Evening star., 1925-11-01
HOOVER THREATENS
TRADE MONOPOL|ES
WITH RETALIATION
Rubber and Coffee Growers
Invite Drastic Action by
U. S., He Says.
DECLARES EXTORTION
WILL DEFEAT OWN END
Favors Search for Substitutes That
Will Curtail Unfair Fixing
of Prices.
Rv the Associated Press

OI TIlCeS.
Rr the Associated Press.
ERIE. Pa October 3l.-FOreign
monopolists of rubber. coffee. nitrates
potash, and other raw materials
essential 10 American industry were
warned in A speech here tonight by
Secretary Hoover that if their unfair
eNact;ons upon American consumers
continued they could expect to find
the United States following the same
practices and organizing govern
mentally TO retaliate by showing up
ward the prices on commodities it
produces for world trade.
The Commerce Secretary estimated
that the United States IS now spend
ing upwards of $500 100000 annually
for the purchase of monopoly-con
trolled commodities. and declared the
procedure of some Of these price CON
rrollers might ultimately bring a
crash around entire industry
MIR. Hoover deplored the situation.
and asserted that the best interests of
world commerce unqueStionablN called
for the greatest amount of freedom
OF trade from price controls.
Copper and Cotton Vital Abroad.
The United States, as d matter of
internal policy. had enacted in the
past and enforced the antitrust laws
to prevent its own producers from
combining 10 mulCt consumers of
American products. but now could
easily Countenance the creation of
combinations which would do with
the prices of cotton, copper and oil
I l1- ,Ch
Brazilian, Franco-German. Chilean
and other national producers of raw
mate rials that America imports. The
whole tendency. however. presented
grave international danger, and the
Secretary called upon other nations
TO reconsider their commercial pro
grams.
An easygoing and tolerant world >
he said, anxious above all things 10
keep down international friction.
might let these controls in interna-
tional trade continue. Objectionable as
they are, If their conduct in every
case had been merely to secure a rea-
sonable profit to the producer. But
some of them have advanced prices
far beyond this point and again dem
onstrate that inherent quality of all
combinations in restraint Of trade
that no unregulate monopoly is ever
ways seeks 10 justify the upreason-
able on some grounds or other.
Rubber Price Unreasonable.
The uniform expression Of the man
ayers of the rubber control in the
Last Indies up to eight months
ago was that the industry sought
pound for their product. and our
Investigation showed they could earn
% per cent on the capital invested
when rubber brings that price. 1t
i today over. 81 per pound and pro-
duction is still being restricted. 1t is
said that previous losses of the grow
crs must be recouped. The same
might he said by our wheat, cotton,
oil and copper producers.
Likewise the assertion of the cof-
fee industry over years since the war
was that sterilization was sought only
4 roughly l. cents per pound. 1t has
recently been lifted as high as 81
cents and is today ~ cents. with
great surplus OF supplies in its pos
session.
That this difference between 'rea.
sonable' and high prices is not triv-
ial in its monetary implication to our
consumers is perhaps indicated by
the fact that this margin alone over
the whole list is today costing us up
wards of $500. .000. 900 per annum. And
II is not our people who are alone
concerned, but every other consuming
nation"
High Prices Boomerang.
High prices stile consumption, and
when we stifle consumption we do two
things, reduce the standards of living
OF the consumer and in the long run
tend 10 reduce the business of the pro
ducer. We thus reduced our
consumption of coffee by 20 per cent
during the past year.
The rubber user patches his auto
mobile tires and RECEIVERS old rubber
10 Use it again. Every chemical la bo-
ratory starts on a search for better
methods OF rubber reclamation The
tin user turns To galvanized iron and
glass containers. The farmer de-
nands Of his Government that it shall
produce synthetic nitrates. On the
production side the whole world goes
s-arChing for other sources of sup
ply outside the controlling country.
High profits stimulate production
wherever possible in other quarters.
If all these forces he carried to the
extreme. the combined result may ul-
timately bring some Of these controls
in crash around the entire industry
producers. manufacturing consum-
eHS ana ulStrlDQlO9$ IilEp. p
The very erection o. these controls
i an invitation T. the entire Consum-
Ing world To fight militia ntlv for it's
existence. The length Of time that
any particular control can last against
these forces no doubt depends upon
the degree of need for any particular
commodity and the other possible
sources, and the possibility of subsui-
tutes.
Defeat Inevitable.
These forces can proba bly, break
the control of any agricultural prod
net in few years, for many alterna-
tive sources of production exist Ad-
vance in synthetic production of some
chemicals VIII perhaps remedy these
combinations. Others might be more
difficult to meet. However, these
pressures operate very slowly and in
The meantime | assume that these
facts being well known to the con-
trolling nations they calculate on
TeapinG suCh a harvest as will COM
pensate them for the ultimate possible
decentralization of their producing in
dustry.
From a political point of view
tand | am not speaking of domestic
politics. but of international relations)
these actions and their reactions are
alive with danger.
Our foreign offices will thus sooner
- IL,