¹ The Lorraine comptoir at Longwy formed in 1876 is an early example of a French steel cartel. Already in 1831 crystal manufacturers had created a common sales agency. Freedman, Charles E., “Cartels and the Law in France before 1914,” French Historical Studies 15 (Spring 1988): 465.Google Scholar

² Entente and comptoir mean literally something like “association“; however, these were the accepted words for cartels. For example, the International Steel Cartel was in French the Entente Internationale d'Acier. For a clear exposition of the governmental intervention, see Chapter 5 in Sauvy, Alfred and Hirsch's, Anita, Histoire Economicque de la France entre les deux Guerres, vol. 2 (Paris, 1984)Google Scholar, or Caron, François and Bouvier, Jean, “Structure des firmes, emprise de l'Etat,” in Histoire economique et sociale de la France, ed. Braudel, Fernand and Labrousse, Ernest (Paris, 1980), vol. 4, part 2.Google Scholar

³ There were cartels for semi-finished steel (demi-produits), structural shapes (poutrelles), merchant bars (aciers marchands), thick plates (toles fortes), and sheets (toles minces).

⁴ As one can imagine this caused all sorts of problems and a steady stream of requests (demands) for increased quotas. For example, in a letter from Marine-Homécourt (7 June 1935) to Monsieur Du Castel of the Comptoir Sidérurgique de France (CSF) the groups Marmiche and Rombas demand higher quotas under the new system, describing in detail their new installations and expansions, even down to the expansion in the diameter of one of their blast furnaces, which increased its capacity from about 160 tons per day to about 250 tons. Archives Nationales 139AQ132.

⁵ The percentages only include the products over which the CSF had full control; this does not mean that other products were not under CSF supervision. For example, by July 1935 merchant bars sold to automobile manufacturers were outside the cartel's direct control, but there were exclusive sales agreements between the cartels and car manufacturers; Citroën-Michelin agreed to buy exclusively from the cartel and in return received a special rebate. Minutes of the Meeting of the Board of Directors of Hautmont, 4 July 1935, Archives Nationales 139AQ156(2). For the “loyalty” agreement between the cartels and Citroën-Michelin, see the handwritten note from Monsieur Truchy, 30 Nov. 1934, Archives Nationales 139AQ140(26,2).

⁶ The International Steel Export Cartel, formed in 1933, had original members of the earlier 1926 International Steel Cartel. The main differences between the two cartels was that the 1933 cartel was subdivided into product cartels and only controlled exports. Later, membership was expanded to include the United Kingdom, Czechoslovakia, Poland, and the United States.

⁷ Archives Nationales 139AQ156(2).

⁸ Letter to Marine-Homécotirt from the CSF, 7 March 1934, Archives Nationales 139AQ98(5).

⁹ Desgranges, Pierre, Le Comptoir Sidérurgique de la France (Paris, 1976), 95.Google Scholar

¹⁰ CSF circular letter to Marine-Homécourt, 24 June 1935, Archives Nationales 139AQ132.

¹¹ When Marine-Homécourt acquired the Onzion works, the Collège Arbitral decided (Sentence #116, 4 Sept. 1934) that after 1 January 1934 Marine-Homécourt's quota in merchant bars would rise from 3.21 percent for its Hautmont works to 3.46 percent. In order to keep the overall quota still at 100 percent the other members' quotas were multiplied by 96.54/96.79. In order to estimate the capacity of Onzion, the cartel stated that the steel industry was at 56 percent capacity in 1934. See the Letter from Marine Homécourt to du Castel, 4 June 1933.

¹² See the Minutes of the Meeting of the French steel cartel, 20 March 1941, Archives Nationales 139AQ99(3).

¹³ Ibid.

¹⁴ An example of this is the Mines et Usines de Decazeville which stopped producing steel in 1935–1936 because its costs were to high. Yet, in 1939–1940, the blast furnaces were refired and production was resumed under the direction of the Ministère de l'Armement. For the production history of Decazeville see the Annual Reports of the Usines de Decazeville from 1928–1940, Archives Nationales 110AQ100–101.

¹⁵ See Tirole, Jean, The Theory of Industrial Organization (Cambridge, Mass., 1989), 241.Google Scholar Also, Bernheim, B. Douglas and Whinston, Michael D., “Common Marketing Agency as a Device for Facilitating Collusion,” Rand Journal of Economics 16 (1985): 269–281.CrossRefGoogle Scholar

¹⁶ As Bussière reports, the directors of the member firms of Marine-Hoinécourt sat on DAVUM Board of Directors, and T. Laurent, general director of Marine, was the chairman. Bussière, Eric, “The Evolution of Structures in the Iron and Steel Industry in France, Belgium, and Luxembourg: National and International Aspects, 1900–1939,” in Changing Patterns of International Rivalry, ed. Abe, Etsuo and Suzuki, Yoshitaka (Tokyo, 1991), 150.Google Scholar

¹⁷ Meeting of the CSF General Assembly, 1 February 1933. Archives Nationales 139AQ149.

