The Southland Times. PUBLISHED EVERY MORNING. Luceo Non Uro. WEDNESDAY, OCTOBER 27, 1926. THE RUBBER CONTROL

Southland Times, Issue 20011, 27 October 1926, Page 4

The Southland Times. PUBLISHED EVERY MORNING. Luceo Non Uro. WEDNESDAY, OCTOBER 27, 1926. THE RUBBER CONTROL

Mr Hoover, the United States Secretary of Commerce, has complained bitterly more than once of the effects of the Stevenson Plan under which the British growers of rubber controlled the output from their plantations and forced up the market prices which had fallen beyond a profitable level, and in the annual review published by his department, the matter is referred to again. In the first place there was a complaint that the British Government was behind the scheme, the aim of which was to penalise the Americans, who are large users of the raw material; but this allegation was promptly challenged and it was made clear that the Government was not involved in the scheme. The United States Department of Commerce “.admits” the success of the Stevenson Plan and complains that other foreign Governments have copied the move by restricting the outputs of staple products which the United States requires as material for its industrial activity, and for which the United States is the greatest single consumer. This grievance is not without its humorous America, the creditor nation in a world almost entirely peopled by debtors, has a high tariff which impedes the activities of those nations which, owing her large sums, hope to repay them under debt settlement arrangements. Their best means of paying their debts to America is to sell to America, but the tariff wall stands in their way and unquestionably it is making the task of these debtor nations the more difficult. Creditors rarely enjoy the sympathy of those who owe them money, and in this case some of the shrewdest men in the republic have warned the Government that while in the matter of debt settlements it has all the logic on its side it may lose far more than it gains in pursuing the “logical” line. In insisting on these debt repayments it may not lose its own soul, but the United States may lose the respect of the entire world. That is the plea put up by some Americans and it is backed by adVice quoted from some of her past presidents. There is nothing surprising in the attitude of the debtor Governments who are seeking to retaliate by artificially raising prices on the United States, particularly if they are strong enough to accomplish this. A.

“corner” in any commodity is successful and can be justified by those who establish it if by this means the market can be controlled, but anything short of complete control may lead to disaster. This fact should bring thoughtfulness in the train of any rejoicing on the part of the Governments and the producers who have successfully operated a restrictive plan, because the answer to their schemes is available to a nation as powerfully situated economically as the United States. If a nation is attacked in this way, no matter how surely the attackers may justify their action, retaliation is possible, and in the case of rubber the Americans have not wholly forgotten that fact. Some of the large consumers of yubber have already made preparations to take up the growing of it. While the prices of the raw material are at a level which is satisfactory to the manufacturers they do not give serious attention to the production of it, # but when the market rises high enough to make production worth while they may use their financial strength to supply their own requirements and in this way bring prices down again. Henry Ford has done this time after time, and in each case he has succeeded in cheapening the cost of the material he needs. Restriction of output may reduce supply and artificially increase the effects of demand, but in the long run there is reaction, the pendulum swings back. In the case of rubber the long period between the beginning of the effort and the production of marketable supplies will delay the swing back, but where control is used to hamper the free flow of goods to the market and to force up prices the retaliatory processes will ultimately swing into action. This point is of special interest to all people who favour the use of control in this way. An immediate success may be gained, but the stipulation of further production beyond the scope of the control is a factor that must not be ignored. Dairy produce is not immune from the effects of this operation of the law of supply and demand and in this country it is well for that fact to be remembered.