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The International Mercury Cartel, 1928–1954: Controlling Global Supply

Published online by Cambridge University Press:  08 July 2015

Miguel A. López-Morell  and
Luciano Segreto
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Abstract

This article describes the features of the international mercury market during the first half of the twentieth century. It analyzes the various market agreements made, their effectiveness, and their consequences. The period studied is little understood, although it was one in which mercury production greatly increased. It was also one that saw persistent efforts at market manipulation, owing to a series of agreements between Spanish and Italian producers that proved very effective until the arrival of shipments of mercury produced by Soviet bloc members and by some developing countries.

Type
Research Article
Information
Business History Review , Volume 89 , Issue 2 , Summer 2015 , pp. 255 - 280
Copyright
Copyright © The President and Fellows of Harvard College 2015 

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References

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7 MacKie-Mason and Pindyck, “Cartel Theory and Cartel Experience,” 201.

8 Although the mercury figures are universal, there is a slight deviation with North American production, where flasks are marginally smaller. Specifically, U.S. flasks weighed 76 pounds while Spanish ones were 34.5 kilograms, equivalent to 76.0582 pounds (75 Spanish pounds).

9 Segreto, Monte Amiata, 58–62, 47, 221; López-Morell, “La comercialización del Mercurio de Almadén,” 325.

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11 Meeting of 30 Aug. 1941, R-15/527, Mercurio Europeo (hereafter, ME), Grupo Español, vol. 6, Fundación Almadén Archives, Almadén (hereafter, AFA).

12 J. L. García Ruiz, “El Banco Español de Crédito, 1902–2002: Un siglo de servicio a la economía Española” (unpublished document, 2002). The Banca Commerciale Italiana, the main shareholder in Monte Amiata, would take a share. See Segreto, Monte Amiata, 86.

13 Javier Puigarnau, “Las minas de Almadén,” in Revista nacional de Economia (1925).

14 Zarraluqui, Los Almadénes de azogue, 800. According to some sources, Spanish mines sold only 46,000 flasks in 1926.

15 “Visita a las minas de azogue de Italia,” 12 Nov. 1921, b. 2 file 2752, Sociedad Minas Almadén, Archivo Historico Nacional, Madrid (hereafter, SMA, AHN); documents dated 12 Mar. 1922 and 3 Feb. 1923, Serie Rossa, 520, Archivio Storico IRI, Archivio centrale dello Stato, Rome (hereafter, ASIRI, ACS).

16 Minutes of the Monte Amiata board of directors (hereafter, MA minutes), 14 Jan. 1928 and 3 Feb. 1928, General Legal Affairs Department, Archives Finmeccanica, Rome (hereafter, AF). In 1974, Monte Amiata mining activities were concentrated in a new state-owned company controlling all the mercury mines of the Amiata region. Finmeccanica, the Italian state holding for the mechanical and defense sector, acquired its real estate and financial assets, formally acquiring Monte Amita, when the company had already transferred its mines to the state; “Venta del mercurio de las minas de Almadén,” 1 Feb. 1930, b. 2, file 3080, SMA, AHN.

17 Meeting of 29 Sept. 1928, ME managing committee minutes, vol. 1, R-15/513, AFA.

18 The Italian share was distributed as follows: Monte Amiata 51.03 percent; Idria 25.67 percent; Siele 23.3 percent.

19 Meeting of 29 Sept. 1928, ME managing committee minutes, AFA; ME, “Considerazioni sull'esercizio 1930,” 16 Jan. 1931, Serie Rossa, b. 520, ASIRI, ACS.

20 Italian producers sold, in total, 61,200 flasks in 1928, 21,800 in 1929, and 23,000 in 1930, but the companies outside the consortium sold, in the same years, 1,000, 1,200, and 3,500 flasks, respectively. ME, “Considerazioni sull'esercizio 1930,” ASIRI, ACS.

21 Meeting of 5 Feb. 1929, ME managing committee minutes, vol. 1, R-15/513, AFA.

22 There was a proposal for a reduction of 5 shillings to exceptional customers, on condition that they did not make this public.

23 Meeting of 7 Oct. 1929, ME managing committee minutes, vol. 1, R-15/513, AFA; meeting of 12 May 1931, ME managing committee minutes, vol. 2, R-15/514, AFA.

