THE MARSHAL:The Tribunal is again in session.
DR. NELTE:Dr. Nelte for Hoerlein. Mr. President, may I be permitted to make a short statement? This morning at the beginning of the session the Prosecution made a statement in regard to Hoerlein Document No. 79, Exhibit No. 71. You, Mr. President, have also made a statement about this document and if I understood the translation correctly you stated for the Tribunal that parts of this Koenig affidavit that I submitted had been improper and inadmissible. You will understand that this statement forces me before I make any further negotiations with the Prosecution, to make a short statement for the record in order to avoid any misunder standing. I repeat, in the case of this document we are not concerned with an affidavit that I took. When I was in Leverkusen I asked Dr. Koenig to give me an affidavit on the basis of his knowledge. I am now speaking of Document 74 of Book 3, on page 66. When I asked him Dr. Koenig told me that he had been interrogated at Frankfurt by Mr. Minskoff and by Mr. von Halle and that he was waiting for a draft of an affidavit that was supposed to be sent to him. I did not ask him anything further about this matter and at the beginning of January 1948 I received what is now Document Hoerlein No. 79 through the mails. When I asked him Dr. Koenig then explained to me why he was sending me this document, that he had submitted this document both to the Prosecution and to myself and that this document contained nothing but what he had stated in answer to questions put to him by Mr. Minskoff and Mr. von Halle. If there is anything contained in this affidavit considered improper by the Tribunal or considered inadmissible by the Tribunal then I can only say if Dr. Koenig spoke the truth, these are the answers to the questions of the Prosecution. I, on my part, do not want to assert that the Prosecution has asked the witness any questions that were immaterial or improper. You may be assured that I shall be glad to comply with the request of the Tribunal and that I shall endeavor to be an honest mediator between the Prosecution and the affiant Dr. Koenig.
THE PRESIDENT:Dr. Nelte, --
DR. NELTE:One more sentence, please, Mr. President, which I consider important? I believe that the Prosecution should give me the shorthand notes of the interrogation of Dr. Koenig in Frankfurt/Main and that on the basis of that record it shall be very easy to find an understanding with Dr. Koenig and with the Prosecution.
THE PRESIDENT:Dr. Nelte, permit me to say that when commenting on the document the Tribunal certainly meant no reflection upon your integrity or honor or ability. I think that I would personally go this far; that I think we could trust your own good judgment as to what would constitute a proper affidavit to be submitted to this Tribunal. I think if you had been preparing this affidavit in the first instance perhaps we would have had no such problem as we have now. Undoubtedly the whole trouble arises with the fact that the witness did prepare his affidavit on his own initiative and used his own judgment as to what would be proper evidence...It would have been much better if he had relied on some such counsel as we regard you, then I am sure we would have obviated all of this trouble. Now, we get to the suggestion that I made this morning that you consider the matter of having the affidavit revised because we feel quite certain that if you would assume that responsibility we would eliminate all this trouble. The Tribunal is unconcerned as to any controversy between the witness and counsel for the prosecution who may have had interviews with him in the past. We are only concerned in haveing a simple direct statement from him as to facts within his knowledge or opinion which he is entitled to express as an expert that will help us resolve the questions that are before the Tribunal. I may say further that in offering the suggestion that perhaps one way out of the dilemma would be for you to prepare a new affidavit was only made in fairness to you because if we undertake to eliminate the parts of the affidavit we regard as objectionable it may leave the remaining part in a situation that would not be fortunate from your standpoint. The context might be so disturbed as to leave the document in a bad situation. As to the suggestion that you make with reference to counsel for the Prosecution turning over the notes of its previous interrogation of this witness, that's a professional matter between you and counsel for the Prosecution in which the Tribunal will not inject itself.
You may do one of two things; you may wait until the Prosecution has prepared a motion to strike out parts of the affidavit and entrust the Tribunal to act on that motion or you may after sufficient deliberation withdraw the affidavit and submit a new one. If you do withdraw the affidavit and submit a new one we shall be very, very confident that the affidavit that you submit will be acceptable subject, of course, to whatever objections the Prosecution may have to make with reference to the competency or materiality of the contents. I think that is sufficient for this time and take your time and determine your own course of action. We were attemting to be helpful to you in offering the suggestion that we made.
