Business & Finance: Unstable Rubber

• Share

One of the striking developments of business this Spring has been the practical break-down of the British plan to stabilize rubber prices.

The collapse of rubber prices was serious to Britain, who has large investments in rubber plantations. Thus, when the "Stevenson Scheme" to raise and maintain rubber prices by curtailed production was announced, the British entered into it with enthusiasm, although different interests failed to agree to the price at which crude rubber should be held.

Unfortunately for the rubber manipulators, 70% of rubber production is sold in the U. S. American rubber buyers considered the higher prices unreal, and bought only from hand to mouth, Moreover, the general adoption of cord tires tended to reduce rubber consumption because of their better wearing qualities compared with fabric tires.

The Dutch gave the "Stevenson Scheme" its coup de grâce by refusing to restrict their considerable rubber production, and unloading their product on the syndicate. Rubber, instead of remaining at the pegged price of 30¢ a pound, has declined to 22¢. Even on the best British plantations the cost of production is something like 18¢ a pound. The chief solution proposed to the rubber growers' dilemma is to increase the use of rubber in floor coverings, and to amalgamate plantation companies so as to get a real control over their operations.