570 



THE INDIA RUBBER WORLD 



[July 1, 1916. 



PRODUCTION COST OF RUBBER GOODS. 



As a consequence of prevailing conditions here, the rubber in- 

 dustry is burdened with additional costs that can he classed as 

 follows : 



First; costs affecting the raw material, caused by higher rates 

 of exchange in the Far East and other regions producing crude 

 rubber ; increased ocean freight charges, in many instances as 

 much as 250 per cent ; increased cost of marine insurance, in 

 some cases amounting to 1,425 per cent and small increases in the 

 costs of handling merchandise, stevedoring, etc., due to labor 

 shortage. 



.A second cause for high costs is the increase in maintenance 

 expenses, that is to say, the upkeep of machinery, appliances and 

 equipment, due to higher cost of such materials as iron, steel, 

 copper, wood, leather, etc., — in general, all factory supplies. This 

 increase amoimts on an average to 100 per cent. 



Third, general overhead expenses are extremely high ; coal, 

 mineral oils, greases, chemical products, cardboard, paper, station- 

 ery, etc., have all advanced 100 per cent. 



GENERAL EFFECT ON M.VNUFACTURING INDUSTRIES. 



Taking into account the universal military service throughout 

 I'rancc, it can easily be understood that the effect of the war 

 upon manufacturing industries has been very pronounced. The 

 help is taken away, no one is left behind to do the work except 

 those physically unable to serve in the army. Raw material is 

 hard to obtain, and it is costly. Coal is three times as high as 

 in normal times. To all of this is to be added the difficulty of 

 running a plant under such a disorganized condition of affairs 

 as necessarily prevails. Few plants can reach normal efficiency. 



Industries dependent upon enemy countries for certain articles 

 such as dyestuffs, or which are dependent upon such countries 

 for the sale of their products, are naturally great sufferers. 



Industries are going ahead, but in a much crippled manner. 

 Business is good. The only difficulty is to fill orders. 

 CONDITIONS AFTER THE WAR. 



After-war conditions are being freely discussed throughout 

 France, and there will be no lack of initiative in going ahead 

 as soon as peace is reestabHshed. The great industries of the 

 invaded territories will be rapidly reconstructed and reorganized. 

 In those districts machinery has suffered as much as buildings. 

 The latter can be easily and rapidly reconstructed, but the 

 machinery problem will present greater difficulties. The market 

 which war-stricken districts will offer is enormous. Everything 

 there appears to have been either stolen or destroyed. When 

 the men come back from the trenches, they too will have to 

 pass through a period of reconstruction, as they have been away 

 so long from civilian life. 



Wages after the war will be higher than they were previous 



to the great struggle, so will raw materials, and, consequently, 



the cost of production will be greater than before the war. 



Freights also will be on a high level. 



TREATIES. 



The allied nations will arrange treaties and tariffs to favor 

 themselves and their colonies. Increased and discriminating ex- 

 port duties will be placed on colonial products and arranged so 

 as to favor the Allies. In this respect the Central Powers are 

 sure to be placed at a great disadvantage for the supplies of 

 such colonial products as rubber. The great demand for labor, 

 if nothing else, is sure to make labor high, and it is certainly 

 easier to increase wages than it is to reduce them. 

 DUMPING. 



I understand that in America, you fear the dumping of stocks 

 of merchandise accumulated in Europe during the war. I do not 

 believe this fear well-founded. The Central Powers have 

 acquired much material as a result of conquest, but with the 

 prolongation of the war and the Allies' blockade, these powers 

 will have been obliged to use up much of their spoils. This 

 opinion is supported by the following instance : The invaders 

 took enormous quantities of cloths and fabrics from the Lille- 



Tourcoing-Roubaix district, but they are obliged to use these 

 goods ; we have captured prisoners >vearing uniforms made 

 of Roubaix cloths, and have brought down aeroplanes, in the 

 make-up of which we found much Lille-made linen. Of course, 

 these are but instances, but they indicate conditions and speak 

 louder than words. 



No doubt there will be some dumping in certain lines of 

 merchandise, but I believe little is to be feared on this score. 

 It will be found that the Central Powers, like France and her 

 Allies, will have been more engaged in making shells and other 

 war munitions than in making great stores of manufactured 

 goods. 



RECAPITULATION. 



After peace is reestablished, and after the period necessary 

 for reorganization and the return to normal conditions, the 

 cost of manufacturing in France will approach the same level 

 as before the war, but will be rather above than below ante- 

 bellum levels. 



Raw materials will continue at high prices for a year or so, 

 due to the exhaustion of supplies throughout Europe. 

 TIRES FOR MILITARY PURPOSES. 



The situation here is practically the same as it was when 

 I mailed my last letter. The Verdun struggle is still on, 

 and, besides men and ammunition of all kinds, it continues 

 to consume enormous quantities of rubber tires, both solid 

 and pneumatic. However, there is no more shortage of 



tires here than there is a shortage of other elements of 

 modern warfare. Worn tires are readily replaced by new 

 ones and the constant travel of rubber-tired vehicles-, to and 

 from the front, continues without interruption. To fill the 

 demand has been a heavy task, but we were ready for all 

 emergencies and everything has been moving like clock- 

 work in the industries as well as in the army. 

 IMPORTS PROHIBITED. 



Recent presidential decrees prohibit the importation into 

 France and -Algeria of various articles, among which are 

 automobiles, automobile rims, bicycles and parts thereof. 

 OBITUARV. 



It is my sad duty to inform you of the death of Lieutenant 

 C. L. Gatin, one of our leading tropical agricultural scientists, 

 who was a representative of France at the last (1914) Rubber 

 Exhibition in London and a member of the expert staff of 

 our leading tropical agricultural paper, the "Journal d'Agri- 

 culture Tropicale." Lieutenant Gatin was killed while lead- 

 ing his company of Zouaves in the defense of Verdun. His 

 premature death is mourned by his wife, his mother and hosts 

 of admiring friends. 



PERSONAL. 



Lieutenant Alcan, of the firm of Alcan & Cie., successors 

 to Hecht Freres. Paris, dealers in rubber goods, has been 

 made Knight of the Legion of Honor, a deserved recognition 

 of his special valor in the present war. 



