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The Roaring 20s And The Roots Of Fascism: Part 1

The Roaring 20s and the Roots of American Fascism

Part 1: I.G. Farben


For most Americans, the Roaring 1920s was a decade of speakeasies, bootleg

liquor, flapper girls, and the Charleston. Without a doubt, the 1920s was the most

repressive decade of the 20th Century. It was a decade marked in the beginning by

the Palmer Raids of 1919, and at the end with the massacre of the Bonus Marchers in

the midst of the Great Depression.

Perhaps there is a misunderstanding about the 1920s because the American

psyche recalls only the apple pie culture of repressive times. As a society, we fail to

recall the brutal repression visited upon the labor movement or the many race riots of

the decade. Our collective view of the 1950s, another decade of repression, is much

the same and consists of images of "Leave it To Beaver" and "Ozzie and Harriet". Few

recall the madness of McCarthyism or images of the escalating Cold War.

As a society, we are led to overlook great threats to our freedoms that took place

during repressive times. If the Palmer Raids or McCarthyism had taken place in any

country behind the Iron Curtain, we would have been quick to condemn the actions

as massive purges of dissidents.

The 1920s held a bountiful promise of progress at WWI’s end. The US could

have seized the chance to become a world power and leader. Instead, the nation

retreated into itself, and rejected President Wilson's League of Nations in favor of

isolationism.

New technologies and industries were busting down the doors. Autos were

replacing the horse and buggy. Telegraphs were being replaced with telephones. The

kerosene lamp was being replaced with electric light. Air travel was now a reality.

However, it was a decade that didn't live up to its promise. The decade ended in a

spectacular failure of laissez-faire economics, the stock market crash of 1929. The

resulting depression was so severe it left an indelible mark for the rest of their lives

on those that lived through it.

Every major war this country has fought has been followed by a period of

repression. Certainly, the aftermath of the Civil War fits the pattern. McCarthyism

followed World War II and coincided with the Korean War. Even with Vietnam, we

observed the phenomenon, although in this case the repression was split. In one part,

the repression occurred during the war with the exposure of COINTELPRO, and the

other part followed in the 1980s with the advent of the Reagan administration. On

the very heels of World War I, the infamous Palmer Raids followed.

The repression that followed can best be summarized by the four prime targets

of Army Intelligence Network Lt. Col. Ralph Van Deman: the IWW, opponents of the

draft, socialists, and blacks. These groups were brutally repressed throughout the

1920s. The decade, in fact, is punctuated with massacres and race riots. In 1917, even

before the war's end, Van Deman had already opened a file on Martin Luther King's

maternal grandfather.7

Van Deman was an anti-Semite and is credited with establishing military

intelligence as part of the modern army. Most officers within the Military Intelligence

Division (MID) at the time was also virulently anti-Semitic. MID officers promoted

every anti-Jewish publication, including the Protocols of the Elders of Zion, as fact. It

was commonly accepted within the MID that communism and Jews were one and the

same. The anti-Semitic aspect of military officers extended beyond MID and was due

substantially to West Point's teaching of eugenics and anti-Semitism.

The almost universal anti-Semitism and racism of military officers allowed

them to overlook the pogroms of the 1920s in Poland and other countries. Such

beliefs were also a contributing factor to the passage of the 1924 bill that restricted

immigration of "undesirables". Indeed, the anti-Semitism of military officers would

last until well after WWII and was a deciding factor in the failure of the United States

to offer sanctuary to Jewish refugees in the late 1930s. It was also a contributing

factor to the poor treatment of Jewish survivors of Nazi concentration camps.

During WWI, fear that the Germans would exploit Negro unrest left Van Deman

preoccupied with black churches as centers of sedition.

However, the most sinister aspect of the Van Deman network was the

encroachment of the military into civilian affairs. Federal troops were brought out

several times during the 1920s to intercede in civilian events. For example, federal

troops were used to break a Seattle strike. The encroachment still continues today. As

late as 1947, military intelligence was still being directed at the very same targets

listed by Van Deman, evidenced by the inclusion of Martin Luther King, Jr. into the

111th Military Intelligence Group's files.

These post-war periods of repression are the very times our freedoms are most

imperiled. Such repressive times are only a natural extension of the war, as troops are

deactivated, and returning soldiers seek work in an economy that is shifting from war

to peace. Unemployment usually rises, as many of the deactivated troops have little

or no peacetime skills. Additionally, in the case of WWI, inflation ravaged the nation

as wartime controls were lifted, adding further to the economic woes of returning

veterans.

However, the real danger comes from troops formerly engaged in intelligence.

