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

844. Reference teletype conference of October 24 concerning proposed law on decentralization of German economic power, and urtel 708, October 22, 9 a.m.46 Legal Directorate meeting in which proposed suggestions will be discussed has been postponed until Saturday.

It is essential that I be immediately informed on whether it is the Dept’s determined policy that article I of the proposed law—as quoted in our telegram 735, October 10, 1 p.m.47—should be changed in terms of the suggestions from Washington in the Teletype Conference to the effect that “any one of the following factors should constitute an excessive concentration of economic power” (and thus are forbidden and must be eliminated).

The engaging, directly or indirectly, by any business unit in enterprises or activities of a dissimilar character or covering distinct stages of production.
The owning or controlling by any enterprise or activity of more than.…48 percent of the total productive capacity in any single line of commerce.
The employment by any enterprise or activity of . . . . . or more employees in any single line of commerce.
The production by any enterprise or activity of a commodity exceeding an annual turnover of . . . . . RM (Reichsmarks).

General Clay has already suggested that A above should be considered not as mandatory, but instead only as a factor to be considered. The Dept will realize, of course, that if the American representatives are forced to insist upon B, C and D above as mandatory provisions, it may well jeopardize early agreement for any decentralization law because of British opposition.

If B, C and D above are to be mandatory, it is essential that the Dept give at least its advice as to the figures to fill in the blank spaces.

  1. Record of teletype conference not printed; telegram 708 registered the Department’s opposition to a portion of the draft law contained in telegram 735, October 10, 1 p.m. (not printed), which would have permitted participation by German individuals in international cartels (800.602/10–1045). As indicated in telegram 802, October 18, 3 p.m., from Berlin, p. 1563, this draft law had been returned to the Directorates for further study and emendation.
  2. Not printed.
  3. Omissions in this telegram indicated in the original.