May 1. 1919.] 



THE INDIA RUBBER WORLD 



415 



Our Trading Power for Rubber. 



By L. n\ Ah^vn-Schmidt. 



IT has been one of the achievements of the late Willard D. 

 Straight that he has drawn the attention of American 

 industry to the fact that many of its most essential raw 

 materials are produced outside the frontiers of the United 

 States and that the continuous well-being of these industries 

 makes essential special safeguards for the regular supply of 

 these materials. India rubber belongs to these industrial raw 

 materials. Our large rubber industry, the most important in 

 the world, could not exist without the corresponding importa- 

 tion of more than 300,000,000 pounds of India rubber annually, 

 not an ounce of rubber being grown in our own country. The 

 position of the American rubber industry in this respect differs 

 very little from the European rubber industry. Xo rubber is 

 grown in any European country. But the English. French, Bel- 

 gian, and Dutch rubber industries have at least the support of 

 their large colonial rubber production. The German and Aus- 

 trian rubber industries have operated very much under the same 

 conditions as the American. 



In normal times little discrimination exists in the distribution 

 of the world's industrial raw materials. The British rubber 

 growers of Ceylon or the Straits Settlements were just as ready 

 before the war to supply German rubber factories as they were 

 to supply English or American. Times, however, are not nor- 

 mal any more. The war has shown that the possession of pri- 

 mary raw materials gives a great strength to the country 

 owning them, and all the countries at war have made a very 

 effective use of the economic weapon placed in their hands by 

 the sole ownership of important industrial raw materials. Eng- 

 land withheld rubber from Germany, and America, cotton. 

 Germany retaliated by not permitting the export of potash. Ger- 

 many was the loser in this economic battle, because her power 

 of withholding raw materials from her enemies was less than 

 that of her opponents. 



For a while the Allies seriously contemplated the idea of an 

 economic alliance binding the allied powers to a mutual eco- 

 nomic support, principally against what were then their enemies. 

 The underlying idea of this alliance, pronounced in more or less 

 certain terms during the famous Paris Conference, was a pooling 

 of the mutual raw material resources which were to be used, 

 first, for the industries of the Allies and secondarily, for the 

 industries of other countries. The governing principle of this 

 arrangement was the old preferential trading theory based upon 

 a series of commercial treaties between a number of countries, 

 promising each other special benefits, which were not to be 

 attained by countries not being parties to these treaties. Ger- 

 many had been the main culprit in creating this policy of ego- 

 tism. It had made during the last twenty years a series of 

 special tariff treaties, securing to its commerce special preferen- 

 tial rights in France. Belgium, Russia, Austria-Hungary, Rou- 

 mania, Servia, and Japan. Other nations had become parties 

 to these treaties by way of the so-called most favored nation 

 clause which was inserted in many international treaties and 

 gave to the country in question the right to participate in all 

 preferential treatment accorded by the contracting parties to 

 other nations. 



Let us consider shortly how such a development might have 

 affected the American rubber industry. The principal countries 

 participating in the conference were England, France, Belgium, 

 Russia, Italy, and Japan. Three of these countries control very 

 considerable rubber interests in all parts of the world and supply 

 great quantities of india rubber to the United Stales rubber 

 industry. During the year 1916 when the conference took place 

 we received 72.000.000 poimds of rubber from England. 7S.000.000 



pounds came directly from the Straits Settlements, and 26,000,000 

 pounds from other British possessions. From Belgium we had 

 nothing and very little from France, which, however, does not 

 mean essentially that the adherence of the two countries to the 

 alliance would not be felt severely in the United States rubber 

 industry. Belgium before the war had sent 11,000,000 pounds 

 of rubber to this country and France nearly 3,000,000 pounds. 

 As it is, of the 267,000,000 pounds of india rubber imported 

 into the United States, 176,000,000 pounds came from British 

 sources, and the total control exerted by the former allied power 

 interests on the American rubber supply amounts to approxi- 

 mately three-fifths of the total rubber consumption of the United 

 States rubber industry. 



There is now little chance that the program of the so-called 

 Paris Conference will be carried out. The League of Nations 

 will doubtless replace the Conference and through it a fair 

 distribution of all the industrial raw materials of the world 

 may be ensured to the members of the League. Without the 

 foundation of such a league, however, remains the menace that 

 our big rubber industry might find itself suddenly cut off from 

 its most essential raw material by a coalition of foreign interests. 

 It would then be the question how far the United States would 

 be able to import the supply of rubber and other raw materials 

 not found in the United States, by withholding from other 

 countries essential American raw materials. 



In normal years the consumption of india rubber by our 

 industry probably will total from approximately 200,000,000 

 pounds to 220.000,000 pounds. This consumption will increase 

 from year to year with the progress of the American rubber 

 industr}'. The supply will be augmented by the use of balata, 

 guayule, reclaimed rubber and plastics. To make up the total 

 requirements of india rubber we may probably rely on England 

 for a supply of 50,000.000 pounds annually. The Straits Settle- 

 ments will give us the same quantity and 20,000,000 pounds may 

 be had from Ceylon and other British sources. Brazil is able to 

 send us 50.000,000 pounds, Belgium may have available 7,000,000 

 pounds for American consuitiption and France approximately 

 2,000,000 pounds or slightly more. Germany, which in former 

 years was able to send us as much as 7,000,000 pounds, may 

 drop out from the sources of supply, as she has no rubber-pro- 

 ducing territories of her own and is not likely to collect suffi- 

 cient stocks of rubber. The Netherlands, on the other hand, 

 may be very helpful by way of the Asiatic possessions w'hich in 

 recent years have largely increased their shipments of rubber 

 to this country. Allowing for withdrawals on German and 

 Dutch account, the Dutch East Indies should have, nevertheless, 

 approximately 15,000,000 pounds of rubber for our purposes. 

 Mexico may send us 2,000.000 pounds and Peru another 2,000,- 

 000. From all the other sources 10,000.000 pounds finally should 

 be expected. This makes in all an approximate supply of 

 209,000,000 pounds or just enough for the wants of our rubber 

 industry. 



It may be assumed that these supplies will be given to us only 

 too willingly. However, it is always pleasant to know that just 

 the countries on which we rely most for our supplies have a very 

 iliaterial interest in keeping our economic friendship, as we also 

 have to offer certain supplies in exchange which cannot be had 

 at present anywhere else in the world in like quality and 

 quantity. 



Cotton is the first and principal one of these materials. Of 

 an average total production of 27.000,000 bales of cotton in the 

 world. 14,000,000 bales arc produced in the United Slates, 4,000.- 

 OtTO in British East India. 1.000.000 in Egypt, and the rest scat- 



