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- TnEOREGOJt STATES1IAN, S ALEil; OREGON
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The Truth About the
Current Rubber Price
By SHERMAN ROGERS
Reprinted from the September
Issue ot "Success" Magazine by
special arrangement with the pub
lishers. J :' i 4' v'.':.-'
Copyright, 1 92 5, Success Magazine
, Corporation
M t . : . ' .. - " :
Whs 4 to blame tor the present
inexcusable-, satiation f rubber
prices? . :.:' ,'.
The American! rubber manufac
turer says, with a great deal, ot
sincere rigor, that the inflexibility
of the British Restriction Act,
backed by the British Government,
is the cause. t
. , i
i But the Plantation Owners' As
sociation- and the 'Stevenson com
mittee, with Sir Erie Mller. rub
ber leader; as spokesman, are just
as itlgorous in their contention
tha the American manufacturer
is mostly to blame for being sad
deay caught in a situation Where
the, rubber plantation owner and
British trader la In control of a
runaway marcei. ;
They claim they gained this
control because the tire i(nufac
turrs in the United States failed
to take long term contracts at a
time when the price ot rubber
hovered, between 24c and 37c a
pound. ' , .. , ; " .
The "American 'manufacturer
replies: "Why should we load up
on ' WdtyefiV committments when
the 'very spirit jof the Stevenson
Act 1 was to stabilize the market
and1 thereby make long committ
ments unnecessary. .
Back of the present controversy
l.i a story of geographical changes
In Rubber production. The enter
prising British colonial developers
in a short period of years switch
ed the production center from
Southern Africa' and the Para sec
tion of Brazil to the British East
Indies. .: "'3 . ;; V..v.''
In 1920 theEast Indian plan
tations produced - and marketed
orer' 300,000 tons from 3,000,000
acres, while Brazil and the re
mainder xf the world produced
es4 than 38.000, tons.
Aadatthis time, the develop
ment in the East Indies showed
thai from a plantation standpoint,
the British produced 75 per cc-nt.
of rubber ttrown, the Dutch...? 2. per
cent, with the balance of the
world 3 per cent.
And at this samettme,. the Fnlt-
ed States of America imported 7 i
per cent of all the .rubber grown
in the world.
But In the falK of 1920 the
great rubber market ' demands
ceased on the heels jf Jihe Ameri
can commercial depression.
The plantation owner now faced
a crisis. The entire English in
vesting public faced a crisis.
The rubber investors of Great
Britain walked around with grave
faces. The storm was on, and
they hadn't the slightest idea
when it would stop. The condition
became critical. ' . j
Critical because a rubber plan
tation will grow back Into Jungle
in less than one year. If not cul
tivated, and the enterprise ruined.
The Englishmen 'now got busy,
A few far seeing leaders develop
ed. , Sir Eric Miller rapidly loom
ed as a storm center in the rub
ber world, x
The land nnder f iTlvation in
the East Indies had now grown to
the tremendous area of over 4,-
000,000 acres, with a total. invest
ment of nearly $1,000,000.00.
In 1920 the price of rubber was
48c. In 1921, 19c a pound. In
1922; it had dopped to 14c (wa
pound, or 9 under the estimated
cost of production. In December,
1923, due to various causes that
we will, describe later, rubber
jumped to 27c but t it dropped
back by March, 1924,to 22 c
A recognized crisis faced plan
tation owners in 1921. A commit
tee was formed of prominent En
glishmen interested in rubber pro
duction.
This committee .' recommended
to the colonial secretary a scheme
to be enforced ia Malaya, .Ceylon,
and the Netherlands East' Indies.
The Dutch, producing around 23
per cent of the world rubber, had
becoma the fly In the ointment.
The British leaders Importuned
both the Dutch .government and
the Dutch investors, to co-operate
with them, but the Dutch refused.
was again called together and re- j
commended a concrete scheme to
apply to Malaya and Ceylon only.
The suggestions -of this committee
were viewed with favor by. the
colonial secretary and brought In
to force In November, 1922.
While the Colonial Restriction
act .that followed only applied to
Malaya; and Ceylon, most all Bri
tish plantation interests adhered
to t. j
The government edict was vig
orously enforced on the following
basis:
Taking the 1920 production as
a 100 per cent basis of calcula
tion, only 60 per cent ot that
capacity was allowed to be ship
ped. Ia was figured (hat this
rigid restriction of exportation
would,! in a short time, clean up
the stocks on hand and create a
condition that would bring back
rubber production to a profitable
basis, j If the price of rubber
went over 36c a pound the Gov
ernment would release 10 per cent
more rubber at Intervals vf every
90 days., ,. '
At the present time the amount
of rubber that each plantation is
permitted to ship is only 75 per
cent of its rated capacity. .
