The Evening Star SATURDAY, JANUARY 9, 1920. MR HOOVER’S OUTBURST.

Evening Star, Issue 19143, 9 January 1926, Page 6

The Evening Star SATURDAY, JANUARY 9, 1920. MR HOOVER’S OUTBURST.

The rubber share section has for many weeks been the centre of interest on the London Stock Exchange, The extraordinary prosperity and excellent outlook of rubber plantation companies brought about a boom of speculation. A year ago the average price of rubber was Is Gjd per lb. Five months later the increasing consumption and the operation of the output restriction scheme caused a shortage, and prices jumped. Towards the end of November the quotation had reached 4s 8d per lb. The reason was that there were only 4,510 tons on spot, whereas the recognised working margin is 28,000 tons. The rubber companies had been releasing greatly increased quantities. British importations were 50 per cent, greater in October, 1925, than in October, 1924. Yet there was no building up of the margin on spot beyond 6,000 tons, so inSatiate were the demands of users of the raw material. According to an English financial paper, the remarkably high prices of rubber ruling in the past few weeks are due to a genuinely increased consumption spread over many months past. It is, however, highly probable that the scale of releases according to market prices, which is the basis of the Stevenson scheme, has kept supplies discreetly in the rear of the exceptional demand. Thus the rubber companies are enabled to reimburse themselves rapidly for endurance of lean years in the near past. As to the future, they aro content to bo more reasonable. They have made forward sales of portion of their output as far ahead as 1930 at prices ranging from about 4s per lb for 1926, 2s 8d for 1927, 2s 3d for 1928, and 2s for 1930. The position appears to ho that rubber planters over-estimated the world’s consumption for the past year or two and endangered their industry’s existence. By combining and restricting their outputs they rectified matters in too great a hurry from the point of view of consumers, though probably not from that of their shareholders; and now they are prepared to allow markets to come bade to normal very gradually. America is the largest consumer of rubber, and certain of her subjects have been horrified at the way in which they have been “held up.” The matter was transferred from the commercial to the political sphere a few weeks ago. Just before Christmas, in the United States House of Representatives charges were made that British and colonial Governments had been manipulating the prices of rnbber and other raw materials. One Congressman even alleged that the British Government had openly boasted that by this means Britain would mulct the United States of four billion dollars, and thereby pay its American war indebtedness. Ah that the British Government had to do with the matter was that it sanctioned the scheme for restricting the output of British plantations. Nevertheless, the House of Representatives set up a committee of inquiry, and this has now begun its task. The first witness to appear before it is Mr Herbert Hoover, who holds the portfolio of Commerce in the United Stales Cabinet, and'whose activities in wnt relief work in Europe were remarkable for their promptness and efficiency. He said soma very arresting things—remembering his official position, some

almost Inflammatory tilings. His state of mind had previously bean disclosed in an interview on the ovo of the ivk quiry. In that interview ho advocated a kind of British iiihber boycott, which included a campaign to reduce consumption by the American motor car makers, the uso of substitutes, a combine of American rubber buyers instead of their competing for supplies, and the establishment of American-owned plantations. At the inquiry itself bo spoke of foreign control of rubber prices as “threatening not only the sane progress of the world, but containing great dangers to international good-will. From Ids official altitude be has watched certain developments in world trade. He finds that “ governmental combinations ” control nine important raw materials, and be evidently believes that the time has come for the United States to protect herself from exploitation, or, in his own words, to decide the policy she should pursue towards a comparatively now and growing menace in international trade. It is comforting to hear Mr Hoover say that the situation would only be aggravated by retaliation. This doubtless was in reply to the suggestion made that the United States should manipulate cotton prices, and thereby give Lancashire a staggering blow. But the first question Americans might ask themselves is whether this now menace in interational trade is not a fomi of retaliation for earlier ventures in the sarao direction by America herself. Has the high price at which petrol has been kept in these parts of the world not been largely due to the control of American organisations? Has not America’s growing monopoly ,)f the world’s gold supplies contributed to the critical financial embarrassments of many European countries? When wo come to consider the measures that should bo adopted to prevent the growth and abuse of monopolistic power, no matter bow it has been acquired, wo enter a controversial field, and one Ml of contradictions and anomalies. _ Mr Hoover lias been instantly reminded of this by members of the U.S. House of Representatives. Ho has been invited to take a look at the American trusts winch are running between the legs of Congress. The American Government has been singularly unsuo cossful in what is known as “ trustbusting.” Mr Hoover himself is accused as having encouraged monopolies, and as now being a propagraudist for the American rubber interests. That, however, is beside the question. The point bo has brought prominently before the world is whether a community is entitled to say that those who deal in tbo necessaries of life or of trade must only do so on n basis of profit that is considered reasonable. The further point, then, arises as to who is to decide what constitutes reasonable profit. The matter bristles with difficul\ies and with flat contradictions. On tSo one band the public complains of combinations keeping up prices unduly, while on the other band outside manufacturers complain iu Homo cases that the combinations are so efficient that it has been found impossible to compete with them prices. The matter becomes even more complicated when it is lifted from the national to the international plane, and when it involves the control of raw materials. It was largely her 'desire to radically alter the then existing basis of that control which induced Germany in 1914 to betake herself to force in order to gain her “place :u the sun,” .