Foreign Relations of the United States: Diplomatic Papers, 1945, European Advisory Commission, Austria, Germany, Volume III

800.602/4–1845

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

No. 5341

Washington , April 18, 1945.

The Secretary of State transmits, for the information and guidance of the Ambassador, a document regarding the policy of this Government toward German participation in international cartels. The recommendations set forth in the document have been approved by the Executive Committee on Economic Foreign Policy, with the concurrence of representatives of the War and Navy Departments, and are intended to serve as a basis for discussions with the allied governments represented on the European Advisory Committee.

[Enclosure]

Memorandum by the Committee on Private Monopolies and Cartels of the Executive Committee on Economic Foreign Policy ²¹

ECEFP D–61/45

[ Washington ,] April 6, 1945.

U.S. Policy Toward German Participation in International Cartels and Combines

summary

I. Problem

The purpose of this paper is to formulate a basic United States position, for discussions with Allied governments, on the policies and the measures to be adopted by the central Allied control authority operating in Germany with respect to German participation in international cartels and combines. The recommendations made below pertain primarily to the period during which the Allied control authority operates in Germany, although it is recognized that some of the measures may be initiated by the various governments before the control authority is established or may be continued by other agencies after that authority is abolished. The recommendations are also concerned fundamentally with cartel and combine participation rather than general trade relations, and with action by the central authority rather than by the United Nations. However, since the measures to be taken are closely related to German foreign trade in general and can be made more effective if accompanied by certain cooperative actions by the several United Nations, several supplementary recommendations have been included.

II. Assumptions

It is assumed:

A. That a central Allied control authority will be established in Germany, with full powers to control or otherwise dispose of German interests or participation in international contracts, combines or trade.

B. That this central Allied control authority will take measures to identify and control all German foreign holdings in neutral and ex-enemy countries.

C. That any long-run policies developed will be directed toward preventing the reestablishment of German participation in international cartels or combines, and will, therefore, be consistent with the recommendations of this paper.

III. Recommendations

A. Cartel and Combine Recommendations. The central Allied control authority should:

1. Terminate promptly all German participation in international cartels or other restrictive contracts or arrangements and forbid the negotiation of new agreements. To effect such termination, such techniques as may be available and useful may be employed, including, without limitation, stoppage of performance, repudiation, enactment of legislation prohibiting performance and making performance illegal, and so forth.

2. Require registration of all international cartel agreements in effect in Germany at any time and for any period after January 1, 1933.

3. Require registration by all German firms of their foreign subsidiaries, affiliates, substantial foreign assets, and contracts evidencing substantial community of interest with foreign persons, and of foreign companies with which they are joined by interlocking officers or directors. The registration should call for current information as well as such historical information as the central control authority may desire.

4. Organize immediately in Germany a systematic collection, search and analysis of information relating to German participation in international cartels and combines.

5. Make available data collected under subparagraphs 2 and 3 hereinabove and other pertinent information on industrial organization to United Nations governments.

B. Supplementary Recommendations. In recognition of the close interrelation of restrictive and “normal” German foreign business relationships or holdings, and the consequent necessity of taking supplementary steps with respect to all German international trade relationships or foreign holdings in order to effectuate a policy of terminating German participation in international cartels, combines or other restrictive arrangements, it is also recommended:

1. That the central Allied control authority:

(a) Plan to control closely all important German foreign trade relationships, even though not immediately identifiable as restrictive, with a view to preventing the reestablishment of restrictive arrangements;

(b) Conduct or control all business communications between Germany and foreign countries;

2. That the United Nations, through appropriate machinery, follow a policy, in controlling or disposing of German property in neutral or ex-enemy countries, directed to the avoidance of private monopolies and combines.

3. That the United Nations seek agreement on a policy of controlling or disposing of German property within their borders directed to the avoidance of private monopolies and combines.

IV. Comments

A. The recommendations made above apply to restrictive contracts and arrangements including those which concern patents and licenses under patents. Special problems relating to the disposition of German-owned patents under licenses to patents abroad or patents granted by the German government or licenses thereunder should be discussed in a separate memorandum.

B. When licenses under a foreign-owned German patent or contractual rights to use foreign-owned property in Germany are terminated pursuant to the recommendations in Section III it is anticipated that through compulsory licensing, requisitioning, or otherwise the central Allied control authority will be able to make such licenses or property available for use. Other problems peculiar to foreign-owned property situated within Germany have not been considered in the above recommendations. It is believed that certain of these problems may also require separate treatment.

C. On the basis of studies now in progress recommendations will be made with respect to the acquisition and dissemination of German technical and industrial information, whether or not protected by patents. These recommendations will be designed to further the widest and most equitable distribution and use of such information. Hence, no recommendation on the subject has been made above.

D. The problem of German domestic cartels has not been dealt with in this memorandum, since it is believed that treatment of this topic is best postponed pending approval of the present document.

21. Filed separately in the Mosely Files.