San Antonio light. [volume] (San Antonio, Tex.) 1911-1993, 1923-02-14
Producers Don't Want to
Kill the Goose That
Lays Golden Egg.
RECENT FURRY OVER
Tire Manufacturers Say
High Prices Will Check
Production.
BY j. c. ROYLE.

New York, Feb. 14.-Thc British
producers of crude rubber are not go
| ing to kill the goose that lays the
golden egg, represented in their case
| by the tire producers of the United
States. However, they are determined
that the returns from the goose shall
! be as large and regular as possible.
That was the consensus of opinion to-
' day by men in closest touch with the
crude rubber markets of the world.
Transactions in rubber have slack
ened pace materially since the recent
| Hurried advance to above 81 cents a
pound. Tire manufacturers have
pretty well covered their requirements
Through February, March and April.
according to dealers. That buying
served TO aid the upward trend. Prices
have slackened off since it ceased.
Most experts expect the market to be
generally quiet for some time, although
with little recession from present price
Hlevels.
The opinion is confirmed by the
fact that although III S market has
been slightly below a parity with
London, orders from that market 10
| buy here have brought out few offer
|ings whereas offers of London rubber
here met with small response.
Shipments Cannot Increase Now.
Output of crude rubber from now
until April 80, from the Straits set
Elements, the Malay peninsula, and
the Far East, necessarily must re
main at the same level as for the last
three months, according TO the laws
restricting shipments imposed by the
British colonial government. Those
regulations provide that when the
price of crude rubber has averaged
1 shilling pence (abOut 33 centS)
for the three months period, output
automatically may be increased D per
cent. The price for the last three
months did not attain that average.
Producers. dealers and consumers
today all stated that they did not
wish to see the price rise too extern
.sively OF too quickly. The producer
recognizes that the American tire
manufacturers are his best customers
land his main source of revenue. He
bias no wish to see their operations
|rurtailed. Moreover the more rubber
the producer is allowed to produce
and which he can market at q fair
price, the cheaper he can produce it
and he would prefer to obtain slight
V lower figures for a greater tonnage
than higher prices for a more restrict
I'D output.
Dealers Want Low Prices.
Dealers also are opposed 10 high
Sprices, although in the normal trend
bf markets, dealers are nearly always
nclined to the long" side. In their
rase, however, they must finance the
importation of the product. They
bring it into this country. buying from
the producer and hold it for sale to
he manufacturer, Their operations
ARE limited strictly by the amount of
money they are able to borrow from
the banks to finance these transac-
lions. If the price of the product is
hbnormally high they can handle a
FAR less amount with their credit ia
ELITES than if the price is low.
Tire manufacturers protest that
high prices for rubber will check pro-
iuction of tires and result in a ire
Inendous cost to American car users.
Dealers and producers on the other
hand, declare that in the ordinary
Ford size tire there is less than five
bounds of rubber and that the recent
Increases oil from. 10 to II per cent
n tire prices more than covered the
Increase in the price of the rubber
Ised.
Narrow Margin Contracts Dangerous.
Dealers say, however. that the diff
riculty of the tire manufacturers lies
not in production of tires at a profit
hinder the prices, as in supplying tires
TO manufacturers on contracts made
Dn an extremely narrow margin OF
profit long before the increase in rub
Der andsfabric prices took place.
In the meantime producers know
ing the extent of the production
schedules of the automobiles manu-
facturers, estimating the number of
Tres for requirements throughout the
country and with output strictly reg
ulated by law and ony TO be enlarged
by price advances or legislative en-
|hctment, are thoroughly convinced
they do not have to kill the goose to
get an adequate supply Of golden eggs.