immediate concern of the Occupation forces to convert the former Farben properties from war to peaceful industry, to eliminate its monopolistic practises, its interlocking directorates and international ties, to prevent its control of markets and prices for its own good, and to purge both its management and working staffs of former Nazis who had used the Farben empire to promote their political aims and carry on espionage activities abroad.

How is this mission being accomplished, and of what signifiance are Farben and all similar monopolistic aggregations to the American people?

Recent history has amply shown the need for eliminating German cartels and monopolies. Following World War I, the German economy became more and more concentrated in the hands of a few individuals and financial institutions. This concentration had gone far beyond mere ownership or possession of the means of production. It had become tantamount to economic empire and private business government. I. G. Farben was the largest of these concentrations. While non-existent today, the potential extent of this power and control remains enormous and in the future might well constitute a menace both to the peace of the world and to the reconstruction of Germany on a democratic basis. In fact, the practises of limiting production and controlling markets by German industrialists and business men, became so restrictive that at the height of the war, February 4, 1943, the German Government found it necessary to pass a special law prohibiting such practises. It is extremely interesting to note that a special exception was written into this law to allow these same restrictive practises where foreign markets were concerned.

Decartelization Branch

The Decartelization Branch is charged with three primary duties: (1) the deconcentration of German industry,

(2) the decartelization of German industry, and, as a first specific step, (3) the elimination of I. G. Farben as a corporate entity.

This program is based upon paragraph 12 of the Economic Principles and paragraph 3, section (iv), of the Political Principles of the Potsdam Declaration, which have since been reaffirmed in unilateral statements by leaders of the four occupying powers.

Paragraph 12 of the Economic Principles reads as follows: "At the earliest practicable date, the German economy shall be decentralized for the purpose of eliminating the present excessive concentration of economic power as exemplified in particular by cartels, syndicates, trusts and other monopolistic arrangements." Paragraph 3, section (iv) of the Political Principles states: "The purposes of the occupation of Germany by which the Control Council shall be guided are: To prepare for the eventual reconstruction of German political life

on a democratic basis and for eventual peaceful cooperation in international life by Germany."

Education for Economic Democracy

The Decartelization Branch, acting with and through other Military Government agencies, is therefore making every effort to decentralize and decartelize all excessive concentrations of economic power in Germany. In carrying out this program it will strive to convince the German people that economic democracy is a necessary basis for political democracy.

In some respects the reorganization of the German economy along democratic lines is more important than mere mechanical decentralization. The German people must be taught that a democratic economy is the most favorable medium for the full development of an individual, and that in such a medium the material success of an individual will depend primarily on his own ability to satisfy the economic requirements of others. It is in such a system that an individual will exercise an alert and effective control over his government and will compel its officials to act for the general welfare rather than in the interest of some special class. Just as we must convince the Germans on the political side of the unsoundness of making an irrevocable grant of power to a dictator or an official authoritarian group, we must also convince them on the economic side of the unsoundness of allowing a private enterprise to acquire dictatorial power over any part of the economy.

The Branch will draw heavily on the experience acquired in the development of economic democracy in the United States and will endeavor to Convince the German people that the development of free markets, the prevention of discrimination among businessmen and industrialists, the elimination of economic toll bridges, and the protection of the consumer, are the cornerstones to the reconstitution of a new and democratic German economy.

Present Activities

To counteract the menace of excessive concentration and to implement the Potsdam Declaration, a quadripartite working party has been formed to draft a law prohibiting excessive concentration of German economic power and eliminating German participation in domestic and international cartels. An I. G. Farben Control Committee has also been established and is operating on a quadripartite level.

When the proposed law is enacted, the Branch will be charged with the responsibility for its application and enforcement. It is planned that Branch offices will be established one in each of the Laender capitals. These offices will collect information, confer with local industrialists, receive break

up plans formulated by the Germans, and aid in the enforcement program.

In the interim before the enactment of the law, investigations of major industries and predominant firms are under way so that the application of the law in the U. S. Zone will be prompt and effective. Specific investigations are undertaken from time to time at the request of the Department of State and Justice, the German External Property Commission, and other agencies.

The efforts of the U. S. Control Office have had a high degree of success, although circumscribed by the fact that only 10 percent of I. G. Farben's assets are located in the American Zone. The four I. G. Farben Control Officers, however, meet regularly to report on progress in their respective Zones and to coordinate future planning. Much progress has been made on the quadripartite level. French, British and Soviet representatives work regularly in Griesheim, where high-level quadripartite cooperation has been and is maintained.

The first major objectives have been achieved. The Control Office has seized and exercised control over 42 major manufacturing plants, 56 sales offices, and 26 miscellaneous installations, all of which had been owned, controlled or operated by I. G. Farben in the U.S. Zone. These represented potentially a powerful industrial force at the close of hostilities. In these plants a complete program of denazification has been carried out, during which approximately 1100 officers and employees, including key personnel in management and research, have been dismissed.

Of the 42 major plants owned by I. G. Farben and its susidiaries in the U. S. Zone, seven plants, employing at normal capacity approximately 6550 persons, have been offered as available for reparations, subject to quadripartite action. All special purpose equipment specifically designed for producing munitions and other war-making products will be destroyed prior to delivery. This represents a 25 percent reduction in the number of plants in the U. S. Zone in this category. Fourteen of the remaining plants were "Montan plants" Reich owned but I. G. Farben operated. Of these, two have been destroyed, and the general purpose equipment in the remaining twelve has been offered for reparations, again subject to quadripartite action. After removal of general purpose equipment for reparations, all war-producing installations, including powder magazines and other munition producing and storage facilities, will be destroyed, (using I. G. Farben explosives). All of the Montan properties will thus be disposed of. These plants employed over 27,000 persons, and the cost of their buildings and equipment was approximately RM 900,000,000.

Of the 42 major manufacturing plants in the U. S. Zone, 21 plants, thus have either been destroyed or offered for reparations. This represents approximately 52 percent of the former manufacturing capacity of I. G. Farben in the U. S. Zone. These 21 plants were a part of the German war production machine or were in excess of the German peace time requirements. The re