Evening star., 1942-04-26
The Case Against Cartels
Writer Says They Contributed to L. s. Unpreparedness


responsibility on the United States-that
Of rubber arsenal for the democTacieS-
Present shortages involve not merely
this country but Latin America, the
British Empire and other associates OF
the United Nations with the partial ex-
ception Of Russia. which years ago de-
/ veloped quantity production Of synthetic
rubber from alcohol.
/ Served for perhaps a generation from
/ all major supplies Of natural rubber, the
! United States finds itself today with
these expedients for satisfying impera
tive demands of the anti-Axis cause:
Only the rudiments Of a synthetic rub
Der industry; the first beginnings Of
natural rubber production in the South
west. tropical America and Liberia; and
reserves of natural rubber, fresh and re-
claimable, sufficient for less than two
years of military consumption alone
How could such debacle have come
to pass? A shocking answer has been
proposed in recent testimony before
congressional committees and evidence
gathered by the Justice Department
\uL VI DdNhSbdSC OOSCGIlls lIlbO Tic
spotlights glare has been dragged a
| contrivance forged by international
capital in the service of private profit.
This instrument bears an evil Gel
ebrity under the name of cartel. Gen.
turies ago the word designated a chal-
lenge to single combat. After 1920 it
began to assume a deadlier meaning.
1t has expanded to signify the global
monopoly OF some given resource or
resources with exclusive command of
production distribution and markets
Characteristic policies have been iron
control Of prices, restriction of output
and merciless elimination of independ-
ent competition. The cartel stands
accused of playing hidden but domi-
nant role in the tragedy of Anglo
American unpreparedness
Worlds Wealth Parceled Out.
Before September, 1889, about 200 in
ternational syndicates were in operation
and had engrossed lions share of the
worlds industry and trade, particu-
larly in the field of vital combatant
materials. The greatest were nothing
less than superempires, omnipotent and
irresponsible, which executed sovereign
treaties parceling the earths wealth
among themselves.
The chieftains of such cartels have
been described as the most subtle and
ruthless brains extant." Political gov
ernmentS often became their tools or
accomplices. From a remote Olympus
OF poWer-commerce, they looked down
upon world wars themselves ais urfor-
tunate but transient interruptions of
trade.
While cartel members in Britain
France, Holland and Belgium frequently
were strong enough to influence their
governments, the Nazi dictatorship from
the start overpowered and deliberately
utilized German corporations as all-out
instruments of foreign policy. They
were employed to discourage and retard
production in countries potentially hos
tile, arnaSs foreign exchange for equip
ping the Reichs war machine and pro-
vide finances for propaganda abroad,
PdA lASuAolly Ill LdllIl America.
With confidence in the gullibility of
their partners, the German trusts in not
few instances gave notice that govern
mental pressure would compel them to
exceed contracted quotas of production.
The reaction of American associates.
according to the record, was often two
fold: Commiseration for their Nazi
/ friends, thus victimized by tyranny and
persuasion that business honor" re-
quired fulf1llment of obligations, even if
they were violated by the Germans.
Patents Perverted for Conquest.
Patents were perverted into a prime
weapon of conquest. Designed originally
to protect inventors in the fruits of their
discoveries. they were elaborated into a
worldwide policing system The methods
used progressed far beyond suits or
threats Of suits for infringement They
included onerouS or prohibitive royalty
rates, compulsory back-licensing, sup
preston of new inventions and crushing
limitations on production, use and sales
Typical contracts are declared to have
had so-called secrecy" and treason"
clauses. The former pledged that knowl-
edge Of the pact in question would be
safeguarded by lock and seal against
| employees of the companies and out
siders in general, and that "the existence,
! content and operating details of this
| agreement must be kept secret by both
| parties notwithstanding the possible
| obligation of disclosing 1t to public
| officials"
The treason" clause usually provided
that contracts would not lapse in case
! Of war, but carry on as far as possible
and revive in full force as soon as the
disturbance" ended.
! Through royalties on German patents
/ Hitler was able to levy tribute on Amer
lean business and even the United States
/ the NaZi war machine After the block
/ ade Of the Reich became effective, Amer
! lean associates of German corporations
/ took over their trade in Latin America
! and amassed profits which were used 10
| finance espionage and subversion These
activities were in direct conflict with the
administrations good neighbor policy.
Although the Reich in general occupied
a dominant position in cartel super
governments, the corporate subtleties
and strategy of the modern International
combine are believed at the Justice De-
partment to have been master minded
by an American, Charles E. Mitchell.