Rubber

Last week the House Committee on Interstate and Foreign Commerce opened its investigation of foreign control of raw products--the "mulcting of America" by control of production and boosting of prices.

The hearing was opened with Secretary of Commerce Hoover speaking:

"The world has often enough seen attempts to set up private monopolies, but it is not until recent years that we have seen governments revive a long forgotten relic of medievalism and of war-time expediency by deliberately erecting official controls of trade in raw materials of which their nationals produce a major portion of the world's supply, and through these controls arbitrarily fixing prices to all of the hundreds of millions of other people in the world.

"We cannot solve these by acquiescence or acceptance and we will only compound and aggravate them by retaliatory action. On the other hand, if we are able to evolve the basis for a broad constructive solution, I believe we shall also make an important practical contribution to the promotion of stable international relationships.

"There are at present governmentally controlled combinations in nine raw materials--Egyptian long staple cotton, camphor, coffee, iodine, nitrates, potash, mercury, rubber and sisal. At present prices, if we maintain our present rate of consumption, these commodities will cost us about $1,200,000,000 for 1926."

He pointed out that the cost of producing raw rubber and cotton is about the same, but cotton sells at 22-c- and rubber at 90-c- a pound. On succeeding days rubber manufacturers told the committee the same story.

Several methods of avoiding high prices were suggested: 1) Planting rubber in the Philippines and elsewhere outside British control (this will not bring relief for several years, however--not until the rubber trees grow to bearing age.) 2) Co-operative buying, perhaps legally enforced, by all U. S. rubber manufacturers. 3) Using rubber as economically as possible, and carefully reclaiming all old rubber. 4) Tapping wild rubber trees still growing in many places.

But while ways and means of defeating rubber prices were discussed in the Committee, a Democrat, Loring M. Black of Brooklyn, presented on the floor of the House an entirely different attitude:

"Here are the expanding tire companies sicking the faithful Hoover on the British lion just when they are about to inflate prices. They want an alibi to gouge the public, so they bark at the East India rubber planter, whose empire protects him better than the Napoleonic sphinx of the White House, who, campaigning on the back of a cow, protects our farmers. [Laughter and applause.]

"Hoover is the right man in the right place, a go-getter, a calliope and a limelight rolled in one. . . . "

The British Government put on the Stevenson restriction plan to conserve the supply of rubber and to save their planters from bankruptcy. It was not done to gouge American manufacturers, for British manufacturers as well were affected by it.

"Let us see how badly some American manufacturers have suffered by it. The Goodrich Tire Co. in 1920, before restriction, faced a $24,000,000 deficit. In 1925, after three years of restriction, it made $7,000,000 in six months.

The Firestone Rubber Co. in 1921 reported a profit of $1,250,000 and in 1925 a profit of $13,000,000.

"Mr. Harvey Firestone ought to send some complimentary balloon tires to the British colonial office instead of firing a couple of congressional popguns at it it."