The International Copper Cartel

Abstract

The International Copper Cartel, established in 1935, terminated prematurely in 1939 upon the outbreak of the Second World War. It represented an attempt by the world's largest copper producers to regulate the world copper market outside the United States chiefly by adjusting the mine production of copper ore to consumption at prices agreeable to the cartel members. The structure and operation of this international collective marketing control offers a wealth of source material for the statesman, political scientist and economist. The history of the copper trade can be traced back to ancient man's search for better implements and materials. Even then the copper trade assumed an international character as it followed the development of civilization in Europe, India, China. Then for a time it was superseded by the discovery and use of other metals. In the Middle Ages, interest in copper revived again. In 1548, an international copper cartel was formed which did not differ much in its structural aspects from modern international marketing organizations. Scarcity of supply, poor transportation facilities, and, last but not least, the protective measures of the almost insolvent Holy Roman Emperor gave this monopoly its peculiar power. This cartel controlled the bulk of production and trade in this commodity all over Europe. The marketing controls were so stringent as to stir up an anti-monopolistic movement which was quelled only by the efforts of the Emperor himself.' Much has been written about the historical and technological development of the so-called red metal. We all know that the discovery of the rich ore deposits in the United States made this country by the end of the nineteenth century the largest producer of both raw and refined copper, and that the age of electricity was ushered in with the improvements in smelting and producing of copper.2 It seems advisable to mention briefly some of the outstanding features of the international controls operating on the copper market between the two world wars. It was in 1918 that possibly the most successful cartel (at least from the producers' point of view) was formed to liquidate the tremendous stocks of copper piled up as a result of the war and to regulate new production and exports.