The Comptoir Sidérurgique de France, 1930–1939

The French inter-war steel cartels were characterized by contemporaries as powerful trusts, restricting output and raising steel prices. The cartels were cited as a cause for the length of the French depression, the low productivity of the 1930s, and the rapid rise in steel prices after 1936. This paper shows that the formation and development of the French steel cartels was problematic and argues that the French industry was not structurally conducive to widespread collusion and was further harmed by governmental policies. Steel cartels were unable to police their arrangements effectively among members and were unable to stop outsiders from undercutting prices. It is not at all clear that firms in the cartel achieved higher profits. The increase in prices that did occur after 1936 was not due to firms colluding and profiting from the increased demand for steel due to the anticipation of Nazi aggression; rather, these price increases occurred because of input price increases caused by government action that raised the costs of production.