by the international exchange aspect of the rubber question. It was hurried through the Colonial Legislatures as an emergency measure and came into force on November 1, 1922. Of the British-controlled rubber companies in the Dutch Indies, 90 per cent. (by acreage) adopted it voluntarily. At the commencement of the scheme, therefore, the bulk of the world's production of plantation rubber was under control. Its advocates declared that it was intended as a " long-term average stabilisation scheme," and the Rubber Growers' Association put it on record that the fundamental remedy for the ills of the industry lay in the extension of the uses of rubber, and that restriction was regarded as only a temporary measure. It was thought that three years of control would suffice to set the business on its feet again; but, shortly before that term expired, the Colonial Office made it known that the scheme would be continued sine die, with certain modifications. The details of these need not be set forth here, but they were somewhat drastic. In the first place, the "pivotal " selling price of 1/3 per lb., which in 1922 was held to be a figure at which the companies could comfortably rub along, was raised to 1/9, although the costs of production had certainly not gone up in the interval.

Next, it was provided that if in any quarter the average price fell below the new pivot of 1/9, the reduction of the exportable quota would not be 5 per cent. as hitherto, but 10 per cent.; or, if the quota stood at 100, then 20 per cent. Furthermore, it was laid down that in no case would the exportable quota be allowed to exceed the full standard production, or be reduced below 60 per cent. of it. These revisions were intended to meet the objection that the scheme was too slow in its working.

The cost of the administration of the scheme comes out of the export duty, which, in Malaya, would seem to have yielded about £1,857,000 in 1925, when duty was paid on 199,000 tons, and about £2,632,000 in 1926 (dutiable exports 282,000 tons). Some part of the duty is set aside to assist the discovery of new uses for rubber.

It is evident that restriction has been successful in bringing that "much-needed revenue to the Colonial Exchequers," which was one of the minor arguments in favour of its imposition. Another argument, that the duty would stabilise prices, to the advantage of growers and manufacturers alike, has not been

realised. Speculation and an unforeseen increase in demand have been stronger than compulsory regulation of exports. There is no control of the London stocks, which are an important factor in shaping the course of the market. These had fallen to less than 30,000 tons-much below the normal-at the beginning of 1925, when, as a result of the introduction of the balloon tyre, the demand was exceptionally strong. The rubber goods manufacturers became frightened, many of them rushed into the market, and prices rose steadily until, in December, 1925, smoked sheet stood at 4/8 per lb., and the stocks were below 4,000 tons. Manufacturers who held no forward contracts at low figures were severely hit, and the public had to pay extravagant prices for its rubber goods. With the depletion of the London stocks the only safeguard against panic prices disappeared, and speculators had things their own way.

The failure of the scheme to prevent speculation is shown by the following quotation from the Evening Standard of July 13, 1925

The small section of the Stock Exchange devoted to rubber shares presented an extraordinary spectacle. A struggling, shouting mass of brokers and dealers made it physically difficult for transactions to be carried out.

The cardinal miscalculation made by the Stevenson Committee appears to have been its failure to realise the magnitude of the coming demand. It was this expansion of demand, quite as much as the operation of the restriction scheme, that accounted for the absorption of the heavy stocks of 1922. How that demand outran the supply is shown by the following statistics :

Imports of crude

rubber by manu

turing countries 380,000

445,000 475,000 560,000 545,000

The United States alone took 390,000 tons in 1925, and 365,000 tons in 1926. The present American consumption of

rubber is distributed in the following proportions: automobile tyres and tubes, 85.1 per cent.; mechanical goods, 4.6 per cent. ; boots and shoes, 4.3 per cent.; insulating compounds, 0.9 per cent.; soles and heels, 1.3 per cent.; other goods, 3.7 per cent.

As has been shown, the refusal of the Dutch Indian Government to associate itself with the policy of restriction was recognised from the outset as a serious obstacle to its success. Rubber planting in Java and Sumatra has, beyond question, been encouraged by the Stevenson Scheme. The exports of crude rubber (reduced to dry rubber) from the Dutch Indies have gone up steadily from 94,000 tons before restriction to 204,000 tons in 1926. There seems to be no proof of the assertion, which is often made, that the Dutch are endangering the future of their plantations by over-tapping. Much inferior rubber containing a high degree of moisture is produced by native growers in the Dutch Indies, and is sent to Singapore for re-milling; but a company has now been formed in Holland to prepare this material for the market in Sumatra itself. The average cost of growing rubber in Java is reported to be about the same as in Malaya ; in Sumatra it is said to be less.

