Evening star., 1931-12-23
RUBBER PRICE DIP
MAY Be CONTINUED
Suspension of Gold Standard
by England Affects Value
of Product.
BY WILLIAM LEE,

The fall of the gold standard in Eng
land is having repercuSSion in rub
ber producing in Malaga, Ceylon and
Netherland India that promises an echo
which the American motorist may hear.
Unless the rubber estates and the
British and Dutch governments patch
up the punctures it is possible that
motor tires may be even cheaper than
they are now.
There has been a long-standing row
between the producers over the question
of regulations restricting production.
Some want it; some do not Some pro-
ducers are under the British flag; some
owe allegiance to the Dutch. So the
affair is about as complicated as it is
possible to conceive. And into the midst
of the situation has been catapulted
a devalued British currency.
May Affect U. S. Motorists.
Just what the end is going to be it
is obviously impossible to forecast at
this distance. but a Department of
Commerce official suggested today that
it is circumstance in which the
American motorists have much more
interest than the bulk of them realize.
The fact that the fight is going on
thousands of miles away makes no
difference, in the opinion of the de-
partment. because the results will carry
around the world message of changed
prices.
1t had been reported previously in
official adVlces that goodly number of
financially weak producers were on the
verge OF shutting up shop. If that con-
dltlon stlll obtains and the policy of
survival OF the fittest" goes on, it is
not unlikely that large number Of
planters will discontinue operations.
Before the gold standard fell in Eng
land many Dutch producers believed
they possessed an advantage over the
Brltlsh-governed estates in the matter
OF production costs, since then the ad-
vantage seems TO be definitely in favor
OF British Malayan producers.
lnasmuch as the currency in Malaga
mas flXed ratio to sterling, the de-
preclatlon has operated as a reduction
IN wages and overhead expenses of the
Malaga estates At the same time. if
the American Cor world price for rub
Der were stable in terms of gold. the
Malayan exporter would now receive
more Malayan currency than before
abandonment Of the gold standard in
England, while the Dutch exporter
would receive the same as formerly
Actually, according to the Department
of Commerce, the gold price of rubber
having declined somewhat, the Dutch
exporter is receiving less than before
while the Malayan exporter is receiving
mOre-each in terms of his own cur
rency.
There is much evidence that con-
certed effort is under way to introduce
government production regulations in
all three rubber-producing areas. The
British government is willing to listen
to overtures from the Dutch, but the
Dutch government has run into house
divided against itself among its own
producers.
Oppose Government Influence.
AS the matter stands, there is a real
drive on by the so-called strong estates
against any governmental interference.
They take the position that hands-off
policy would force out financially weak
estates and estates that are ineffciently
managed. Their argument is predicated
on the theory that 1t is better to let the
fit survive than to force all on reduced
schedule of operation.
At any rate, the far-aWay conflict is
being closely watched, since upon it de-
pends the trend of prices here. Hun
dreds of millions of dollars are directly
involved. and hundreds Of millions more
in investments are in position where
the moose may be drawn if negotiations
for a settlement fall down.
(Copyrisht, l93l)