Unhappy Entente

In Liege, Belgium, there gathered last week the steel lords of Europe, members of the International Steel Entente. Potent in theory is this cartel which was formed in 1926 to regulate production, later began to fix prices. But in fact it has become feebler and feebler through dissension among its members, bitter competition from Great Britain and Poland (non-members). Last week's meeting indicated definitely that the cartel's recent threat of competition against the U. S. is ended, indicated most definitely that the cartel was groaning in its death struggle.

Although no law prohibits a U. S. industry from joining a foreign cartel, no official connection between U. S. steelmakers and the cartel has been established, stories of gentlemen's agreements are given scant credence.-- That the cartel and the U. S. steel industry would soon be engaged in direct competition seemed likely when the cartel recently started an export division with strategic sales offices. In South America especially did a battle loom. Yet at last week's meeting the export division was abandoned, cartel members apparently having enough trouble in settling their home problems.

The chief problem strikes at the very purpose of the cartel: fixation of production schedules. The rules provide for an elaborate system of fines for overproduction. Regularly has Germany overproduced, had its quota raised. Now a new complication is brought on by the fact that German production has recently slumped more than France's, angering Germany.

Unable to decide on anything, last week the cartel ordered production reduced 25%, knew few members would pay any attention. A meeting was arranged for December, at which time a vote will be taken on whether to continue or not. Little doubt was felt as to the outcome of this suicidal ballot.

*U.S. manufacturers are members of world copper, electric bulb, aluminum, zinc and borax cartels.

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