Of course, it takes more than
one man to fight. When the res
triction proposition was broached
in America it had both friends
and foes amvmg the rubber con
sumers warm trlends and vigor
ous foes. .
At this time Mr. Eric Miller
took the spotlight with its full
glare, i
He made a trip to America
he put up his proposition as stre
nuously as possible to the Ameri
can manufacturers of rubber.
. He called on vur spirit of fair
ness. He requested faith in Bri
tiBh'iair play. And here was a
case where faith was necessary
Mr. Eric Miller said so, and there
wasn't; any doubt about it in the
minds of anyone at that time,
i He wanted the American Rub
ber association to endorse the
Idea. ! . .
Our; tire producers pondered
over this because of commercial
pride, j '
-They had consistently lowered
tire prices year by year, at the
same time turning out a product
of a much higher grade.
They didn't want to jeopardize
their well earned reputation for
playing fair with the American
After this refusal the committee i automobile owner. So they ques
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n 'it- o
SI
UUU.U
tloned Sir Eric quite pointedly re
garding the stabilization ot a rub
Lr price at an amount that would
grant a reasonable profit to the
plantation owner and the British
trader as well, at the same time
protecting our own customers.
They were entirely frank In
these discussions and were per
fectly willing to help protect the
East Indian planter. It meant
their own protection in the long
run to do so.
However, the Rubber associa
tion 'officials pointed to Sir Eric
that they were not favorable to
the principle of the Stevenson
act. But as long as the British
were going ahead on that ide?.
there was nothing more to be said
on that subject.
But they wanted to know how
rigidly the restriction act was
going to work In emergencies
They wanted to know if there
would be a flexibility in the 10
per cent quarterly increase in ex
portatlons under emergency condi
tions. :
. At this time the American rub
ber people pointed out to Sir Eric
that if there was no flexibility In
the releases,. it would mean that
rubber traders in London could
juggle the market to suit them
selves pretty much in a case of
emergency shortage. And their
contention regarding the flexibil
ity was based on this danger.
According to several of the
leading tire manufacturers in this
country, whose integrity I believe
is beyond question, representa
tions were made that if the British
restriction caused rubber prices to
mount too rapidly past the 36c
a pound, the 10 per cent release
in the restriction clause would be
augmented to throw more rubber
on the market and stabilize prices.
Harry Firestone bitterly fought
the whole arrangement, declaring
that the government interference
plan was fundamentally unsound;
that it new In the teeth, of the
age old law of supply and demand
"But the vast majority of Amer
ican manufacturers had confid
ence and faith in the British sense
of fair play. They had Sir Eric's
wordand they endorsed the propo
sition," declares a prominent rub
ber manufacturer.
And then the shoe began to
pinch.:; A queer turn of affairs
caused the pinch. William O'Neil,
president ot the General Tire com
pany In Akron, brought up an in
teresting phase of the situation.
He said this:
"Under normal conditions the
Stevenson act may have worked
out all right, but all of a sudden
the balloon tire came into being.
It was accepted as a new signpost
of progress; and almost immedia
tely every tire distributor
throughout the country found
himself in a position where his
customerj . were calling for ba!-
loon tires and they were calling
vigorously. Tbey didaVwant' to
use old size tries any more.'
"As a result: tire prices started
j up and the 10 per cent increase
allowance under the Restriction
act each 90 days was not heavy
enough to stabilize the market.
l and rubber has Jumped nearly 500
per cent in twelve months. In
other words the, flexibility verbal
ly promised was not forthcoming
i imnK Air. obeli's point is
well taken. I believe that the
balloon tire had a great deal to
do with the situation. Be that as
it may. Sir Eric, when importuned
ny the American tire roanufactur
ers who saw prohibitive tire
In the offing, refused to recom
mend a flexibility of 10 per cent
increases. Even in the face of
COc rubber In July, he obdurately
re r used to do so.
Now the American manufactur
er charges Sir Eric with broken
faith, and they make their charg
es in no uncertain language
The British plantation owners
arei in a position to dictate a rub
ber price, and they will be in that
f .
position ior some time if they
desire to force the issue, although
i personally believe that the con
tinued 10 per cent increase in im
puiiuuuns every so days will
more rapidly bring us back to I
normal than we have any idea of
iat the present time. In fact the
J high market is breaking now
wnat Is the next step? That's
the question that is burning in
the minds of many leading Ameri
can tire men. They are not asleep
but the public and the American
manufacturer must remember one
thing. Regardless of all talk, we
cannot grow rubber commercially
in large quatities in Mexico and
compete with the East Indies We
cannot grow it in South America
and compete with British and
Dutch owners. It canot be pro
duced in the Philippines under
present laws in competition for
two reasons, first, a Philippine
law that onlv normiti
tlon to own but 2.500 ocres of
land, and second, labor restriction
laws that prevent the importation
i lu'iito coone labor Into the
Philippines. These two restric
tions place the Philippine Islands
beyond the pale of competition at!
the present time.
