PRICES

No other commodity, in all probability, has been subject to such wide fluctuation in price as rubber; for example, consider a high of almost $3 a pound in New York in 1910 and a low of under 3 cents a pound in 1933. Furthermore, the commodity accepted on the market as rubber today varies radically from the rubber of commerce 20 years ago which, in turn, was entirely different from the rubber in 1860. and earlier.

Fine Para rubber from the Amazon River Valley was for many years the standard of quality; and even today, because of its scarcity, it commands a premium over plantation grades for the manufacture of certain products. Plantation rubber was first sold in London in 1900; the sale consisted of 327 pounds from Perak, British Malaya, at 3s. 10d. ($0.93) a pound. In 1902, six cases of fine rubber from Ceylon were auctioned in London at 3s. 4 d. ($0.82) a pound, whereas the highest price obtained during that week for Para rubber was only 3s. d. ($0.74). Sheet rubber from plantations in the Middle East made its first appearance at London rubber auctions in May 1905 and brought 6s. 8d. ($1.62) a pound; it reached its highest price there on April 10, 1910, at 12s. 10d. ($3.12), the particular lot finally arriving at a rubber warehouse in Manchester, England, at 12s. 111⁄2d. ($3.15), about the highest recorded price for plantation rubber.

Actually, the highest recorded price for rubber is that mentioned in the preface to the book by Dr. Joseph Priestley (in 1770) of 3 shillings for a cubical piece of about half an inch, which he recommended be used for erasing black pencil marks from paper. Such a price means about $175 a pound. Ten years later, bottle rubber from Brazil sold in London for a guinea an ounce, or about $80 a pound. During the vulcanization experiments of Charles Goodyear, from 1835 to 1851, rubber sold at prices ranging from 5 to 50 cents a pound, according to quality. Rubber appears to have been given an arbitrary value in early import statistics, French unit values being as follows (in United States cents per pound) for the years specified: 1826, 31; 1832, 13; 1833, 13; 1834, 13; 1835 to 1846, 31; 1847, 22; 1848, 22; 1849, 26; 1850, 35; 1851, 44; 1852, 26; 1853, 35; 1854, 30; 1855, 26. Unit values for rubber imports of Austria-Hungary were about 34.5 cents a pound for the period from 1831 to 1840.

Wholesale Prices, Wages, and Transportation, by Senator Nelson W. Aldrich (of Rhode Island), a report to the Committee on Finance (published by the Government Printing Office in 1893), covers the prices of rubber in the period from 1856 to 1891, and tables summarizing these data have been included in this bulletin. For the period from 1892 to 1899, a table has been prepared from The India Rubber World, of New York. Additional tables cover the period from 1900 to 1937.

Popularity of the bicycle and the demand for rubber tires brought about the high prices in the 1890's; and, similarly, the automobile

and the Brazilian scheme for valorization of rubber were directly responsible for the high prices of 1905 to 1910. In this latter period of boom in rubber prices, jungle areas of the world were scoured for supplies. There were over 300 different grades of rubber and rubber

like gums reported; and as many as 20 grades of Brazilian rubber, 20 other South American, 10 Central American, and 50 African grades on the market, for which prices were quoted with some degree of regularity. In 1914, plantation rubber exceeded the amount of wild grades on the market; and from that time on, the number of varieties marketed declined, until in 1937 there were quotations for less than 20 grades of wild rubber regularly available in New York.

PRICE DIFFERENTIALS

Tables have been prepared to indicate the price differentials between the better grade of Para rubber and each of the other grades of wild rubber. These price differentials are subject to considerable fluctuation, owing to the comparatively small quantities available and to the irregular consumptive demand. It will be noted, also, that differentials in price between one grade of plantation rubber as compared with another fluctuate considerably, because of numerous factors which cannot be gone into fully in this necessarily short discussion. The more outstanding of these factors are scarcity of actual rubber in the face of spirited demand and the ability of manufacturers to make better use of off-grades owing to improvement in machinery and processes.