These former spies seek to ply their trade in the government or private sector. For

instance, following the Civil War, many Union spies went to work in the private

sector as union busters. After WWI, the newly formed American Legion was deployed

in union-busting, but even more sinister, went much further seeking to destroy

political dissent and anyone left of center. The end of WWII ushered in the McCarthy

era of wild witch-hunts for suspected communists.

There is little doubt that after the United States entered the Great War, German

agents were actively engaged in sabotage in the U.S. The Kingsland fire of Jan 11, 1917

was traced to sabotage by a German agent, Fiodore Wozniak dubbed the Firebug. In

that one act of sabotage, 275,000 artillery shells and huge stores of TNT and other

munitions valued at over $17 million were destroyed.1

Although the destruction of war plants and munitions hindered the war effort, these

acts paled in comparison to the economic sabotage by the corporate warlords of I.G.

Farben. The cartel agreements that American corporations had with I.G. Farben were

a stranglehold on munitions production, as well as many consumer items.

Before looking at the cartel agreements and how they hindered both wars, a

brief history is required. Often, rather obscure events determine future world peace

and war. Events starting in chemistry labs have played enormous roles leading up to

both world wars.

First, Germany has always been a country short of natural resources. Although

it has ample supplies of coal, Germany lacks high-grade iron ore and other minerals.

The soil is not particularly fertile, and Germany has traditionally been unable to feed

its people without importing food. This factor, alone, played a dominant role in

Hitler's quest for living space to the east.

The second factor that comes into play is the location of Germany. Its only

access to the world's oceans is through the North Sea. The lord and master of the high

seas, England, could easily blockade this route. Hence, any factor that decreased

Germany's dependence on imports increased its ability to wage war and challenge

England's dominance over all Europe.

Germany's chemical industry developed in the 19th Century. English chemists

were the first to discover that pigments could be produced from coal tar but failed to

recognize the significance. German industry was quick to capitalize on the

development, and soon dominated world pigment production. The work of German

chemists on coal tar launched a new branch of chemistry, organic chemistry. Along

with pigments, a host of new products came gushing forth; the first sulfa drugs,

plastics, and, by the advent of the Second World War, even rubber.

Along with the many useful and beneficial products that could be developed

from this new branch of chemistry, a sinister side arose as well. One of the

developments that had a direct impact on WWI was the Haber process to produce

nitrates. Prior to Germany perfecting it, Germany was dependent on Chile's nitrate

deposits. With the Haber process, nitrates could be produced from nitrogen in the

air. Germany's war machine was no longer dependent upon shipments from Chile

that could be blockaded by the British Navy. As war approached, a more sinister side

of the new chemistry was developed: poison gas.

WWI was the first war in which technology overpowered the front-line soldier.

The chemistry labs of Germany played a pivotal role in its ability to wage war on its

neighbors. These labs would play an even larger role in WWII with the development

of producing both gasoline and synthetic rubber from coal.

At the center of the chemical arms production was I.G. Farben. Farben was a

product of cartelization formed from six dye companies: Badische Anilin & Soda

Fabrik (BASF), Farbenfabriken vorm (Bayer), Farbwerke vorm (Hoechst),

Aktiengesellschaft fur Anilinfabrikaten, Leopold Cassela, and Kalle & Co. The big six

were completely merged into I.G. Farben in 1916.2 In the ten years preceding WWI,

I.G Farben relentlessly pursued a path enhancing Germany's ability to wage war.

By the time WWI broke out, I.G. Farben controlled the new worldwide chemical

industry through cartel agreements and patents. Germany, particularly through I.G.

Farben aggressively sought patents in foreign countries, then refused to grant

licenses to corporations in that country. This shifted all aspects of the industry to the

German homeland.

In light of recent court decisions allowing corporations to patent genes, and the

resulting genetically engineered food crops, one would be well advised to study how

Germany used patents to gain worldwide control over the fledgling organic chemical

industry.

                                                                    1

Joseph Chamberlain summed up England's loss of the coal tar industry in 1883:

"It has been pointed out especially in an interesting memorial presented

on behalf of the chemical industry that under the present law it would have

been possible, for instance, for the German inventor of the hot blast furnace,

if he had chosen to refuse a license in England, to have destroyed almost the

whole iron industry of this country and to carry the business bodily over to

Germany. Although that did not happen in the case of the hot blast industry,

it had actually happened in the manufacture of artificial colors connected

with the coal products, and the whole of that had gone to Germany because

the patentees would not grant the license in this country."3

Lloyd George reiterated Chamberlain's view in 1907:

"Big foreign syndicates have one very effective way of destroying British

industry. They, first of all, apply for patents on a very considerable scale. They

suggest every possible combination, for instance, in chemicals, which human

ingenuity can possibly think of. These combinations the syndicates have not

tried themselves. They are not in operation, say, in Germany or elsewhere,

but the syndicates put them in their patents in obscure and vague terms so as

to cover any possible invention that may be discovered afterward in this

country."4

These quotes leave no doubt as to the destructive nature of the cartel

agreements and the patents sought by I.G. Farben in England. Nor is there any doubt

over how such cartel agreements hindered U.S. war efforts during WWI. During the

war, numerous I.G. front corporations were seized under trading with the enemy act.

