Thursday, February 20, 2014

Predatory Pricing and the German Cartel

In a time long long ago, the world supply of bromine was controlled by Bromkonvention, a German cartel backed by the German government composed of 30 separate entities. This powerful monopoly sold bromine at a fixed price of 49 cents per pound throughout the world.
In 1889 Dow received his first patent after inventing
a more cost-effective and streamlined process for bromine extraction. His associates were impressed with his work and in 1890 helped him to found the Midland Chemical Company in Midland, Michigan. Dow continued his work extracting bromine and by early 1891 he had invented the Dow process, a method of bromine extraction using electrolysis to oxidize bromide to bromine which was more efficient than the existing processes of the world. With his new company and new technology, Dow was able to produce bromine very cheaply, and began selling it in the United States for 36 cents per pound. The German cartel had made it clear that they would flood the American market with cheap bromine if Dow attempted to sell the element abroad. In 1904, Dow defied the cartel by beginning to export his bromine at its cheaper price to England. A few months later, an angry Bromkonvention representative visited Dow in his office and reminded him to cease exporting his bromine.

Predatory pricing-: 
In business and economics, predatory pricing is the practice of selling a product or service at a very low price, intending to drive competitors out of the market, or create barriers to entry for potential new competitors. If competitors or potential competitors cannot sustain equal or lower prices without losing money, they go out of business or choose not to enter the business. The predatory merchant then has
fewer competitors or is even a de facto monopoly.

Why is it relevant?
One of the most popular views is that the government needs to protect us from predatory price-cutting. Large corporations, according to this argument, have big advantages in the marketplace. They can cut prices, drive out their competitors, then raise prices later and gouge consumers. Antitrust laws are needed, so the argument continues, to protect small businesses and consumers from those corporations with large market shares in their industries.
The story of Herbert Dow, founder of Dow Chemical Company, is an excellent case study for those who think predatory price-cutting is a real threat to society. Dow, a small producer of bromine in the early 1900s, fought a price-cutting cartel from Germany. He not only lived to tell about it; he also prospered from it. Like David fighting Goliath, he actually believed he could throw stones at the large German chemical monopolies and topple them from world dominance.

The Battle
Dow started the battle in 1904, selling bromine in England and undercutting the cartel at the same price he was selling it in the US.
In early 1905, Bromkonvention followed through on its threat, cutting the price of potassium bromide in half in the US from 30 cents/lb, to 15 cents/lb, while holding the price at 40 cents/lb in Europe. Other bromide prices were also halved.
Another visit was paid by Jacobsohn (the representative of Bromkonvention), who threatened a price war to run Dow out of business if he did not desist. The cartel was backed by the German government and had ample financial resources to win, he argued. Herbert Dow would have none of it, and dismissed the astonished Jacobsohn, who said: "You don't know what you are doing."

The Master Plan
The imaginative Dow worked out a daring strategy. He had his agent in New York discreetly buy hundreds of thousands of pounds of German bromine at the cartel’s 15 cent price. Then Dow repackaged the German product and sold it in Europe—including Germany!—at 27 cents a pound, again, lower than the cartel's rates at Germany. "When this 15-cent price was made over here," Dow said, "instead of meeting it, we pulled out of the American market altogether and used all our production to supply the foreign demand. This, as we afterward learned, was not what they anticipated we would do."

The Aftermath
Antitrust laws are needed to protect small businesses and consumers from those corporations with large market shares in their industries.
Indeed, the Germans were befuddled. They expected to run Dow out of business; and this they thought they were doing. But the U. S. demand for bromine kept growing higher and higher! And where was this flow of cheap bromine into Europe coming from? Was one of the Bromkonvention members cheating and selling bromine in Europe below the fixed price? Powerful tensions surfaced from within the Bromkonvention. According to Dow, "The German producers got into trouble among themselves as to who was to supply the goods for the American market . . . ." The confused Germans kept cutting U. S. prices—first to 12 cents and then to 10.5 cents a pound. Dow meanwhile kept buying the stuff and reselling it in Europe for 27 cents. Even when the Bromkonvention finally
caught on to what Dow was doing, it wasn’t sure how to respond. As Dow said, We are absolute dictators of the situation." He also wrote, "One result of this fight has been to give us a standing all over the world . . . . We are in a much stronger position than we ever were . . . ."
The bromine war lasted four years (1904–08), when finally the Bromkonvention invited Dow to come to Germany and work out an agreement. Since they couldn’t crush Dow, they decided to at least work out some deal so they could make money again. The terms were as follows: the Germans agreed to quit selling bromine in the United States; Dow agreed to quit selling in Germany; and the rest of the world was open to free competition. The bromine war was over, but low-priced bromine was now a fact of life.

