The Penn's Grove record., 1919-08-15
How Germany Killed American Dye
Industry
Continued from page ]

1t will be noted that all OF IneSe eS-
Establishments with the single exception
of Berlin are concentrated in a narrow
strip of territory near the Rhine and
its tributaries. Their growth may be
illustrated by a few figures as to two
of the largest. Hoechst was organ
lied in 1868 and started with five
workmen and 81 chemists, using
1910 horsepower. 1t then produced
1.75O different colors. In 1912 1t en-
ployed 1850 workmen, 374 foremen,
307 chemists, and IA. engineers and
used 10000 horsepower. The number
of colors reached 1900. The works
of the Badische, which was organized
in 1866, covered, in 1914, 50O acres
with a water front of a mile n a
half on the Rhine. There were Ioo
acres of buildings, AZ miles OF railway
within the works, and the power
nlants comprised 369 steam engines
and 472 motors; 1000 workrnen were
EMPLOYED and the company was capt.
taIized at 81, 900, 900 marks. The es-
+~ablishment of Bayer was on a scale
entirely comparable with these two
GIANTS of the industry. The works OF
Sassella and Berlin were slightly
smaller, while those OF haile were the
least important of the SIX. Weller-
ter-Meer was important largely oe4
cause of its connection with the greaC
Swiss house of Geigy d Go. Gfies77
helm Elektron, prior to the war hao
enormous works chiefly devoted TO t1e
manufacture of electrolytlc chenllcaIs
and became an important factor IN the
dvestuff business only WITHIN reeeHI
ears. when by absorption OF the zen
Ter Works and the C~hemikallen WerKe
Greisheim its color production reachea
a scale approaching that OF the larger
houses. Of these eight great concerns
each had active agent houses IN the
limited States, which were among the
most important factors in the Amerl-
can industry and accordingly IN the
work of the Alien Property Custodian
in connection herewith.
The tendency toward combination,
however, by no means exhausted ltselI
in the creation of these giant enter
prises. The same which pro.
duced the enormous concentrations OF
capitaI in other German industries IN
the form of cartels were also working
in the chemical industry. BY l9O4
two such immense combinations had
been formed in the dyestuff industry
each including three Of the largest SIX
houses. One of these comprised Bayer,
Badische, and Berlin; the other
Hoechst, Cassella, and Kalle. lndl-
rectlv, each of these cartels was aided
and guided by the Imperial Govern
ment. By pooling profits, by so ar
ranging capitalization that each com
pany held stock in the other companies
of its own cartel, and by other faml-
liar means, the risks incident to the
enormous expansion of the business
and the immense increases OF export
trade were minimiZed. The centrl-
petal tendency, however, did not stop
here. In 1916 the two pre-eXlstlng
carte1s were combined with Grieshelm
Elektron. Weiler-ter-Meer, and various
smaller companies in n gigantic car
tel. representing a naturalization OF
the entire German dye and pharma-
ceutical industry. The combination
is extremely close. Profits of the
companies are pooled and after being
ascertained each year on common
principles are divided according to
agreed percentages. Each factory
maintains an independent adminlstra-
ton, but they keep each other inform
ed as to processes and experiences.
To stimulate and keep up the spirit
of competition between the factories
it has been arranged that each product
shall be manufactured by two or more
factories. There is also an agreement
that in order to circumvent tariff OBJ
stacles in other countries materials
are to be produced outside of Germany
bv common action and at common eX-
pense whenever and wherever deslr-
able.
At the time of the formation of this
organization the capitallza-
ton of each of the principal component
companies was largely increased,
Hoechst, Badische, and Bayer each in
creased their capitalization by 36,00O,-
900 marks, bringing the capital of
each up to 10000, 900 marks. The new
stock was offered to the old stock
holders at 107, which vas a melon OF
some magnitude, since the last avail
able quotations of the stock Of n at
least of these companies at the end OF
1916 was 400. Berlin increased its
capital from 19,800,000 to 33,O0O,O0O
marks. Other increases brought the
total nominal capital of the group to
1888, 900, 900 marks. For many
years a large part of the enormous
profits Of these concerns has been put
back into the works with the result in
Dictated by the stock quotations. The
real capitalization is thus much greater
than this nominal figure. In fact, it
is estimated that the actual invest
ment in the works comprising the car
tel is not less than $500, 000,0 00. 1t
can not be doubted that this enormous
engine of commercial warfare has
been created expressly for the eX-
pected war after the war, and that
it is intended to undertake still more
efficiently and on a larger scale the
various methods by which German at
tacks upon all competition were car
ried on.
In addition to the favorable effects
of the foregoing factors, an important
aid to the success of German export
trade in dyes and pharmaceuticals was
the advantage taken of the patent
laws of the several countries. Owing
to the immensely greater number Of
research chemists engaged in this