Evening star., 1928-03-04
EUROPEAN CARTELS SEEN
FRAMEWORK FOR PEACE
Movement in Industry Abroad Is Used
as instrument by Sponsors of
World Amity.

able in some measure to steady cayeen.
ing markets by mutual aid. The re-
t1ections of their success upon dividends
and bank accounts allayed much OF the
! public fear of the giant combination
Capitalization became movement def
| nitely taking its place In the economic
and political life. publicly proclaimed
welcomed by governments.
The organization of the steel cartel
among the producers of France. Ger
many. England. Belgium and LuXem-
| burg; the operation of the European
| Rail Makers Association: the COM
| pletion within past months of cartel
| agreement between the French anu
| German producers of dyestuffs. with
England probably to Join later, and
| further agreements now in the making
! regarding artificial silks and nitrates.
caught the popular imagination and
| awakened Europe to consciousness Ct
| the scope and Importance of the cartel
! movement
| Movement Watched.
Governments, including the United
] States Department of Commerce, fol-
! lowed the movement with interest from
its inception. 1t was evident industry
in the United States could not remain
continually aloof Months ago legisla-
| ton was reported to be brewing to ia
cilitate the participation OF American
! industries in cartels affecting thel:
| markets For three years American
, commercial agents abroad have kept
Washington informed of the maio:
cartels in process Of formation.
There is a story of a young American
whose employer detailed him to con-
| firm the organization OF the great steel
cartel year and half ago. He follnd
the Offices in Paris where the leading
| French. German, Belgian ana british
! steel producers were in conference. saw
| the champagne glasses on the table.
| was invited to drink, and was sent
away with no icformatto1.
Nevertheless, within the hour his
cable was In the home Office declaring
! the steel cartel had been formed. Later
| he was asked where he found the leak.
In America" he said. 1--WE sometimes
take a cocktail to sharpen our wits fer
a deal. In Germany you might serve
beer while things were Being talked
over When the French bargain they
trade first and toast when they've
succeeded
When widespread cartelliZation began
to win attention there was an inclina-
ton to describe II as aimed at Amer
ican industry" and to see In II threat
to crush United States competition. In
quiry among American representatives
abroad in the large metallurgical and
chemical industries. the subjects of the
most important cartels, revealed that
scarcely an agreement had been formed
without the actual participation Of
American interests in some manner. and
that none had been formed without in
yitation to the Americans TO Join.
Becomes a Part.
Through the holding of stocks or the
controlling interests in European COM
panies industry In the United States
easily became part Of the cartel move
ment whenever Its interests demanded
Restrictions imposed by Federal laws at
times have made participation difficult.
but never impossible.
The governments OF Europe have de-
veloped definite political policies re-
garding the cartellization Of their in
dustries. NJ. Bokanowski, the French
Minister OF Commerce, sanctioned t.Cm
the platform such combinations as do
not tend TO raise prices artif1:ially or
oppress workers. German cartel legisla-
ticn is model. and the government has
done much TO inspire the heavy indus
! tries toward cartels erasing as much as
possible the effects of loss OF territory
! OF great economic worth. Out of some
what Indefinite beginnings Great Brit
ain is shaping clear policy. In ac-
| coroance with which IL believes Its in
dustrtaliSts should enter or avoid agree
ments with those Of the Continent. The
international Economic Conference at
Geneva last spring disSected the poli.-
ico-economic connotations OF the ca--
tells with enthusiasm,
A cartel Is an opportunisi' instri-
c1cnt. AS business agreement It usti-
ally Is loosely knit, flexible Unlike the
trust. II requires no great concentra-
ton OF capital II does require larse
concentrations OF buGiness friendship.
overcoming the obstacles Of conflicting
national sentiments.
Despite the importance IT has as
sumco IL remains q fragile and volatile
form Of international alliance. Scarcely
more than a year old. the steel cartel
was all but wrecked at It's meeting last
November In Brussels. when the French
and Belgian producers demanded IN
creased sales quotas.
Not Risidiy Bound.
Less rigidly bound than trusts or
nonopolistic corporations, the cartel Is
susceptible 10 the interplay OF national
rivairieS and all the barOmetric changes
Of national markets and industrial con-
ditions. in individual instances It's
career usually I checkcred Today
t"o-score Of the industries suffering
, from chaotic markets may have entered
some form Of international agreement
| Tomorrow half a dozen or more Of them
I.Gy <ffEA H.d
/ This fugaci0us nature Of their struc-
| tufe Is In one respect their saving quail
ity. ~ Is barrier against too much
! acquisition of power.
In this regard. the findings OF the
Geneva economic conference are inter-
esting They represent the opinions oi
. practical economists Of most Of the ma =
! tons, large Or small. which have been
Or are likely 10 be affected by the cartel
movement. Even the Soviet delegate
; declared his government had become
/ allied ~ith phases OF the movement
I The conference recognized the caftels
! IS products of necessity They could
! not be regarded as a form OF organi-
zatIon which could by itself alone re-
move the causes 0f the troubles from
which the economic Efe of the world
and particularly Europe, Is suffering -
I<ul Nify fftuld secure a more mfLhDu~
! icsl organization of production and n
! reduction In costs by means Of a better
utilization of existing equipment and d
more rational grouping of undertak
ings, and act as h check on uneco.
nDiiIic competition and reduce the evils
resulting from fluctuations In Industrial
activity"
The problem OF control was treated
in detail II allowed 10 encourage
monnpollstic tendencies. the conference
said. cartris could retard technical
progress become dangers 10 the le-
ultimate Interests nf ilurl1rtant hectious