On the Block

Since war's end, many an impatient squawk has been sounded against the U.S. Military Government for failing to do "something" about Germany's cartels --though hardly anybody knew what the something should be. Last winter, a civilian committee headed by Federal Trade Commissioner Garland Ferguson trotted off to see if the squawking was justified. The group reported that it was.

Decartelization--dissolution of agreements to control prices, markets, etc.--was not going along satisfactorily. Furthermore, deconcentration--the actual sale of assets held or controlled by the cartels--had got nowhere, partly because of Allied political differences. The committee recommended deconcentration of the plants of the I.G. Farben empire, a mainstay of the Nazi war machine. General Lucius Clay, then Military Governor of Germany, retorted that any further break-up of German enterprises "would be a political and not a security measure." His staff, which got much of the blame from the committee, was even sharper. Sneered his economic adviser Lawrence Wilkinson: the Ferguson report was "low comedy."

First Sale. Last week in Frankfurt the low comedy was taken seriously. On the block went the first Farben unit, the Kalle plant at Wiesbaden, reportedly valued at $6,000,000. It employs 2,200 and produces Cellophane, photographic papers and chemicals. The Military Government wanted to offer some 80% of the stock for sale to Germans, while 20% would be set aside for the foreigners who already owned an interest in Farben. The Military Government also announced that part of another great industrial empire, the Robert Bosch electrical equipment combine, was to be sold. It looked as if "something" was finally being done to deconcentrate the cartels.

Goal? What was the ultimate goal of Allied decartelization policy? That was still up in the air. Britain wanted to nationalize the deconcentrated plants, while the U.S. wanted them to form a new basis for free competitive enterprise to strengthen the German economy. France was more interested in keeping Germany weak.

The deadlock had thus far prevented sale of a single asset, though 1,100 cartel agreements had been ordered dissolved. Now that some plants were ready for sale, there was another obstacle--a shortage of German capital to buy them. Much of the available capital in Germany was controlled by the cartelists. But the Military Government hoped that enough safeguards could be set up to keep the plants from being secretly bought by the old cartelists or being drawn into new cartels.

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