Algi ST 1, 1919.] 



THE INDIA RUBBER WORLD 



617 



A review of the successive steps taken in making these index 

 numbers will illustrate the process. In dealing with crude rub- 

 ber, for example, the amount of each individual type imported 

 into the United States in 1917 was firsi determined, and this 

 amount was adopted as the weighting factor. (See Table II.) 

 Secondly, the price of each type in every month of the six- 

 year period covered was multiplied by this weight. Thirdly, the 

 products of the prices of the nine different types of rubber, times 

 their respective weights, were added up separately for each 

 month ; and, finally, these monthly aggregates were turned into 

 relatives on the pre-war base; that is, the average of the aggre- 

 gates for the 12 months, July, 1913, to June, 1914, was made 

 equal to 100, and all the other individual monthly aggregates 

 converted into relatives on that scale. 



The method adopted in weighting rubber products was some- 

 what different. In this instance, because of the lack of informa- 

 tion regarding the amount of the various classes of goods 

 produced, it was found necessary to give to the individual 

 classes a weight which was proportionate to their importance in 

 the entire rubber industry. The amount of rubber consumed in 

 the manufacture of the various types of goods was here used 

 as the determining factor (see Table I), and the number of tons 

 of rubber which went into the production of each class was 

 used as the weight for that class. 



It is apparent that index numbers made on this plan for 

 the entire rubber industry are coinparable with the relative prices 

 for individual commodities as shown in the various charts. By- 

 using these index numbers the reader can get a clear idea of 

 average price fluctuations in the rubber industry as a whole and 

 can have at the same time a basis for comparing such fluctua- 

 tions with those in other industries. 



RUBBER PRODUCT PRICES. 



To understand fully the course of the prices of rubber goods 

 during the war period, it is necessary to review briefly the 

 status of the rubber industry in the, years prior to 1913. The 

 first two years of the present decade saw the plantation industry 

 still in its infancy, and in 1911 the amount of rubber taken by 

 the five leading rubber-consuming countries surpassed the world's 

 total production. A similar situation, in a less marked degree. 



existed in 1912, and two-dollar rubber was not uncommon. Talk 

 of synthetic rubber and the future sources of supply was rife 

 in the trade and 1913 opened with rubber prices around one 

 dollar and rubber products still reflecting the high level of 

 the previous year. It should, therefore, be borne in mind that 

 the base year (July, 1913, to June, 1914) was one of high prices 

 for the rubber industry and that these high prices were the 

 result of crude rubber costs. Later, the situation changed, and in 



1917 and 1918, after a period of relative sluggishness, the price 

 of rubber goods rose to a point above the pre-war level. This 

 time the high cost of cotton fabrics and other ingredients was 

 the controlling factor; indeed crude rubber prices in these years 

 were considerably below their pre-war level. 



Rubber products did not feel the effects of the speculative 

 price rises experienced by crude rubber at various intervals 

 during the six years here considered. Unlike crude rubber, the 

 prices of finished products continued along a more or less level 

 path, broken at relatively few points, tending dow-nward through- 

 out the first half of the period and upward during the second. 

 It will be noted, on the one hand, that the rise in the price level 

 of rubber goods began almost simultaneously with that of all 

 commodities (see Figure 2), while on the other hand it lagged 

 almost a year behind the rise in the level of ingredients, such 

 as cotton and chemicals. 



Rubber goods in general, however, never reached the high 

 level of either their ingredients or commodities in general, the 

 low price of crude rubber having exercised a tempering effect. 

 Thus the rubber-product price level had by the latter half of 



1918 advanced but 57 per cent above its lowest point in the past 

 five years, while prices of the ingredients rose by 164 per cent. 

 The index for "all commodities" had jumped 110 per cent in 

 the meantime. 



Few industries, on the other hand, experienced anything equal 

 to the price slump of rubber commodities in 1915. In that year 

 practically all rubber goods underwent a price decrease, and 

 the average level for rubber products fell approximately 20 per 

 cent. This situation may be explained by the fact that crude 

 rubber was relatively cheap at the time, while the glut of the 

 cotton market had sent the price of that commodity to a low 



GURE 6. Relative Prices of Rubber Cloth- 

 ing: Double and Single Texture: Calen- 

 dered.— I!y Months, January, 1913, to De- 

 cember, 1918. (Average Quoted Prices. Iulv, 

 1913, to June, 1914 = 1000 



'iGURE 7. Relative Prices of: Ice Bags, , 

 erage of 3 Series; Water Bottles, Aver, 

 of 2 Series.— By Months, January, 1913, 

 December, 1918. (Average Quoted Pric 

 July, 1913, to June, 1914 = 100.) 