24 ME, report on the year 1930, Serie Rossa, b. 520, ASIRI, ACS.

25 Riccardo Salvadori to J. Toeplitz, CEO of Banca Commerciale, 28 June 1930, Serie Rossa, b. 520, ASIRI, ACS.

26 Meeting of 20 Oct. 1930, ME managing committee minutes, vol. 1, R-15/513, AFA; ME, report on year 1930, Serie Rossa, b. 520, ASIRI, ACS. In particular, the large American market fell spectacularly in 1930: only 1,200 flasks sold, compared to 11,356 in 1929.

27 “Mercurio Europeo, Considerazioni sull'esercizio 1931,” Serie Rossa, b. 520, ASIRI, ACS; “Sistema seguidos para la venta de las minas de Almadén desde la recission del contrato con la casa Rothschild,” b. 2, file 2715, SMA, AHM.

28 Meetings of October 1931, ME managing committee minutes, vol. 2, R-15/514, AFA; ME, report on the year 1931, Serie Rossa, b. 520, ASIRI, ACS.

29 Meeting of 14 Dec. 1931, MA minutes, AF.

30 Meeting of 17–18 Nov. 1931, ME managing committee minutes, vols. 2 and 3, R-15/514–515, AFA.

31 Finally, as guaranteed, Roura & Forgas was to deposit $150,000 in a leading bank, agreed upon with ME, and would allow the cartel to have a delegate in its offices to supervise the whole process (meeting of 20 Nov. 1931, ME managing committee minutes, vol. 3, R-15/515, AFA).

32 The Italian mercury mines went from employing 3,207 workers in 1929 to just 865 in 1934 (Segreto, Monte Amiata, 226).

33 “Annexe au procès verbale de la réunion du Mercurio Europeo tenue à Paris les 9–14 octobre 1933,” Serie Rossa, b. 520, ASIRI, ACS.

34 Document signed by Luigi Cardella, 14 Aug. 1933, Serie Rossa, b. 520, ASIRI, ACS; Report dated 9 Feb. 1934, b. 2 file 2715, SMA, AHM.

35 Italian ambassador Raffaele Guariglia to Italian Foreign Ministry, 26 Aug. 1933, Serie Rossa, b. 520, ASIRI, ACS.

36 Vincenzo Fagiuoli to the Italian Ministry of Corporations, 7 Jan. 1933, Serie Rossa, b. 520, ASIRI, ACS.

37 Almadén would retain 60 to 66 percent and the Italian group 40 to 44 percent; ME managing committee minutes, vol. 4, session 9, 11 Oct. 1934, R-15/516, AFA.

38 Siam and Argus mines accumulated over 4,000 flasks. “Nota acerca de la negociaciones mantenidas con el grupo italiano sobre la posible renovacion del contrato en vigor con Italia para la venta del azogue,” 9 Feb. 1934; documents dated 16 Sept. 1936; and “El primer contrato entre los gobiernos espanol e italiano,” undated draft, all in b. 2 file 2715, SMA, AHN.

39 ME managing committee minutes, vol. 4, 15 Jan. 1934, R-15/516, AFA; “Mercurio Europeo, Rapporto sulle sedute del Comitato direttivo di ‘Mercurio Europeo,’ tenute a Parigi dal 10 al 15 dicembre 1934,” Serie Rossa, b. 520, ASIRI, ACS.

40 Document dated 3 Mar. 1936, n. 1, file 1240, SMA, AHN.

41 Giura, Vincenzo, Tra politica ed economia: L'Italia e la guerra civile spagnola (Naples, 1993)Google Scholar.

42 Meeting of 22 Sept. 1937, MA minutes, AF.

43 Segreto, Monte Amiata, 129. With an international market price of $62 to $67, the project was to give the Spanish $8 to $10 per flask, the balance to be given to the Italian Ministry of Finance.  The Italian government estimated that this would bring 40 million lira into Italy (meeting of 27 Feb. 1937, MA minutes, AF).

44 Meeting of 19 Oct. 1938, MA minutes, General Legal Affairs Department, Added Archives, AF.

45 Meeting of 18 July 1940, MA minutes, General Legal Affairs Department, Added Archives, AF; Meeting of 8 May 1939, ME Spanish group minutes, vol. 5, R-15/526, AFA.

46 Hess, “‘Mercurio Europeo,’” 130.

47 “Prórroga del convenio Hispano-Italiano,” June–Sept. 1940, b. 2 file 3126, SMA, AHN.

