Emil Lederer: The Enterprise as a Unit (1921)

This recorded intervention in official commission proceedings concerns the principle for determining compensation when an enterprise is taken over. Lederer challenges Mayor Wermuth’s proposals as incompatible with § 12, which requires treating the enterprise as a unit. His brief argument moves from this conflict to the underlying question: what does recognizing an enterprise’s unity actually mean for valuation?

Lederer argues that Wermuth’s approach dissolves the enterprise into separately acquired objects:

In den Ausführungen des Herrn Oberbürgermeisters Wermuth existiert nämlich das Unternehmen als Einheit überhaupt nicht, sondern das Unternehmen stellt sich für die Stadtgemeinde dar als ein Haufen von Gegenständen, die einmal gekauft wurden und die nun zum Anschaffungswert, wenn ich richtig verstanden habe, abgelöst werden sollen.

English translation: In Mayor Wermuth’s remarks, the enterprise as a unit does not exist at all; rather, for the municipality the enterprise appears as a heap of objects that were once purchased and are now, if I understood correctly, to be taken over at their acquisition cost.

The contrast between an enterprise and a “heap of objects” gives the objection its conceptual force. Treating a business as a unit must mean something beyond adding up historical acquisition costs. Lederer nevertheless qualifies his account as dependent on whether he has understood Wermuth correctly.

The concluding sentence identifies an asymmetry in the proposed valuation:

Nur dann, wenn der Ertragswert geringer ist als die Summe, die der Anschaffungswert beträgt, würde der Ertragswert berücksichtigt werden.

English translation: Only if the earnings value were lower than the total acquisition cost would the earnings value be taken into account.

Earnings value would thus matter only when it lowered compensation. Lederer offers no complete alternative formula here. The intervention’s significance lies in demanding consistency between the declared principle of enterprise unity and the method used to value it: naming the enterprise as a whole is insufficient if compensation still treats it as an inventory of purchases.