owing to the size of the company and the quantities of sales involved, Degesch tended to be of secondary importance for Degussa. Profits from distributing Zyklon B until 1938 came mainly from abroad. After the start of the war, the Armed Forces and the SS grew to become major clients of Testa – not just soldiers’ accommodation but also the concentration camps barracks had to be disinfected.

The question whether those in charge at Degussa knew that Zyklon B was being used to murder people from September 1941 on cannot be answered with final certainty. What is clear is that Bruno Tesch, the Managing Director of Testa, had known about the situation from the start of 1942 – he was therefore charged by the British and hanged in 1947.

Degesch Managing Director Dr. Gerhard Peters had been closely associated with the Zyklon B product since the beginning of his career. He was not only a party member, but also stood up publicly in favor of the objectives of National Socialism. When in 1943 the SS Obersturmführer Kurt Gerstein reported that human beings were to be the victims of the pest control agent, Peters nevertheless continued with the deliveries – directly to Auschwitz. “He just went along with it”, as its states succinctly in the minutes of the court proceedings. None of the members of the Management Board of Degussa ever stated that Dr Peters had informed them of the murders committed using Zyklon B, and none of the documents obtained can refute this.

Working on the basis of quantities sold, no conclusive evidence can be found as only minimal amounts of Zyklon B were needed to murder human beings. Moreover, it has been established that Degussa did not generate any excessive profits from the sale of Zyklon or dividends from Degesch.

However, despite everything it seems unlikely that Dr. Gerhard Peters led Degesch without Degussa’s management exercising control. When Dr. Peters appeared before a German court after the war and was sentenced to penal servitude, Degussa provided him with legal aid in the form of the services of a member of the board. On top of this, the company offered to pay bail to keep Dr. Peters from being held in custody during the appeal period, and employed him in a factory. Dr. Gerhard Peters was acquitted in 1955 on appeal. Members of the Board of Degussa were never charged. After the war, they underwent the process of denazification as was normal then, were classified as “Mitläufer” (nominal supporters) and at the end of the 1940s returned to their positions. For a long time, as a result of the Nuremberg trials the public associated the topics of Degesch and Zyklon B only with I.G. Farbenindustrie AG, which went in administration in 2003.