Evening star., 1944-04-30
CurteIs
been inconsistent with the develop
ment of international trade.
Continued From Page C-1)

AlCIlt VI lIltcTIldIlOIlal LrdQe.
(4 That cartels often restrict
productive capacity and retard the
commercial application of technical
progress. Edwards cites under this
head, among other instances, the
prewar restriction of productive ca.
paclty in the American magnesium
industry through a device by which
each participant accomplished a
different purpose: The Aluminium
Co. of America prevented the devel-
opment of magnesium as an impor-
tant substitute for aluminium: the
Dow Chemical Co. avoided the con-
struction of competing plants which
might have jeopardized Dow's high
prices, and I. G. Farbenindustrie
avoided the risk of American ex-
ports to Europe.
go That an almost inevitable
part of cartel policy is a concerted
effort by cartel members to weaken
independent concerns.
go That the available evidence
indicates that cartel activities tend
to diminish rather than increase
efficiency. But even if they do in
crease efficiency, ''the value of the
achievement is questionable so long
as cartel control endures. The in
terest of the community in greater
efficiency is ordinarily based upon
the belief that lower costs will lead
to lower prices and thus enhance
consumption. Efficiency in a mo-
nopolistic combination rebounds pri-
marily to its own advantage and
may not contribute much to the
advantage of the community"
Place in World Politics,
What of cartels in their interna-
tional political aspect? Should
world peace be sought through en-
couraging the union of great in
dustr1al enterprises across national
boundary lines? Is this, perhaps
as asserted by some Of the advocates
OF the cartel, the road to political
union and world peace and pros
perity? The evidence in the record
runs overwhelmingly to the con-
trary. And if peace could be
acheved through the cartelization
OF the world, it would be peace at
the price of the democratic system
of government.
Assistant Attorney General Berpe
IN recent speech denounced the
conduct of cartels before and during
the war as "one Of the tragic pages
OF our history and warned that
even now cartelists in this and othe,
countries are making their plans fol
the control of postwar trade.
Berges speech forms such a lucic
and powerful statement of the polft.
lcal evils of the cartel system that il
is worth quoting here at some
length:
America can never have a for.
elgn policy based on the principles
OF democracy and internationa
good will as long as internationa
trade Is dominated by cartels. II
does not seem possible that the At.
iantic Charter, the good neighbol
policy and the reciprocal trade pact.
can effectively prevail if the specia
privileges of cartels dominate trade
and politics in the postwar world.
Biames Cartels in Shortages.
"Cartels are, in effect. private
economic governments which seek
to divide and rule world industry or
the basis of economic privilege. Il
cartels are successful in gaining z
foothold in the postwar period, il
Will be almost impossible for thi.
Nation to maintain a high level o1
peacetlme production or to CO.
operate in the reconstruction OF
world trade"
AS to the war record of cartels
The shortages of aluminium anc
magnesium resulting from cartel re.
strlctlonS forced us to strip the
kitchens of America and scar ouI
public squares with scrap piles. The
scarcity of rubber is never -ceasins
threat to our productive effort. Oul
armed forces plead with us to con.
tribute our binoculars. The lack o1
vital drugs and medicines has leo
pardized our men fighting in fever.
stricken areas. In fact. almost
wherever there was cartel there
was a shortage"
But, he continued, cartels have ar
even more serious aspect in theil
menace to the sovereignty of demo.
cratic nations. National public pol.
icy can be undermined in the future
as it has been in the past by carte
arrangements. He gave these ex.
amples from the record:
In February of 194l. when Brit,
ain was in the most critical peril. q
cartel agreement decreed that q
large American munitions manu-.
facturer could not supply certain
explosives to the British. Thi.
would have violated the commit
ment of the American cartelist tc
its German partner.
In 1885, after Hitler had an.