Central German lignite syndicate

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Former cartel seat of the Central German Brown Coal Syndicate at Nordplatz 11 in Leipzig

The Central German Brown Coal Syndicate was a business cartel based in Leipzig . As an association of companies in the coal and steel industry in the central German lignite district , it was supposed to regulate the extraction, own consumption and sales of its members for raw coal , briquettes , wet pressed stones and coke . The syndicate existed from 1909 to 1913 in the legal form of a limited liability company and from 1919 to 1942 as a corporation under public law .

Although the syndicate was a compulsory state cartel from 1919 onwards, of all German coal syndicates it had the least unity and the least internal stability. The most important members included the Bohemian coal magnates Ignaz and Julius Petschek , who initially fought the syndicate and later used it as a competitive instrument for themselves.

The takeover of power by the National Socialists did not fundamentally change anything in the existing cartel system. However, from 1939 onwards, the mobilization and conversion of the German economy to total war production led to a reorganization of the economic management apparatus , which is why the syndicate was liquidated in 1942 . The final dissolution took place on the orders of the Soviet military administration in Germany on May 20, 1946.

General

Business cartels , including coal syndicates, were legal in Germany until 1945 and enjoyed legal protection. Since the late 19th century, they have developed into a regular form of cross-company cooperation in almost all industries and in many countries. Above all, companies in the basic industry joined forces to form various cartels after the experience of the so-called start -up crisis and the subsequent phases of economic instability. This development was strongly supported by the Reich government through a cartel-friendly jurisprudence as well as by the banks, which favored the formation of cartels for an otherwise due market shakeout through company failures. Broad circles of society were convinced of the positive effects of cartels. This also included workers and unions who preferred regulated markets and production to unrestrained competition, as this was associated with more job security and regular income.

The swelling movement of concentration in the central German lignite area with its increasing outcrops of new and ever larger coal fields resulted in an increase in production with which demand could no longer keep pace. The mismatch between supply and demand led to price undercutting, which forced entrepreneurs to compensate for the lost profits as a result of falling prices by further increasing production. In addition, the Central German lignite received competition from British hard coal, but above all from Bohemian lignite. In order to penetrate the German market, the foreign traders sold their coal at dumping prices .

The devastating competition pushed the price below the cost of raw material extraction, inflicted heavy losses on numerous companies and led to the restriction or complete shutdown of operations. Mines that were built on a weak financial basis and with the use of large loans collapsed completely. An example of this is the Elise II mine in the Geiseltal , which was opened up in 1902 and closed twelve months later. The high capital losses and fluctuations were accompanied by a slide in wages, extreme hire and fire and growing unemployment. In order to safeguard the capital risk, an increasing number of central German mining companies sought mergers and joint agreements for uniform pricing and sales.

While by the year 1919 for mining companies cartelization was voluntary, joined after the founding of the Weimar Republic , the coal industry law in force, which presented the German coal industry under the supervision of the state and the formation of forced syndicates prescribed. Corporate cartels were not considered harmful, but were viewed by many contemporaries as a modern and positive economic instrument. Unlike today, the doctrine assumed that the formation of cartels could prevent the emergence of monopolies. Especially for the central German lignite mining industry , at the end of the 1920s, economists stated that without the syndicate a ruinous price war would arise, in which not only the few small companies that still exist would perish, but also many larger stock corporations.

Leading economists were convinced that ruinous competition would lead to severe macroeconomic damage. Experience had shown that even large companies, using all available financial resources, reduced prices well below cost in order to be able to keep up with sales battles. Therefore, through the formation of cartels, a stability of prices and the livelihood of a large number of small and large market participants should be achieved. In addition, the compulsory cartelization during the Weimar period was intended to prevent an increase in the capital poverty that existed in Germany after the First World War, as well as a sell-off of German companies and the outflow of profits abroad.

Striving for unification

The first lignite associations in Central Germany only covered certain areas:

