Evening star., 1928-06-12

America leads the world In mass
production" but against that fact.
Europe leads America in Its "cartels. s.
And by cartels her producers hope to
control markets, limit competition and
regulate profits. Therein lies a danger
point for American trade. including
agriculture, which counts, mayhap
futilely, on outcompeting Europe and
dumping surpluscs outside OF our home
markets in order to limit supplies at
home and so dictate prices 10 the
American ultimate consumers. some
what higher than world prices.
The Department Of Commerce has
just released a review Of THE Inter-
national Cartel Increment" which
throws strong light upon European
trade conditions, not at all familiar TO
the average American producers. 1t is
said that we have no cartels in the
United States. because of our restrain
Ing laws, but In Europe. especially In
Germany, the laws have given protection
to cartels and so encouraged n1onopolies
and restriction OF production and the
fixing of prices. The review. written
by Mr. Louis Domeratzky. chief OF the
Division Of Regional Information, con-
tains historical sketch Of the cartels
of Europe,
What Is a cartel? Reference To a die
tionary fails TO enlighten as 70 a COM
mercial cartel, but II defines the word
as meaning "a military challenge" I"
Perhaps 1t also means a commercial
challenge. The author, Mr.. Domerat-
ky, says:
we may accept for our purposes the
definition given by Grunzel, as volun-
tary association of independent enter
priscs with common interests and aims,
for the Joint regulation Of production
and distribution. y Attention should
be called 10 the fact that n cartel pre-
supposes complete independence OF
members, except as regards the partlcu~
lar objects involved In the cartel agree
nent. A combination involving any
control OF one member by another cam
not be classified as cartel, but belongs
10 the more intimate forms OF combi-
nations. such as mergers, trusts, com
bineS, etc. This distinction must be
kept In mind. because many eartels In
clude in their membership not only In
diyidual enterprises, but also combined
groups, such aE KonZerne, 'fusionen,
etc, which are exercising q strong in-
fiuence on the policies and tendencies Of
cartels. Another feature Of cartel u
that II ig n1onopolistic In It's essence
i.e., IL tries 10 embrace the entire indus
try or trade~~go as 10 present united
front TO the consumer OF the finished
product, or the seller OF the raw mate
rial or seini-manufactured product. ae-
oofding To the object OF the organi-
zation,"
Cartelg are classified into three
divisions: Territorial, which seek to
m0n0pollze the markets Of a certain re-
stticted fleld; price cartelh, which put
a minimum price on the article, and
bind all members not 10 undetaell, with
q fipe or penalty for any cut prices
and production caFtels, which limit the
output OF factories or mines, 80 AZ To
limit the market supply.
There IL one form OF cartel which
may enter into any one OF the three
general elaAsificati0ns mentioned above
II Is particularly significant In interna'
tional commerce, the patent cartel
based upon All agreement for the p00l~
Ing of all patents, with certain c0ndl~
ti0ns attached 10 the granting Of
licenses 10 sell In certain territory by
The officials controlling the cartel the
license conditioned upon restricted ter
fit0fy and control Df prices. For exs
ample, note the International electric
bulb cartel.
This cartel was organized In 1908
and included all producers OF bulbs In
Austria Hungary Germany, France,
Switzerland and the Netherlands, and
Its joint selling offiee was In Berlin. II
represented 30 per cent Of Eufope's
production. and at that Tins the United
Etateg was importing her bulbs, The
participating producers bound them
selves t0 abstain from any sale OF their
products except through the central Of
iice, and also undertook 10 abstain from
any participation In any new or Gutklda
plant for the manufacture Of lamps oI
parts, The central office tDDk the entire
product Gf eaeh producer, within the
allotted quota, and absolutely controlled