BY DR PELCKMANN :
Q.Herr Von Knieriem, we just wanted to talk about Exhibit 625. That is in Book 35, on page 64 of the English, page 136 of the German. You looked through these documents. I assume, may I say once more, that in the letter of the firm of Goldschmidt A.G. of 10 March 1938, directive to Farben, they refered to a letter of Farben of 5 March 1939. This letter is missing in the document that has been submitted. From the reply to Farben of 10 March, it can be seen that Farben expressed the request to be represented in the Aufsichtsrat of Orgazit GMBH. There is one further letter of the Farben industry in Ludwigshafen by the legal department, Dr. Boeckler, of 12 March 1938, to Dr. Goldschmidt personally. This letter refers to Goldschmidt's Letter of 10 March 1937, according to which Farben's request for the representation in the Aufsichtsrat of Orgazit has been rejected. This letter of 12 March is signed by you, Mr. von Knicricm, on behalf of Farben. Do you remember these events?
A.I have only a very vague recollection that I signed such a letter at one time. I believe it was supposed to be directed to Mr. Goldschmidt personally. I never had anything to do with Mr. Goldschmidt about these affairs, and never had any business relations with him. How ever, I knew him socially and that may perhaps be the reason why it was sent to him personally.
Q.In the letter of 12 March a detailed discussion is suggested, because this, as you say, was not possible to be done in writing. Did you participate in such oral discussions?
A.I believe not because otherwise I would remember it. As far as I know now, Farben did not receive the representation in the Aufsichtsrat of the Orgazit.
Q.Did you know at that time what products in final analysis were being produced by Orgazit with the use of Farben processes?
A.I don't think I know it at the time. As far as I know I was informed about the connections in the chemical warfare field only when in 1941 I entered the Aufsichtsrat of the Anorgana when this was the beginning of my interest in the contractual relations of Anorgana.
Q.I now turn to the charge of the prosecution to the effect that Farben, with its numerous cartels, had a possibility to weaken the economic power of potential enemies in order to be able to proper a future war of aggression. This point is given a lot of space in the indictment and as I said already in my opening statement, I shall be quite brief in answer to this point -- as brief as possible. First of all I should like to ask you, Mr. von Knieriem, what are cartels? Is the same meant by the word cartel in the United States and in Germany?
A.According to German and continental conceptions, cartels are mergers and agreements for the arrangement of production and sales. The American definition apparently includes much more, and there the word cartel seems to comprise all those arrangements which might hamper free competition in some way or other, and which are therefore in congradiction to the anti-trust laws. Contracts are apparently also termed cartels in America which constitute an abuse of the patent monopoly. In this borderline territory between what is the permissible patent monopoly and the prohibited cartel monopoly there arise many difficult questions and serious doubts. When, for instance, we concluded our large contracts with Standard Oil, a recognized authority was consulted. This was John W. Davis, the former Solicitor General and Ambassador in England and the presidential candidate against Hoover. We discussed these matters with him at the time and nevertheless Standard Oil combination was later attacked because it allegedly violated the anti-trust laws.
DR. PELCKMANN:The interpreter perhaps should consider that the expression 'zusammenschluss", mentioned has been translated with merger. Merger is supposed to be a fusion and in this sense perhaps it should be translated by combination. Thank you very much, BY DR. PELCKMANN:
Q.The prosecution, under paragraph 51 of the indictment, states that the number of Farben cartels amounted to more than two thousand.
We are not concerned with the exact figures here, but I should like to ask you what you have to say to that.
A.At the time of the German collapse there were 1700 agreements listed in the Central Agency for Agreements and contracts. Yesterday I explained that not all contracts had to be sent to the Central Agency, only those contracts in which some conflicts might be possible. But in this category we must put the cartel contracts, so that one might start from the assumption that all cartel contracts were registered with the Central Agency for Contracts. It seems inconceivable to me that the larger amount of these 1700 contracts were to have been cartel contracts. Certainly even if the most liberal American interpretation is given to these contracts. This number of 200 seems to be exaggerated to me, if I may add this.
Q.Are cartels a form of an economy that was used especially by German associations ?
A.No, that is not true. The cartel contracts which have been prohibited by the Sherman Act in America, are a permissible form of economy in all other countries with the exception of Norway. It is true, however, that the number of German cartels of Farben and the number of cartels in general in Germany is rather large. But there are special reasons for this. Germany is poor in raw materials and in food. It can not afford a completely free economy in some fields. Unless cartels and syndicates are formed, the State would have to intervene. Let us take the case of the nitrogen fertilizers. Nitrogen fertilizers are extremely important for food and agriculture. There are various types of nitrogen fertilizers. All are needed because every type is best for some particular soil. If as much food is to be produced on German soil as is possible, none of these types can be spared. All of them are needed. Some of these types, however, are more expensively produced than others. The farmer won't buy them because he doesn't buy any nitrogen fertilizer that is more expensive than the one his neighbor uses.