  • In the north of the area, the Magdeburg General Convention and the Helmstedt-Oschersleben Convention were created in 1892 . Four years later, raw coal sales in the Helmstedt-Magdeburg district were transferred to a joint sales point of unified brown coal works in Magdeburg , which was short-lived due to its loose structure. In 1900 the lignite syndicate in Helmstedt was founded and in 1902 the Magdeburg lignite syndicate was founded .
  • In the south of the central German area, where numerous mines were close together and which were most exposed to the competition of the Bohemian traders (supply struggle for industrial companies and private households in the cities of Leipzig and Dresden), the Saxon Association was founded in 1890 by 21 mining companies -Thuringian lignite works . In the summer of 1904, the association moved its headquarters to Halle and at the same time renamed the Association of Central German Lignite Works .
  • The mines in the Bornaer Revier and Meuselwitz-Altenburger Revier also merged in 1904 to form a cartel, the sales association of the Saxon lignite works based in Leipzig, and in the same year joined the Price Association of Central German Lignite Works in Halle as a self-contained group .
  • In the west of central Germany, seven mines merged in 1905 to form the sales association of the Hessian lignite works based in Kassel, which was loosely connected to the Rheinisch-Westfälischen Kohlen-Syndikat .
  • In the east of the area, the Bitterfeld Revier , there had been a cartel of its own called Sales Association Bitterfeld Braunkohlenwerke since 1909 . This association proved to be extremely stable and successful up to 1919, because without exception all mining companies in the Bitterfeld area joined the cartel, which pursued a moderate price policy.

During the Depression of 1906 and 1908, several attempts were made to combine the different cartels in the central German lignite mining district into a stable syndicate. As a model that served Rheinisch coal syndicate , which as a pattern of organization Art of years and decades due to the balanced power balance shareholders, was between management employees, unions and employers worldwide as an "ideal cartel".

The expansion of the area and the regional fragmentation of the mining industry proved to be unfavorable factors for the formation of a joint cartel in central Germany. The Central German lignite mining area was not narrowly defined, like the Rhenish or East Elbe lignite mining area , but fell into numerous individual areas, some of which were far apart. The northernmost pits were in the vicinity of Helmstedt . They belonged to the Helmstedt-Magdeburg district, which extended to the northern edge of the Harz Mountains . To the east, the Elbe formed the border from Magdeburg to Dresden , and to the south all of East Thuringia belonged to the Central German district. In addition, there were the mines around Kassel, some 300 kilometers away from the nuclear areas .

A different mining law also made the formation of cartels in central German mining more difficult , as the area was in several member states . These included the Kingdom of Saxony , the Prussian provinces of Saxony and Hesse-Nassau and the duchies of Anhalt , Braunschweig and Saxony-Altenburg . For example, in the Meuselwitz-Altenburg and Zeitz-Weißenfels districts, the Saxon mining regulations still applied until 1918 , according to which the owner of a parcel automatically owned the rights of use for the mineral resources below. In the rest of Prussia , the natural resources were owned by the state.

A very large number of individual mines were built in the areas of the Electoral Saxon Bergordnung. In fact, every farmer or craftsman with land ownership had freedom to prospect, which means that many turned to the burgeoning lignite industry. Numerous entrepreneurs from sugar factories or brickworks also bought land in these regions and opened their own mines. Herein lies the cause of the strong competition in the Central German mining areas and the cause of the lack of financially strong coal and steel companies. Only after 1910 did consolidations take place , leaving a few financially strong companies.

Syndicate from 1909

On December 23, 1909, the Central German Brown Coal Syndicate was founded as a GmbH based in Leipzig. The merger was largely due to the initiative and unity of the mining companies from the Zeitz-Weißenfels, Meuselwitz-Altenburg and Borna districts. The following were elected to the board:

The syndicate cartelized the sales areas, the extraction (quotas), the prices and the sale of raw coal, briquettes , wet stone and coke for its members . As part of their membership, the companies involved were able to exclude individual elements, for example the distribution of their own products. With a few exceptions, all central German mines in Saxony, the Prussian province of Saxony and the Duchy of Saxony-Altenburg joined the association after April 1, 1910. The mines from the Kassel Revier did not join the cartel due to the distance, those of the Bitterfeld and Helmstedt-Magdeburg Revier from 1911 only joined the cartel.

Despite the considerable increase in power, the first joint association of central German lignite accelerators was only short-lived. Although it was possible to reduce the proportion of Bohemian coal from 25.48% (1890) to 7.42% (1913), the Bohemian traders took countermeasures. The syndicate threatened foreign competition not only with the loss of a large part of their sales income, but with the loss of the entire German sales market. To prevent this, the Bohemian coal merchants bought their own mines in the Central German district. At the end of 1909 , the Dux coal association was the first to secure lignite fields in the Borna mining district. This was followed by the Aussig industrialist Jacob Weinmann, who bought the Beuna coal works near Merseburg , the Witznitzer coal works near Borna and several coal fields in the Halle district near Lochau . These entrepreneurs refused to participate in the formed cartel and from December 1909 sold German or Bohemian coal between 20 and 25% cheaper than the companies affiliated with the Central German Brown Coal Syndicate.

