Swiss chemical firms put profits first, study finds

The study found that some Swiss firms went out of their way to sack Jewish employees Keystone Archive

Scrutiny of chemical firms' archives has provided key insights into the attitude of Swiss business in its dealings with the Nazis.

Switzerland’s 20th century pharmaceutical giants – Ciba, Geigy, Sandoz (since merged to form Novartis) and Roche – have traditionally kept tight-lipped about their wartime past.

But that changed when the firms were ordered to open their archives to an Independent Commission of Experts (ICE), set up in 1996 to probe Switzerland’s wartime past.

The study into “Swiss chemical subsidiaries in the Third Reich”, by historians Lukas Straumann and Daniel Wildmann, was one of numerous studies published this year by the ICE, led by historian Jean-François Bergier.

The study reveals that the four Swiss parent companies, which were all based in Basel, had a greater control over their German subsidiaries during the period under consideration (1933 to 1945) than had hitherto been assumed.

Pressure to sack Jews

The 358-page study provides evidence that the firms did not come under Nazi pressure to sack Jews until 1938 – before that they were more or less free to employ and dismiss anyone they chose.

Nevertheless, the authors point out, Ciba, Geigy and Sandoz went out of their way as early as 1933 and 1934 to voluntarily “Aryanise” their German subsidiaries by sacking Jewish employees and replacing Jewish members of the board of directors.

Roche’s subsidiary in Berlin, by contrast, only reluctantly replaced its Jewish staff, and did so only in 1938 when the Nazi regime intensified its anti-Semitic policies, allowing only “non-Jewish” companies to continue to operate.

The decisive factor in Roche’s case was probably personal, the authors contend. “[Roche director-general] Emil Barell had a Jewish wife, which meant that he was more sensitive to Nazi policies towards Jews than other people”, Wildmann says.

Straumann adds: “We found documents in the Roche archive that describe details of Nazi ‘aryanisation’ policies, which proves there was an interest in the fate of Jews.”

Forced to comply

Swiss enterprises have often justified their behaviour in Nazi Germany by saying they were obliged to comply with the Reich’s policies as a condition of doing business.

But Wildmann’s and Straumann’s evidence belies such an interpretation. Roche didn’t lose any business as a result of its loyalty towards Jewish employees – in fact the company boomed like no other during the war.

The report suggests that the chemical sector is particularly suited for studying the ethical standards of Swiss business as a whole during the war years.

The reason is because as a knowledge-based industry, the chemical sector had traditionally established closer ties between parent company and subsidiaries than was the case in other sectors. The industry probably also employed more Jews, especially as scientists.

The study probes other controversies surrounding the business practices of Swiss subsidiaries in Nazi Germany – their contribution to the German war-effort, their use of forced labour, and financial transfers.

German re-armament

Firms who relied on dyes and heavy chemicals, chiefly Geigy, did less well out of German re-armament and the war than subsidiaries that relied on pharmaceuticals.

Roche did particularly well thanks to its control of the German vitamin C market and its position as a major producer of opiate-based painkillers. Its sales almost trebled during the war from 8.8 million Reichmarks (roughly worth $100 million today) to 22 million Reichmarks.

Unlike other sectors, where Swiss investments in subsidiaries paid off after the war but not in the short-term, Swiss chemical firms managed to transfer large sums to Switzerland in the form of licence fees.

In addition, most of the German-based production relied on input materials from the parent company, the payments for which were also transferred freely to Switzerland.

But the most interesting aspect of the study is what the authors discovered about the moral choices faced by the companies’ managers.

Polish ghetto

Wildmann tells of a situation where the management of Ciba dispatched one of its employees to track down a former client who had disappeared in the Jewish ghetto of Stenstochow, Poland – in order to recover a payment that Ciba was owed. On his return, the employee drew up a report but omitted any mention of the conditions in the ghetto.

When the Austrian drugs company Syngala was “aryanised” in 1938 and its Jewish owners forced to sell, Geigy saw an opportunity to expand into the pharmaceutical market.

Geigy agreed to buy the company from its Jewish owners, who escaped to the United States, but failed to meet all its payments.

When the issue was brought up in a boardroom discussion, Geigy’s company lawyer remarked that Syngala’s former owners wouldn’t be able to sue. He later added to the minutes in handwriting that the point was “unimportant but worth a consideration”.

“It is from small and rare remarks like these that you deduct that there was indeed an awareness of wrongdoing”, Straumann says.

by Markus Haefliger