-.Sumatra, the most fertile sec
tion of the tropics for rubber cul-j
tivation. is only a short distance!
from Java, a country smaller than
the state of Texas, that contains!
35.000 people, industrious work
ers who are deeply concerned in
making enough money to keep
body and soul together.
And all of the British East In
dian possessions lie In close prox
imity to the 400,000,000 people ot
India and the hordes of coolie
labor in China. Therefore, they
will always be In a position to
command tremendous snppliea ot
extremely cheap labor, labor that
only demands a IracUon oj the
amount ot wages commanded by
people of any section of either
Central ot South America, where
rubber can be produced. '
In the meantime what? Some
of the well Informed believe that
America tire manufacturers j will
go Into Sumatra where millions ot
acres ot fertile rubber lands can
be obtained and develop a reserve
supply of their own that will sta
bilise the market. This can be
done and it the American rubber
manufacturers feel that tbey are
going to be taken advantage ot.
there isn't the slightest question
but they will protect themselves
adequately.
W SEES PUN
i . . . . . - i
the eales drive recently! started piria cottage ior a wwW'
by the entire Star and Durant or- . , . 7lo,,
Durant Motors Innucoirate
Policy to Enable Every
one to Have Car
However, my own personal view
of the whole affair is that there
exists in London and Singapore a
misconception of the spirit that
actuated American endorsement of
the restriction arrangement.,
When the British public, the
East India planters, and respon
sible British political leaders be
come thoroughly acquainted with
the truth of the situation, cool
heads that have always been
friendly and fair will cause reason
and.common sense to prevail.
It is incomprehensible , that
Americans who consume 74 per
cent of world's rubber, and Brit
ish interests who produce 75 per
cent of world's rubber should pro
long a controversy that must
eventually bring grief to both
sides. . .
We know that Englishmen are
fundamentally honest. We know
that they are noted for being fair
sportsmen in business. The rub
ber leaders of America are both
honest and fair sportsmen.
My opinion is that before many
weeks have passed, a new leader
ship will have been obtained in
the Rubber Planters association
of the British East Indies. Such
action will create lasting confi
dence and mutual faith between
tbem and the rubber manufactur
ers of the United States that will
spell continued prosperity and re
newed progress in one of the
world's greatest industries.
BUS CARRIES ORCHESTRA
A new role for the flexible mo
tor has been found by Arnold
Johnson and his Hollywood, Flor
ida, Golf and country club orches
tra who are touring the country
this summer in a specially design
ed White double-deck tally-ho bus.
Johnson and his musicians left
Chicago June 1, for an extended
tour to fill concert and dance en
gagements in the principal cities
of Illinois, Indiana. Ohio, Pennsyl
vania. Michigan. Kentucky and
New York.
During the past week the Dur
ant Motor company throughout
the western territory Inaugurated
one of the. most revolutionary yet
practical sales plans ever devised
by any automobile factory, and the
overwhelming response as report
ed to the factory from the north
west dealers is a clear reflection
of the instantaneous public appro
val for the Star Gold Certificate
Save and Earn Plan.
Thousands of people over the
west have enlisted under this new
plan a factory report shows which
has Just been received by Salem
Automobile company, local Star
and Durant dealer.
In discussing the plan that
promises to create a new method
of selling automobiles, Mr. Delano,
local Star and Durant dealer
pointed out the following remark
able features:
"This newly created plan gives
every man, woman and child an
extraordinary opportunity of be
coming an owner of a Star car
without the outlay of any money.
By putting forth a certain amount
of effort devoting a portion of
one's spare time to the interest
of the Durant organisation, any
one may earn an automobile with
a wide choice of the various mod
els included in the Star line.
"This Gold Certificate plan Is
not limited to present Star own
ers. It Is not limited to districts,
but Is open to all who may wish
to become owners ot an automo
bile. "
"Details ot the plan have been
carefully worked out and it is
amazing how even the most skep
tical people have given their en
thusiastic cooperation for the plan
after all details have been care
fully explained."
In the entire western territory
which is under the general super
vision of Norman De Vaux. actiVe
bead of the Star and Durant or
ganisations In the west, this new
plan promises to create sales rec
ords which will shatter the sensa
tional sales records of June and
July which were the largest in the
history ot the western organiza
tion. This plan Is in accord with
eanlzation and has already added
an em pet us to sales which will
cause the factory to step up pro
duction which is now running at
record making capacity and will
continue on this basis for many
months to come.
Several weeks of careTuI plan
ning and checking of the results
nf ifiA nlnn ftr It Tnarf Tneen In
effect at the company's branches tne Iowa
in California where sales plans
and ideas are tried out, definitely
showj the advantages ot the plan
for the dealers and the invaluable
assistance to those pemons desir
ing a Star car. Every phase of the
plan is carefully explained in the
literature prepared for the pros
pective Star car owner and will
prove of considerable assistance.