Ignaz Petschek ( Aussig ) and Julius Petschek ( Prague ) proceeded differently . They blew up the cartel from within by not buying or building any coal plants themselves, but by acquiring majority stakes or qualified minorities from German lignite companies. In doing so, they became syndicate members with voting rights and claimed higher funding quotas and a reduction in prices for the companies in which they were involved. As early as 1912, the heavily divided brothers brought 27.8% of the German lignite industry under their control. As a result, a price war began that drove many mining companies to ruin.

Even large stock corporations, such as Zeitzer Paraffin- und Solarölabrik AG, Naumburger Braunkohlen AG, Waldauer Braunkohlen-Industrie AG or Sächsisch-Thüringische AG, got into financial difficulties due to dumping prices and had to merge with other companies within a short period of time. This hitherto unprecedented concentration movement in the Central German lignite industry led to the collapse of the cartel from mid-1912. The official dissolution took place on March 31, 1913. In the period that followed, several small cartels were formed again, which, however, remained in strong competition with outsiders, but also with each other.

War economy (1914-1918)

When the First World War broke out, several cartels of purely local importance existed in central Germany. These include the Meuselwitzer Brikettverkaufsgesellschaft mbH based in Leipzig, the Bitterfeld Sales Association in Bitterfeld or the Helmstedter Braunkohlenbrikett GmbH, which merged with the Magdeburg lignite syndicate to form the Magdeburg lignite briquette syndicate in 1918. Several attempts to create a comprehensive syndicate for all entrepreneurs in Central Germany, as in the Rhineland, were unsuccessful. They failed, on the one hand, because of the diversity of the deposits and the opposing mining conditions, and on the other, because of the fact that, due to the growing coal shortage, the companies were relieved of any sales concerns during the war.

The discontinuation of British hard coal imports after the outbreak of war as well as the increasing shortage of miners due to conscription led to a falling supply of coal and rapid price increases as demand increased. Against the background of growing protests by the population, the then Federal Council issued an ordinance on July 12, 1915, which provided for a state administration of raw materials and the possibility of uniform price determination for hard coal and lignite. In order to prevent this, the majority of the Central German lignite companies formed a cartel under the name Preisverband Mitteldeutscher Braunkohlenwerke , immediately after the law was passed . In fact, however, this syndicate only existed on paper, since the large lignite companies in particular resisted fixed prices.

The unregulated and constantly increasing coal prices led to a supply crisis during the First World War, combined with unrest and demands from broad sections of the population for the nationalization of the coal industry. In addition to private households, craftsmen and traders suffered particularly from the coal shortage, since small businesses were mostly classified as "not important to the war effort" and hardly received any raw materials. In the press, the Petschek brothers in particular came under fire for price increases. By hostile takeovers they had succeeded within a short time in attaining a monopoly position in individual districts. Even the economically liberal Frankfurter Zeitung warned the Petscheks that “people not only grow with higher purposes, but also with higher duties”. It has been proven that various foreign entrepreneurs raised the prices for coal and briquettes because, as foreigners , they could undermine the requirements of the War Resource Department .

By 1915 Ignaz and Julius Petschek had controlled 37.77% of the briquette production in the Central German mining area and 43.49% in the East Elbe mining area. So there was a real danger of monopoly. In Saxony, the actions of the Petscheks contributed significantly to the enactment of the so-called blocking law of October 21, 1916. It initially prohibited the sale of mines and the development of new and expansion of existing coal fields for a limited period. On June 14, 1918, Saxony introduced the Bergregal , which meant that all coal fields that were not yet privately owned became state property. As a result, the Petschek brothers sold large parts of their holdings in mines in Saxony and shifted their focus in the Central German district to the Prussian provinces and East Thuringia.

The government of Anhalt went one step further with the Anhalt Mining Act, which came into force on April 4, 1917. This decree granted the state of Anhalt the sole right to prospect and extract lignite, regardless of any authorizations that had already been acquired, as well as a right of first refusal in coal works and expropriation in the event of speculative price gouging . The bill stipulated, among other things: “Bohemian large coal traders are trying to use a planned procedure to gain a decisive influence on the central German lignite industry, with the aim of mastering the competition that is unpleasant to them. This threatens to abolish the legally existing mining freedom through a private monopoly ”.

Prussia and the imperial government held back with sanctions due to existing German investments in Bohemia. However, since the importance of lignite for the Central German armaments industry had increased enormously with the outbreak of the First World War, the German Reich itself participated in several mining companies from then on. This included EWAG , which had been operating the large Zschornewitz power station on behalf of the Reich government since 1915 in order to supply the Reich nitrogen works in Piesteritz and other industrial companies with electricity. The empire-owned EWAG grew into one of the most important energy suppliers in Germany and acquired numerous mines, especially in the central German lignite district.

