42 



THE INDIA RUBBER WORLD 



[November i, 1903. 



rubber as, for instance, in wheat. Rubber can't be bought on 

 'margin.' In the next place, it is not a safe commodity to 

 carry. You may buy wheat, and it doesn't deteriorate in quality 

 or quantity. Buy whiskey, and the leakage for a given time 

 can be calculated to mathematical accuracy. But buy rubber, 

 and no man on earth can predict the extent of the shrinkage. 

 An outsider once, who had noticed that rubber sometimes 

 fluctuated, instructed me to buy a lot for his account, and then 

 waited for a rise. When he had grown tired waiting, and gave 

 orders to sell, he found that not only had the rubber declined 

 10 per cent, in the market, but it had lost 7 per cent, in weight, 

 making him a loser in two ways." 



" Would it be possible to ' corner ' the market for Para rub- 

 ber in these days ? " 



" It would be a very difficult undertaking. The Para rubber 

 output for 1897, figured at the prices prevailing there at the 

 end of the year, was worth not less than $34,000,000. The 

 people who bought this rubber did so with the expectation of a 

 quick turnover, in order to be able to use their capital again. 

 Now, in order to gain a controlling interest in the Paid market 

 it would have been necessary from the start to pay more for 

 rubber than the prices at which manufacturers, in the ordinary 

 conduct of their business, buy freely. There would have to be 

 taken into consideration the interest charges on the large 

 capital involved, and the heavy loss from shrinkage in case any 

 rubber was held long, not to mention the possibility of having 

 finally to unload some of it at less than cost. There are many 

 goods made of rubber for which consumers will not pay a high 

 price, for which reason there are limits in cost that a manufac- 

 turer cannot go beyond. Then there are other rubbers. When 

 Vianna got up his great rubber ' corner ' some years ago, al- 

 though he made an utter failure, he frightened manufacturers 

 into experimenting with other sorts than Para, giving rise to 

 the present large use of Africans. As compared with Vianna's 

 day, the Para crop is now twice as great, and the business is 

 scattered over Brazil, Peru, and Bolivia, and harder to con- 

 trol than when, as he found it, all centered at Pard. And the 

 value of African rubbers is now assured, whereas it had then to 

 be learned. 



"There was a good chance for speculating in Para rubber 



within the past year," the broker went on. "The demand has 

 been so great that any one buying largely at an advance over 

 the market prices, could have unloaded at a still greater ad- 

 vance, but the importers didn't recognize it until it was too 

 late. There was an equally good chance two years ago, at 

 the beginning of the ' boom ' in rubber consumption in Europe. 

 The importer who could have foreseen the heavy demand 

 there, and bought largely while prices were still low, could 

 have unloaded at better profits than most of them did pocket 

 in the end." 



" Where are rubber prices made, as a rule ? " 



"Where the largest stocks are. If there are large holdings 

 at Para and limited supplies of Pard sorts elsewhere, the con- 

 trolling quotations will be made in the Para market. As be- 

 tween New York and Liverpool, whichever port is better sup- 

 plied with a certain class of rubber than the other, to speak 

 generally, fixes the price which the market that is short of the 

 rubber must pay for it. Hence prices are made here or there, 

 as conditions vary." 



" Shall we have cheaper rubber soon ?" 



" It doesn't seem so. The ' boom ' in the European industry 

 may have passed, but it leaves the manufacture of rubber on 

 a larger scale there than before. There may not be any great 

 ' boom ' in business in America, but indications all point to a 

 continuation of our large rate of rubber consumption. The 

 Pard rubber crop may be expected to show the usual small 

 yearly rate of increase, but, judging from recent history, Afri- 

 cans will hardly do more than hold their own in quantity. 

 African rubbers, by the way, are coming more and more to be 

 sold on their merits, independently of the market for Para 

 grades, and some of these, with an established reputation but a 

 decreased yield, are selling higher in consequence. There is, 

 in addition to all these considerations, a short interest in this 

 market so far as certain grades are concerned, and this has the 

 effect always of stiffening prices some, but it is not attributable 

 to what can properly be called speculation." 



• * * 

 In this connection it has been thought well to present the 

 chart below, relating to conditions for ten years past, an explan- 

 ation of which appears r n the paee following. 



TONS 



55)00 

 5600 

 5300 

 5000 

 4700 

 4400 

 4100 

 3800 

 3500 

 3200 

 2!>00 

 2000 

 2300 

 2000 

 1700 

 1400 

 1100 



THE FIGURES TO THE LEFT. EXPRESSING STOCKS IN TONS, 

 RELATE TO THE HEAVIER LINE ACROSS THE CHART. 



THE FIGURES TO THE RIGHT, EXPRESSING PRICES IN CENTS, 

 RELATE TO THE LIGHTER LINE ACROSS THE CHART. 



COMPARISON OF PARA RUBBER STOCKS AND PRICES FOR TEN YEARS. 



