Optimistic Rubber

In 1934 rubbermen created the International Rubber Regulation Committee-- a cartel that represents 98% of the world's rubber producers. The I. R. R. C.'s aims are two:1) to establish and maintain a base limit to rubber planting, 2) to fix quarterly quotas on the amount of this rubber that is marketable.

Last spring, with rubber bounding over the 25-c--per-lb. level for the first time since 1929, the I. R. R. C. met in London, upped the rubber quota for the second half of 1937 to 90% of the base (TIME. March 29, 1937). Almost immediately afterward came the collapse of the British commodity boom, and rubber consumption presently slumped about 25%. In the U. S., world's biggest rubber buyer, rubber consumption dropped as much as 8,000 tons per month and the price to 14-c- a lb. Last December, therefore, the I. R. R. C. again met in London, cut the rubber quota for the first quarter of 1938 to 70% of the base.

Last week rubber was selling at 10.31-c- on the New York Commodity Exchange, cheapest price in three years. Yet to appear was any sign of industrial revival sufficient to bounce rubber up again. But the I. R. R. C.'s 1934 agreement on planting bases expires this year. So the I. R. R. C. again met in London last week, this time to establish not only the export quota for the next three months, but a new planting limit. Recognizing the present slump, I. R. R. C. set the quarterly quota at 60%. Optimistic for the long pull, however, I. R. R. C. upped its bases along a graduated line. The 1934 base was 996,500 tons. Last week the I. R. R. C. proposed bases of 1,519,000 for 1939, 1,541,000 for 1940, 1,554,000 for 1941, 1,563,000 for 1942, 1,569,000 for 1943.

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