In order to improve the supply in general, a Reich Coal Commissioner was founded in February 1917, but this only worsened the bureaucratic chaos. The surreptitious trafficking took on enormous proportions and bypassed state controls. Ultimately, the supply bottlenecks led to concrete plans for a complete reorganization of the energy industry even during the war.

State compulsory syndicate

After the November Revolution, the socialist parties tried to implement one of their most important program points: the nationalization of the means of production . First and foremost was the expropriation of energy companies and their transfer into common ownership . Although these demands were enshrined in Article 156 of the Weimar Constitution and in the Socialization Act of March 23, 1919, the National Assembly could not agree on the practical implementation. Especially for the coal industry occurred only on 21 August 1919, the same time adopted the socialization law Kohlenwirtschaft law in force.

Although this law placed the German coal industry under the supervision of the state, the companies remained privately owned. Instead of nationalization, there was a forced syndication. The coal producers of economically related areas were obliged to unite in syndicates. On October 1, 1919, three semi-public corporations were established under public law : the Central German Brown Coal Syndicate based in Leipzig, the Rhenish Brown Coal Syndicate based in Cologne and the East Elbian Brown Coal Syndicate based in Berlin.

The cartels were subordinate to the Reich Coal Council, which centrally specified prices, discounts, delivery conditions, the regional distribution of sales markets, wages and other working conditions. The tasks of the syndicates included: the

  • Supervision of the implementation of the guidelines, orders and decisions of the Reich Coal Council and the Reich Coal Association
  • Regulation of the production rates of the member companies, of self-consumption and the sale of fuels within the framework of the given regulations
  • Establishment of central sales outlets to which the entire products of the member companies should be made available for central distribution.

As a result of state intervention, the organization of lignite mining throughout the empire was given a new structure. In place of the member states of the German Empire, the officially designated free states came after the establishment of the Weimar Republic . The central German lignite mining area comprised all mining areas west of the Elbe in the Free State of Saxony , the State of Thuringia , the Free State of Anhalt (including the District of Zerbst ), the Free State of Braunschweig and, in the Free State of Prussia, the Province of Saxony , the Province of Hanover and the administrative district of Kassel . For reasons of liability, the cartel had to be founded in the form of a double company . The mine owners were on the one hand amalgamated in the Mitteldeutsche Braunkohlen-Syndikat GmbH and on the other hand they formed a corporation under public law with this GmbH .

In the central German lignite area, nine syndicate districts were formed:

The control and administration of the individual, geographically fixed mountain areas was carried out by the mining authorities . Some of these had existed in central Germany since the 16th century. Structurally, the mining offices and their districts remained essentially unchanged until 1946, with the Bornaer Revier (Bergamt Borna in Borna) replacing the Northwest Saxon district in 1930 , because lignite was only mined in this region in northwest Saxony. The largest mining companies in the central German lignite district included: the

  • A. Riebeck'schen Montanwerke AG , which, after taking over many large mining companies in the sub-districts of Zeitz-Weißenfels, Bitterfeld, Halle-Röblingen and in the Geiseltal, had considerable production capacities for briquette production, electricity generation and chemical refinement .
  • Werschen-Weißenfelser Braunkohlen AG , which mainly produced in the districts of Zeitz-Weißenfels, Geiseltal, Halle-Röblingen and whose majority of the shares were owned by Julius Petschek from 1916.
  • Anhaltische Kohlenwerke AG (AKW) with production facilities in the areas of Halle-Röblingen, Borna, Zeitz-Weißenfels, Meuselwitz-Altenburg, whose majority stake was also acquired by Julius Petschek from 1918 onwards.
  • Deutsche Erdöl-AG (DEA), which had considerable production capacities in the Geiseltal, Meuselwitz-Altenburg, Halle-Röblingen and Borna districts and was heavily involved in the chemical refining of lignite.
  • Niederlausitzer Kohlenwerke AG, the majority of which was owned by Ignaz Petschek and which had large production capacities mainly in the East Elbe lignite mining district , but also in the central German districts of Meuselwitz-Altenburg and Borna.
  • Elektrowerke AG (EWAG), which, as a Reich-owned company, operated large power plants with its own opencast mines, especially in the Bitterfeld mining area, from 1915.
  • Braunschweigische Kohlen-Bergwerke AG (BKW), which, after various merger and takeover processes, concentrated in the Helmstedt district and in the Oschersleben-Egeln-Nachterstedt area.

