THE INDIA RUBBER WORLD 



[I'kbuiarv 



should give very effective support to the European rul)bfr 

 industry. 



Competitive production is not only a matter of manufacturing 

 method; it goes right down lo the very roots of the industry. 

 The ability to compete springs from the volume of the original 

 investment, of the productive capacity and cost of labor and from 

 the efTectiveness of the equipment. It depends upon the price 

 of the raw material and the overhead expenses of the industry. 

 We can, therefore, easily concede points to Europe for new 

 inventions and improvements in the method of the industry if 

 we can only meet competition as to the cost of labor, materials 

 and the general operation of our plants. 



If it should prove that we pay more for our raw materials, 

 that our labor costs us more than it costs the European manu- 

 facturer and that our overhead expenses are higher, then we 

 may very well experience a severe set-back in the prospects of our 

 industry. Europe will not only take away from us our recently 

 gained export markets but it also may attack us in the domestic 

 market. 



CRUDE RUBBER AND FOREIGN EXCHANGE. 

 There is little reason to expect that European rubber manu- 

 facturers should be able to buy their rubber much cheaper than 

 our own manufacturers. The .\merican rubber manufacturer has 

 bought rubber as cheaply in London as the English in pre-war 

 times and the freight has not made much difference in the cost of 

 the product at the door of the factory. During the war this con- 

 dition has still more improved as we have discontinued largely 

 the old practice of buying in Europe but have purchased and 

 shipped our requirements at the source. The cost of the raw 

 inaterial, therefore, will not favor in future any side any more 

 than it has in the past, and the chances are even that the scale 

 may dip slightly in our favor. 



This chance is supplied by the present exchange situation. .\s 

 neither France, nor England, nor the United States, is able to 

 produce rubber in their respective countries,, they must neces- 

 sarily buy it somewhere else, in Brazil, Africa, or Singapore, 

 for example. In these markets each of the purchasers appear on 

 his own merits. But the .American purchaser, at least at the 

 present time, has the advantage of the greater purchasing power 

 of the dollar. Where the English manufacturer still pays twenty 

 shillings to the pound sterling, the American pays only $3.72 

 which gives him a superiority of approximately 20 per cent in 

 his purchase. 



OTHER SUPPLIES. 

 What applies to the principal product, applies also to the sup- 

 plementary ones, as the textile fabric in the tires, chemicals, etc. 

 The rise in the cost of many of these has been quite phenomenal. 

 These supplementary supplies are not so narrowly confined to 

 ihcir original sources as rubber. Of course, for the fine cotton 

 required for tire fabrics we rely almost exclusively on Eg>ptian 

 cotton, as the Sea Island product is not at present available 

 in sufficient quantities. But it appears that we should be able 

 to purchase this cotton as cheaply or expensively as our European 

 competitors. Our position as to chemicals probably is less favor- 

 able. England, France, and our other European competitors have 

 manufactured these products generally cheaper than our own 

 factories, and they most likely will continue to do so. It may be 

 said that we can purchase these products from them, and by 

 doing so can share in their advantageous position. But since the 

 war much has changed in our own chemical industry, and it may 

 become a matter of good policy that we should favor rather our 

 national producers instead of the foreign, even if we should have 

 to pay a higher price. After all is said, there remains, however, 

 the fact that matters will remain practically unchanged and that 

 the advantage in buying will remain pretty much where it was 

 before the war. 



Conditions are different as to labor. In this respect we have 

 to deal in Europe with three distinct groups of production, each 



having its special problems of labor, and each being differently 

 affected by the recent reorientation. 



LABOR SITUATION. 

 In England and France little has changed in the outward posi- 

 tion of labor. True, it has increased its political control in the 

 first-named country, but the English workingman has always 

 exerted a certain influence upon the industry of the country ky 



It is an Expensive M.^^tter for the Plrchaser to Buy an 

 .-\merican, 34 By 4H-in'cii Fabric Tirk with the Depreciated 

 Money of England and France. 



way of a very well developed system of trade unions. Conditions 

 are similar in most of the neutral countries and in Italy. In 

 Germany, however, great changes have taken place and are still 

 under way. The German working population is not only taking 

 part now in the managc.nent of the political affairs of the nation 

 but it has become the government itself. The change has not 

 been always to the best interest of the industry of that country 

 but the outlook is rather hopeful and in the end a fairly sound 

 system of cooperation between manufacturer and workman may 

 be obtained. Nothing has yet been decided as to the status of 

 labor in the nevyly created republics east of Germany, such as 

 Poland and Bohemia, while in Russia proper at the present time 

 labor has not only control of the governmental machine but has 

 laken in charge the whole nation. This growth of the political 

 influence of labor has been followed in each instacne by a rise in 

 wages and it is this aspect of the situation which is of most 

 importance for the future competitive position of the European 

 rubber industry. 



WAGE INCREASES. 



Wage increases have varied a great deal in the different parts 

 of Europe. In England wages have gone up at rates varying 

 between 7S and 100 per cent. Wage increases, however, have been 

 generally more heavy on the European continent because wages 

 were lower there than the average wage scales paid in England. 

 In France, for instance, the rubber industry now pays easily 150 

 per cent more than it used to pay in pre-war days, and in Ger- 

 many increases have been as high as 200 per cent and even more. 

 Conditions in Germany are very unsettled and the present wage 

 movement has not come to an end yet, owing to the continual 

 depreciation of the German exchange. We may take it, however, 

 for granted that continental European wages in the rubber indus- 

 try will settle down finally upon approximately the same level as 

 that prevailing at the present time in England. This will bring 

 about a great change in the competitive situation in Europe. 



In pre-war times it was generally acknowledged that the con- 

 tinental European factories were able to out sell the English ones 

 in their own market. As the result there existed in London a great 

 number of European continental agencies selHng the product 

 of their respective factories in competition with English manu- 

 facturers. During the war, a noticeable reduction in the number 

 of these agencies has taken place and their return in the same 

 strength is not expected. England in fact may be able to hold 