The fact that his soil conditions are different from his neighbor' s he does not understand. What would happen now if nothing was done and everything was left up to free economy. The expensive nitrogen fertilizer would not be bought, and as a result it would not be produced, and overall food and nutrition would suffer.
Court No. VI, Case No. VI.
In this instance a syndicate, whether a cartel or not can be of assistance. Certain system can be found according to which the manufacturer of a particular expensive nitrogen fertilizer might be granted some subvention at the expense of the other manufacturer, or some such arrangement. We don't have to worry about details. With this example, I want to show that in such cases either the State, or a cartel of the manufacturers can create an alleviation. In 1919, already, a Reich Monopoly for nitrogen fertilizer was to be created, The manufacturers of nitrogen fertilizer of those times didn't like this. They wanted to prevent this development towards a Nationalized Economy. As a result they created the Nitrogen Syndicate, which has already been mentioned in the course of these proceedings. The circumstance in Germany at the time were such that we had a law according to which private enterprises could be forced to join a cartel, or to conclude cartel agreements. It is quite interesting to compare these different attitudes in America and in Germany.. Cartels are prohibited in the United States, even punishable. In Germany there is a law according to which some one can be forced to join a cartel.
QWere the foreign cartel agreements of Farben concluded with a deliberate policy, and was this discussed in the Vorstand?
ANo, certainly not. One must understand how such a cartel contract is concluded. A suggestion eminates from groups of business men, either of Farben, or of other enterprises, at home or abroad, on same point about which a reasonable private industrial arrangement is to be made. Then these people would meet and negotiate, and try to find a solution. It takes weeks, sometimes months, and then after that has been done, the lawyers draw up the contract in a reasonable way, according to the situation as it existed. When this matter is viewed subsequently, it will sometimes be a cartel agreement, accord ing to German ideas, sometimes it may be a cartel according to the American ideas, and sometimes it may be perhaps no cartel, even ac cording to the American interpretation, but that case seems to be Court No. VI, Case No. VI.
very rare.
QOn this point the Prosecution has talked about so-called cartel contracts. These are mostly contracts which provided for a technical cooperation together with exchange of experiences, for instance with the oil executives. Why were such contracts concluded?
AThey were concluded because they guarenteed the quickest possible introduction of technical progress, and because they promoted the quickest technical development. For instance, as early as the summer of 1939, there was a combination which was arranged in the field of Catalytic Refining between the largest oil companies of the world which knew the oil field best, and Farben, who knew the chemical processes of oil refinement best, and a few large firms in the United States, which were the top ranking specialists in that country for this field. One wanted to exchange experiences very widely, and it is, of course, quite clear that when such a group works together, and if everyone gives to the other what they have to give, then results are achieved most quickly, but this combination may have been considered a cartel also. Therefore the cartels as such have a certain benefit at times. I believe that during times of need, this will be recognized as such in the United States also. That is to say, it will be recognized that a cartel can be an instrument which develops a technical process most quickly. I believe I know that in June 1942 a law was issued in the United States, according to which the regulation of the Sherman Act didn't have to be applied if the interest of the National Defense required this in regard to some particular speedy development that was needed.
QDid Farben in such cases observe their contracts which obligated them to exchange experiences even after 1933?
AIt was not my function as a lawyer to transmit the "know how" of which I didn't understand anything myself, but I didn't have the least doubt that Farben always proceeded in a completely loyal manner. This question will be discussed at great length in the course of this Court No. VI, Case No. VI.
proceedings, I want to emphasize here that since 1933 the attitude of Farben towards their foreign cartel partners didn't change at all. As I already explained previously, in view of the regulations regarding treason, from a certain point onwards, Farben had to ask, but as I already stated, Farben was mostly given permission, I believe you could almost say always, to exchange these experiences. I already stated, I believe, that so far as I knew, Standard oil was in a quite similar situation, and that they conducted themselves just as loyally.
QDid the so-called cartels have anything to do with political propaganda, or with collection of strategic information?
AI don't know the least about this, but I am convinced that it is not true.
QAs a so-called incriminating document, the Prosecution submitted Exhibit No. 888, in Book 48, it is Document No. NI-11197. It is a letter to the Reich Ministry of Economics in regard to the Chemnico. Did the Chemnico have anything to do with conclusions of contracts?