Other not insignificant companies that owned shares or their own mines in the central German lignite mining area were: Michelwerke , Allgemeine Elektrizitätsgesellschaft (AEG), Mansfeld AG , Braunkohlen- und Brikett-Industrie AG (Bubiag), Solvay AG , Didier-Werke AG and Salzdetfurth AG .

Syndicate contracts

Even after the forced syndication, the coal industry in Central Germany did not develop uniformly and its importance lagged behind the Rhenish one. The syndicate contracts of the central German lignite companies often only lasted two years, renegotiations about quotas often dragged on for weeks, and agreement was usually only reached through intervention by the Reich Ministry of Economics. Against this background, five compulsory societies were formally created, which are to be differentiated according to contract law:

  • Central German Brown Coal Syndicate 1919 GmbH in Leipzig
  • Central German Brown Coal Syndicate 1925 GmbH in Leipzig
  • Central German Brown Coal Syndicate 1927 GmbH in Leipzig
  • Central German Brown Coal Syndicate 1932 GmbH in Leipzig
  • Central German Brown Coal Syndicate 1937 GmbH in Leipzig

The previous syndicate continued to exist as a GmbH in liquidation, in some cases for a very long time . From this it emerged, for example, that in 1945 the "Mitteldeutsche Braunkohlen-Syndikat 1932 in Liquidation" and the "Mitteldeutsche Braunkohlen-Syndikat 1937 GmbH" still existed. With a few exceptions, the members of the syndicate always remained the same. The organs of the GmbH included a managing director (director), a 33-member supervisory board and the shareholders' meeting . These consisted of the managing director of the GmbH, the supervisory board of the GmbH, the assembly of the plant owners and the committees. The assembly of the factory owners was the most important organ because it could set up permanent and temporary committees with special rights. Hermann Garbe was the director of the Central German Brown Coal Syndicate from 1920 to 1928 .

The first syndicate contract in Central Germany did not come into being on October 1, 1919, as prescribed by the legislature, but rather on April 1, 1920 due to a quota dispute . The contract ended on March 31, 1925. Since the members could not agree on the continuation, the Reich Ministry of Economics threatened to enforce the formation of a syndicate by ordinance. A new contract was not concluded until May 5, 1925, but it already failed after two years. This was followed by the Central German Brown Coal Syndicate of 1927, which was also about to be dissolved two years later, but was forcibly extended to five years through government intervention in 1929.

However, this syndicate contract only lasted two years: Due to price and wage undercutting, the Reich Ministry of Economics dissolved the cartel on December 31, 1931, with effect from January 20, 1932. A new contract was only concluded at the end of February 1932, which lasted until February 1937. Although the contract, which was then newly created on March 31, 1937, required the Central German lignite companies to compulsorily regulate the cartelization, the Central German lignite syndicate had the least cohesion and clout as well as the least internal in comparison to the East Elbe, but above all Rhenish syndicate Stability on.

Market players

Before the Second World War, the Central German mining district supplied around two-fifths, the East Elbe and Rhenish each around a quarter of all German lignite. The largest consumer of central German lignite was the chemical industry, followed by power plants, potash plants and sugar factories. Before the war, sales of the required raw coal were 61% for industry and 39% for domestic fuel .

94 companies belonged to the first syndicate contract in central Germany from 1919/1920. The members had different voting rights, which were based on their holdings in the GmbH. The holdings corresponded to the amount of products (raw coal, briquettes, coke, etc.) specified for sale. As a result, the mining entrepreneurs with the largest production volume had a higher voting right, which was associated with a permanent quota dispute over production and sales volumes. The ten largest companies in the Central German syndicate districts during the Weimar period were:

Shareholder Raw coal / tonnes of
sales participation 		Raw coal / tonnes of
own consumption
(e.g. for own power plants) 		Briquettes / tons of
sales participation 		Briquettes / tons of
own consumption
Deutsche Erdöl AG (DEA) 827,000 201,000 2,145,000 3000
A. Riebeck'sche Montanwerke AG
(subsidiary of IG Farben from 1925 )		 2,739,000 6,266,000 2,202,000 48,000
General Electricity Society (AEG) 730,000 501,000 818,000 8000
Michelwerke 312,000 529,000 1,452,000 5000
Julius Petschek 1,406,000 290,000 2,133,000 6000
Ignaz Petschek 961,000 145,000 2,842,000 10,000
AG Sächsische Werke (ASW) 244,000 181,000 15,000 0
State mine ownership 2,009,000 3,015,000 1,005,000 15000
Salzdetfurth AG 672,000 455,000 0 0
Wintershall 543,000 125,000 102,000 0

