740.00119 Control (Germany)/12–2045

The Acting Secretary of State to the Ambassador in the United Kingdom ( Winant )

10966. Quadripartite discussions proceeding for several months in Allied Control Council re law for deconcentration of control of German economy in accordance with Potsdam decisions, para. 12. US, French, and Russians have agreed on following mandatory standards to define excessive concentrations of economic power: Employment of more than 3,000 persons, annual turnover exceeding 25,000,000 RM, and control of more than 20 per cent of total productive capacity by a given firm in the industry to which it belongs.

Other discretionary standards for guidance of Economic Directorate in making determinations in particular cases as to excessive concentration also included. Proposed law contains escape clause providing exemption from application of measures at discretion of Economic Directorate.

British members ACC have refused to accept any mandatory standards. You are requested to discuss this refusal with appropriate members British Govt to determine Govt’s reasons for this position and to suggest modification. It should be made clear that Dept does not insist upon any of the three standards mentioned above. Others could be suggested, such as “no enterprise in Germany shall own or control more than one establishment unless it can be demonstrated that considerations of technical efficiency are substantially involved”.

[Page 1574]

It should be explained to British that purpose of Depts position in supporting mandatory standards is to establish clear presumption in outstanding cases of large combines that deconcentration will be carried out. Dept believes this to be minimum undertaking in view of US Govts repeated and firm declarations on subject and in view of public disclosure of pre-war and war activities of many German enterprises.

Since discussions in ACC on this subject have been broken off, Dept requests your urgent attention.

Acheson