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Origin and Development of Farben
The history of Farben
is virtually the developmental record of the chemical industry in Europe. In
1904, the first move toward combination of several German enterprises occurred
with the formation of two “Interessen-Gemeinschaften” (communities of
interests), one including Bayer, Aktiengesellschaft fuer Anilinfabrikation and
Badische Anilin-und Sodafabrik, the other Casella and Meister, Lucius &
Bruning.
On 9 December 1925, Badische changed its name to the present
designation of “Interessen-Gemeinschaft Farbenindustrie
Aktiengesellschaft,” and, with five other leading chemical firms of
Germany, merged into a new corporation (Farben) under that title. In September
1926, the consolidation emerged with a combined capital structure of 1.1
billion reichsmarks, more than three times the aggregate capital of all other
chemical concerns of any consequence in Germany, and assumed a position of
undisputed predominance in the field of German chemistry.
From these
beginnings, Farben steadily expanded its plants, the scope of its production,
and its economic influence. By 1940, it owned or held participating interests
in more than four hundred firms in Germany and about five hundred abroad (of
which forty-eight were located in the United States), and it controlled a great
number of patents (twenty-eight thousand foreign registrations) in all
important spheres of chemical production throughout the world.
At the
peak of its activities, Farben and its subsidiaries, including Dynamit A. G.,
showed an annual turnover of four billion marks. Concerning the internal
corporate structure and functioning of Farben, the following should be noted:
The Aktiengeselischaft — ( "A. G.") similar to an American
Stock Corporation — has two governing bodies, one charged with general
supervision, the other with actual management. One is called the
“Aufsichtsrat” (often translated as “Supervisory Board of
Directors”), the other the “Vorstand” (often translated
as “Managing Board of Directors”). Taken together, the two boards
exercise the ordinary functions of a Board of Directors.
“Interessen-Gemeinschaft” (IG) means, in literal
translation, a “community of interests,” usually crystallized
in a formal agreement between two or more business firms, providing for mutual
adherence to its provisions governing such matters as pooling and sharing of
profits, division of markets, control of prices, coordination of production and
distribution, research, patent practices, et cetera, et cetera. An outstanding
example was the combine, between 1916 and 1925, of eight major German chemical
firms, often referred to as the “old IG,” which eventuated in the
formal merger of I. G. Farben A. G. on 9 December 1925. |
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