A tin price of £230 is, of course, out of all normal relation to average production costs. It ensures high profit margins, even to the high cost producers, but it does not provide an indisputable advantage to the international in trade. For it is disproportionate to the prices of competitive products, such as other base metals, glass, artificial resins, cellophane, etc. In other words, the prospective tin price-level of the next few months is likely to stimulate not only outside production but also substitution. Although the combined output of countries outside the tin scheme rose from 14,523 long tons in 1931 (the year of the introduction of tin restriction) to 28.564 tons in 1937, and although also the replacement of tin by other products has already reached an advanced stage, these two movements will not necessarily threaten immediate danger to the working of the tin scheme. Their adverse effects will be felt chiefly in the long run. The results of the high tin price will be seen rather in the form of unduly low production quotas. There is no doubt that the present free market quota is much too low to meet current requirements, Until the end of March, however, tin producers are able to make use of the 10 per cent. buffer pool quota, which will then be dropped, because by that time the pool will have reached the upper limit of 15,000 tons specified by the buffer scheme. Unless world trade activity slows down next year, an increase in the free market quota seems likely to be essential in the second quarter of 1939. It is most unlikely, however, that the increase will exceed the 10 per cent at present retained for the accumulation of the pool, and in the absence of a sat! factory trade revival the increase will probably be even smaller.
Text read from the printed page and cleaned; old type leaves the occasional error.