Another outcome of the restriction policy has been the din it has raised among some of the manufacturers in America. Mr. Harvey Firestone (of Akron, Ohio), whose company is said to turn out 35,000 tyres a day, has particularly distinguished himself by his denunciations of the measure. But as Mr. Firestone's company in the year 1925 made a profit of 12,800,000 dollars on a capital of 21 millions, he does not, as yet, seem to be seriously hurt, and the assertion of other American critics that restriction is the cause of the high cost of tyres in the United States is unconvincing. Rather more significant, perhaps, are the outbursts of American politicians. Mr. Nicholas Longworth, the Speaker of the United States House of Representatives, has publicly called the Stevenson Scheme an international swindle; and in January, 1926, the House passed a resolution declaring "that the well-being of the American people was seriously threatened by the monopolistic control of the production and supply of rubber, resulting in excessive prices, wholly unjustified by the normal laws of supply and demand." The House proceeded to appoint a committee to enquire into the matter. This resolution was followed by a diplomatic protest to Great Britain,

and by the threat of reprisals, and the agitation probably helped to pass through Congress the Haugen-McNary Farm Relief Bill which President Coolidge subsequently vetoed. Mr. Hoover, the Secretary of the United States Department of Commerce, has joined in the hue and cry.

The American protests were founded upon wrong assumptions, but the fact that they were made justified the fear expressed in 1922 by the Rubber Manufacturers' Association that restriction would cause international complications.

The great present need of the rubber growers is new or extended industrial uses for their product. An industry which depends upon one country and upon one branch of manufacture for the sale of four-fifths of its output cannot be regarded as in a safe economic position, and is bound to feel some misgiving for its future. While it is true that the demand for motor-cars shows no sign of nearing the "saturation point " that was dreaded in certain quarters a few years ago, an increased utilization of rubber in other branches of industry is a cardinal necessity for the planters.

To do them justice, they are straining every nerve to attain this end. The rubber trade is very thoroughly and efficiently organized in all its branches. The great majority of the estates are in the hands of joint-stock companies banded together in groups, and the Rubber Growers' Association in London is a strong and wealthy body with over 900 members. It has spent thousands of pounds in furthering the technology of rubber; it maintains a valuable research department and conducts a propaganda that for intensity can hold its own with the best efforts in that line. This research department, under the auspices of a subsidiary company, has laid down stretches of rubber roadway in London, introduced rubber tiles in hospitals, and done much to popularise the use of crêpe rubber soles. Rubber flooring and linoleum, and the incorporation of rubber with cement for building purposes, have also received attention. Among many other instances of new uses of rubber which have reached the stage of practical development, or show promise of doing so, are its employment as an anti-abrasive material for the lining of tube-mills and for tail-ends of dredger-chutes, rubber flowers, rubber-topped tables, sponge rubber mats, stair carpets, upholstery and mattresses, rubber suspension of automobiles and rubber

roadways. Apart from the use of rubber for paving, considerable scope exists for the employment of white line rubber blocks in connection with the control of traffic.

In 1919, the Association organized a competition for new uses for rubber. Prizes to the amount of over £10,000 were offered and more than 2,000 entries, embodying some 10,000 suggestions, were received. As happens always in such competitions, most of the suggestions were of no value, but a fair proportion contained the germ of ideas that, when worked up by experts, might lead to practical results. These suggestions are embodied in a handbook, printed on rubber latex paper and published by the Association. The first prize in the competition was awarded for the use of sponge rubber for upholstery, and the second for the incorporation of liquid rubber with paint as a wood-preservative or anti-corrosive.

A noteworthy development of the rubber trade since the year 1922, has been the direct utilization of latex-the milky juice which exudes from the cortical tissue of the tree and furnishes the rubber of commerce. Latex has long been employed by the natives of Bolivia to impregnate their ponchos; it was the "liquid caoutchouc " of the patent taken out by Thomas Hancock as long ago as 1830 for impregnating substances; but difficulties of transport and preservation appear to have prevented its industrial application in the past. A few years ago, however, its utilization in the manufacture of paper and paper-like materials was the subject of a patent by F. Kaye, and since 1923 the exports of latex have been considerable. The importance of the new trade is made plain by the following official figures :

Some plantations are reported to have made contracts for the sale of their whole production in the form of liquid latex, thus saving the cost of turning the material into sheet or crêpe rubber. Fresh latex is a perfectly limpid liquid, miscible with water in all proportions. It contains on an average about 30 per cent. of rubber substance. For export, a small quantity of ammonia is