Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-10-12
In the Motor World
BY q. ADAMS HOWARD.

, studebaker, Stutz, Viking, WHY'S
knight, Whippet and Windsor.
Truck exhibits will include:
Chevrolet, Corbitt, Diamond r,
Federal, General Motors, Maccar,
Paige, REQ, Schacht, Stewart, s. p.
A. and WHY'S.
Three taxicabs will be on dis
play. They will be the Checker,
the Dodge and the Yellow Cab.
There is no likelihood Of any
decrease in the prices Of auto
mobile tires, in spite of the recent
decrease of cents pound in
the price of crude rubber, 1t Is
agreed by leading tire manufac-
turers.
While about eight pounds of
crude rubber are built into small
sized tire. other items of expense
in the production Of this tire have
changed little in the past few
months and have much more to
do with tire prices than the price
of crude rubber has, 1t is pointed
out.
Financial Journals Quoted.
In this connection various
financial journals are quoted as
saying:
william O'Neil, president of
one of the large rubber companies,
large producer Of replacement
tires, said the price OF tires was
only about one-tenth Of the pre-
war price and that in view of
other factors, such as reduced
schedules, the drop in price, Of
crude rubber can have little effect.
"'Even a 20 per cent drop from
10 to 8 cents a pound, in crude
rubber, when crude rubber &C
counts for approximately only Is
per cent Of the entire cost of q
tire, can hardly be passed on to
consumer Mr.. O'Neil declared.
Reduced schedules of approx
mately 40 per cent have cost the
tire companies In the one item Of
depreciation nearly as much as
they will gain by this drop In the
cost Of crude rubber
"He gave 90 an example q tire
company with q plant investment
Of 500, 600, 900, producing about
$4,000, 900 tires q year at full
schedule, which must charge OF
10 per cent or $10,000,000 year
for depreciation.
eft this company produces only
1880, 900 tires this year, as It
probably will, it still must charge
of $10,000,000 depreciation Mr..
O'Neil said. This means that
each tire produced must bear 10
cents or more Of this charge,
while the recent drop in the price
Of crude is only about 16 cents on
the average small size tire
Claim Sales Below Cost.
"OficialS Of other companies
agreed with Mr.. O'Neil that tires
were as cheap as they could
profitably be built, and, although
none would predict an immediate
increase, several agreed that tires
were now in many cases being
sold below production cost.
"A high official quoted authori-
ties to the effect that the present
price of rubber was 6 cents a
pound less than the lowest esti-
mate of the cost at which crude
rubber could be produced in any
place, and IL cents below the
generally accepted cost of produc-
ton.
"Oficials agreed that there was
no economic basis for expectation
of q reduction in tire prices at
this time based on the drop in
crude rubber prices.
When tire companies quit
their silly competition and start
charging for tires something near
their production cost there will
be an Increase instead of a Drop
one ofiicial said"
All Of which does not help the
public in any way. The manu-
facturers know that automobiles
must have tires, and so they must
be bought. The so-called SILLY
competition is the only cause
preventing the public from pay
ing five times the price Of tires
they now do.