Show 0 INS cartels hinder trade 1 and stifle competition big monopolies regulate commerce between nations valuable information given axis under business pacts I 1 by BAUKHAGE news analyst and commentator service union trust building washington D C when the political smoke of the campaign dies away we are all going to hear a lot more about cartels mo most s t people probably have a general e ra I 1 idea of what they are but those of us who ba have followed the hearings ingus of the kilgore subcommittee on war mobilization learned a lot of things we know I 1 think I 1 heard about cartels first arst from bill shepherd a newspaperman whom I 1 was always meeting in different parts ot of the world he had bad just come back from germany shortly after the last war and was full of the subject on which he had bad written an article for colliers but we know the hall half of it then I 1 mention that because it seems incredible that more was not done to break down tin thi cartel system before the e simplest definition of a cartel is a in monopoly and its most obvious effect is to gouge the consumer with m monopolistic prices A chemical pa plastic aftic wh which I 1 eh can be sold to commercial at 85 cents a pound costs dentists a pound same stuff a synthetic substitute tor for quit quinine ane sold to the government ern ment presumably at a profit at 50 for a thousand tablets by a company with a cartel controlled patent latent under a contract that will end and six iz months after the war costs you and me 1200 per thousand tablets another feature of some cartels involved patent leasing and this practice has resulted in most of the furor oday because by means of international cartels both germany and japan got hold of secrets of value in th the e war ar for example eZ example ample the american bosch corporation provided its german affiliate with information developed by the signal corps of the army which the german army used as the basis for radio communication between tanks and ground and air forces the bosch company got the information in the form of special actions in army contracts on which it was bidding government moves to ro smash system naturally the government had to take action in cases like that re antly th the e state department established an industries branch in the division of the office of con conom ornic lc affairs and for some time he department of justice has been conducting investigations and in several cases has taken action cartels are one of the highly complicated matters which the peace negotiations tiati ons will deal with assistant Attorn attorney ei gen wendell berge who has charge of investigations now going on said it teems seems abundantly cle clear ar that amerla can never have a foreign poll policy C y ased on the principles of democracy and international goodwill so tong iong as international trade is dominated by cartels berge beige believes the principle involved in the operation of the inter sal aal pools and monopolies is the greatest threat to full employment arad nd therefore in many respects is one date of the central issues of our time this type of organization he believes restricts rather than promotes trade because it not only lelve out competition but also enters into agreements to limit that came out in the war and wherever there was a serious short ige rubber robber aluminum magnesium frogs drugs a cartel was discovered in the woodpile these combinations tend to become little governments of their own and their effect on foreign relations is clearly evidenced in ift the tase lase of south america where the germans obtained exclusive rights in many trade fields through these trade agreements and used these rights to build up their nazi propaganda machine before the united states entered the war germany was able to prevent firms in this country from supplying certain types of explosives to britian because the american manufacturers rs had an agreement with the german affiliate not to do so the tame applied to optical goods there are other examples which make your hair curl the lillagore lill gore committee makes th this Is statement tar for instance in hi its re port the japanese were able to get gel technical know how on some proc esses for or production ot of per cent octane gasoline before they were generally available to american Ame firms and in at least one case as late as june to find out through commercial channels the amount 0 of our oil and gasoline shipments to pearl harbor some agreements sanctioned by U S it must be said in frankness that in some cases americal Ame Arne companies specifically the one which had the right to certain manufacturing processes in high octane had permission from the war department to extend their use in foreign countries the universal oil products company made special inquiry of 0 the general stall staff reg regarding arding installing plants in germany end and japan and they were told in july 1938 the war department has no objection for or the exploitation ot of these processes abroad other manufacturers were not so BO scrupulous the kilgore report reveals an interesting letter written on april 17 1940 three months after the president had announced a morale embargo against japan the letter was written by an official of a texas oil company to a mr darcy representing the mitsubishi oil company of japan it was sent to darcas home following up the conveying of certain technical information which mr darcy sent to tokyo this is an excerpt from the letter for your confidential information enclosed herewith please find photo static copy ol of Say bolts analysis no 1433 covering the supposedly 92 octane gasoline for the maritime oil company you have conclusive proof that our oil will run up to 83 93 the attached report is sent you in complete confidence and be very careful to whom you disclose it as it would get me into a terrific jam if it ever leaked out that I 1 sent you this data but the government of the united states seized the files of the mitsu beishl company and it has leaked all over the place and what is more i it is a comparatively harmless sample of other things which will c ome come out later on one of the interesting cartels deals in a product that few people not in the leather business know ary anything thIng about it is the quebracho a substance used to tan and preserve leather and it comes from the bark of a tree grown chiefly in argentina the cartel is controlled by a company P owned and managed by the british it has an exceedingly tight monopoly and to an extent can therefore control leather prices since it has been in operation quebracho prices have shot up and production has gone down the figures disclosed by the investigation show that before the cartel was formed quebracho was selling at just about one half what it costs today six price boosts were made in seven seen years and the arm is said to be now me making king 33 per cent profit all but 10 per cent of the quebracho production Is controlled by the cartel and many methods are used to hamstring the independents the chief of which is to make secret arrangements with shippers not net to allow cargo space to the com competitors pett and the cooperation which the cartel enjoys in high places Is revealed in the course of indictment proceedings by the department of justice the two firms involved were represented by no less than an official envoy of the argentine government ern ment the th quebracho pool sent vital supplies to japan up to the last few years and did it at cut rates absorbing the loss by boosting the price to this country it has recently been predicted that it if this pool continues in operation there will be a serious leather shortage after the war but substitutes are no solution of the cartel problem A world in which one man has to use ersatz sauce tor for his goose while another gets the gravy for or his gander exactly according to the american idea of fair play |