The state mine owned belonged to the Reich, Prussia, Anhalt, Thuringia and Saxony and did not form a unit within the syndicate. EWAG , Braunschweigischen Kohlen-Bergwerke , Harbker Kohlenwerke ( Harbke ), Leipziger Kohlenwerke AG ( Kulkwitz ), Preußische Bergwerks- und Hütten AG (Preussag Tollwitz ) and Vereinigte Industrieunternehmen AG (VIAG ) were among the largest state-owned companies in the Central German mining region Golpa ).

In terms of output, A. Riebeck'sche Montanwerke AG and the Petschek brothers were able to exert the greatest influence on the Central German lignite syndicate. However, for the Riebeck'schen Montanwerke, whose production focus was coal refinement ( carbochemistry ), the quotas for raw coal and own use played a greater role than for the Petscheks, whose main concerns were high quotas for briquette production or briquette sales participation. In this segment, the Petschek achieved a production and sales monopoly.

After the establishment of the Weimar Republic, the two warring brothers expanded their position of supremacy by acquiring additional blocks of shares in lignite plants and, by 1932, gained considerable influence on the Central German lignite syndicate. When they took over, the Petscheks benefited from the fact that they had become Czechoslovak citizens in accordance with the Washington Declaration in 1918 . This newly formed republic achieved an upswing in the early years that was in stark contrast to the hyperinflation in Germany and Austria.

In addition to the inflation, there were nationalization plans of the various imperial governments, which is why many shareholders saw it as a risk, especially in the early years of the Weimar Republic, to keep their mining shares and sold their shares to the Petscheks at below market value . Towards the end of the 1920s, the brothers controlled 50 percent of European coal production and 30 percent of German lignite plants. East of the Elbe, their share fluctuated between 66 and 70 percent. Werschen-Weißenfelser Braunkohlen AG and Anhaltischen Kohlenwerke were considered to be dominant in central Germany. Julius Petschek held the majority of shares in both companies.

Due to their monopoly, the Petscheks succeeded until the 1930s in preventing the distribution of coal in Central Germany through the syndicate. Sales took place through the participating entrepreneurs' own sales outlets. Thus the Central German Brown Coal Syndicate was only a price and quota cartel without a sales function until 1937. In 1929 a study stated: "In Central Germany, the forced syndication of lignite is nothing more than a statistical department and administrative office, since the companies that dominate central German mining have not yet been able to achieve a closed sales structure". Nothing changed until 1937.

The Petscheks have repeatedly asked for the production quotas of the briquette plants they controlled to be doubled. To enforce them, they led numerous lawsuits against the syndicate, some through several instances, and repeatedly achieved the liquidation of the cartel. Politically, the Petschek brothers were close to the economically liberal German Democratic Party (DDP), which was represented as a coalition party in almost all Reich governments until 1932. The DDP was strongly committed to the formation of cartels, but rejected state control of the cartels. Several leading members of this party received high supervisory board or director posts in companies in which the Petscheks held the majority of the shares. These included, among others, the Saxon State Minister Emil Nitzschke , the politicians Heinz Pulvermann and Walter Albert Bauer and Eugen Schiffer , the first Reich Finance Minister of the Weimar Republic.

As a result, there was no free trade in all of Central German lignite mining during the Weimar period. It was not until November 1931 that the legislature took targeted action against the Petschek's sales and trade policy. The Reich Ministry of Economics decreed the dissolution of the syndicate on December 31, 1931 and implemented changed quota rules and various new control bodies. Although sales were left to the companies in the new syndicate agreement of 1932, the Petscheks' market power in the central German lignite mining area was broken after this reorganization.

The Petscheks completely lost their influence on the Central German lignite syndicate in the course of the Caro-Petschek trial, which lasted from June to December 1932 . Scandalous business practices such as unfair competition , tax evasion , extortion , breach of trust , spying on lawyers, bribery of members of the Reichstag and journalists were exposed. As a result of the revelations, the Saxon state parliament debated for days whether “the coal industry law was promoting the arbitrariness of the Petscheks” and issued sanctions against the brothers.

After Julius Petschek's death (1932), his heirs sold several shares in mining companies, particularly in the Meuselwitz-Altenburg lignite district, to DEA. Likewise, Ignaz Petschek had already sold complete blocks of shares in various lignite plants in Saxony to DEA in the 1920s. This made Deutsche Erdöl AG the largest mine owner in the Saxon and Thuringian mining areas.