Courtesy
Arnab Saha
Class of 2015

For more interesting articles read DoMS' own magazine "Dhithi" Click Here


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  19. UNIVERSAL FUNDING GROUP!!!

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  24. Do you need a quick long or short term loan with a relatively low interest rate as low as 3%? We offer business loan, personal loan, home loan, auto loan,student loan, debt consolidation loan e.t.c. no matter your credit score. We are guaranteed in giving out financial services to our numerous clients all over world. With our flexible lending packages, loans can be processed and transferred to the borrower within the shortest time possible, contact our specialist for advice and finance planning. If you need a quick loan contact us via Email: mrjohnwilliams537@gmail.com

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  25. Hello, I am Malissa Delh, currently living in New jersey city, USA. I am a widow at the moment with three kids and i was stuck in a financial situation in April 2014 and i needed to refinance and pay my bills. I tried seeking loans from various loan firms both private and corporate but never with success, and most banks declined my credit. But as God would have it, I was introduced to a Man of God a private loan lender who gave me a loan of $85,000USD and today am a business owner and my kids are doing well at the moment, if you must contact any firm with reference to securing a loan without collateral , no credit check, no co signer with just 3% interest rate and better repayment plans and schedule, please contact Mr James Lewis. He doesn’t know that am doing this but am so happy now and i decided to let people know more about him and also i want God to bless him more.You can contact him through his email: amacoloancompany@gmail.com

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  26. Are you in search of a reputable lender, tired of being rejected banks and mortgage, are you tired of looking for funding for your business, or you are financially embarrassed that you can not repay your debts and bills, hurry up and grab a guaranteed unsecured mortgage Today, contact us by email. musaddiqloanlending@gmail.com

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  28. Do you need Personal Loan?
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    ReplyDelete
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  31. Do not use all of these Private Money Lender here, there are not legitimate and if they have a free email account tag i.e. yahoo, gmail, hotmail, live etc then they are not legitimate. If they have telephone number with international dialing codes from Nigeria, India, UK, Singapore and France then you have to beware. A legitimate company would have a genuine website, personalized email address/account and based in the country they claim they are. I would recommend anyone looking a a serious/honest loan lender to visit: DAVID HERLEY FINANCE HOME BASED IN THE USA and their reputation speaks louder than others in the industry when it come to obtaining all kinds of loan, mortgage, debt consolidation and Real Estate Loans. Their full website information and contact details are tel no: +1 (321)-323-1809, Website: www.dherleyfinancehome.net or Email: loans@dherleyfinancehome.net located in Orlando, Florida. USA. Skype: dherleyfinance

    ReplyDelete
  32. Do not use all of these Private Money Lender here, there are not legitimate and if they have a free email account tag i.e. yahoo, gmail, hotmail, live etc then they are not legitimate. If they have telephone number with international dialing codes from Nigeria, India, UK, Singapore and France then you have to beware. A legitimate company would have a genuine website, personalized email address/account and based in the country they claim they are. I would recommend anyone looking a a serious/honest loan lender to visit: DAVID HERLEY FINANCE HOME BASED IN THE USA and their reputation speaks louder than others in the industry when it come to obtaining all kinds of loan, mortgage, debt consolidation and Real Estate Loans. Their full website information and contact details are tel no: +1 (321)-323-1809, Website: www.dherleyfinancehome.net or Email: loans@dherleyfinancehome.net located in Orlando, Florida. USA. Skype: dherleyfinance

    ReplyDelete
  33. Guten Tag, ich bin ein registrierter privaten Geldverleiher . Wir geben Kredite zu unterstützen Menschen, Firmen, die ihre finanziellen Status aktualisieren müssen auf der ganzen Welt, mit sehr geringen jährlichen Zinssätze so niedrig wie 3% innerhalb eines Jahres bis 30 Jahre Rückzahlung Dauer Zeitraum zu jedem Teil der Welt, Wenn Sie interessiert sind kindly diese E-Mail Kontakt> centrumfirmloancom@gmail.com

