75 
Part I] Lindsay and Harlows Lac and Shellac 
current prices of the raw material and finished article, and, secondly, 
on an estimate of the future trend of these prices. His profit will 
depend on his being able to secure a satisfactory margin between 
the price of the raw material and the price secured under his contract 
for the finished goods. The manufacture of shellac is an industry 
of this class. As already shown, the stick-lac markets are highly 
speculative. To some extent stick-lac quotations follow the course 
of Calcutta TN prices, but they naturally fluctuate to a greater 
degree than TN, chiefly because the extent of forthcoming supplies 
cannot be even approximately estimated in advance ; and hence the 
future trend of the TN market is the subject of the wildest guess¬ 
work. Even the manufacturers of private marks are misled in their 
estimates and postpone their purchases of stick-lac too late or pur¬ 
chase too early against forward sales of their marks. Still more is 
this the case with the manufacturers of TN, who are usually men of 
small means in the hands of big local dealers. They depend entirely 
for success on attempts to estimate accurately the forward trend 
of stick-lac and TN rates; and too frequently they are caught short of 
their raw material which they are compelled to purchase at a dis¬ 
advantageous time, forcing up prices against each other. Chart 
No. I compares fluctuations in the prices of stick-lac and TN during 
1912 and 1913, and illustrates the wide fluctuations of the former 
in comparison with the latter. 
The solid line represents the cost of stick-lac required to make one 
maund of TN shellac, to which is added all charges for manufacture 
and marketing in Calcutta ; the table on the chart shows how these 
figures were obtained. The monthly prices of stick-lac were supplied 
by a Calcutta manufacturer and, to ensure accuracy, the exact 
factors for conversion on which he based his biuli prices have been 
used (Note that the lac is art, not phunki). The interrupted line 
shows the price one maund of TN actually fetched in Calcutta The 
two lines continually cross and recross one another. When the TN 
(interrupted) line is above the solid line there is a manufacturing 
margin of profit. When the solid line is above the interrupted 
the manufacturer who buys his stick-lac and sells his shellac on the 
same day must lose. The double and single shading on the chart 
show respectively periods of loss and profit on manufacture and 
spot sale. 
[75] 