¹⁸ The twelve regions had three centers in Paris, Lille, Rouen, Nantes, Tours, Bordeaux, Touluse, Marseille, Lyon, Bougongne, Est, and Algeria. Taken from the Minutes of the Meeting of the Commission of the Steel Commercial Trade, 20 Jan. 1939. Archives Nationales 139AQ148(43).

¹⁹ Report on the Project to organize the sales in the new cartels, 10 Dec. 1935. Archives Nationales 139AQ149.

²⁰ See the Report from Jacques Barbou on his trip to Germany, 28 Feb. 1935. Archives Nationales 139AQ149.

²¹ Le Henaff, for example, did not join and would not comply with the CSF. Still, in 1938 Le Henaff, which was in Saint Etienne, had not stopped fighting the cartel's proposals. In February 1938 Le Henaff sent a letter to the CSF claiming that the firm's directors would not succumb to threats which they characterized as, “concede or we will cut off all ties. We are the stronger; if you do not concede, we will do everything in our power to destroy you.” (See the Letter from Le Henaff to the CSF, 18 Feb. 1938, Archives Nationales 139AQ148(42).) They would agree to the sales conditions of the cartel, but absolutel refused to agree to abide by the pronouncements of the Collège Arbitral which they called “arbitrary arbitrage which is misconceived and badly managed.” In conclusion, the directors of Le Henaff said simply that they refused to sign “and do not want to sign because, we repeat, we have no confidence [in the agreement].” Minutes of the meeting of the CSF and the iron and steel merchants, 16 Oct. 1936, Archives Nationales 139AQ148(43).

²² These producers of rolled steel products, like bars, sheets, wire, etc., had no blast furnaces or steel mills. They purchased semi-finished steel and “re-rolled” it into various steel shapes.

²³ For a detailed examination of this problem for the Belgian case see Barbezat, Daniel “Belgian Domestic Steel Cartels and the Re-Rollers, 1933–38,” Business and Economic History 18 (1989): 218–227.Google Scholar

²⁴ Tolliday, Steven, Business, Banking, and Politics: The Case of British Steel, 1918–39 (Cambridge, Mass., 1987), 142, 311–12.Google Scholar

²⁵ Archives Nationales 139AQ148(43).

²⁶ Minutes of the Meeting with the Re-rollers of Merchant Bars, 24 Jan. 1939.

²⁷ The international accords did allow some Belgian semis into the French market. How much cheating in over-quota sales occurred, I do not know—although given the strong stance of the re-rollers against the CSF and the problems with cartel coordination in Belgium, they could be attained.

²⁸ Of course, there were strong conditions prohibiting re-sale of semis. Minutes of the Meeting of the CSF, 6 July 1939. Archives Nationales 139AQ136(1).

²⁹ Minutes of the Meeting of the CSF, 23 Dec. 1936. Archives Nationales 139AQ100(3).

³⁰ These prices would have been between 30–40% below the regular cartel price for semis.

³¹ The total ristournes were 17,130,215.63. Letter to Marine-Homécourt from the CSF, 12 Nov. 1934. Archives Nationales 139AQ136(1).

³² Report from the CSF commission on the regime for the re-rollers, 27 April 1936. Archives Nationales 139AQ140(2).

³³ The union had always been a problem. For example, in the earlier cartels, the quarerly average price for the cartel was made with and without Hagondange, just in case it left the cartel before the quarter was over. See the CSF letter to Maniache, c/o Marine-Homécourt, 20, Nov. 1931. Archives Nationales 139AQ133(2).

³⁴ This is quoted in Feidenson, Patrick, Histoire des Usines Renault (Paris, 1972), 293.Google Scholar

³⁵ Archives Nationales 139AQ133.

³⁶ I have reduced Kiersch's figures by a conservative 10%. Using some received price data from the French firm Marine-Hoinécourt, the list prices publicly distributed (and used by Kiersch) seem to be about 10–15 percent too high. For example, on 24 Sept. 1937 the French cartel released a report giving the received average prices in August 1937 for semis (660 francs), structural shapes (796 francs), merchant bars (877 francs), and thick plates (984 francs). These are well below the prices given by Kiersch of 9670, 1055, and 1195, respectively. See Kiersch, G., Internationale Eisen- und Stahlkartelle (Essen, 1954).Google Scholar

³⁷ Bron, Jean, Histoire du Movement ouvrier français, Volume 2 (Paris, 1970), 224–239.Google Scholar

³⁸ Sauvy, Alfred and Hirsch, Anita, Histoire Economicque de la France entre les deux Guerres, vol. 1 (Paris, 1984), 253.Google Scholar

³⁹ See Jeanneney, J. M., “La Politique économique de Léon Blum,” in Léon Blum: Chef de gouvernement, ed. Renovin, P. and Rémond, R. (Paris, 1981).Google Scholar

⁴⁰ Kindleberger, Charles, The World in Depression (Berkeley, Calif., 1986), 252.Google Scholar

⁴¹ Quoted in Bernard, Philippe and Dubief, Henri, The Decline of the Third Republic, 1914–1938 (New York, 1985), 314.Google Scholar

⁴² Maurice Hamon, “La Loi de Quarante Heures dans les Mines et la Métallurgie,” Actes du 98;se Congrès National des Sociétés Savantes (Sainte-Etienne, 1973), 175.