Mr. and Mrs. J. Ham and fam
ily Portland.
Harry Rustard and wife, Port
land. Mr. and Mrs. Wm. Echlamd.
Mr. and Mrs. Brubell.
Evelyn Seittlnger.,
Doris Barkstrom and Arnold.
Alice," Frank. Wayne, Hugh and
Melba are spending the week at
Mr. K. If. Warren spent tn
week end with his. family st the
Welch cottare. '
Mr. and Mrs. "Weather and son
Kenneth spent the week end at
Manhattan.
Mrs. William II. Witt and chil
dren Dorothy and Wilms are
spending the remainder of the sea
son at their cottage Wilwet inn.
Mrs. Spieker of Hillsboro sad
Mrs. .'Koethe of Lacronse were
Twenty-six sawmills are oper-lweek tni guest at the Wilwet.
ating In territory tributary to Cot
tage Grove.
. !
BEACH NEWS
I (CnUnmd fra 3)
W
Mann.
Mrs. George McNalley ot Tort-
lanJj Is spending a few days In
cottage on the
the McNally
ridge.
- Mr. and Mrs. George Bassen-
dale and Mr. Uassendale's mother at the Daylight Inn.
Arthur Wm. Tarkhnrst. Miss
Margery Charette. Mis Francis
Wright and Miss Ruth McDonali.
are staying with MK He!n Mc
Donald for a week in the Oregon
cottage. .
Mr. and Mrs. P. E. Day. ;
Mr. and Mrs. John Tunzat,
Mrs. W. P.. Smith are, staying
at the Walklay cottage.
William Stetnhauser and Miss
Alice Cook spent the week end at
the Mir-a-Mar.
Mrs. Irene ? pence spent a week
and sister. Mrs. II. H. Bassendale
and Miss Ruth, of Portland, are
vacationing in the Minnehaha
cottage this week.
Mr. and Mrs. F. M. Cole of
Dallas and W. H. Prunk of Salem
were guests of Mr. and Mrs. Joe
Glath In the Pocahontas cottage.
over last week end.
Mr. and Mrs. E. A. Dunham
and family, of Klamath Falls and
their guest. Mrs. Anna A. Dun
Mr. A. E. Graves has gone to
Portland for a few days on busi
ness. - 1
Mr. and Mrs. II. Warren and
daughters Marian and Verna. have
returned to Portland after spend
ing three weeks In the Welch cot-
tape. ; v i .
daughter Lo's ot Hoqiuam, Wash.,
spent the week end at the Welch
cottage. "i
Roy Swltzer spent the week end
&(f Via f mil. at titm fmm X7m
ham of Elynla. Ohio, were guests I pott. . j
at the Driftwood Inn tor several
days' last week
cottage. t
M. A. Welch spent a week with
In the Neth-er-lands cottage for hU fam,,T t the Welch cottage.
two weeks are Mr. and Mrs. C,
Howard Knapp and , daughter.
Jean, of Portland
Mr. and Mrs. H. B. Ingram of
Portland, -visited last week with
Dr. and Mrs. Chandlee at the
Wallula cottage
A. J. Butler and two daughters.
Miss Ethel and Miss Verl of Port
land, are domiciled in one of the
Astman cottages.
In the p. W. Mann Eacajawea
cottage are Mr. and Mrs. L. S.
Kirchner of Multnomah.
George Welch motored down
for the week end to Join his fam
ily. ' I
JIAMIATTAX
Otto Dennton and Noah Toates
ot Portland are staying at the Aa-
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Barrett Bros.
GARAGE
1999 N. Capitol Phone 520
Formerly Texas Garage
I M . ' . II 4
ElcadlctteiPj gow cgro vy-fceed decreets, $3L13)S
22E
ET3 tone 3$aim . . .u-.-.
v
IT Ad A
All FriccsTn. TUSf lLorrfs
TheseTrrices foliow the greatestseasoiiJooii ever hLTI-v
creased volume, the Jesuit of oti.f?i;tndhTgTnlncs rflcrsrs Moca
. to emphasize thissrjpe
The cars are allstrictly 1926 -models on the new year ahead
chassis. They4nclude.new style-creating Ixxiiesyiimshed in
duo-tone Daco, hydraulic 4-wheel brakes, new finger-light
steering, especially degnrd for the balloon tires. '
Be surand-seethis Intert-prodoctof aTSyOOOjJOO-conv
-v , . I - - -
JS,
V;
. Salem Automobile Co: .
151 North High- . ' ' .Salem
.diana" "EIGHT" "is'eorD ANP'smvLmr'iivm.y winonririn.tot-i deaxeiis
X