In the other areas of the central German lignite mining area, after the Petschek's loss of power, Friedrich Flick, along with the Riebeck coal and steel works, gained increasing influence. Since 1926 he has owned the majority of shares in Mittelstahl . After the acquisition of Anhaltische Kohlenwerke and Werschen-Weißenfelser Braunkohlen AG , Friedrich Flick KG developed into a mega-corporation in the German lignite industry and thus gained the dominant position in the Central German lignite syndicate.

Development from 1933

The takeover of power by the National Socialists led to expanded state intervention, but did not fundamentally change the cartel system. In addition to the already existing compulsory syndication in the coal industry, the law on the establishment of compulsory cartels came into force on July 15, 1933 . This law created the possibility of forcibly amalgamating other industries in cartels, which in reality hardly ever happened. Important for the antitrust law was the adoption of the Reich Minister of Economy dated November 12, 1936 , the reform of corporate accounting initiated and already in 1920 by the National Federation of German Industry created Cartel Office harnessed into the antitrust enforcement.

The reorganization corresponded to the realization that there is an inseparable connection between costs, prices and the market. Taking this relationship into account led to significant advances in economic practice and state supervision, which are still relevant today. In practice, however, the syndicates in Germany lost their importance with the increasing armament from 1936 onwards. The better the order situation, employment and prices became, the less interest the entrepreneurs found in cartel agreements.

In addition, in the course of the four-year plan, a Reich commissioner for price formation took over the "safeguarding of economically justified prices in industrial production and in trade", who on November 26, 1936 ordered a nationwide price freeze. This meant the introduction of fixed prices , since with the stop any price change was prohibited by law. The freeze on prices initially met with a great lack of understanding among entrepreneurs and economic experts, but later proved to be a business and economic success. This made cartels obsolete, but formally remained in existence, although a large part had materially died.

Against this background, on January 28, 1937, a new syndicate contract came into force in the central German lignite mining area, now in the form of a pure sales cartel. This means that the syndicate no longer set any prices or funding quotas. The new articles of association fixed a term until March 31, 1945 and prescribed representation by two managing directors. Georg Wolff and August Zöllner took over these positions . The Völkischer Beobachter published the following on February 7, 1937:

“Contrary to reports to the contrary, the Reich Ministry of Economics states that the Central German Brown Coal Syndicate, in accordance with the instructions of the Reich Minister of Economics, has been renewed in the form of a pure sales syndicate. According to the contract, the syndicate is entitled and obliged to accept the fuels to be made available to it by the mines and to sell them in its own name for the account of the plant owners. "

The new syndicate now sold its products to consumers through its own sales outlets, to which the entire production was made available for independent distribution. The sales outlets were bound by the syndicate's price and delivery conditions, which had to be agreed with the Reich Commissioner for pricing. There were a total of 16 sales trading companies through which the products were sold. Border agreements have been concluded with other coal syndicates to regulate sales and the corresponding sales areas. The Central German Brown Coal Syndicate also had outside areas for the sale of the products. This included the coastal and foreign areas as well as precisely designated regions that were outside the lines of the border agreements. The syndicate had a special sales point for these outlying areas, the Brikettverkauf Sonne GmbH .

Were sales and production quotas become as superfluous, the enormous increase in clarified mining production and the disruption numerous new opencast mines . The German lignite production in 1934 amounted to around 138 million tons, in 1936 to 160 million and in 1938 to 208 million. In 1938, the Central German mining area accounted for around 45% of the total funding, the East Elbe with 25% and the Rhenish with 30%.

The self-sufficiency of the Nazi leadership, in which the central German lignite mining area played an essential role, forced this increase in production . In particular, the large-scale industrial complex in the Leuna-Buna-Bitterfeld chemical triangle, which was geared towards self-sufficiency from the start, was based on the use of domestic lignite. According to newspaper reports at the time, the increase in lignite production was mainly attributed to fuel production. In the sphere of the Central German brown coal syndicate to-reach most fuel stations, for example, were petroleum Lützkendorf Wintershall, three Hydrierwerke the BRABAG and especially the Leuna works of IG Farben, the brown coal in the mid-1930s, millions of tons of synthetic fuels transformed.

