Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-02-13
CONTROL OF RAW MATERIALS
PRODUCTION IS ADVOCATED

best interests Of q raw material in
dustry will be served by submitting to
this automatic but ponderous mode Of
regulation"
How Law" Works.
In the case of tin, Anglo Oriental
points out that the demand arises
largely from necessity and is not much
influenced by price. Production costs
kept working to maintain, in the long
run, an adequate supply. If overpro-
duction for any period of time is per-
mitted, prices collapse and the high
cost mines are forced to shut down
and suffer heavy financial losses. Even
tually surpluses are used up, the price
OF tin goes skyrocketing, causing the
refnancing and the restarting of high
cost mines.
This, says Anglo Oriental, is the nor
NAL working of the law of supply and
demand, an uncontrolled series of
booms and hardships. Apostles of the
law" 1t says, believe that this working
provides encouragement of the low-coSt
producers and the elimination of the
h1gh-coSt producers, but over a period
Of time the effects are exactly the op-
posite. When the high-cost mines have
shut down, a shortage eventually in
1N
boom in mining stocks, financing is
easy and the high-cost mines are re-
financed and rush in to participate
IN the prosperity. Overproduction re-
suits and depression follows, leading
to another shortage and another boom,
and so on, again and again.
Can any producer of raw material
or any financial expert honestly believe
that II by intelligent cooperation this
deplorable state of affairs can be cor
rected it would be bad policy to do so?'
asks Anglo-Oriental.
It says the only basis of contention
is that the price of tin would be kept
too high by keeping alive the higher
cost producers. An examination o.
prices over the past II years, Anglo.
Oriental asserts. refutes the contention
It points out that G220 a tor
would give profit to the majority OF
IL years, 1T finds, have the average
prices been under E2oO. while in six II
has been over f290 ton.
Fall in Price Cited.
Let the price of tin be ruled by the
relationship of supply and demand, -
the company concludes, but let there
be an intelligent relationship. It is
quite possible to anticipate demand with
reasonable limits and to preserve a res
ervoir Of stock to meet fluctuating
needs"
Since the early months of 1927 tin
has fallen from an average monthly
price of over $500 a ton to only a little
over f100. Contrary to the belief that
efforts to restrict tin production have
heretofore failed utterly, Anglo Oriental
says that the partly. effective restric-
ton plan, which kept some $4,000 tons
on the market, undoubtedly saved the
industry from wreckage, because, with
the possible exception of the Dutch,
practically all tin-producing countries
would have made severe losses had the
price fallen below E100"
Anglo riental's comments are par
ticularly interesting to the United
States, which is forced to import all of
It's needs of this basic commodity. They
are also interesting in relation to the
recent effort to bring all producers into
an effective restriction plan. Recent
rumors that the plan had struck a snag
have been denied. The Tin Producers
Association announced last week that
the differences between the Malayan
government and the other producing
countries had been adjusted. The re-
striction is expected to take effect
March /. The governments Of Bolivia,
the Netherlands, East Indies and Nj
geria have accepted the plan.