    ReplyDelete
  34. Hello Everybody,
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  36. Hello Everybody,
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    ReplyDelete
  37. Are you tired of seeking loans and mortgages from banks? Have you been turned down constantly by your banks and other financial institutions due to bad credit? Are you about loosing your home due to financial constraints? Global Lenders Inc is here to set you free from debt. For immediate enquires you can contact us via email powerfinance7@gmail.com

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  62. I want to write a little testimony about the good work of doctor ehiaguna who cured me from Hsv 1 and 2 for just 2 week with his herbal medicine, I never believe I can be normal again and have a good life like others I always regretted the day I got diagnose with the virus, I was lost of hope when my doctor told me there is no cure for it but I keep thinking and thinking about my future, if I can have kids of my own well I am so grateful for my helper who get me cured with his herbal medicine, I go online in search of anything that can help me because I can’t deal with it forever so I found this doc ehiaguna email on a blog of someone who was cured by him I quickly contact him for help and explain all my pain to him, he told me not to worry about it there is cure for real, I never believe until he send me the herbal medicine when I order for it and I have it within 4 days that is how I took the medicine for 2 week and the following week I go for test just to confirm I was 100% cured from this sickness what a miracle in my life I am so happy right now, you can also get in contact with him if you have such sickness through drehiaguna@gmail.com and also WhatsApp him +2348073908953... And He also have herbs medicine to cured the following diseases; eczema,urethra wart,chronic problems.Herpes, Cancer, Als,Hepatitis, Diabetes, HPV,Infections,ulcer  ETC

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  63. We are a fully registered and certified loan firm, that offers secured and unsecured loans to individuals and companies at a very low interest rate of 2%. We offer long and short term loans.Our company has recorded a lot of breakthroughs in the provision of first class financial services to our clients, especially in the area of Loan syndication and capital provision for individuals and companies. We have brought ailing industries back to life and we back good business ideas by providing funds for their up start. We have a network of Investors that are willing to provide funds of whatever amount to individuals and organizations to start business and operations.We are a group of energetic and experienced loan professionals with thorough knowledge of financial markets.In general we offer mortgages, home loans business loans and bad credit loans commercial loans, start-up- working capital loans construction loans car loans, hotel loans Xmas loans Our interest rate is 2% per annual repaid, our loan takes a maximum of 3 working days to get to all approved customers across the globe.You can contact us via
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  64. We are a fully registered and certified loan firm, that offers secured and unsecured loans to individuals and companies at a very low interest rate of 2%. We offer long and short term loans.Our company has recorded a lot of breakthroughs in the provision of first class financial services to our clients, especially in the area of Loan syndication and capital provision for individuals and companies. We have brought ailing industries back to life and we back good business ideas by providing funds for their up start. We have a network of Investors that are willing to provide funds of whatever amount to individuals and organizations to start business and operations.We are a group of energetic and experienced loan professionals with thorough knowledge of financial markets.In general we offer mortgages, home loans business loans and bad credit loans commercial loans, start-up- working capital loans construction loans car loans, hotel loans Xmas loans Our interest rate is 2% per annual repaid, our loan takes a maximum of 3 working days to get to all approved customers across the globe.You can contact us via
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  65. We are a fully registered and certified loan firm, that offers secured and unsecured loans to individuals and companies at a very low interest rate of 2%. We offer long and short term loans.Our company has recorded a lot of breakthroughs in the provision of first class financial services to our clients, especially in the area of Loan syndication and capital provision for individuals and companies. We have brought ailing industries back to life and we back good business ideas by providing funds for their up start. We have a network of Investors that are willing to provide funds of whatever amount to individuals and organizations to start business and operations.We are a group of energetic and experienced loan professionals with thorough knowledge of financial markets.In general we offer mortgages, home loans business loans and bad credit loans commercial loans, start-up- working capital loans construction loans car loans, hotel loans Xmas loans Our interest rate is 2% per annual repaid, our loan takes a maximum of 3 working days to get to all approved customers across the globe.You can contact us via
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  66. We are a fully registered and certified loan firm, that offers secured and unsecured loans to individuals and companies at a very low interest rate of 2%. We offer long and short term loans.Our company has recorded a lot of breakthroughs in the provision of first class financial services to our clients, especially in the area of Loan syndication and capital provision for individuals and companies. We have brought ailing industries back to life and we back good business ideas by providing funds for their up start. We have a network of Investors that are willing to provide funds of whatever amount to individuals and organizations to start business and operations.We are a group of energetic and experienced loan professionals with thorough knowledge of financial markets.In general we offer mortgages, home loans business loans and bad credit loans commercial loans, start-up- working capital loans construction loans car loans, hotel loans Xmas loans Our interest rate is 2% per annual repaid, our loan takes a maximum of 3 working days to get to all approved customers across the globe.You can contact us via
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  67. We are a fully registered and certified loan firm, that offers secured and unsecured loans to individuals and companies at a very low interest rate of 2%. We offer long and short term loans.Our company has recorded a lot of breakthroughs in the provision of first class financial services to our clients, especially in the area of Loan syndication and capital provision for individuals and companies. We have brought ailing industries back to life and we back good business ideas by providing funds for their up start. We have a network of Investors that are willing to provide funds of whatever amount to individuals and organizations to start business and operations.We are a group of energetic and experienced loan professionals with thorough knowledge of financial markets.In general we offer mortgages, home loans business loans and bad credit loans commercial loans, start-up- working capital loans construction loans car loans, hotel loans Xmas loans Our interest rate is 2% per annual repaid, our loan takes a maximum of 3 working days to get to all approved customers across the globe.You can contact us via
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  68. Good evening to you all I want to write a shortly message to the world how doctor ehiaguna help with his great herbal medicine to cured me from this horrible virus HSV 1 and 2 I get his email from someone name Olivia mason how she was also cured by doctor ehiaguna I never believe there was cure until I meet her testimony, I contacted doctor ehiaguna I don’t believe there was cure well I am so happy to write this testimony to the world, this man immediately when I sent him email and this man response within 20 minus and give me the necessary process and the herbal was sent to within 4 day I took it according to the instruction so with 2 week I was completely cured and I get my test done I was confirm negative I am so happy if you want to get his contact you can message him with this email drehiaguna@gmail.com or you can also WhatsApp him +2348073908953 he can fix this.HIV.HEPATITIS.ANTHRAX.HPV.CANCER.ALSAND ALSO SOLVE YOUR RELATIONSHIP PROBLEM