⁴³ Minutes of the Meeting of the CSF to examine the consequences of the 40 hour law on the iron and steel industry, 15 Dec. 1936, Archives Nationales 139AQ153(3).

⁴⁴ See Sauvy, vol. 1, 252 for a description of Belin's part in the negotiations.

⁴⁵ René Belin, La Semaine de 40 heures et la Réduction du Temps de Travail (Paris, n.d.), 23.

⁴⁶ Jackson, Julian, The Popular Front in France (New York, 1988), 176.Google Scholar

⁴⁷ Minutes of the French Group of the International Steel Cartel, 16 Dec. 1938. Archives Nationales 139AQ139(5).

⁴⁸ Minutes of the Meeting of the Comité des Forges du Nord, 29 June 1938. Archives Nationales 139AQ88(2).

⁴⁹ Minutes of the Meeting of the Conference Générale des Transformateurs de Barres Marchands. 21 May 1937. Archives Nationales 139AQ140(2).

⁵⁰ A good illustration of this caution is the British industry. Somewhat spatially disperse and very disperse in terms of firm size, the industry was able to form a rather cohesive steel federation that worked within the context of the international steel cartels. The difference between the French and British cases is that the British did consolidate, slightly through firm's shutting down and mainly through mergers and that the British cooperation was actively supported by governmental activity. See Steven Tolliday, “The Economics of Steelmaking,” 18–45, and “Government and Industry in the 1930s,” 299–334; also, Clemens Wurm, “The Steel Industry under Protection,” 72–110, all in Tolliday, Business, Banking and Politics.

⁵¹ Although two regions, East and Alsace-Lorraine, together made up about 78 percent of French production, firms in the two had very different structures and patterns of development. The Alsace region rejoined France after 1919 and its firms had an export orientation unlike those in other French areas. In 1913, France exported 630,000 tons of steel; in 1925, after the boundary change, France exported 3,875,000 tons. Bussière, “The Evolution of Structures in the Iron and Steel Industry in France, Belgium, and Luxembourg,” 147.

⁵² The index is the sum of the squared market shares and does not mean anything directly about concentration, but can be used to compare the concentration/dispersion of market shares. For merchant bars the index was 851.2, using shares for all firms, while the German figure was 1416.5, using about 80 percent of the total shares. Derived from Table 7 and from the Vereinigte Stahlwerk Monatsberichte, 1936.

⁵³ Firms in the Saar were affiliated with the Stahlweksverband but had very different structures from the Ruhr producers; they were far less vertically integrated. This often caused problems and relations with Saar firms were always problematic.

⁵⁴ Voigt, Fritz, “German Experience with Cartels and their Control during the pre-war and Post-war Periods” in Competition, Cartels and their Regulation, ed. Miller, J. P. (Amsterdam, 1962), 171.Google Scholar

⁵⁵ Although some have argued that excess capacity gives firms the ability to retaliate against cheaters more easily (see Spence, M., “Entry, Investment and Oligopolistic Pricing,” Bell Journal of Economics 8 (1977): 534–44CrossRefGoogle Scholar, and Cowling, K., “Excess Capacity and the Degree of Collusion,” The Manchester School, 341–59Google Scholar), the literature is mainly in agreement that increases in excess capacity, especially due to slumps, breakup collusion. Valerie Suslow, for example, has used cross section data on cartels to test whether depressed periods breakup cartels. Her results seem to show that for a wide variety of cartels, slumps do cause cartels to revert to non-cooperative behavior. Suslow, Valerie, “Cartel Contract Duration: Empirical Evidence from International Cartels,” Rand Journal of Economics (1991).Google Scholar Even in more complicated models, this result seems to hold; R. W. Staigner and F. A. Wolak show that expending models to include the impact of uncertainty weakens the ability of tacit collusion to weather downturns, see their “Collusive Pricing with Capacity Constraints in the Presence of Demand Uncertainty,” Rand Journal of Economics 23 (1992): 203–220.

⁵⁶ Using the data of Lister, French excess capacity in 1936 was 3.1 million tons. However, in an internal report of the Marmiche group total capacity is calculated at 11.48 million tons, rather than the 9.8 million tons of the Svennilson report, which would result in an excess capacity of 62 percent. See the Internal Report from Marmiche in response to the circular letter no. 6 of the CSF, 3 March 1936. Archives Nationales 139AQ131(1).

⁵⁷ He identifies the iron and steel industry as one of these monopolized sectors. Thorez, Maurice, France Today and the People's Front (London, 1936), 45, 93.Google Scholar

⁵⁸ Both these articles are in Charles Rist and Gaétan Pirou's survey of the French inter-war economy; see Marc Aucuy, “Structure Industrielle,” 198, and Denuc, Jules, “Structure des Entreprises,” 240, both in De la France d'avant Guerre à la France d'Aujourd'hui, ed. Rist, Charles and Pirou, Gaëtan (Paris, 1939).Google Scholar

⁵⁹ See, for example, Bussière, “The Evolution of Structures in the Iron and Steel Industry in France, Belgium, and Luxembourg.”