Interhandel, short for Internationale Industrie & Handelsbeteilungungen, was a Swiss conglomerate, known for its long-running disputes with the U.S. government over German ownership during

World War II World War II or the Second World War, often abbreviated as WWII or WW2, was a world war that lasted from 1939 to 1945. It involved the World War II by country, vast majority of the world's countries—including all of the great power ...

. Interhandel, which had both financial as well as industrial holdings was the corporate successor of I.G. Chemie, which the U.S. government had claimed was a

front organization A front organization is any entity set up by and controlled by another organization, such as intelligence agencies, organized crime groups, terrorist organizations, secret societies, banned organizations, religious or political groups, advocacy ...

for Germany's

I.G. Farben Interessengemeinschaft Farbenindustrie AG (), commonly known as IG Farben (German for 'IG Dyestuffs'), was a German chemical and pharmaceutical conglomerate. Formed in 1925 from a merger of six chemical companies—BASF, Bayer, Hoechst, Agfa, ...

during World War II. Interhandel was publicly traded in Switzerland from its formation as IG Chemie with a complex structure of ordinary and preference shares, which concentrated voting rights with an array of Swiss investment banks. Approximately 80% of its capital was tied up in the long-running GAF investment, with the remainder consisting of various small chemical companies, Bank Hoffman of Switzerland, a small bank in Panama and various property investments - most of which had been acquired after the end of World War II, under the control of Managing Director Walter Germann, a relative of M. Greutert, a banker and the I.G Farben representative on the I.G. Chemie board of directors. In 1958, prior to the successful resolution of the GAF/Interhandel case in the U.S.A, a number of shareholders who had previous links to I.G. Farben (including Industrie Bank and M. Sturzenegger) were bought out, and UBS Bank’s chairman Dr. Alfred Schafer became chairman of Interhandel. In the years prior to this, UBS acquired approximately 50% of Interhandel shares on the open market. Upon the announcement that Interhandel would receive $122,000,000 USD in compensation for the seized shares of the former I.G. Farben U.S.A subsidiaries (GAF), a tremendous uplift in the value of the Interhandel shares was realised, allowing UBS to gradually take control and absorb the cash in a 1967 merger. The company was acquired by the

Union Bank of Switzerland Union Bank of Switzerland (UBS) was a Swiss investment bank and financial services company located in Switzerland. The bank, which at the time was the second largest bank in Switzerland, merged with Swiss Bank Corporation in 1998, to become ...

in 1967.UBS History
Company website
Funding Universe, Retrieved August 10, 2010

History

Interhandel's predecessor, I.G. Chemie, was established in 1928 by the German company

as a Swiss

holding company A holding company is a company whose primary business is holding a controlling interest in the securities of other companies. A holding company usually does not produce goods or services itself. Its purpose is to own shares of other companies ...

, located in

Basel, Switzerland , french: link=no, Bâlois(e), it, Basilese , neighboring_municipalities= Allschwil (BL), Hégenheim (FR-68), Binningen (BL), Birsfelden (BL), Bottmingen (BL), Huningue (FR-68), Münchenstein (BL), Muttenz (BL), Reinach (BL), Riehen (BS), ...

, to hold the company's foreign investments. The company owned a group of financial and industrial businesses in Europe and the U.S, including

American IG The American IG Chemical Corporation, or American IG, for short, was an American holding company incorporated under the Delaware General Corporation Law in April 1929 and headquartered in New York City. It had stakes in General Aniline Works (GAW), ...

. By 1940, I.G. Chemie had severed its direct ownership from its parent company

in order to avoid the seizure of its U.S. assets. Shortly after the start of the U.S. involvement in the War, on April 24, 1942, the U.S. government seized General Aniline & Film (later

GAF Materials Corporation GAF is an American manufacturing company based in Parsippany, New Jersey, that has roots dating back to the late 19th century. The GAF acronym stands for General Aniline & Film. The company has historically been primarily focused on manufacturi ...

), an Interhandel subsidiary, and it was not until 1963 that the long-running dispute between Interhandel and the U.S. government was resolved. The shares in GAF Corporation were sold in a highly competitive auction in 1965 and the proceeds were split between Interhandel and the U.S. government. As a result of the sale of GAF, at the time of its merger with UBS, Interhandel held substantial amounts of cash. The addition of the Interhandel's capital resources, which propelled UBS into the top spot among Swiss banks in 1968, also made UBS one of the strongest banks in Europe and helped fuel the bank’s further expansion in the late 1960s and 1970s.Handbook on the History of European Banks
Edward Elgar Publishing, 1994

The IG Chemie case

All of IG Chemie's American assets were seized by the United States government under the

Trading with the Enemy Act of 1917 The Trading with the Enemy Act (TWEA) of 1917 (, codified at and et seq.) is a United States federal law, enacted on October 6, 1917, that gives the President of the United States the power to oversee or restrict any and all trade between the ...

. These assets, seized between 1942 and 1946, included bank accounts in six New York banks, and over 90% of the

capital stock A corporation's share capital, commonly referred to as capital stock in the United States, is the portion of a corporation's equity that has been derived by the issue of shares in the corporation to a shareholder, usually for cash. "Share capi ...

of General Aniline & Film Corporation (today

, then part of the holdings of American IG). I.G. Chemie was accused of participating in a

conspiracy A conspiracy, also known as a plot, is a secret plan or agreement between persons (called conspirers or conspirators) for an unlawful or harmful purpose, such as murder or treason, especially with political motivation, while keeping their agr ...

with

, which had by then been designated a German enemy corporation "...to conceal, camouflage and cloak the ownership, control and domination by I.G. Farben of properties and interests in many countries of the world, including the United States, other than Germany". The Swiss banking partnership Ed. Greutert & Cie (later Sturzeneggar & Cie, today Baumann & Cie, Banquiers) was also accused of involvement. IG Chemie, seeking to recovery its properties, filed a lawsuit on October 21, 1948. IG Chemie claimed that it was neither an enemy or ally of an enemy of the United States. As plaintiffs, the holding company filed a motion under Rule 34 of the

Federal Rules of Civil Procedure The Federal Rules of Civil Procedure (officially abbreviated Fed. R. Civ. P.; colloquially FRCP) govern civil procedure in United States district courts. The FRCP are promulgated by the United States Supreme Court pursuant to the Rules Enablin ...

for the

discovery Discovery may refer to: * Discovery (observation), observing or finding something unknown * Discovery (fiction), a character's learning something unknown * Discovery (law), a process in courts of law relating to evidence Discovery, The Discove ...

of documents from the government. A similar motion was filed by the government, "including documents of subsidiaries of the plaintiff, Osmon A.G., and Sturzenegger & Cie.". Overruling objections by IG Chemie, the court ordered full production of the documents. The government fulfilled the order but the plaintiff filed another motion after the Swiss government prohibited H. Sturzenegger & Cie from transmitting the records. They said transmission of these records would violate Swiss penal law. Because they could not produce the documents as ordered, t. Even though it was accepted that the plaintiff had made good faith efforts to produce the Sturzenegger documents, the plaintiff's suit to recover their seized properties was dismissed with prejudice because they had been unable to meet the compliance standard of the US Courts required for legal procedures.

References

{{Authority control UBS Financial services companies established in 1928 Conglomerate companies established in 1928 Holding companies disestablished in 1967 Defunct financial services companies Conglomerate companies of Switzerland 1928 establishments in Switzerland Holding companies established in 1928 Financial services companies disestablished in 1967 1967 disestablishments in Switzerland

History

The IG Chemie case

See also

References