Cartel agreements

Almost the entire history of the sulfur industry has been marked by cartel agreements among the world s leading produc-ers-particularly among the two chief sources of supply, the American and the Italian companies. 

The sulfur industry is even more concentrated than the copper industry, and, like the latter, has been characterized by cartel agreements, rigid prices, and comparatively high profit ratios for the leading companies, according to the Commission s Report on the Sulfur Industry and International Cartels, transmitted to Congress June 16, 1947. 

From 1926 through 1931, during the first three years of which there were only two American producers it appears that the domestic price level yielded substantial profits. Price protection afforded the Italians maintained export prices substantially higher than domestic prices, and still further enhanced the profits of the American producers. Quota restrictions under the cartel agreement, however. 

The operations of all four producers constituting the American sulfur industry have been highly profitable, and the indications are that Sulfur Export Corp. s foreign cartel agreements have added to the profitability of the United States industry even with respect to the non-member companies. 

Unlike the United States, where the antitrust legislation restricted cartel behavior, German cartels enjoyed legal sanction, which meant the cartel agreements could be enforced in courts. The German dyes industry first turned to cartels in 1881, and over the next two decades the various... 

The department also tried to keep up with the almost continual rumors circulating among American and European manufacturers, whether about dyes seized by the French in the Ruhr occupation or about impending cartel agreements... 

For one overview of the variety of cartel agreements in Europe, see Schroter, Cartels as a Form of Concentration in Industry. Stocking and Watson, Cartels in Action, 377, 406-16. Other historians use similar political metaphors to discuss the cartel style of economic decision making. For example, see Reader, Imperial Chemical Industries, 1 468-71. In 1929, after three years of negotiating, the German, Swiss, and French dyes manufacturers formed the Three Party Cartel, which divided markets and set sales quotas. Schroter, The International Dyestuffs Cartel, 1927-1939. ... 

A historically fragmented Japanese industry, with rapid growth to meet internal demand, changed in 1979 with an agreement by its five principal manufacturers (Mitsubishi, Sumitomo, Nippon Kayaku, Mitsui Toatsu, and Hodogaya) to the formation of a cartel to coordinate research as well as manufacture. Successful operation of this cartel could have profound effects on the international situation by the end of the twentieth century. 

In the 1930s, when strong protectionism emerged in Japan, I.G. Farben concluded several agreements with Japanese companies either on its own or as a member of international cartels so that it succeeded in securing a stable share in the Japanese market as well as in the Chinese and other Asian markets. I.G. Farben, however, had to acknowledge that meanwhile... 

Even before the formal establishment of the three-party cartel, a united front of European and American producers had been formed against Japan. In October 1928, a half year after the effectuation of the Saito-Waibel Agreement, most Western producers simultaneously raised the export prices to Japan of all kinds of dyestuffs by a uniform 5 percent. This concerted action was proposed by LG. Farben and was followed by Swiss and American companies. In fact, Swiss companies were at first opposed to this action, partly for the technical reason that the different export prices of each company s products made it difficult to raise prices uniformly. A more important reason for their initial opposition was that the Swiss companies were afraid that Japanese companies, especially Nihon Senryo, in an attempt to dominate the Japanese market, would not follow the Western companies price increases. The fear of the Swiss producers became a reality Japanese firms did not follow suit. As a result, while the market share of the three-party cartel fell, that of the Japanese firms rose. Moreover, Japanese exports, mainly to the Chinese and other East Asian markets, exceeded 1,000 tons.30... 

Details of the negotiations are unknown. It is, however, certain that although the three-party cartel wanted a comprehensive agreement with the Japanese, on the Japanese side, both Nihon Senryo and Mitsui Mining... 

The reason for their attitude is clear. The Japanese dyestuffs industry was still developing. It suffered from a lack of production lines in some principal dyes such as synthetic indigo, as well as from limited areas of export. The Japanese side was therefore afraid that it would tie its own hands if it concluded a comprehensive agreement. It preferred instead to conclude a series of partial agreements and to aim at developing new products while expanding its production capabilities and widening its export areas from China to Indochina and British India. The tactics of I.G. Farben as well as those of the three-party cartel were entirely different from those of the Japanese side. The Western firms wanted to contain the Japanese production capabilities. I.G. Farben s explanation to the Swiss companies mentioned above may, therefore, have concealed its own real aims. What is certain, in any case, is that I.G. Farben endeavored to obtain the consent of the Swiss companies. 

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