EXCHANGE VALUE OF DOLLAR

Prior to the announcement of the President of the United States on January 31, 1934, that the domestic value of the United States dollar would be 59.06 cents, the falling value of the dollar in gold-currency exchanges had a daily influence on the New York price of rubber. The influence naturally was to increase the domestic price of rubber, since rubber is an import commodity and must be paid for by the issuance of foreign exchange. Weakening of the dollar in gold currencies began in April 1933. At the end of that month the average value of the dollar in such currencies was 86.6 cents, and it continued falling during 1933, until a value of 63.0 was reached on December 30, 1933. During this same time, the New York spot price for ribbed smoked sheets rose from 3 cents, at the beginning of April 1933, to 8.88 cents at the end of the year. Stated briefly-rubber rose 196 percent, while the dollar fell 37 percent; it is apparent, therefore, that other factors had their influence upon the price of rubber in this period. Some of the other factors were (1) from April to July, the increasing heavy demands for rubber from the domestic manufacturing industry, which was operating at very nearly its full capacity, (2) from November to December, rumors of rubber-production restriction and announcements from the committees studying restriction.

WHOLESALE PRICES

A monthly pamphlet entitled "Wholesale Prices" is issued by the Bureau of Labor Statistics, United States Department of Labor. The Monthly Labor Review and special bulletins on wholesale prices, by the same Bureau, give actual prices and composite index numbers by months, from 1913 to date, for rubber, and similar price data for rubber products, as follows: (1) automobile tires, from 1913; (2) rubber shoe heels, men's and women's, from 1931; (3) rubber garden hose, % inch, from 1931; (4) men's rubbers, from 1933. Wholesale prices for rubber only will be treated in this pamphlet. The composite index number for rubber, which is labeled "Rubber, crude, per pound, New York," is made up of two prices for the years 1913 to the end of 1928-namely, (a) Para, island, fine, and (b) Plantation, ribbed smoked sheets. From January 1929 to date, three prices are used in the compilation of the composite index number: (1) Amber No. 3, (2) Latex, crepe, firsts, and (3) Plantation, ribbed smoked sheets. Composite wholesale-price index numbers for rubber are given for the period from 1913 to 1937.

DECLARED VALUE OF RUBBER IMPORTS

Monthly statistics, covering the period from 1920 to 1937, on the declared value per pound of United States imports of rubber are given in this publication. What rubber actually costs rubber manufacturers has always been a question uppermost in the minds of statisticians. Such a price perhaps would be between the actual market price and the declared value of rubber imports.

RESTRICTION OF OUTPUT

Little need be said regarding the effect of output on rubber prices. Restriction, under governmental control, was effected in the following periods, and its influence may be noted in the various price tables in this bulletin: (1) Defesa da Borracha, by Brazil, April 17, 1912, but practically in force from 1905 to 1912; (2) Stevenson Restriction Scheme, November 1, 1922, to November 1, 1928; (3) International Rubber Regulation Agreement, July 1, 1934, to December 31, 1938, and on February 22, 1938, recommended for extension to December 31, 1943, by preliminary draft of the revised International Rubber Regulation Agreement.

Table 11.-Month-End Prices of Para Rubber at New York, 1856-91

Table 12.-Monthly Average Price (at New York) of Upriver Fine Para Rubber, January, April, July, and October, 1892-99

Table 13.-New York Annual Low and High Spot Rubber Prices, 1900-1937

Annual low and high of prices given on 1st day of month; in 1906-10 known as "Ceylon plantation fine sheet;" 1912-13 known as "Plantation fine smoked sheet."

Source: All prices from India Rubber World, published monthly at New York, N. Y.

Table 14.-Monthly Average of Daily New York Spot Closing Prices for Plantation Ribbed Smoked Sheets, 1921-37