Cartel agreements between American corporations and I.G. Farben created

monopolies and spheres of influence eliminating any competition. In effect, the cartel

agreements were the second wave of robber barons. This time, however, the robber

barons resided in Germany and structured the agreements to maintain control over

American corporations, even to the extent of limiting the production of war material. In

effect, the cartel agreements were nothing short of an attempt to put corporate rule

ahead of government.

Recent trade agreements such as NAFTA, GATT, the failed MAI and GATS (all

are proposed under the banner of free trade agreements) have placed the rights of

corporations above and beyond the reach of the government. The inherent danger of

allowing corporations to rule will be readily apparent in such a study. Furthermore,

all these agreements contain clauses that set up tribunals as the final arbitrator in

disputes, bypassing the court systems of the signatory countries which in effect allows

the corporations setting on the tribunals to establish the law by decree. 

Even before the Nazis came to power, the cartel agreements formed a vital part

of Germany's plan to wage war, and exact revenge for the Treaty of Versailles. The

the willingness of corporate America's leaders to re-establish cartel agreements with I.G.

Farben during the 1920s, and their subsequent support for fascist groups in the

1930s forms the basis of fascism in the United States.

Although there were literally dozens of companies seized during WWI for

trading with the enemy, my focus will not be on those seized. Rather, the focus will be

on the ease and speed with which I.G Farben was able to reform their cartels, aided

by the laissez-faire economic policies of Harding, Coolidge, and Hoover.

During the war, corporations reaped fat profits. With the lifting of wartime

controls in 1919, business leaders craved a chance to get back to normal. Prices had

been frozen during the war, and before the war, Teddy Roosevelt had pursued a

policy of breaking up monopolies. The only threat to reestablishing their monopolies

and domination of the economy came from the new labor movement and

communism. In the aftermath of the 1919 Red Scare, the pro-business candidate,

Warren Harding was elected president, setting the stage for the rebuilding of the

cartels.

World War I should have taught the allied nations that Germany used

international cartels as its spearhead of aggression. The German military mind long

understood the concept of total war. The father of modern German militarism, Karl

von Clausewitz, best summarized the concept:


"War is no independent thing, the main lineaments of all strategic plans

are of a political nature, the more so the more they include the totality of War

and State. Disarm your enemy in peace by diplomacy and trade if you would

conquer him more readily on the field of battle."5

This philosophy of war and peace became a cornerstone of Germany's political

and economic interactions with other nations. The history of I.G. in the twentieth

century is one of support for German military adventurism. It consistently advanced

German military plans, and subordinated its own financial interests to German

nationalistic aims.

With the ink hardly dry on the armistice agreement, the New York Times

received a dispatch from its Berlin correspondent on December 1, 1919 stating:

"The firms composing the German dye trust have decided to increase

their capital to the extent without parallel, I believe, in the history of German

industry. The trust which consists of three great and four minor concerns in

the industry, valued at, roughly, 15,000,000,000 marks, is extending for two

reasons: It is determined to reassert German supremacy in the dye industry;

in the second place, there is the question of nitrate, so important for the

agricultural life in the country.

The trust is aiming at making the fatherland independent of foreign

supplies and to increase production so that it will be able to export large

quantities."6

The First World War pointed out deficiencies in Germany's armor. I.G.'s

activities in the inter-war period must be understood to understand how the U.S.

corporations willingly hampered the war effort in the 1940s. From 1919 onward, I.G.

pursued a path of re-establishing its dominance. I.G. Farben continued to use the

same methods it had used successfully in the first war as well as newer forms of the

cartel. Several I.G. developments in the inter-war period, such as Buna rubber, the

production of gasoline from coal, as well as aluminum and tungsten carbide

production, would figure prominently in WWII.

