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THE INDIA RUBBER WORLD 



1 



Published on the 1st of each Month *by 



THE INDIA RUBBER PUBLISHING GO., 



No. 395 BROADWAY, NEW YORK. 

 CABLE ADDRESS: IRWORLD. SEW YORK. 



HENRY C. PEARSON, 



EDITOR. 



HAWTHORNE HILL, 

 ASSOCIATE. 



Vol. 41. 



OCTOBER 1. 1909. 



No. 1. 



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COPYRIGHT, 1900, BY 

 THE IMUA RUBBER I'l BLI8HIXG CO. 

 Entered ai Now York postoffice as mail matter of thi second 



TABLE OF CONTENTS ON LAST PAGE READING MATTER. 



SPECULATION IN RUBBER. 



AB< i L T twenty-five viars ago, when a rubber trailer 

 at Para, then a small and little known city, man- 

 aged to get the then existing stocks under control to an 

 extent which forced the price up to SI. 24. there was con- 

 sternation among consumers accustomed in buy "from 

 hand to mouth." It was not long, however, before the 

 continued arrivals from sources up the Amazon not con- 

 trolled by the venturesome speculator filled his financial 

 backers with alarm; prices dropped to their former level, 

 about one-half the figure reached under speculative in- 

 fluences. This result, by the way, came too soon, for 

 too many people were left with the idea that "whenever 

 rubber goes up. it must come down again." 



Subsequently, whatever the conditions of the rubber 

 trade, there were manufacturers who. following every 

 rise in the price of raw material, laid their plans for a 

 fall as prompt and as decided as that which followed the 

 ill-fated speculation of Vianna. In other words, that 

 episode seemed to inspire many consumers with the idea 

 that rubber prices could not. long at a time, remain 

 higher than in the pioneer days. Hence, selling goods at 

 too low a margin of profit — as ultimate!} proved; hence, 

 cheapening the quality of goods — to the disadvantage of 

 22 the whole trade; hence, some unnecessary bankruptcies. 



Came then into the field a daring American specu- 



<T> 



lator, with the idea that the Amazon river, the sole chan- 

 nel by which "Para" rubber could reach the market, was 

 capable >>i being "bottled up." Seize the whole output, 

 and the trade could lie controlled: then every buyer 

 would he ai the mercy of the bold operator. Bu 

 "make good" on this proposition, it was necessary to 

 buy, buy, buy — while a production up-river, which 

 never he measured in advance, was coming in at an in- 

 convenient rate. And one day the last straw broke the 

 camel's back; there was no more money with which to 

 bin . 



There might have been monej --till at command, but 

 rubber is not SO thoroughly a necessity as some pi 

 have described it; the masses will not buy even over- 

 shoes if they become too costly. So the -peculation based 

 upon the idea of controlling all the Amazon rubber, be- 

 cause people would be obliged to buy it in the end. failed, 

 and prices again dropped temporarily to almost nothing, 

 strengthening the idea that "when rubber goes up, it 

 must come down again." 



Meanwhile, rubbers from elsewhere than the Amazon 

 had appeared in such quantities, and had been utilized 

 to such an extent, as to rob South America of its old- 

 time primacy. And this latter condition still prevails, as 

 illustrated in the growing output from plantations in the 

 bar East. This observation is pertinent here, however. 

 only as showing the futility of trying to "bottle up" the 

 Amazon. 



The third and lasl great "coup" attempted in the Para 

 market seems to have been based neither upon lessons 

 learned from the former episodes, nor upon an) other 

 discernible reason than that it was intended only as a pure 

 "gamble" of a day. Rubber had fallen to the lowest 

 figure for \ears. and America was not buying heavily. 

 It had been declining steadily; why not assume that it 

 would decline further? Hence exceptionally heavy 

 "short stiles." at prices lower than were actually quoted 



during the v ear - 



-i. e. 



at 2s. <)d.. when lower than 2s. '<</. 



was never reached in the published quotations. These 

 sales had to be "covered." of course, at any prices that 

 might be claimed by whoever happened to be in posses- 

 sion of rubber when the time came for deliveries. Again 

 losses overtook the speculators, and corresponding profits 

 for those in a position to supply the demands of the 

 market. Meanwhile some of the largest consumers in 

 the world have been in a fortunate position from having 

 bought a great deal of rubber at artificially low prices. 



The latter circumstance undoubtedly tended to put 

 rubber prices higher at times during the past year than 

 would have been reached otherwise, but its effect cannot 

 he held to explain current quotations. In other words. 

 a high level of prices may reasonably be expected to con- 

 tinue at least until raw material for the business in sight 

 at the factories has been secured, and the current and 

 early prospective demand for goods has been more ac- 

 curately measured. 



So far as the manufacturers are concerned, it may be 



