Krupp on the March

"We have a moral obligation, and I will not look for escapes." Thus spoke West Germany's Alfried Krupp (TIME Cover, Aug. 19, 1957) of his pledge to the Allies to sell the coal and steel companies in his industrial empire. Last week, instead of selling, Alfried Krupp got permission from the High Authority of the European Coal and Steel Community to buy another steelmaker. The firm: Bochumer Verein, Germany's biggest producer of special steel. The purchase would give Krupp the biggest steelmaking capacity (4,000,000 tons) in Europe.

The Allied ruling on Krupp, later written into German law, was designed to break up the huge combine that supplied Hitler with much of his arms. Krupp won extensions from the original March 1958 deadline by pleading he could not find a buyer for the Rheinhausen works, center of his coal and steel holdings. Permission for Rheinhausen to buy the new company made it almost certain that Krupp will not have to keep his promise to dispose of his coal and steel holdings this year. Said a Krupp spokesman: "The promise was given under compulsion."

The Allies themselves are divided on Krupp. Both the U.S. and France have let the West German government know that they are not opposed to letting Krupp keep his property. Only the British have insisted on holding Krupp to his promise. Since there is little they can--or want to --do about it, the Allies may now decide to release Krupp formally from his pledge. Krupp is already believed to own 75% of Bochumer Verein's stock, obtained through the good offices of his friend, Swedish Industrialist Axel Wenner-Gren.

The Big Eight. The trend toward reconcentration of West German industry affects more than Krupp. Eight big firms--Krupp (with Bochumer Verein), Dortmund-Horder Hlittenunion, Phoenix-Rheinrohr, Mannesmann, Hoesch Werke, Klockner-Werke, August Thyssen-Huette, Huettenwerk Oberhausen--control 75% of West Germany's steel production, almost 40% of German coal.

To make the ring even tighter, August Thyssen-Huette, one of the keystones of a huge Third Reich steel combine of 177 companies, has applied to the High Authority to merge with Phoenix-Rheinrohr, West Germany's third biggest steel producer. The move would create a giant even bigger than Krupp-Bochumer Verein, with a 6,000,000-ton capacity and nearly $1 billion in sales. Mannesmann, the No. 4 steel producer, recently eliminated several of its subsidiaries, absorbed them into the main firm. The trend to growth extends beyond iron and coal. Friedrich Flick, a prewar steel baron who was forced to sell off many of his holdings after he was sent to prison as a war criminal, has built a new empire in autos. He got control of Daimler-Benz, joined it with the big Auto Union manufacturer to form Germany's biggest auto moneymaker.

The Big Three. To finance industrial reconcentration, many West German banks have gone down the reconcentration path themselves. Last September the last of the Big Three commercial banks, the Commerzbank, linked its semi-independent units into one big house; Deutsche and Dresdner banks, the other members of the Big Three, did the same two years ago.

Some Germans are worried about the trend. Said Chancellor Konrad Adenauer: "There is great future danger that a handful of economic structures will control the German economy to such a degree that government will be forced to take drastic steps against them." But the opposition to bigness is largely weak and scattered. German firms argue that they are forced to merge by anticartel laws which prevent them from making price and production agreements, point at such foreign combines as the Luxembourg's ARBED steel combine as proof that they are not alone in the need to merge. Asked a Krupp official last week: "Is it bad for Germans to be big, and not bad for others?"

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