800.602/10–2645

The Secretary of State to the United States Political Adviser for Germany ( Murphy )

764. Urtel 844 Oct 26. Following is Dept’s reconsidered position which you are requested to negotiate.

Standards to be suggested for Article I your draft shall apply only to organizations which have assets in excess of 10,000,000 RM, based on 1938 RM valuation.

Dept believes it essential that definite standards be set up to determine what constitutes an “excessive concentration of economic power”, since it would be just as difficult to negotiate such standards in subsequent administrative rulings and decrees as in present draft law.

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Dept believes it is essential that substance of A. and B. of Dept’s version of Article I be considered as the factors constituting an “excessive concentration of economic power”.

Dept suggests that A. should read as follows:

“A. Engaging directly or indirectly by any business unit in enterprises or activities of a dissimilar character or in distinctly different lines of commerce.”

It should be noted that this statement omits reference to “distinct stages of production” as mentioned in A. of urtel 844.

Dept suggests that B. should read as follows:

“B. The owning or controlling by any enterprise of more than 25% of the total productive capacity in any single line of commerce.” Dept suggests 25% as provisional, and expects that OMGUS, which has more facilities for on the spot investigations exercise its own discretion in this matter.

Dept now believes that C. and D. of Dept’s version of Article I should not be included in present draft law unless opposite govts insist.

Dept believes that spirit of Article V50 in your draft will require change in view of suggested mandatory provisions in our Article I.

Byrnes
  1. As transmitted in telegram 735, October 10, 1 p.m., from Berlin, article V of the draft had indicated that size alone was not necessarily proof of excessive concentration (800.602/10–1045).