AA certain Dr. Hochschwaendter belonged to Chemnico. He was a technical man, and he was, so to speak, a liaison agent, between Farben and the Standard Oil, when exchanges of experiences took place. You must take into account that Farben always had a large number of technical experts in America. They had to be introduced to Standard Oil by somebody, and this was done by Dr. Hochschwaendter, and Standard Oil acted similarly in Germany. They also had people constantly working in Germany, solely for the purposes of keeping in touch with Farben, and to help occasionally in questions of this nature. Dr. Hochschwaendter had also on other occasions some work to do when contracts were discussed, or when license negotiations were concluded. Then your question can be answered by saying that occasionally Chemnico had something to do with the conclusions of contracts and patents and so on.
QIn No. 56 of the Indictment, the Prosecution asserts that one particular patent had prevented an important economic development in the United States before the war, and that that particular patent had Court No. VI, Case No. VI.
been controlled by Farben. The Prosecution didn't offer any proof for this. Their general assertion to such intentions of Farben was not withdrawn by the Prosecution. I should like to ask, is such a thing possible at all?
AThe facts which the Prosecution presented have not been described correctly. It was quite different. But that is not the point in question. I understand your question to mean that quite apart from this fact, I should state whether it was possible. If I am asked whether any single foreign patent could make a necessary economic development impossible in America, then I have to say theoretically that is possible, and I'll have to answer the question in the affirmative, but that is due to a peculiar American Patent Law System. All the other countries of the world, so far as I know, provide for a possibility in their patent law that even during peacetime, when economic reasons make it desirable, obligations to grant licenses might exist against the will of the person holding the patent. However, these regulations do not exist in the United States. That is strange. For America, as such, is opposed to monopolies, but because of the fact that this regulation does not exist there, due to this strange patent law, their patent monopoly was strengthened.
QOne last question on this detail. The Prosecution asserts that certain German patent holders in the United States, and especially Farben, exploited their patent rights in the United States ruthlessly. What can you say in this connection?
Court No. VI, Case No. VI.
AI can not answer this question on such a general scope, but I should like to point out only quite briefly one fact which, I believe, is not generally known. I had already stated a short while ago that it was peculiar that the patent monopoly had been strengthened so enormously in the United States, although the United States was really opposed to monopolies, and, I pointed out previously that this was done because the United States does not know of compulsory licenses, but on another point, especially in regard to chemical patents, the United States strengthened patent monopoly enormously and unusually. In the field of chemistry there are two ways of protecting patents. There is a weak and a strong system. The weak system consists of socalled process patents; the holder of a patent can only prohibit that any particular material is produced according to his process; it may, however, be produced according to another process by anybody. That is the weak system. The strong system are the so-called product patents. Here the holder of the patent can prohibit anybody to manufacture this particular product, even according to other processes, this product may not be produced. It is completely frozen. United States, Germany, Switzerland, and Holland --
QNot the United States, only England.
AGermany, England, Holland and Switzerland, all have the weak system to protect the patent products in the chemical field. That is, the process patent. The United States has the strong system, the product patent. That has an economical consequence. Although the United States is opposed to monopolies, it has created a strong patent monopoly in the chemical field. According to International regulations, the citizen and the foreigner in any country has the same position. In Germany, therefore, an American has the exact position that is held by the German, and, in America a German has the same legal position as an American. Germans as well as Americans, there fore, have a strong system of patent products in America, and both have only the weak system in Germany.
Court No. VI, Case No. VI.
From this the following results: If a German enterprise has obtained a predominating patent position in the United States, then this has a very strong effect, because the monopoly in the United States has been so particularly strengthened. If it is so strong, a monopoly is less comfortable for the competitors than a weak monopoly. Then sometimes, the fact that patents belonging to Germans in the United States are particularly severe, may have something to do with it. I ask your forgiveness for having explained these general things, but I believe that they may be quite interesting as a general background, and, I thought perhaps they were not generally known.
DR. PELCKMANN:We are now going to present the details in regard to this background, but my colleague Dr. Silcher will continue the examination later. Mr. President, may I ask to have a recess now?
THE PRESIDENT:The Tribunal will recess until 1:30.
(Noon recess until 1330 hours, 6 February 1948).
AFTERNOON SESSION (The Tribunal reconvened at 1330 hours, 6 Feb.