                                                                    2

The mindset of I.G., and its use of patents and cartels to establishing a German

empire, is best illustrated with the example of Bayer 205. Bayer 205, or Germanin,

was announced in 1920 as a cure for sleeping sickness. Through indirect channels,

I.G. made an offer to the British government: to exchange the secret of Germanin for

the return of German colonies in Africa was lost in WWI. The British government refused

the exchange. However, the resourcefulness of I.G. was preserved in a British medical

Journal in 1922:

"A curious illustration of German desire, not unnatural in itself, to

regain the tropical colonies lost by the folly of the rulers of the German

Empire is afforded by a discussion that took place at a meeting of the

German Association of Tropical Medicine at Hamburg. The Times

a correspondent in Hamburg reports that one of the speakers said that Bayer

205 is the key to tropical Africa, and consequently the key to all the colonies.

The German Government must, therefore, be required to safeguard this

discovery for Germany. Its value is such that any privilege of a share in it

granted to other nations must be made conditional upon the restoration to

Germany of her colonial empire."7

The intent of I.G. and Germany could hardly be masked in such a report. An

even more ominous warning appeared in 1925:

"In open violation of the Treaty of Versailles, the Germans shipped

munitions to the Argentines. Rottweil (I.G’s wholly-owned subsidiary) still

makes and sells excellent military powders, and German factories for

munitions have been built or openly offered to build in Spain, Argentina,

Mexico, etc."8

Article 170 of the treaty specifically prohibited German export or import of

armaments or munitions. Both the British and American State departments were

aware of the violation. British Imperial Chemical Industries refrained from lodging

any protest as it was locked into a cartel agreement with Farben. America, locked in

the grip of isolationism, simply ignored the violation.

In 1926, the German army formed the Economic High Command. Robert

Strausz-Hupe summed up its express purpose as follows:

"Studying the deficiencies of the German economy and laying plans for

transforming it into Wehrwirt-shcaft Rapid conquests alone could provide

new resources before Germany's reserves, accumulated by barter, ruthless

rationing, and synthetic chemistry, had been exhausted in the initial war

effort.

These new resources could then be poured into the war machine, rolling

on to ever larger territorial conquests, and as long as it kept on rolling, the

the economy of greater space need never fear a crisis."9

 I.G. had direct and indirect communication channels opened with the

Economic High Command. Farben policies were adjusted to accommodate the High

Command's plans. In 1932 Colonel Taylor of du Pont reported:

"One of the motives back of the French proposal, that all countries

should establish conscription, is to upset the present German system of

handling their Reichswehr. The Reichswehr is limited to 100,000 men of 12

year enlistment and it would appear reasonable to suppose that there should

be at present a number of soldiers around the age of 33 or 34; the fact is that

when one meets a soldier of the Reichswehr he is a young man in the early

the twenties, and it is pretty well accepted that there are several men available

under the same name and hence training a much larger number of men than

permitted."10

During the 1920s there were over a hundred secret treason trials in Germany of

journalists and others who revealed the truth. Quoting Dr. H.C. Englebrecht. and F.C.

Hanighen:

"It would seem then that despite the Versailles treaty that Germany is

again a manufacturer and exporter of arms. This interference is confirmed by

various incidents from the past ten years. There was the Bullerjahn case of

1925. On December 11, 1925, Walter Bullerjahn was sentenced to 15 years in

prison for treason. The trial was held in secret and the public was excluded.

Both the crime with which the condemned was charged and the name of the

accuser were kept deep and dark secrets. After years of agitation by Dr. Paul

Levi and the League for Human Rights, the facts were finally disclosed. The

accuser was Paul von Gontard, general director of the Berlin-Karlsruhe

Industriewerke, the same man who used the French press in 1907 in order to

increase his machine gun business. Gontard had been establishing secret

arsenals, contrary to treaty provisions, and this fact was discovered by the

Allies. Gontard disliked Bullerjahn and had serious disagreements with him.

In order to get rid of him, he charged him with revealing to the Allies the fact

that Gontard was secretly arming Germany. This was termed treason by the

court and Bullerjahn was condemned, although not a shred of evidence was

ever produced to show his connection with the Allies. The exposure of the

facts in the case finally brought the release of Bullerjahn."

"A little later Carl von Ossietzky, the courageous editor of the

Weltbuehme was convicted by a German court of treason because he had

revealed military secrets in his journal. The secrets he had published were

closely related to the secret rearming of Germany contrary to treaty

provisions.

There is also some evidence that Germany is importing arms and

munitions from other countries. In a confidential report of the exports of

Skoda for 1930 and 1931, classified by countries, Germany appears as

an importer of comparatively large amounts of rifles, portable firearms, aero

engines, nitrocellulose, dynamite, and other explosives."11

The previous quotes should have alerted the astute reader to one simple fact

that has been blurred by time: Hitler had the support of the ruling class as early as

1923. The reader should recall, from Chapter I, that Hitler was instructed to attend a

meeting of what evolved into the Nazi party by his commanding officer.

