GROWTH OF CARTELS

Sun (Auckland), Volume II, Issue 407, 16 July 1928, Page 12

GROWTH OF CARTELS

MANY COMMODITIES UNDER CONTROL INTERNATIONAL DEVELOPMENT International cartels are destined to play an increasingly important role in Europe’s economic and political life, according to the division of regional information, in a comprehensive study of the movement made public by the United States Department of Commerce. A summary of it follows: The first great international cartel was that of rails in ISS4 in which, besides Great Britain, Germany, Belgium, France and other European countries, there were included certain American producers who obtained the reservation of the domestic and Latin American markets in exchange for an undertaking to stay out of all othei markets. The pre-war and post-war developments have involved a great many commodities, with a tendency since the war to expand carefully organised “national” cartels that would b© called "trusts” in the United States. Previous to 1924 international cartels were functioning in such important industries as iron and steel, chemicals, glass and aluminium. These cartels were essentially economic, resorted to primarily for the purpose of dealing with the difficulties of the particular industries involved. The international cartel in its post-war phase is looked upon by its chief exponents as a menace for readjusting the whole European economic structure, putting an end to competition and even replacing tariffs by cartel agreements. Potash and Steel Cartels Differ Outstanding among the numerous international cartels renewed or organised since the war are the FrancoGerman potash agreement and the Continental steel entente. The difference between these two cartels is marked, the former dealing with a commodity practically monopolised by two countries while the latter covers one of the most competitive products in the world. With potash, Government intervention is of long tradition, and continues in the cartel, while in that of steel, private interests have exclusive control. Both of these organisations have been considerable factors in the readjustment of the political as well as the economic relations between France and Germany. At the present time negotiations are going forward between Germany. France, Great Britain and a few of the less important European countries for an international understanding affecting such important chemical products as dye stuffs and synthetic nitrates. The international rayon cartel organised last year includes the three largest producers in Great Britain, Germany and Italy, whose subsidiaries extend throughout the* world. Germans Lead In Movement “The rayon industry,” the report says, “represents the striking anomaly of an American industry producing a staple manufactured product of which the United States produces and consumes more than any other country in the world, but which is either directly controlled by or closely affiliated with foreign interests, in this particular case Courtaulds (Great Britain) and Vereinigte GlanzstoffBemberg (Germany), the leading members of the international combination.” The linoleum and copper cartels are recent, the latter being of particular note because it originated and is controlled in the United States. One of the most significant features of the whole movement for international economic agreement is the prominent part played by Germany in starting and carrying on such negotiations. While m the international phase of the concentration movement the cartel is still the most common form there is evidence that even there the influence of the big domestic combinations is becoming very strong and that the further development of the international cartel is most likely to involve industries with a high degree of concentration in the domestic field.