1948) DIRECT EXAMINATION (Continued
AUGUST VONKNIERIEM, Resumed
THE MARSHAL:The Tribunal is again in session. BY DR. SILCHER:
QMr. von Knieriem, as you and the Defense counsel discussed previously, the document in Counts 51 to 53 charges Farben with collaboration with the Nazi Government in preparing a war of aggression, including the use of international cartel agreements as a military weapon to weaken other countries. This brought a tragic impediment in the development of strategic industries in the countries which Germany intended to attack.
As one instance of this, the Prosecution mentions, among others, that in the years 1927 to 1929 and 1930--that meant long before the Third Reich-
MR. AMCHAN:Your Honor-
THE PRESIDENT:Let him complete the question.
MR. AMCHAN:I am sorry. BY DR. SILCHER:
QThe contract was concluded between Farben and Standard Oil of New Jersey. The Prosecution has offered Exhibit 942 and 943 in this connection.
That is, Mr. President, Book 42, English page 1 and page 26. Also Exhibit 1012. That is, Mr. President, 43, page 282, where Francis Biddle, Attorney General, and Wendell Birch, Assistant Attorney, testify that 1929 was the critical year in the offensive of German firms against the United States. And in this connection they mention, among others, Farben's agreement with Standard Oil.
Did you have anything to do with the creation of this contract between Farben and Standard Oil, and are you well-informed about this?
MR. AMCHAN:We have no objection to the question as finally put.
The objection we want to state is of counsel's practice of elaborate recitals stating what the Prosecution-- Our objection is to counsel's elaborate, argumentative recitals as to what the Prosecution is changing in the evidence. And since this particular Defense counsel is beginning his examination, we would want to make this general objection and observation at this time.
THE PRESIDENT:That objection will be overruled.
Counsel should not, by indirection, undertake to testify or to import facts to the Court; but it is not improper within reasonable limitations for an attorney who is about to question a witness to direct his attention to the subject matter to be inquired about. After all, this is a problem of reasonable application so far as counsel is concerned, and sound discretion so far as the Tribunal is concerned.
Since this counsel is just now starting to interrogate the witness, we do not deem it improper in this instance for him to direct the attention of the witness to the scope of his inquiry.
As we said before, that should not be abused. It should not be used for the purpose of putting counsel in the position of testifying or appraising evidence.
Mr. Defendant, if you understand the question, now, after the interruption, you may proceed to answer.
DEFENDANT VON KNIERIM:Yes, I did participate in drawing up this contract. I had a very important part in the negotiations and in the formulation, and for this purpose I was in America for weeks at a time.
QThen please describe as briefly as possible, but so that we can get a true picture of the situation, the background, origin and the essential contents of this contract, and this "marriage", as I might call it, between Standard Oil and Farben.
But, first of all, one other question. Was the character of the oil policy of Farben definitely of a private business nature.
AYes.
QDo you consider the agreement with Standard Oil, of which we are speaking of right now, a typical and good example of this private industry character of Farben's oil policy?
AA very good example.
QThen please begin your description. First of all, up to the time when the first contract was concluded in 1927.
AIn the year 1924 the Badische Anilin and Soda Fabrik, one of the founder companies of Farben, began work in the field of hydrogenation of crude oil and coal. That means the treatment of crude oil and coal under high pressure with catalyzers and the use of hydrogen. This work was the logical development of the work of the Badische in the field of ammonia synthesis which led to the well-known Haber-Bosch process which has been repeatedly mentioned here.
On both processes one worked under high pressure and with catalyzers. Bosch remarked that this was probably the great and most difficult problem still to be solved, and he seized upon it passionately. Certain preliminary work had already been done in this field. The German chemist Bergins worked in this field and had taken out certain basic patents throughout the world. These patents belonged to a Dutch company which was under the control of the Royal Dutch Shell. At this time the Badische Anilin and Soda Fabrik had the I.G. Basel, which was very closely connected at that time, acquire control of this Dutch company. In 1926, approximately, Farben--for the merger had taken place in the meantime--discovered that the problem would be solved but there was still a great deal to be done. It was now found that Farben needed the assistance of an oil company. They had to be better informed about the customary methods in use up to then by the oil industry. They also had to be informed about the cost of the previous methods in order to have a basis for comparison, and finally they had to be informed more than they were about the needs of the consumer, as for the different qualities. According to the new process of Farben one could produce all kinds of products and each of these products could be produced in different qualities. One had to know what qualities were needed and for what qualities a high price could be charged.
Otherwise the longer would have existed of working in the wrong direction and the production of products in qualities which were not needed.