48 Meetings of 5, 25, and 28 Nov. 1939, ME Spanish group minutes, vol. 5, R-15/526, AFA.

49 Meeting of 13 May 1940, MA minutes, General Legal Affairs Department, Added Archives, AF.

50 Meetings of 30 Aug. 1941 and 22 Jan. 1942, ME Spanish group minutes, vol. 6, R-15/527, AFA; meetings of 14–19 Dec. 1941 (meetings in Geneva, Zurich, Basel, and Frankfurt), ME managing committee minutes, vol. 6, R-15/518, AFA. After the agreement was signed, meetings were held in Berlin.

51 During the negotiations, the Reichstelle für Metallen tried to decide the price but was opposed by the cartel.

52 Meeting of 30 Oct. 1941, ME Spanish group minutes, vol. 6, R-15/527, AFA.

53 In August 1942 an offer from Japan to purchase 20,000 flasks had to be rejected because half the payment was offered in gold, with no guarantee that it could be delivered (meeting of 4 Sept. 1942, ME Spanish group minutes, vol. 6, R-15/527, AFA).

54 A good part of the increase in Spanish production figures was due to the use of forced labor in the Almadén mines (Angel Hernández, Los esclavos del rey [Almadén, 2010], 364–70).

55 Meeting of 6 Nov. 1941, MA minutes, General Legal Affairs Department, Added Archives, AF.

56 Meetings of 12 May 1944 and 19 Oct. 1944, ME Spanish group minutes, vol. 6, R-15/527, AFA; b. 2, files 2763 and 3138, SMA, AHN. A special representative was also nominated for the United States.

57 Meeting of 1 Nov. 1944, ME Spanish group minutes, vol. 6, R-15/527, AFA.

58 Meeting of 12 Feb. 1945, ME Spanish group minutes, vol. 7, R-15/528, AFA.

59 Meeting of 26 Mar. 1946, MA board of directors minutes, AFA. The situation probably also was influenced by the fact that the Allies found 45,000 to 50,000 flasks in Germany when they occupied the country in 1945, but it is not known in what proportion the United States and United Kingdom split this quantity of flasks.

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61 Meeting of 12 Oct. 1946, MA board of directors minutes, AFA. ME received other proposals from Pickering and Roura & Forgas.

62 Meeting of 7–8 Dec. 1946, ME managing committee minutes, vol. 6, R-13/520, AFA.

63 Segreto, Monte Amiata, 152–54.

64 U.S. commercial attaché in Bern to State Department, RG 59, 865.602/7-2388, Archives II, National Archives and Records Administration, College Park, Md. (hereafter, NARA).

65 Meeting of 10 Feb. 1949, MA board of directors notes, b. 520, ASIRI, ACS; sessions of 28 May 1948 and 2–5 Apr. 1949, ME managing committee minutes, vols. 6 and 8, R-15/520, AFA.

66 Meeting of 13 Sept. 1949, MA minutes, AFA; Note for the Ministry of Foreign Affairs, 6 Mar. 1952, b. 520, ASIRI, ACS; Ministero industria e commercio, Commissione central industria, sottocommissione industriale Alta Italia, b. 116, file 125, ASIRI, ACS; Giura, Tra politica ed economia, 87; Pablo Hierro de Lecea, “Desafíos en la aplicación de un enfoque transnacional para el estudio de las relaciones hispano-italianas, 1943–1957” (working paper, Seminario de Investigación del Doctorado en Historia Contemporánea, Departamento de Historia Contemporánea Universidad Complutense, Madrid, 2009). The U.S. decision probably was linked to the perspective that the Italian government was ready to include some deliveries of flasks to the Soviet Union in the framework of war reparations (Segreto, Monte Amiata, 163).

67 U.S. embassy in Rome to Monte Amiata, RG 59, 865.602/7-2348, NARA.

68 Note for the Ministry of Foreign Affairs, 6 Mar. 1952, b. 520, ASIRI, ACS.

69 “Mejora de las instalaciones metalúrgicas,” b. 2, file 1951, SMA, AHN.

70 Meeting of 27 Jan. 1950, Spanish sales committee minutes, AFA.

71 Comité Exterior de ventas, vol. 2, 30 Aug. 1954, R-15/527, AFA. See also Segreto, Monte Amiata, 164; MacKie-Mason and Pindyck, “Cartel Theory and Cartel Experience,” 193.

72 MacKie-Mason and Pindyck, “Cartel Theory and Cartel Experience,” 201.

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