Cartelization of Industry
One method of dealing with excess capacity, overcapitalization, and low profits was for producers to form combinations that would limit competition, allocate markets, and support prices. Trusts and cartels were certainly not new in the 1920’s, but their number and significance greatly increased in that decade, especially in Germany, where the government actively aided attempts to control competition. In 1923 a decree law was enacted there to regularize the activity of cartels, and their number was at that time officially estimated at 3,000. The cartelization movement was by no means confined to Germany, and manufacturers sought to introduce a measure of control in international as well as domestic markets. One of the most important international cartels was the International Steel Cartel, created in 1926 by producers in Germany, France, Belgium, Luxembourg, and the Saar Territory. In 1927, Czechoslovakia, Austria, and Hungary joined. The Cartel countries accounted for roughly 30 per cent of world steel production in the late 1920’s, but for about two-thirds of world steel exports. The text of the agreement establishing the Cartel and a note on the quotas for production are given below.
KeywordsCommon Fund Crude Steel Agreement Object Share Quota Unanimous Consent
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- League of Nations, Economic and Financial Section, International [World] Economic Conference, Documentation: Memorandum on the Iron and Steel Industry (Geneva: League of Nations, 1927), Annex VI, pp. 109–113.Google Scholar