The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1926-07-29
TIRE MAKER GIVES
FACTS CONCERNING
RUBBER SITUATION
(By Harvey s. Firest0ne.)

On August | the British govern
ment will unquestionably adopt a
new and more drastic restriction OF
the production and expectation of
rubber, and | feel should bring to
the attention of the American car
owner the full import Of what this
means.
The minimum price Of rubber un-
der the new restriction is to be set
ut AZ cents per pound The Steven
son restriction act rs originally
adopted November 1, 1922, fixed the
minimum price ut 25 cents per pound.
One of the arguments for the adop-
ton Of this act by the promoters Of
the scheme was to stabilize the price
Of rubber between rs and 30 cents
per pound. but instead Of fulfilling
this function, it not only increased
the price beyond all reasonable linn
its but also through resulting wide
fluctuations made very unstable.
speculative and hazardous condition
for the rubber manufacturers.
Rubber was selling around II
cents per pound when the Stevenson
restriction act became effective. The
act allowed 60 per cent Of normal
production to be exported and called
for quarterly revisions according to
the price Of rubber. That is, If the
price Of rubber fell below an average
of rs cents per pound for any quarter
an additional per cent restriction
would be placed, and if the price of
rubber for any quarter averaged
above 80 cents an additional per
cent would be released. In this way,
it was claimed, the price of rubber
would be stabilized between 25 and
80 cents per pound.
Prices Boosted
Immediately upon the adoption of
the restriction act the price Of rub
her advanced. The first quarters
average was above Is cents per pound
and sold as high as 80 cents per
pound with practically the same
available rubber stock in the world
a. existed in the previous quarter
when the rubber was Ia cents per
pound. It was not until the second
quarter Of 1924 that the average
priee Of rubber fell below Is cents,
at which time an additional per
cent was restricted. Next quarter
rubber was still below Is cents and
q further per cent was restricted,
thus allowing only so per cent of
normal production to be shipped from
the British colonies.
These additional restrictions ad-
vanced the price; in the last quarter
Of 1924 the price of rubber averaged
above 80 cents per pound and per
cent was released. The price con-
tinued above 30 cents---in fact sold
rs high as $1.23 per pound in 1925
and according to the provision of the
act, 100 per cent Of standard produc-
tion was released on February /,
1o1G These additional releases Of
rubber brought the price Of rubber
town from over $l.QO per pound dur
ing the last quarter Of 1925 to an
average Of so cents per pound in
81 April 18th Of this ysar ..tAs
British colonial office announced
that 81 the price of rubber for the
next quarter beginning May lst. did
net remain above AZ cents per pound
Tor the quarter, il would place new
restriction on rubber allowing only
~ per cent Of normal production to
80 exported In the following quarter,
starting August l, 1926. Rubber con-
'timnod r. decline rapidly until it
reocAed e cents, end now the aver-
- pftce FOR the quarter IL around
p eoS(ts. A there are over "a, 900
sfena 81 rubber Ii London under the
soo1teel q powerful interests whose
n0fooaos are best served by hoving
Sf6 nov restriction, and % the act
se2I7b lor ~ price 70 ~ fixed for
nneh DAY 81 The last sale ct three
~ oek IS shouD1 - very plain "a
r. 4nn6 tint th1a quarters Aver-
r. nogo lieoly ~ - . lit&1e under