Forestallers

In the Middle Ages the forestaller, who piled up a lot of goods in order to force high prices from consumers, was liable to get his ears chopped off. Modern monopolies are forestallers incorporated, and are punished, within a particular nation, through anti-trust laws. But no laws yet exist against monopolies (forestallings) in international trade. Brazil controls coffee, Russia platinum, Chile saltpetre, Germany and France potash, Great Britain tin and rubber.

British rubber magnates want the price of rubber never to fall below 42-c- a pound, which represents a fair profit for the average grower of plantation rubber. To maintain that price the Stevenson Plan became effective in 1919. When rubber falls below 42-c- growers must curtail production; when it mounts above, they may produce to capacity. The Stevenson Plan prevents loss to growers, but does not restrict their profits. And their profits may mean loss to rubber consumers, who are thus forestalled.

U. S. rubber manufacturers stand as such forestalled consumers. They use 75% of the world's rubber and control very little of production. Since it happens that the current price of rubber is 36-c- a pound the Stevenson Plan will call for a 10% plantation restriction by Feb. 1. Yet there are fairly large stocks of crude and scrap rubber in the U. S. The price will not jump wildly.

None the less, U. S. rubber manufacturers are at the mercy of British growers. Vexed, last week Firestone, Goodrich, U. S. Rubber, Goodyear, Ajax, Fisk, Kelly-Springfield decided to circumvent the forestallers. They invited General Motors, Willys-Overland, Dodge Bros., Packard, Studebaker and other interested firms into their compact; created a $40,000,000 fund to buy up at once 50,000 tons ($30,000,000 worth) of crude rubber. This will be put in storage. If crude prices go above 42-c- a pound, manufacturers can draw on this store or the whole amount may be dumped against a rising market.