Shell’s effort to help maintain Hitler’s foreign markets thereby aiding the Nazi Government in its direct war against Britain

EXTRACT FROM A U.S. SENATE REPORT 1943

By John Donovan

A recently published book revealed the extent to which Shell played a key role in Hitler’s war effort. Unfortunately for Shell, new information about Shell’s Nazi history emerges on a regular basis.

The information below is from a hearing held in the United States Senate in 1943. It is available online as a result of a digitization project by Google.

The featured extract has the headline SHELL OIL INTERESTS OFFERED TO HELP GERMANY EVADE BLOCKADE. It is about a business deal between Shell and its German partner in many major ventures, I.G. Farben. The chemical giant supplied the Zyklon-B gas used to exterminate millions of innocent people in the Holocaust. Many I.G. Farben directors were found guilty of war crimes.

Read: Shell’s notorious business partner: IG Farben

HEARING
BEFORE A
SUBCOMMITTEE OF THE COMMITTEE ON MILITARY AFFAIRS
UNITED STATES SENATE
1
SEVENTY – EIGHTH CONGRESS
FIRST SESSION
ON
S. 702
A BILL TO MOBILIZE THE SCIENTIFIC AND TECHNICAL
RESOURCES OF THE NATION, TO ESTABLISH AN
OFFICE OF SCIENTIFIC AND TECHNICAL
MOBILIZATION, AND FOR OTHER PURPOSES

PART 1

MARCH 30, 1943

Printed for the use of the Committee on Military Affairs

UNITED STATES GOVERNMENT PRINTING OFFICE

WASHINGTON: 1943

FROM PAGE 462

SHELL OIL INTERESTS OFFERED TO HELP GERMANY EVADE BLOCKADE

How the national welfare is endangered when international corporations continue to pursue their private business objectives in world markets during war-time is also illustrated by the activities of Dutch Shell interests.

Their American chemical subsidiary, the Shell Chemical Co., obtained a license from I. G. Farben in August 1939 under United States patents covering the production of acetic, propionic, and formic acids by a process materially different from that used at Baton Rouge by Jasco. As was brought out earlier, the Shell people had considerable difficulty in getting this license because I. G. Farben insisted on prohibiting all exports of these chemicals from the United States not only by Shell but also by its customers.

Shell’s final capitulation to I. G. Farben did not end their interest in exports. Being primarily an international corporation, Shell was obviously as anxious to engage in export trade as I. G. Farben, being also an international corporation, was anxious to prevent such activity.

On September 15, 1939, while the Nether lands were still neutral in the war, Shell offered to supply acids to I. G. Farben’s foreign customers. Chemnyco relayed Shell’s offer to Germany, stating that Shell ” suggests that if under prevailing conditions you are prevented from delivering formic acetic and propionic acid to certain foreign countries you give Shell Development temporary permission to sell these acids from the production of the pilot plant which Shell is erecting in California. Shell is aware that according to the license agreement they are not allowed to export the acids from the United States, but they believe that it might be in the interest of both parties if they would make deliveries to customers whom you cannot supply. Shell is especially interested in selling formic acid to the Dutch East Indies. Shell is prepared to have sales made through your representatives and to discontinue such exports as soon as you so desire. Please cable whether and to what extent you are prepared to comply with Shell’s request. If you agree with the above, Shell will erect a larger pilot plant than originally contemplated ” (exhibit 68).

I. G. Farben rejected the proposal on September 29, 1939, apparently feeling confident that British blockades would be ineffective (exhibit 69).

The rejection of its offer did not discourage Shell. On October 2, 1939, in reply to the notice of refusal, Shell wrote to Chemnyco that “we are still much convinced about the desirability of export of the acids under the present circumstances, and that, therefore, we should appreciate it if I. G. on their side would consider this suggestion again, should any new development put I. G. in a position to do so” (exhibit 70).

PAGE 463

By February 1940 the Germans recognized that they were going to have considerable difficulty in supplying their foreign customers.

Consequently, I. G. Farben reconsidered the Shell proposal and granted them permission to export formic acid on the following conditions:

“ ( 1 ) no deliveries, either direct or indirect, to be made to Europe;
“ ( 2 ) all exports to be discontinued at any time upon I. G.’s request;
“ ( 3 ) that I. G.’s hitherto established prices and terms of delivery are not underbid, but if possible be increased.

