Wall Street and the Rise of Hitler Read Online Free PDF Page A

that only a handful of New York financial houses handled the German reparations financing. Three houses — Dillon, Read Co.; Harris, Forbes & Co.; and National City Company — issued almost three-quarters of the total face amount of the loans and reaped most of the profits:
    Participation
    in
    German
    Wall Street
    industrial
    Profits on
    Syndicate
    issues in U.S.
    German
    Percent
    Manager
    capital market
    loans*
    of total
    Dillon, Read & Co.
    $241,325,000 $2.7 million
    29.2
    Harris, Forbes & Co.
    186,500,000
    1.4 million
    22.6
    National City Co.
    173,000,000
    5.0 million
    20.9
    Speyer & Co.
    59,500,000
    0.6 million
    7.2
    Lee, Higginson &
    53,000,000
    n.a
    6.4
    Co.
    Guaranty Co. of
    41,575,000 0.2 million
    5.0
    N.Y.
    Kuhn, Loeb & Co.
    37,500,000
    0.2 million
    4.5
    Equitable Trust Co.
    34,000,000
    0.3 million
    4.1
    ___________ ___________ _________
    TOTAL
    $826,400,000 $10.4 million
    99.9
    Source: See Appendix A
    *Robert R. Kuczynski, Bankers Profits from German Loans
    (Washington, D.C.: Brookings Institution, 1932), p. 127.
    After the mid-1920s the two major German combines of I.G. Farben and Vereinigte Stahlwerke dominated the chemical and steel cartel system created by these loans.
    Although these firms. had a voting majority in the cartels for only two or three basic http://reformed-theology.org/html/books/wall_street/chapter_01.htm (7 of 10) [8/4/2001 9:44:08 PM]
    CHAPTER ONE: Wall Street Paves the Way for Hitler
    products, they were able — through control of these basics — to enforce their will throughout the cartel. I.G. Farben was the main producer of basic chemicals used by other combines making chemicals, so its economic power position cannot be measured only by its capacity to produce a few basic chemicals. Similarly, Vereinigte Stahlwerke, with a pig-iron capacity greater than that of all other German iron and steel producers combined, was able to exercise far more influence in the semi-finished iron and steel products cartel than its capacity for pig-iron production suggests. Even so the percentage output of these cartels for all products was significant: Vereinigte Stahlwerke
    Percent of German total
    products
    production in 1938
    Pig iron
    50.8
    Pipes and tubes
    45.5
    Heavy plate
    36.0
    Explosives
    35.0
    Coal tar
    33.3
    Bar steel
    37.1

    Percent of German total
    I.G. Farben
    production in 1937
    Synthetic methanol
    100.0
    Magnesium
    100.0
    Chemical nitrogen
    70.0
    Explosives
    60.0
    Synthetic gasoline
    46.0 (1945)
    (high octane)
    Brown coal
    20.0

    Among the products that brought I.G. Farben and Vereinigte Stahlwerke into mutual collaboration were coal tar and chemical nitrogen, both of prime importance for the manufacture of explosives. I. G. Farben had a cartel position that assured dominance in the manufacture and sale of chemical nitrogen, but had only about one percent of the cok-ing capacity of Germany. Hence an agreement was made under which Farben explosives subsidiaries obtained their benzol, toluol, and other primary coal-tar products on terms dictated by Vereinigte Stahlwerke, while Vereinigte Stahlwerke's explosives subsidiary was dependent for its nitrates on terms set by Farben. Under this system of mutual collaboration and inter-dependence, the two cartels, I.G. Farben and Vereinigte Stahlwerke, produced 95 percent of German .explosives in 1957-8 on the eve of World War II. This production was from capacity built by American loans and to
    http://reformed-theology.org/html/books/wall_street/chapter_01.htm (8 of 10) [8/4/2001 9:44:08 PM]
    CHAPTER ONE: Wall Street Paves the Way for Hitler
    some extent by American technology.

    The I. G. Farben-Standard Oil cooperation for production of synthetic oil from coal gave the I. G. Farben cartel a monopoly of German gasoline production during World War II. Just under one half of German high octane gasoline in 1945 was produced directly by I. G. Farben and most of the balance by its affiliated companies.
    In brief, in synthetic gasoline and explosives (two