Surprise Formula

In corporate-merger warfare, the political counterattack has lately become a favorite weapon. Established companies have been delighted by the many federal investigations of upstart conglomerates and by the Justice Department's legally adventuresome crusade against them. Last week Justice's chief trustbuster, Richard McLaren, struck an unexpected if comparatively mild blow against the business Establishment.

Without comment, he released a hitherto-secret report by a Johnson Administration antitrust task force headed by Phil C. Neal, dean of the University of Chicago law school. The group recommended new laws that would empower the Government to break up companies in industries "where monopoly power is shared by a few very large firms." It proposed a "Concentrated Industries Act" that would apply when four or fewer firms controlled 70% of an industry with $500 million a year in sales. Each firm would be forced to reduce its share of the market to no more than 12%. The scheme would break up the Big Three automakers, as well as leaders in aluminum, computers and other fields.

The task force also proposed a "Merger Act" that would bar some large conglomerate takeovers, but not others. Under its complex formula, the Justice Department might have been unable to file some of its recent anti-conglomerate lawsuits, either because the companies were too small or the industry too fragmented.

Many businessmen believe that the Neal proposals to break up bigness would only reduce U.S. industrial efficiency and competitiveness in world markets. The chances seem remote that any of the recommendations will be written into law. Congress always has trouble agreeing on antitrust-law amendments, and the controversial ideas in the Neal report are political orphans.

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