December i, 1903.] 



THE INDIA RUBBER WORLD 



93 



INTERVIEWS IN THE NEW YORK TRADE. 



I — WITH A CRUDE RUBBER MERCHANT. 

 « T)RICES of rubber, while showing some firmness and a 

 •l tendency to advance in the closing days of the month, 

 were on an average much lower at the end of November than 

 at the end of October. The average spot price for Upriver 

 Para was about 10 cents below the price of thirty daysprevious. 

 From the high point to which prices soared sixty days ago 

 there has been a decline of from 15 to 17 cents. The stocks c{ 

 crude rubber in the market are not large, and the demand at 

 the close of the month was more active than it has been in re- 

 cent weeks. 



" The causes for the decline in prices are not hard to deter, 

 mine. It is the general concensus of opinion of the best posted 

 men that prices had been pushed too high for the general con- 

 ditions of business and trade. In other words, the prices of 

 rubber two months ago were out of line — higher than the manu- 

 facturer could afford to pay and do business at a profit: There 

 was very little buying at the top prices, and such as was in- 

 dulged in by the manufacturers was in cases of necessity. 

 That the high prices were the result of speculation, or at least 

 the movement of speculators, is a very prevalent opinion, and 

 it is also the opinion that some of those engaged in the move- 

 ment were found, when the break came, with considerable 

 amounts of high priced rubber still on their hands. It is hard- 

 ly probable that the prices [which marked the closing days o( 

 September will again be reached, nor is it considered by the 

 best judges of conditions that violent price fluctuations in the 

 near future are probable. 



" In the manufacturers' hands stocks are regarded as rather 

 light, an inevitable sequence of high prices, and the inquiry at 

 the close of the month was more active. The general condi- 

 tions of trade do not, however, warrant the belief that there 

 will be an extensive demand for rubber at h'gh prices, or in- 

 deed at any price. While all the factories are running at about 

 the usual activity for this period of the year, reports from sales- 

 men are not entirely satisfactory. Many things contribute to 

 render theoutlook lacking in encouragement: The high prices 

 of money, the disturbances of the Wall street market, the many 

 strikes which have made idle concerns that are large con- 

 sumers of rubber, and the open, pleasant weather that has pre- 

 vailed during the fall. 



" While it is true that business during October and Novem- 

 ber was better than for the same months last year, it was hardly 

 so good as had been anticipated in view of the unusual activity 

 during the spring and summer. Most of the factories are fairly 

 loaded with spring orders, which insures steady occupation 

 during the winter, but new orders are indicating a slight dim- 

 inution. It is of course recognized that the last three months 

 of the year are always the dullest in the year for the manufac- 

 turer, in the matter of sales. The dealer has purchased and re-, 

 ceived his fall and winter supplies, has probably ordered his 

 spring goods, and is at the moment interested chiefly in dispos- 

 ing of his stock." 



II — WITH A RUBBER MANUFACTURER. 



" I am a bear on the rubber market,'' said the head of one of 

 the largest manufacturing concerns, "for the very good reason 

 that I believe that goods cannot be profitably made from rub- 

 ber any higher or even as high as it is at the present time. We 

 have had in this country sirrce 1899 such a tremendous wave of 

 prosperity — or ' boom,' if you choose to call it such — that there 

 has been demoralizing inflation and overproduction. We must 

 get down to a reasonable basis, where money is made more 

 slowly, before we reach the points of safety. The recent panic 



in Wall street has been a rich man's panic and will not affect, 

 except collaterally, the rubber industry, but it will of course to 

 a degree be felt. For instance, I look for a falling off next 

 year in the demand for automobile tires. The automobile is 

 essentially the rich man's device, and the present money panic 

 will be felt. There will be some restriction felt in the vehicle 

 solid tire trade, also, and while this may not be noticeable in 

 the number of tires sold, it will be appreciable in the quality, 

 the average cost being probably less. 



" In other rubber goods I look for the same conservatism to 

 a certain extent, and I believe that manufacturers will be in- 

 clined to figure the cost of goods very closely. For these rea- 

 sons I do not look' for higher priced crude rubber. High 

 priced rubber makes high priced goods, and if the manufac- 

 turer cannot sell high priced goods he will not buy high priced 

 rubber. I do not believe all of this talk about short crops and 

 light stocks. There is no reason why the crop of rubber should 

 be any shorter than the average unless there are floods, or low 

 water or revolutions, or some other demoralizing cause. 

 There is as much rubber to be gathered and there are as many 

 gatherers, and high prices should have the effect of stimulating 

 the production rather than retarding it. 



"The recent high prices were made by speculators, and 

 some of them made money at it and some of them are holding 

 rubber they cannot sell for what they paid for it. The rubber 

 manufacturer must calculate very closely now, or he will lose 

 money rapidly. The business has been demoralized in the past 

 by men who thought it was a ' bonanza ' and rushed in without 

 understanding it. In order to get business they undersold 

 their rivals without counting closely enough, and they went to 

 pieces. The history of the trade is strewn with such wrecks." 



" How about the stocks of crude rubber in manufacturers' 

 hands? " 



" Some have four months' or three months' supply and some, 

 I understand, have gone down to almost the point of exhaus- 

 tion. Some manufacturers are conservative and only buy as 

 they need the rubber, while others are speculative and buy far 

 ahead when they believe a favorable opportunity is offered." 

 Ill — WITH A MANUFACTURER. 



Another manufacturer, who also is the head of a large com- 

 pany, was inclined to be pessimistic. " The competition is so 

 great," said he, "and the cost of material and labor so high, 

 that I do not think the outlook is at all alluring. The 10 

 per cent, advance that was announced by the principal man- 

 ufacturers about sixty days ago has practically been rescinded, 

 and while there has been no official notification to that effect, 

 every one of them, our firm among the number, is selling on 

 the old basis. This indicates that under present conditions 

 high prices for rubber goods cannot be maintained, in spite of 

 high prices for rubber and duck and other material. 



" These high prices are cutting into the profits, and I believe 

 it will require very careful management for some of the weaker 

 brethren to pull through. The factory expenses of our plant 

 will this year be about $80,000 more than last year, although 

 the volume of business is very little increased. Business in 

 every direction has been expanding too rapidly, and there must 

 be a readjustment before things will be safe. At the present 

 time business is dull, very dull as far as new orders are concern- 

 ed, and I do not look for much increase before March. As far 

 as the stocks of crude rubber are concerned in importers' hands, 

 I believe they are plenty, fully up to the average. In the man- 

 ufacturers' hands they are light, but I think purchases will be 

 sparingly made for the next six months. I do not think prices 

 will fluctuate very much, either up or down, for a good while 

 to come." 



