Cartel formation

Overview[ edit ] People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices. Less than 10 percent of all cartels in the sample failed to raise market prices. In general, cartel agreements are economically unstable in that there is an incentive for members to cheat by selling at below the agreed price or selling more than the production quotas set by the cartel see also game theory. This has caused many cartels that attempt to set product prices to be unsuccessful in the long term.

Cartel formation

Robert Hale, London - - ISBN 0 [there are Cartel formation minor typographical errors in this transcription] On a bright May morning inwhile young Americans were dying on the Italian beachheads, Thomas Harrington McKittrick, American president of the Nazi-controlled Bank for International Settlements in Basle, Switzerland, arrived at his office to preside over a fourth annual meeting in time of war.

Gold that had been looted from the national banks of Austria, Holland, Belgium, and Czechoslovakia, or melted down from the Reichsbank holding of the teeth fillings, spectacle frames, cigarette cases and lighters, and wedding rings of the murdered Jews. Its existence was inspired by Hjalmar Horace Greeley Schacht, Nazi Minister of Economics and president of the Reichsbank, part of whose early upbringing was in Brooklyn, and who had powerful Wall Street connections.

He was seconded by the all important banker Emil Puhl, who continued under the regime of Schacht's successor, Dr. Sensing Adolf Hitler's lust for war and conquest, Schacht, even before Hitler rose to power in the Reichstag, pushed for an institution that would retain channels of communication and collusion between the world's financial leaders even in the event of an international conflict.

Cartel formation

It was written into the Bank's charter, concurred in by the respective governments, that the BIS should Cartel formation immune from seizure, closure or censure, whether or not its owners were at war. Established under the Morgan banker Owen D.

The Bank soon turned out to be the instrument of an opposite function. It was to be a money funnel for American and British funds to flow into Hitler's coffers and to help Hitler build up his machine. Among the directors under Thomas H. Farben, Baron Kurt von Schroder, head of the J.

Stein Bank of Cologne and a leading Cartel formation and financier of the Gestapo; Dr. Walther Funk of the Reichsbank, and, of course, Emil Puhl. These last two figures were Hitler's personal appointees to the board. His successor was the forty-three-year-old Leon Fraser, a colorful former newspaper reporter on the muckraking NewYork World, a street-corner soapbox orator, straw-hat company director, and performer in drag in stage comedies.

Fraser had little or no background in finance or economics, but he had numerous contacts in high business circles and a passionate dedication to the world of money that acknowledged no loyalties or frontiers.

In the first two years of Hitler's assumption of power, Fraser was influential in financing the Nazis through the BIS. When he took over the position of president of the First National Bank at its Manhattan headquarters inhe continued to exercise a subtle influence over the BIS's activities that continued until the s.

Other directors of the Bank added to the powerful financial group. Vincenzo Azzolini was the accomplished governor of the Bank of Italy.

Yves Breart de Boisanger was the ruthlessly ambitious governor of the Bank of France; Alexandre Galopin of the Belgian banking fraternity was to be murdered in by the Underground as a Nazi collaborator. Secretary of the Treasury Henry Morgenthau, a deliberate, thorough, slow-speaking Jewish farmer who, despite, his origins of wealth, mistrusted big money and power.

A model of integrity obsessed with work, Morgenthau considered it his duty to expose corruption wherever he found it. Tall and a trifle ungainly, with a balding high-domed head, a high-pitched, intense voice, small, probing eyes, pince-nez, and a nervous, hesitant smile, Morgenthau was the son of Woodrow Wilson's ambassador to Turkey in World War I.

He learned early in life that the land was his answer to the quest for a decent life in a corrupt society. He became obsessed with farming and, at the age of twenty-two, inborrowed money form his father to buy a thousand acres at East Fishkill, Dutchess County, New York, in the Hudson Valley, where he became Franklin D.

During World War I he and Roosevelt formed an intimate friendship. Elinor Morgenthau became very close to her near namesake, Eleanor Roosevelt. While Roosevelt soared in the political stratosphere, Morgenthau remained rooted in his property. In the early s he published a newspaper called The American Agriculturist that pushed for government credits for farmers.

Morgenthau showed great flair and a passionate commitment to the cause of the sharecropper. Legend has it that on a freezing winter day inFDR and Morgenthau met and talked on the borderline of their two farms. Morgenthau is supposed to have said to Roosevelt, "Life is getting slow around here".

Close to a thousand volumes of his official diaries in the Roosevelt Memorial Library at Hyde Park give a vivid portrait of his inspired conducting of his high office. He was aided by an able staff, which he ran with benign but military precision.

Unlike Morgenthau, White came form humble origins. Jewish also, he was the child of penniless Russian immigrant parents who were consumed with a hatred of the czarist regime. White's early life was a struggle: He was opinionated and self-confident to a degree.

Although he was frequently accused of being a communist sympathizer, he was in fact simply an old-fashioned liberal driven by his ancestral memories of Russian imperialism. It is unfortunate that Morgenthau did not appoint White as his representative at BIS meetings, but White was too valuable in Washington.

Cochran was on loan to Treasury from the State Department; he represented the State Department's sophisticated neutralism before and during the war. Very much opposed to White- indeed, violently so- Cochran was sympathetic with the BIS and to the Nazis, as his various memoranda made clear.1 Determining illegal cartel overcharges for markets with a legal cartel history: bitumen prices in South Africa Willem H.

Boshoff1 Abstract A number of South African price-fixing cases have been brought in markets previously. CARTEL FORMATION People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.

It is impossible indeed to prevent such meetings, by any law which either could be executed, or would be consistent with liberty and justice.

Hunter ( cited in Lipczynski et al., ) argues that the formation of cartels is not solely to extract profit from the consumers, but as a measure of self-defence and to . A discussion of crude oil prices, the relationship between prices and rig count and the outlook for the future of the petroleum industry.: Introduction Like prices of other commodities the price of crude oil experiences wide price swings in times of shortage or oversupply.

Cabotage 1. Navigation and trade by ship along a coast, especially between ports within a country. Since the Jones Act, this has been restricted in the U.S. to domestic shipping companies. 2. Air transportation within a country. MARKET POWER AND CARTEL FORMATION: THEORY AND AN EMPIRICAL TEST* DARREN FILSON, EDWARD KEEN, Claremont Graduate KPMG University ERIC FRUITS, and THOMAS BORCHERDING LECG Claremont Graduate University Abstract Antitrust enforcement makes it difficult to test theories of cartel formation because most attempts to form cartels are blocked or kept secret.

Cartel formation and pricing: The effect of managerial decision-making rules - ScienceDirect