ST 1. 1920.] 



THE INDIA RUBBER WORLD 



NRVV VOVK 



■OTa.MCaU 



OAKUbM 



707 



Reg. United S 



Reg. United Kingdo 



THE INDIA RUBBER PUBLISHING CO. 



Xo. 25 West 45th Street, New York. 



Telephone — Bryant 2576. 

 CABLE .-IDDhESS: IRIVORLD, NEW YORK. 



HENRY C. PEARSON, F.R.G.S., Editor 



Vol. 62 



AUGUST 1, 1920 



No. 5 



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TABLE OF CONTENTS ON LAST PAGE OF READING. 



THE COMING RUBBER SHORTAGE. 



UNDER THIS DEFINITELY STARTLING CAPTION, Zom & 

 Leigh-Hunt (London), issue a four-page folder 

 combining statistics and conclusions that will give pause 

 to manufacturers and encouragement to planters. Were 

 not the figures accurate and the conclusions apparently 

 sound, one would take it as promotion talk. To quote 

 the summary of the argument : 



"It will be noticed from the above statistics 

 that for the next three years the increase in 

 the world's production of rubber is not likely to 

 exceed 6 or 7 per cent per annum. For the past 

 five years the manufacturing demand has absorbed 

 increases averaging more than 25 per cent per 

 annum. Even if during 1921-1923 the rate of in- 

 creasing demand should drop to 5 per cent per 

 annum, the world's output will be fully used up. 

 If the rate increases at anything more than 5 per 

 cent we must inevitably reach a period of actual 

 shortage. For instance, supposing that the aver- 

 age increase of the last five years should be cut 

 down to one-half ('12iX per cent instead of 25 per 

 cent per annum) we might by the end of 1921 

 be faced with a shortage of 30,000 tons of rubber. 



to be followed by another two years' increasing 

 stringency. The eflfect of an approaching short- 

 age will make itself felt in the market some time 

 before the position actually arises, as far-sighted 

 consumers of rubber will not quietly wait to be 

 'caught short.' This no doubt explains why it 

 is possible to-day to sell large quantities of rubber 

 for a couple of years ahead at a substantial pre- 

 mium, over the 'spot' price; forward contracts 

 in fact, have this year been made up to 2s. lO'.I.f/. 

 per pound for delivery in 1921. In a word, in the 

 absence of a setback in the trade of the world, 

 there is practically no risk of rubber falling below 

 its present price (except as a temporary fluctua- 

 tion) while the chances of a rise are almost star- 

 tling, in view of the statistical position revealed." 



NO PROFITEERING IN RUBBER. 



PROFITEERS try to palliate their rapacity with the plea 

 that they did not press their advantage nearly as 

 far as they had a chance. In much the same way an 

 impeached British administrator in India once sought 

 to extenuate his crimes of extortion by saying that 

 when he considered the magnitude of his opportuni- 

 ties he was actually amazed at his moderation. 



All the opportunities for gouging the public during 

 and since the Great War have presented themselves 

 to rubber manufacturers as well as to others, but 

 to their credit it can truthfully be said that as a class 

 they neither took unfair advantage of the rising price 

 trend nor expressed regret at not having seized upon 

 an abnormal state of trade as a pretext for exacting 

 an unreasonable profit. 



Proof of this fact is afforded by the price of rubber 

 tires. In 1910 one popular make of 30 by 3^ fabric 

 tire cost $26. In 1920 the same tire sells for $23.20. 

 In 1910 the i2> by 4 size of the same tire sold for 

 $44 and the 34 by 4 for $46.50, as compared with the 

 1920 prices of $38.60 and $39.60, respectively. V.xm 

 more remarkable are the price decreases on the 

 larger size tires. Yet, despite the fact that they have 

 lessened the charge for their products, the tire man- 

 ufacturers have had to cope with such drawbacks as 

 a 250 per cent increase in the cost of cotton fabric 

 and a 200 per cent rise in wages since 1910. not to 

 mention greatly enhanced prices of compounding in- 

 gredients, building materials, machinery, etc. 



Luckily, as was pointed out in a recent issue of this 

 journal, raw rubber has remained the one normal 

 commodity, that, despite all the commercial upheavals 

 due to war and the enormous and world-wide demand 

 for it. is still marketed at about the same old, ante- 

 bellum price. But even the continued cheapness of 

 the basic material does not account for the low cost of 

 present-day rubber products. That explanation is to 

 be found in the remarkable enterprise of rubber 

 manufacturers, who, in the past few years, have, with 

 the aid of chemists, engineers and efficiency e.xperts. 