With the beginning of the Second World War, lignite production increased further and reached its peak in 1943 with 287 million tons. Despite the Allied air superiority achieved from February 1944 and the associated day and night bombing raids on Germany , lignite production fell by only 9% to 261 million tons in 1944. At this time, however, the Central German Brown Coal Syndicate no longer played a role, as the Reichsvereinigung Kohlen, founded in spring 1941, immediately took over control of distribution and transport as well as the coordination and implementation of all state measures in the coal and steel industry.

resolution

From 1939 onwards, the mobilization and conversion of the German economy to total war production led to a reorganization of the economic management apparatus . On December 15, 1939, a "Reich Commissioner for Increasing Performance in Mining" (called "Reich Commissioner for Coal" from 1940) was appointed, whose authority was responsible for determining the coal requirement, monitoring the funding plan and distributing the fuels. In the spring of 1941, all mines, coal syndicates and the coal trade were subordinated to the Reich Commissioner, and the Reich Coal Association was formed on April 21, 1941, with the previous organization being abolished.

Accordingly, the decision to wind up the Central German Brown Coal Syndicate was made immediately . In accordance with the usual deadlines, one year later, on July 10, 1942, the liability of the management and the liabilities of the GmbH were officially canceled. With the remaining funds of the syndicate, Mitteldeutsche Braunkohle GmbH was founded on the same day , which, as the de facto successor company, took over the distribution of raw coal and briquettes in the Central German mining area. Georg Wolff , Johannes Wohlfarth and Alfred Thomas acted as managing directors .

Formally, there was only a change in the legal form . The interest group, which had only existed as a sales organization since 1937, lost its corporate status, but as a now purely privately-run GmbH, it had to continue to handle the sales logistics of the central German mines according to the specifications of the Reich coal association. However, this did not mean that the cartel was completely dissolved. Since the Central German lignite syndicates were in liquidation from 1932 and 1937 , supervisory board elections and shareholder and factory owner meetings were held for the financial years 1941/42 and 1942/1943 until the end of 1944.

On January 29, 1943, the Reich Minister of Economics ordered the lifting of all quota cartels. This was followed on May 20, 1943 by a decree on the cleanup of cartels , with which the already dead and unpopular syndicates were officially buried in large-scale propaganda campaigns. According to the cartel register introduced in 1936, there were around 2,500 cartels. By March 1944, around 90% of all German cartels had been dissolved.

The unconditional surrender of the Wehrmacht was accompanied by the complete elimination of the German cartels. The Potsdam resolutions stipulated that “the German economy should be decentralized as quickly as possible”, with the aim of “destroying the existing excessive concentration of economic power, represented in particular by cartels, syndicates, trusts and other monopoly associations”. The final dissolution of the Central German Brown Coal Syndicate took place with the SMAD order No. 154 of May 20, 1946. It ordered the liquidation of all coal syndicates and the establishment of sales offices for solid fuels in their place.

Administration building

Rear of the administration building built in 1921/22 in the neo-renaissance style, which is now a listed building

The building at Nordplatz 11 was built between 1921 and 1922 by the Leipzig architecture firm Handel & Franke in the neo-renaissance style. The construction financing and the maintenance of the cartel seat took place through membership fees of all participating companies of the syndicate.

After the Second World War, the Soviet headquarters used the building as a school and department store until 1993. During this time, some changes were made to the house itself and to individual components. For example, the school management converted the historic hall into a sports hall. After the withdrawal of the Soviet troops, the building stood empty for around a decade and a half and was heavily infested with dry rot up to the third floor .

The renovation began in 2007, for which the Free State of Saxony invested around 7.4 million euros. During the two-year construction period, special emphasis was placed on a restoration true to the original. The striking corner building, including the interior, is now a listed building . The entrance area is accentuated by a portico made of Rochlitz porphyry . The rustication , the window frames and other decorative elements of the building are made of the same material . The L-shaped building is accessed via a central foyer on the mezzanine floor, in which there is a representative staircase and an elevator originally from the 1920s.

The reconstructed, generously proportioned former apartment of the director of the Central German Brown Coal Syndicate and the library furnishings are on the second floor. The paneling and wall painting as well as many historical details of the large hall on the third floor could also be reworked and repaired in various rooms. The Leipzig II tax office is now located in the state-owned property.

Web links

literature

  • Hans Baumann: Central Germany's lignite as an energy source. Central German Brown Coal Syndicate, Leipzig, 1925.
  • Gottfried Lehmann: The Central German Brown Coal Syndicate in Leipzig. Dissertation. University of Greifswald, 1930.
  • Walter Herrmann: The capital in central German lignite mining. Dissertation. Philosophical Faculty of the University of Leipzig, 1930. Georg Weigel publishing house, 1933.

Individual evidence

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