Editing IG Farben (section)

===Background===
At the beginning of the 20th century, the German chemical industry dominated the world market for synthetic [[dye]]s. Three major firms [[BASF]], [[Bayer]] and [[Hoechst AG|Hoechst]], produced several hundred different dyes. Five smaller firms, [[Agfa-Gevaert|Agfa]], [[Cassella Farbwerke Mainkur Aktiengesellschaft|Cassella]], {{ill|Kalle & Co.|de|Chemische Fabrik Kalle}}, Chemische Fabrik [[Elektron (alloy)|Griesheim-Elektron]] and Chemische Fabrik vorm. Weiler-ter Meer, concentrated on high-quality specialty dyes. In 1913, these eight firms produced almost 90 percent of the world supply of dyestuffs and sold about 80 percent of their production abroad.<ref>{{Harvnb|Aftalion|Benfey|1991|p=104}}; {{Harvnb|Chandler|2004|p=475}}</ref> The three major firms had also integrated upstream into the production of essential raw materials, and they began to expand into other areas of chemistry such as [[Drug|pharmaceuticals]], [[photographic film]], [[agrochemical|agricultural chemicals]] and [[Electrochemistry|electrochemicals]]. Contrary to other industries, the founders and their families had little influence on the top-level decision-making of the leading German chemical firms, which was in the hands of professional salaried managers.{{sfn|Chandler|2004|pp=474–485}} Because of this unique situation, the economic historian [[Alfred D. Chandler Jr.|Alfred Chandler]] called the German dye companies "the world's first truly managerial industrial enterprises".{{sfn|Chandler|2004|p=481}}

[[File:Nicola Perscheid - Carl Duisberg vor 1930.jpg|thumb|upright=0.9|[[Carl Duisberg]], chairman of [[Bayer]], argued in 1904 for a merger of Germany's dye and pharmaceutical companies.{{sfn|Beer|1981|pp=124–125}}]]
With the world market for synthetic dyes and other chemical products dominated by the German industry, German firms competed vigorously for market shares. Although [[cartel]]s were attempted, they lasted at most for a few years. Others argued for the formation of a profit pool or ''Interessen-Gemeinschaft'' (abbr. IG, lit. "community of interest").<ref>{{Harvnb|Chandler|2004|p=479}}</ref> In contrast, the chairman of Bayer, [[Carl Duisberg]], argued for a merger. During a trip to the United States in the spring of 1903, he had visited several of the large American [[Trust (19th century)|trusts]] such as [[Standard Oil]], [[U.S. Steel]], [[International Paper]] and [[Alcoa]].<ref>{{Harvnb|Beer|1981|pp=124–125}}</ref> In 1904, after returning to Germany, he proposed a nationwide merger of the producers of dye and pharmaceuticals in a memorandum to Gustav von Brüning, the senior manager at Hoechst.{{sfn|Duisberg|1923}}{{page needed|date=September 2018}}

Hoechst and several pharmaceutical firms refused to join. Instead, Hoechst and Cassella made an alliance based on mutual equity stakes in 1904. This prompted Duisberg and Heinrich von Brunck, chairman of BASF, to accelerate their negotiations. In October 1904 an ''Interessen-Gemeinschaft'' between Bayer, BASF and Agfa was formed, also known as the ''Dreibund'' or little IG. Profits of the three firms were pooled, with BASF and Bayer getting 43 percent each and Agfa 14 percent of all profits.<ref>{{Harvnb|Beer|1981|pp=125–134}}</ref> The two alliances were loosely connected with each other through an agreement between BASF and Hoechst to jointly exploit the patent on the Heumann-Pfleger [[Heumann indigo synthesis|indigo synthesis]].<ref>{{Harvnb|Tammen|1978|p=11}}</ref>

Within the ''Dreibund'', Bayer and BASF concentrated on dye, while Agfa increasingly concentrated on photographic film. Although there was some cooperation between the technical staff in production and accounting, there was little cooperation between the firms in other areas. Neither were production or distribution facilities consolidated nor did the commercial staff cooperate. In 1908 Hoechst and Cassella acquired 88 percent of the shares of Chemische Fabrik Kalle. As Hoechst, Cassella and Kalle were connected by mutual equity shares and were located close to each other in the [[Frankfurt Rhine Main Region|Frankfurt area]], this allowed them to cooperate more successfully than the ''Dreibund'', although they also did not rationalize or consolidate their production facilities.{{sfn|Chandler|2004|p=480}}
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IG Farben during World War I, expansion into ammonia, nerve gases, war production, formation of IG in 1916-->
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