August 1, 1919.] 



THE INDIA RUBBER WORLD 



619 



point. Another reason assigned by some members of the trade 

 was the growing competition in the rubber industry and the 

 desire of the large manufacturers to crowd out the new arrivals." 

 An analysis of the price fluctuations in the individual branches 

 of the industry will bring out in further detail the factors bear- 

 ing on the price situation. 



KUBBEE TIHES. 



The general low-price level of rubber goods in early 1915 

 was characteristic of every product of the industry. In the 

 case of tires, however, the price fall was most marked, a 27 

 per cent decrease taking place within the first quarter of the 

 year. This may be accounted for by (1) the abnormally low 

 prices of cotton fabrics — the aftermath of the shutting off of 

 cotton exportations — and (2) the abnormal competition in the 

 rubber industry, the results of which were at that time making 

 themselves felt. This competition was the culmination of the 

 situation in the three preceding years. In 1912, when prices were 

 highest, there was talk in the trade of the prodigious profits 

 of the tire manufacturers. This talk naturally resulted in a 

 rush to make tires, and soon capacity of production outran 

 capacity of consumption. An inevitable scaling of prices fol- 

 lowed, and pneumatic times continued downward until the low 

 point was reached in early 1915. The low price of February 

 continued until December, when the price started on an upward 

 course, which reached its summit in April, 1918. This rise was, 

 of course, due to the increasing cost of labor and materials 

 other than rubber. In no case, however, was the rise proportion- 

 ate to either of these factors. 



Solid rubber tires are a relatively new product of the rubber 

 industry. In 1913 and 1914 they were relatively little in demand 

 and it was not until the motorization of the Allied transport 

 system after the outbreak of the European War that they became 

 a factor of large importance. Solid-tire prices continued un- 

 changed through 1913 and 1914, falling early in 1915 in sympathy 

 with all other rubber goods. In late 1915 the war demand for 

 solid tires made itself felt. This demand tended to reinforce 

 the rise of tire prices in general, and January, 1916, witnessed 

 an increase of 16 per cent, as contrasted with a 7 per cent rise in 

 the price of pneumatics. (See Figure 3.) 



In 1917 and 1918 solid-tire prices rose quite regularly with 

 those of pneumatics. The tremendous demand resulting from 

 Army needs accentuated the rise in the price of the former, 

 however, and 1918 ended with solid-tire prices 45 per cent above 

 their pre-war average, as contrasted with pneumatics, whose 

 prices had risen but 16 per cent above the 1913-1914 level. 



MECHANICAL RUBBES GOODS. 



It was in this branch of the rubber industry that price increases 

 were most evident in the six years dealt with in this study. 

 Rubber hose, for example, increased 125 per cent above its 

 pre-war level, while belting reached a level which was 75 per 

 cent above the 1913-1914 average. The rise in the price of hose 

 may be attributed to both the increasing cost of labor and ma- 

 terials — the amount of crude rubber used in the production 

 being relatively small — and the stimulated demand. The Army, 

 the Navy, and the Shipping Board used large amounts of rubber 

 hose, whereas in the case of garden hose civilian consumption 

 also increased appreciably. 



Rubber belting is fast becoming a competitor of its leather 

 prototype, and its price rise may be in part attributed to the 

 increasing price of the leather product. The extension of in- 

 dustrial plants in the last two years and the consequent demand 

 for transmission and conveyor belting was another potent factor 

 in price determination.". 



•The 1ndi.\ Rubber Wokld. March 1, 1915, page 318. 



iTt should be noted that although the price increase of mechanical goods 

 was larger than that of the products of any other_ branch of the rubber in- 

 dustry, yet when compared to prices in general in late 1918, rubber hose 

 was slightly above and rubber belting slightly below the level of "all com- 



RtrBBEB FOOTWEAB. 



Although rubber boot and shoe prices did not drop to the 

 low level of tire prices, they nevertheless remained considerably 

 below their pre-war average for a longer period than did the 

 latter. This may be attributed in part to the low prices of re- 

 claimed rubber, tremendous quantities of which are used in the 

 footwear branch of the industry. The mild winters of the first 

 half of the six-year period dealt with and the consequent dif- 

 ficulty of disposing of stocks also played an important part in the 

 price situation. Increasing costs added to a demand stimulated 

 by war needs sent the price of rubber footwear upward at the 

 end of 1916. It is notable that only three increases were made 

 in the price of rubber footwear during the period of the war — 

 a situation characteristic of very few important commodities. 

 (See Figure 5.) 



RUBBER CLOTHING. 



The rise of rubber clothing prices, which was surpassed by 

 only one other rubber commodity herein dealt with, namely, 

 rubber hose, may be attributed almost entirely to the cost of 

 labor and materials. The Army demand for raincoats had its 

 effect, of course, and this factor was especially evident during 

 1917 and 1918. The relative cost of the rubberization of clothing 

 is of little importance as compared with that of the fabrics and 

 labor employed. Moreover, the cost of rubberization did not in- 

 crease to any appreciable degree in the past six years. The 

 price of fabrics employed, on the other hand, increased from 12 

 to 48 per cent, varying with the individual types of coats; while 

 other costs such as labor, trimmings, etc., which comprise the 

 largest part of the expense of production, rose from 47 to 78 per 

 cent. 



The following table shows the respective increases in the cost 

 of the nine types of coats, the average relative prices of which 

 are shown in Figure 6. 

 Table IV.— INCREASED COST OF RUBBER CLOTHING. 1913-1918. 



Coat I 

 Coat II 

 Coat III 

 Coat ]\ 



Coat 1 I 

 Coat VII 

 Coat VIII 



10.1 



29.f 



59.6 



DRUGGISTS' SUNDRIES. 



This class of rubber products, like that of rubber footwear, 

 experienced but few price changes prior to 1916. In fact, the 

 price of water bottles, with the exception of a slight drop 

 of two per cent in 1914, remained unchanged until April, 1916, 

 when it started a rise which ended in the middle of 1918. Ice 

 bags, on the other hand, changed but little in value d'uring the 

 period prior to America's entrance into the war, the low price 

 of 1914 having remained relatively static until June, 1917. The 

 demands of the Red Cross and the Medical Department of the 

 Army stimulated prices at this time, bringing a rise which had 

 been a long time due. (See Figure 7.) 



CONCLUSION. 



A review of the run of prices for the rubber industry as a 

 whole — that is, for crude rubber, ingredients, and rubber products 

 combined — 'as presented in the Figure 2, makes apparent the 

 fact that with the exception of the 16 months ended January, 

 1915, the rubber industry price situation had little in common 

 with commodities in general. Low prices characterized the in- 

 dustry by and large. During the six years dealt with in this 

 study there were only 12 months in which the index number 

 of the rubber industry was higher than that of "all commodities," 



i^lncludes findings, -trimmings, waste, packing, labor, overhead, profit and 



