the second will appear in these columns next week. The-decision.
Ast of two articles dealing with the position of rubber today, of the International Rubber Regulation Committee, at their meeting. on May 31, to fix the exportable amount for the third quarter of the year at 45 per cent. of the basic quota means a reduction of 15 per cent, on the previous quarter and is more sweeping than was generally expected; 10 per cent. was the most hoped for. It will be welcomed by the market, which was sorely disappointed when, at the previous meeting in March, no action was taken, At that time rubber was in the middle of a violent slump which carried the price down to nearly ten cents in New York, the fall being assisted by the widespread dismay of' rubber interests at what seemed to be the inexcusable weakness of the LR.R.C. The rather severe criticism then indulged in ignored several important factors.
It had been anticipated that the April/June quota, previously fixed at 60 per cent, would be further reduced. This could doubtless have been done ifa sulfciently grave emergency had called for It; but the administrative Aimeulty in connection with the native testates in Java would have been Immense, for the issue of coupons to the thousands of small planters takes six to eight weeks and a revision at the last moment could not lightly be undertaken, The Committee may also very reasonably have felt that they could well defer for a couple of months a decision as regards the third quarter Instead of allowing themselves Quarter instead of allowing themselves rushed into hasty action, As matter of fact the consumption dur~ ing Maren at 74,500 tons is just covered by a re of 60 per cent! and at that time it was still hoped and expected that a seasonal pick-up in. American industry was about to take place and would quickly enable consumption to overtake production fat that rate, The Committee can hardly be blamed for not foreseeing that depression in the United States would further deepen and widen. At any rate, If any blame was attachable to them they have amply atoned for it by their present full-bodied action.
Aim of the Commit Before examining the effect of their decision it would be well to clear tt of one or two prevalent mis conceptions, It is too readily for-that the Committee is a body native of both growers and fers and while {ts principal object ig. to secure an economic price for planters it has also the duty to hold the balance fairly for the other side. The most effective way in which this can be done is to regulate production with a view to maintaining world Stocks as closely as possible technical needs of the market. The control on prices is thus indirect and Guidance in coming to decisions Is sought not so much in the course of prlecs, which are exposed to many {ransifory and extraneous disturbances (not to mention deliberate manipulation), but in the apparent trend of consumption" and stocks which hardly mistakeable. Tt is evident that sound judgment of the latter and propriate regulation must inevitably Yead to a fair price, That the Committee have not entirely succeeded in their aim must be put down to the deplorable condition of the industry when they were called into being and the disturbed condition of world trade, especially in the last twelvemonth, must further be borne in mind that the Law of Diminishing Returns is applicable to other matters as well as taxation and that there is a limit to restriction which, if exceeded, will ensure high prices but, concomitant Fum to most of the estates; a consideration perhaps not fully appre-elated by the advocates of drastic restriction. calamitous further the United States, the quota per~ centage adopted for' July/Sopt. wilt entail a steady and substantial reduction In stocks from the late Summer onwards, but not necessarily, much rise in price as the present weight of supplies gives the whip-hand to con deters. speculators from opt from. a discussion of tong serving further to expand stocks.
For the present quarter, the release is 60 per cent. on which footing production may be estimated as follows:
MGiktny Spor cont\"of bale itin 100 "per "een Moioeo Site oubiries. an "basis "of fan lat, production 2000]
Total os ase It must be noted, however, that in Jan/Mch the quota countries under~ shipped 17,000 tons, These will probably come forward in the second. quarter, but in any case some time this year and must be reckoned with, that the total supply will be 241,300 tons, oF 80,000 tons monthly. Consumption must equal this figure to hold down stocks during the pre~
to encourage such an expectation a sent quarter and 5 there is nothing further Increase ig unavoidable.
'Lacking any means of forecasting consumption with any confidence we will, for the moment, assume the seme offtake as in' Jan/Mch Lo. 206,000 tons which will leave a sur-ins of 25,300 tons. The position at the end of June may therefore be estimated thus:—tons Stock: at end of December 1997 530,00 Radltion during Jan /atar, 33.000 Addition ducing: Apessunc 35.00
Total seeesecessnsseees $0900 or say $89,000 tons equivalent to over months' supply on the 1937 average, of more realistically, 8% month' supply on the current ra of absorption, @ rather dismal picture.
Text read from the printed page and cleaned; old type leaves the occasional error.