500.602/9–644
Memorandum by the Secretary of
State to President Roosevelt
Washington, September 27,
1944.
In further response to your letter of September 6,96a
directing attention to the importance of intergovernmental discussions on
the subject of international cartels, there is herewith transmitted a
statement of recommendations regarding policy for dealing with international
cartels and related private business arrangements prepared by the
interdepartmental Committee on Private Monopolies and Cartels and approved
by the Executive Committee on Economic Foreign Policy.
The proposed cartel policy is regarded by the Executive Committee as
tentative and preliminary, and as subject to such modifications as may be
deemed desirable after consideration of further views on this and other
aspects of commercial policy. A report on the closely related subject of
intergovernmental commodity agreements is now under consideration by the
Executive Committee and will soon be submitted to you.
It is believed, however, that the proposed cartel policy in its present form
is sufficiently definitive to serve as a working basis in discussions with
other governments. In view of such discussions, it is not believed that the
statement should be made public. Alternative proposals are also being
studied in order that carefully thought out recommendations may be available
in case of need.
[Annex]
ECEFP D–53/44
(Cf. D–11 and D–49)
September 20, 1944.
Tentative Program for Dealing With International
Cartels
(As approved by the Executive Committee on Economic Foreign
Policy on September 15, 1944)
summary
- 1.
- The United States should advocate, in discussions with other
nations, the adoption of a coordinated program by which each nation
undertakes to prohibit the most restrictive cartel practices which
burden international trade.
- 2.
- International conventions and national laws about patents, trade
marks, and company organizations should be amended or supplemented
to make such restrictive cartel practices more difficult.
- 3.
- Programs involving international regulation of trade or production
undertaken for such purposes as international security,
conservation, and public health and morals, and in dealing under
certain prescribed conditions with the correction of basic economic
maladjustments should be agreed upon by the governments rather than
private interests.
- 4.
- To facilitate the development and administration of this program,
there should be established an International Office for Business
Practices.
Comment
These proposals are based upon conclusions that the typical effects of
cartels are to reduce output, raise and stabilize selling prices,
increase profit margins, reduce employment, and protect high cost
members; and that through such activities cartels reduce employment and
investment opportunities, hinder the development of liberal policies in
international trade, delay the readjustment of dislocated industries,
and sometimes thwart national policies or serve as the instrument of
aggressive governments. The claims that cartels help preserve balance in
international payments and that they can help solve problems of economic
readjustment are regarded as unfounded.
It is recognized that pressures to organize cartels arise in large part
from depressions, trade barriers, and unbalanced over-expansion of
particular industries, and that the success of a program directed
against cartel restrictions must depend in large part upon successful
policies for coping with such matters.