(continued)
A.Therefore, cooperation with an oil company was necessary, but there was no oil company in Germany. Germany has no crude oil. I.G. Farben now considered the big oil companies and came to the conclusion that the most sitable one would be Standard Oil of New Jersey. It was the biggest, the strongest financially, in the United States, and it was probably the one with the highest technical development, and certain contact had already been established a few years before, -- that is, personal contact through the Du Pont Company.
Farben now invited Standard Oil men to come to Ludwigshafen. A large number of them came, headed bytheir president, Walter Teagel. We showed them our equipment which was producing on a smallscale at that time and explained everything to them. They were very much impressed. They realized that something was going on here that might change the oil industry throughout the world.
They acknowledged the big problem of making gasoline out of coal. After we had talked for a few days, the president made a very reaching suggestion, that is, the suggestion that in the entire field of crude oil hydrogenation and coal hydrogenation, the whole world should collborate. This was too much for Farben at the time. They wanted it to limit collaboration to the hydrogenation of crude oil, and second, to America. When this counter-proposal was made Walter Teagel was a little disappointed. I remember that he said, "We are suggesting a marraige to you, and what you suggest is scarcely an engagement," But we insisted, and I went to America and negotiated with Mr. Howard about this first contract. We drew up a contract which was signed by the two companies.
Q.What year was that?
A.That was in 1927.
Q.Has this contract been introduced by the Prosecution?
A.No, and I do not believe that I should waste the time of the Tribunal in discussing it, because it was sperseded two years later by the big contract.
I should merely like to remark that now there was extremely close technical collaboration between Standard and Farben. Technical experts of the two companies visited each other, and they became acquainted with one another, and became good friends. Further development proceeded well, but it was soon discovered that the basis of collaboration was too narrow.
I said before that it was limited to hydrogenation of oil. Coal had not been included, but that was not a good thing, because the technical experience and know-how use of Farben was also of value in the hydrogenation of coal. Consequently, we believed that closer collaboration had to be established, and that it had to be extended to include coal.
On a second point too, the first contract was too narrow. It was limited to the United States. One can do a thing like that with patents, but not with know-how, which is not protected. If one once had such know-how, in ones head, one cannot forget it, if one is working in a different country. Men of Standard Oil who received this know-how only for the United States, could not forget it, if they went to the Dutch East Indies, and both of us came to the conclusion that closer collaboration was needed for the whole world, and that it should be for the hydrogenation of crude oil and coal.
Now there was a big difficulty. If two such big companies get together it can only be on the basis of a quality that is 50-5-. That is a very good relationship, if the interests are the same. It is, however, a very poor relationship if the interests re not quite the same.
The interests were the same in the field of crude oil hydrogenation, but as for the hydrogenation of coal, the interests had to deviate. Farben would, of course, have been interested in having the process of the liquefaction or hydrogenation of coal applied as widely as possible. On the other hand, Standard Oil's main businesswas always the export of gasoline, lubricating oil, etc., for the whole World. If the continental countries, which have coal but no oil had liquefied coal on a large scale to make gasoline, then, of course, Standard Oil would of necessity have lost its markets.
The same was true in other countries, South Africa, for instance, which also has a great deal of coal but no oil. We thought this matter over for months and finally we made the following suggestion to Standard Oil. We said that we would be ready and willing to turn over all of our interests in this field in the whole world to them, with the exception of Germany, of course.
In other words, we were ready to give them all of our patents, all of our experience, present and future, for all of the world, with the exception of Germany, and they were to give us one large payment of money. Farben had had largo expenditures in the development of this process, so large that it was a little too much, even for Farben. I do no know any exact figures but it may have bean about 200 million marks.
Standard Oil thought the matter over and cane back with the following precise suggestion. Farben was to give to Standard Oil all of the hydrogenation processes for crude oil and for coal; all patents present and future; all of the know-how present and future, and in addition, all other processess italic for the working of crude oil in the customary main production of the oil industry such as gasoline, lubricating oil, etc.
In addition Farben was to have I.G. Chemic, Basel, turn over to Standard control of the Dutch company which had certain basic patents which I mentioned before. Standard in exchange, was to give the following: 600,000 shares in their company, in five annual payments of 120 thousand dollars each, or if the payment was not made in installments, but all at once, it was 548,011 shares, that is with the discount deduction.
The value of these shares was at that time about 30 million dollars, - 30 to 35 million dollars. The rate varied considerably. Also Standard was to give Farben 20 per cent participation in future royalties.