“It is to be understood that you will be prepared to make deliveries to I. G.’s representatives in the respective countries but I. G. does not object to your doing business at the same time with other firms. In consideration of the export concessions for formic acid, I. G. believes that for the time this concession is to remain in force, a payment of 212 % in addition to the contractual royalty of 512 % would be justified; this addition, however, to be independent of minimum royalties set forth in the agreement referred to above and to apply only to deliveries to firms other than I. G.’s representatives “ (exhibit 71 ).

Harsh as these terms were, Shell was quick to accept them. Immediately upon receipt of the German conditions, Shell replied that they “were pleased to see that the I. G. appears willing to consent to the export of formic acid under certain conditions“ (exhibit 72 ). The only provision they opposed was the payment of extra royalties on sales made directly instead of through I. G. Farben agents.
By initiating this proposal and then accepting the terms laid down by I. G. Farben, Shell Chemical indicated that it was willing to maintain the foreign trade of I. G. Farben which the British blockade was trying to prevent. Obviously, Shell was actuated entirely by its own narrow business interests and gave no consideration whatever to the fact that it was aiding the German Government in its direct war against Britain and its indirect war against the United States.

Apparently the fact that the Shell Chemical Co. was an American corporation and that the British had heavy investments in the parent Dutch Shell organization did not affect the international trade policies of the company.

Regardless of how the ordinary British, American, or Dutch citizen might characterize this deal, it did not involve any technical violation of law . Shell, as an international corporation, was quite naturally and quite legally grabbing every opportunity to expand its foreign trade, letting the political and military chips fall where they may.

Not until Germany actually invaded Dutch Shell’s native country in May 1940 did Shell abrogate this agreement with I. G. Farben. On May 13 , 1940, the day Queen Wilhelmina had to flee from the Netherlands and only two days before Holland finally capitulated, Shell wrote to Chemnyco that “ because of the recent political developments, we are no longer in a position to discuss any arrangement as referred to in your letter of May 9th. We have not yet decided whether or not we shall erect a plant for the production of the acids in question ” ( exhibit 73 ).

Thus ended Shell’s effort to help maintain Hitler’s foreign markets.

The question still left unanswered is what would have happened if Shell’s country of incorporation happened to be an ally of Hitler or at least not a victim.

CONCLUSIONS

These case studies are not peak or extreme examples of how international corporations make use of United States patents. What I. G. Farben has done in the acetylene field it has undoubtedly repeated in every branch of industry in which it is interested. Also, its methods and policies have most likely been aped by other enemy corporations. On our side, the practices of Standard Oil and Shell are probably representative of the way international corporations in general have cooperated with foreign business interests in their manipulation of American patents. After all, the corporations involved rank very high in the world of business and their policies and practices have a profound influence on the methods of doing business adopted by others. These case studies can there fore be considered to be typical and as such they point to an alarming situation in the patent field the correction of which is essential if maximum war production is to be attained.

Unfortunately it does not seem likely that private business can clean house by itself . First of all there are probably many legal limitations which would…

(Text continued on to Page 464)

prevent them from doing a thorough job.

Far more important is the fact that these international corporations seem oblivious of the political and military implications of their worldwide patent pools and understandings with foreign corporations. World trade never was a mere matter of business but the dangers inherent in neglecting its political and military aspects never were as great as they have been in recent years. The mechanization of war and the advent of Hitler with his barter diplomacy have intensified tremendously the need for giving primary attention to these features of foreign trade.

I. G. Farben, for example, in recent years was first and foremost an instrumentality of Nazi political and military strategy and only secondarily a business enterprise.

EXTRACTS END

Royal Dutch Shell conspired directly with Hitler, financed the Nazi Party, was anti-Semitic and sold out its own Dutch Jewish employees to the Nazis.

Shell had a close relationship with the Nazis during and after the reign of Sir Henri Deterding, an ardent Nazi, and the founder and decades-long leader of the Royal Dutch Shell Group. His burial ceremony, which had all the trappings of a state funeral, was held at his private estate in Mecklenburg, Germany.

The spectacle (photographs) included a funeral procession led by a horse-drawn funeral hearse with senior Nazis officials and senior Royal Dutch Shell directors in attendance, Nazi salutes at the graveside, swastika banners on display and wreaths and personal tributes from Adolf Hitler and Reichsmarschall, Hermann Goring.

Deterding was an honoured associate and supporter of Hitler and a personal friend of Goring.