Hitler in fact was guilty of a far more serious crime, armed rebellion, but

received a much lighter sentence than Bullerjahn. Hitler served less than two years in

prison. Nor was Hitler's imprisonment particularly harsh. A more fitting description

would be of a hotel with room service. No amount of propaganda can cover up the

difference in the fate of Hitler and Bullerjahn. Without the support of the elite in

Germany, Hitler would have suffered the same fate as Bullerjahn.

At the time of the Beer Hall Putsch, the Nazis were only a minor party. In fact,

the reason the putsch failed was due to a lack of popular support Hitler had counted

on. As already noted, there were hundreds of trials for treason with the defendant

receiving harsh sentences. None were released from prison early without the special

assistance of outside world opinion. Few people outside of Germany had ever heard

of Hitler in 1923.

In a memo dated March 22, 1932 —a full year before Hitler assumed power—the

files of J.K. Jenny, of the Foreign Relations Department of du Pont, reveals that I.G.

and other German industrialists financed Hitler:

"It is a matter of common gossip in Germany that I.G. is financing

Hitler. Other German firms who are also supposed to be doing so are Krupp

and Thiessen. How much truth there is in the gossip we are unable to state,

but there seems to be no doubt whatever that Dr. Schmitz (director-general

of I.G.) is at least a large contributor to the Nazi Party."12

The previous series of quotes clearly establishes the complacency of the three

American administrations of the 1920s towards German violations of the Treaty of

Versailles.

The quotes also establish the ever-increasing role of I.G. as an agent of the

German government, culminating with I.G. support of the Nazis. Further, the quotes

leave no doubt that these administrations were aware of the violations as well as the

intent of I.G. to re-establish its hegemony.

Isolationist policies of the 1920s

Republican administrations were clearly a dismal failure that provided a fertile

environment for rebuilding Germany's war machine. The last quote establishes that

I.G. was a supporter of the Nazis at least a full year before Hitler seized power. One

can only speculate as to when I.G. began to support Hitler, but I.G. had a long history

of supporting German nationalism, as the quotes above show. Perhaps the most

alarming feature of the quotes is I.G.'s increasing boldness and aggressiveness in

violating the treaty. By the mid-1920s there were clear signs Germany was preparing

for another war.

Even more grievous than the complacency towards violations of the Treaty of

Versailles was the complacency of Republicans to the rebuilding of I.G. domestically.

To fully grasp the full extent of this, a brief look at the economic environment

following WWI is needed.

The war's end saw a U.S. pullback into Fortress America, and the imposition of

a strict right-wing isolationist policy despite the best efforts of an ailing President

Wilson to bring us into the League of Nations. The United States had the opportunity

to seize a leadership role in the world but instead retreated.

Compared to European countries, for the U.S. the war was short, and we didn't

suffer the staggering number of causalities they did. The resulting isolationism was

far too widespread to have been caused solely by war losses. Although it went hand in

hand with nativist groups, the resulting isolationism went far beyond fringe groups. It

would be more appropriate to describe the resulting isolationist fever as mass

psychosis. This was as much a product of nativism as it was a product of media

manipulation by corporate America.

From 1900 until the end of the war in 1918, big business took several blows.

First and foremost during this time was the trust-busting administration of Teddy

Roosevelt. Second, price controls enacted during the war restricted corporate profits.

Senate investigations into war profiteering would extend into the 1930s. Finally,

unionism was perceived as a threat by big business, and largely portrayed as either

communism or the product of dirty foreigners.

To the business leaders of the time, getting back to normal meant nothing more

than getting back to the days of robber barons, trusts, and cartels free from

government intrusion and unionism. The laissez faire economics of the three 1920s

Republican administrations were what corporate America was seeking.

As indicated in the quotes above, cartel agreements with I.G. Farben were anticompetitive

and used to establish monopolies. In essence, anti-competitive

agreements were used to increase the profits of larger firms at the expense of smaller

firms and the consumer. Such agreements were the antithesis of Teddy Roosevelt's

trust-busting days and a free enterprise system.

However, to the business leaders of the 1920s, the competition was a dirty word.

The competition had to be avoided as much as unionism. In the view of leading

industrialists of the time, the competition was destructive. Thus the empire builders of

the 1920s were eager to enter into such agreements and the policies of successive

Republican administrations willingly turned a blind eye towards anti-competitive

practices. 

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