Cartels-Their Significance for American Business

FREE competition, long the controlling ideal of domestic trade within the United States, has had the fundamental geographical advantage of functioning in the world's largest area of unrestricted commerce. Goods moved back and forth across state lines, unimpeded by customs, and industrial operations have developed rapidly to meet the expanding needs of a pioneer country richly endowed with natural resources. Fifty years ago, antitrust laws were adopted to protect the competitive private enterprise principle. It became illegal for one person to combine with another to restrain trade or commerce among the several states or with foreign nations. The original legislative measures defining this philosophy were the Sherman Act of 1890 and the Clay- ton Act passed in 1914. The development of Europe and other parts of the world was influenced by different conditions which led to a different theory of trade. Here were many small nations, with limited natural resources and a thin market, and they attempted to protect their national economy by tariff walls. International business arrangements for the purpose of diminishing the ups and downs of the more competitive system --crux of the modern cartel operations-seemed a logical device to stabilize production and guard the interests of both workers and consumers. European governments as well as European industrial interests became convinced that if com- petition could be held in bounds the danger of business depressions and un- employment could be reduced.