234 



THE INDIA RUBBER WORLD 



January 1, 1921 



With still finer analysis, one might suggest that hot- 

 water bottles, inasmuch as they are used for foot warm- 

 ing, are seasonal goods. 



In other words, the vast majority of rubber goods, 

 probably 90 per cent, go directly into this category, which 

 is why the brief has such sweeping application, and why 

 the trade should congratulate itself that it was so well 

 prepared. 



WILL $3 RUBBER COME AGAIN? 



THE long-impending restriction in rubber production 

 by the owners of the great plantations of the Far 

 East is an accomplished fact, the proprietors of fully 

 80 per cent of the 3,000,000 planted acreage having ac- 

 cepted the recommendation of the council of the Rub- 

 ber Growers' Association, of London, to curtail by 25 

 per cent the estimated normal monthly output, either bv 

 leaving untouched one-quarter of the tapping area or by 

 tapping the trees in the entire tapping area only on 

 alternate days. Planters are free to choose either method 

 . to limit the total output. The "Covenant of the League" 

 provides that the repression period shall extend from 

 November 1, 1920, to January 1, 1922; but the time 

 and terms of the restriction may be modified by mutual 

 agreement whenever improved economic conditions, such 

 as a considerable reduction in excess stocks, warrant 

 such action. 



Rubber planters feel amply justified in taking this 

 course toward stabilizing the market for raw gum, which 

 has been severely jolted by a combination of adverse 

 conditions, among them being drastic credit regulations 

 by leading banking institutions of the world to check 

 inflation, labor troubles, demoralization of European 

 trade, and the chaotic condition of the world's exchanges. 

 All this came instead of the predicted post-war boom 

 in rubber, and to mock the predictions of the too opti- 

 mistic. Yet even the most conservative planters never 

 dreamed of the price dropping to 10 pence (normal ex- 

 change), as it did recently in the London market, and 

 which figure, while not below cost of production, does 

 not show much profit. 



Naturally, students of the rubber industry cannot help 

 but speculate on the probable outcome of the decision 

 of the plantation owners to curtail their output. Will 

 not history repeat itself in this case as it has in so many 

 others? Very likely a diminished production of crude 

 rubber will raise the price before long in accord with 

 the workings of the law of supply and demand, but at 

 best this benefit can only be temporary. Attracted by the 

 enhancing prices, and willing to take a chance where 

 the profits are promising, enterprising capitalists are 

 likely to go heavily into raising rubber, and there is 

 still a vast available territory to be exploited. Hence, 

 with much crude gum pressing for sale, the inevitable 

 will happen, just as it did following the excessive pro- 



duction on the advent of the tire industry, and prices 

 will drop sharply. 



Rubber may some day again approximate the $3 mark ; 

 but concerted curbing of production will not bring it 

 about, nor will artificial restriction of sales do it, as the 

 woeful collapse of famous rubber "corners" has well 

 proved. Nor is another sudden and extraordinary de- 

 mand for rubber, with swift price enhancement, such 

 as came with the inception of the tire industry, at present 

 in sight. Wherein then lies the planter's opportunity 

 to get higher prices with a ready market ? He may reach 

 such a goal by producing a type of rubber better than 

 that of his competitors, always homogeneous and up to 

 sample ; by accepting the low prices, but producing a 

 gocjd grade of gum at reduced cost with improved 

 methods ; or by finding some wholly new use for rubber 

 on a considerable and increasing scale. 



TIRE VALUES VASTLY INCREASED 



ESTiM.-\TED in terms of miles per dollar of cost, the 

 rubber tire of today is cheaper by 50 per cent than 

 the tire of ten years ago, which is but another way of 

 saying that the tire buyer gets more for his money now 

 than ever before. Indeed, no other manufactured com- 

 modity in America has undergone as great an improve- 

 ment in quality and workmanship as the pneumatic tire. 

 Five years ago the maximum mileage guaranty was 

 3,500, and that was on the more expensive tires. Today, 

 even on low-priced tires a 7,000-mile guaranty is com- 

 monly given. Yet, while tires have gradually declined in 

 price, tire fabrics have, in the past ten years, fairly quad- 

 rupled in value. Crude rubber took an opposite course, 

 falling in 1920 to a quarter of the 1910 price. The lead- 

 ing tire makers, however, are constantly experimenting, 

 and are doing their utmost to build more miles into their 

 tires so that any loss to buyers will be relative rather than 

 absolute. 



RUBBER AND WHISKEY 



A CORRESPONDENT to the Financial Times. London, 

 pointing to the low price of crude rubber, says: 

 "In 1913 a pound of rubber would pay for a bottle of 

 whiskey (a quart) ; today it would take nine pounds of 

 rubber to buy a bottle of whiskey." A very clever pre- 

 sentment but not particularly valuable as an asset in com- 

 parative statistics, particularly in the United States, where 

 whiskey and rubber conditions run thus: In 1913 a 

 pound of rubber would buy a bottle of whiskey (a pint). 

 Today the Bootleggers' Union would exact twenty-two 

 pounds of rubber for a pint of whiskey, and both buyer 

 and seller would be taking chances at that. 



What is now required is courage and respect for 

 fundamental economic principles. Artificial palliatives 

 to obviate the difficulties of adjustment — particularly 

 proposals involving further inflation and cheapening of 

 credit — must be avoided. 