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  69. Never give up in life they all say no cure to HSV 2 which is a big lie I have pass through many process also i never believe there is really cure to HERPES until I meet Dr.Ehiaguna the doctor that have been helping many people for many years, I come across this doctor online when I was searching for cure online I found out about this man, and to my greatest surprise this man have the herbal medicine which I have been looking for years I explain my problem to him through the email I found on someone who testify about him also, Dr.Ehiaguna write me a reply and explain how the process work so after ordering for the medicine I got it within 4 days and I took it according to the way Dr.Ehiaguna instructed, I was so happy after two week I took the medicine there was very big change in my health when I was done with the process I go for test, I found out I am negative that was the day I have the tears of joy you can also get in contact with my doctor through his email now drehiaguna@gmail.com or you can also WhatsApp him +2348073908953. And He also have herbs medicine to cured the following diseases; eczema,urethra wart,chronic problems.Herpes, Cancer, Als,Hepatitis, Diabetes, HPV,Infections,ulcer  ETC

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    Replies
    1. I Never believed i was ever going to be HSV FREE again, DR.Ehiaguna has given me reasons to be happy, i was HSV positive for 2 years and all the means and medicine i tried for treatment was not helpful to me, but when i came on the Internet i saw great testimony about DR.Ehiaguna on how he was able to cure someone from HSV 2, this person said great things about this man, and advice we contact him for any Disease problem that DR.Ehiaguna can be of help, well i decided to give him a try, he requested for my information which i sent to him, and he told me he was going to prepare for me a healing portion, which he wanted me to take for days, and after which i should go back to the hospital for check up, well after taking all the treatment sent to me by DR.Ehiahuna , i went back to the Hospital for check up, and now i have been confirmed HSV NEGATIVE, friends you can reach DR.Ehiaguna on any treatment of any Disease cos i saw many testimony of different disease like, HEPATITIS,HIV AIDS,EPILEPSY, CANCER,CFS he is the one only one i can show you all up to, reach him on drehiaguna@gmail.com or whatsApp him now +2348073908953. quick contact him for help and you can just quickly drop your number on your first mail as i did for easily conversation

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