INTERNATIONAL SHIPPING CARTELS.

By Daniel Marx Jr. '29. Princeton UniversityPress. 1953. 323 pp- $6.00.

In this volume Professor Marx analyzes the economic organization of the ocean shipping industry, an industry in which American public policy has come to accept a system of private self-regulation under loose public supervision rather than to insist upon rigorously enforced competition. The author hopes that his analysis may have significance beyond the field of shipping in other areas of similar economic or political characteristics.

Ocean shippers have traditionally resolved common problems by means of shipping conferences which are comprehensive agreements among the major carriers in a particular trade, whatever their flags, restricting their competition as to such matters as rates, sailings, schedules and ports of call. Eschewing a characterization of these agreements as per se anti-competitive and bad, Dr. Marx subjects them to searching analysis in accord with the principles of what may be termed effective competition.

Instability in the industry being inherent in its cost structure and a chronic overcapacity which is dictated by political considerations, and public utility controls of the orthodox sort being inapplicable because of the multinational jurisdictional nature of ocean shipping, the industry offers a unique occasion for self-regulation by unrestricted membership conferences, such agreements being in practice limited by non-conference competition and potentially limited by responsible international supervision. Open conferences being valid institutions, reasonable exclusive patronage contracts employed by conferences are to be countenanced as indispensable tying devices to ensure conference survival in the face of sporadic outside cut-throat competition.

Unfortunately, as the author notes, open conferences leave unsolved the issue of a reasonable general level of rates but suggest the probability of a high cost, idle capacity equilibrium, perhaps a minimum price which must be paid for a rational and stable shipping industry.

Professor Marx is diligent throughout to avoid dogma and to test each suggested hypothesis by analysis as well as by available experience. The work is a worthwhile contribution to the literature of effective or workable competition.