6 DECEMBER 1946, Page 10

RUBBER RIDDLE

By G. GORDON GOOK

TODAY the importation of synthetic rubber from America has ceased. British tyre-manufacturers are using up their stocks and preparing to switch over to the natural rubber that is again coming in from the East. By the end of the year we shall be riding on rubber again—real rubber. On the face of it, this is a straightforward readjustment of industry to its pre-war raw materiaL But the synthetic-rubber industry became a major factor in world economy during the war, and is reluctant to immolate itself in the cause of status quo. In making its choice between natural and synthetic rubber, industry is tackling a problem that is giving the world yet another severe international headache. And to the informed observer the outcome is far from clear.

When japan overran Malaya and the Dutch East Indies in the early months of 1942, she deprived the Allies of a source of several of their essential raw materials. Most important of these was rubber. To the Western Powers, two courses of action remained open. Either they could develop alternative sources of natural rubber ; or they could turn to synthetic. It was Hobson's choice, and by early 1942 Britain and America were faced with the inevitable prospect of making synthetic rubber in a big way. Over three quarters of a million tons a year would be needed to carry on the war ; without it the Allied war-effort must fail. Britain had a small source of rubber left in India and Ceylon ; and our industry had by this time developed into a highly integrated war-machine and we had little to offer in the way of raw-material resources on the scale that would be needed for a synthetic-rubber industry of any size. Rightly or wrongly, the decision was taken to leave the job to America. Within two years, America had carried out the biggest industrio-scientific task in the world's history, and was pro- ducing nearly a million tons of synthetic rubber a year. Of this, a small proportion was speciality rubber, like neoprene, that could do jobs rubber would not do. But the bulk was GR-S, a general- purpose rubber based on the German Buna S, which had been made simply and solely as a direct replacement for natural rubber.

Today the Japanese have been cleared out of Malaya and the Dutch East Indies. Already, the plantations are beginning to re- cover, and the rubber trees have suffered less than was feared during the war. But political and economic difficulties are holding up reorganisation. Many of the native labourers were literally worked to death by the Japanese ; others went back to their homes in India and China and have not yet returned to the plantations. In spite of the difficulties, rubber is gradually coming back into production, and under normal conditions could undoubtedly meet the demands of the world's tyre market within the next few years. At what price, it is impossible to say until conditions have stabilised. Before the war, the native trapper worked for a low wage, but was amply supplied with cheap rice and with low-priced textiles and consumer goods, largely from Japan. Now, the Burma-Siam rice-bowl is disorganised, and Japan is out of action ; and the pre-war wage of the native labourer offers little attraction. And it is upon the cost of native labour that the price of natural rubber must ultimately depend. Meanwhile, the synthetic-rubber plants in America continue to feed American industry. And without much effort, the output could be expanded to meet the bulk rubber re- quirements of the world. But according to our war-time ex- periences American GR-S is inferior to natural as a tyre rubber. And although it is difficult to make any accurate cost assessment under present conditions, it seems unlikely that GR-S is being pro- duced at a price that could compete with natural rubber.

Here, then, are two sources of supply for the rubber industry of the world. Under a free peace-time economy, they could fight it out between them on their merits. And on present showing it appears that natural would win. But America had a severe shock in 1942, and she is not so keen to return to her pre-war dependence on a vital raw material over which she has no direct control. Powerful voices in America are demanding that synthetic plants should be retained. On the other hand, America was able to build up her synthetic rubber plants from scratch in under two years during the war. All that she requires, therefore, is a stockpile of natural rubber sufficient to tide her over the year or so that would be needed to re- establish her synthetic industry. But the military men are not the only ones seeking to retain the synthetic plants. Many American rubber-using industrialists are themselves in favour of the continu.td use of synthetic, which is not subject to the controls and price fluctua- tion that were characteristic of natural rubber between the wars. Moreover, they say, the quality of synthetic is completely controlled and standardised ; they can always be sure of getting just what they expect. And though GR-S may be inferior to natural rubber for tyre treads, it meets the needs of the job well enough.

So much for America's arguments in favour of keeping her syn- thetic rubber plants. But one most important factor remains. GR-S was chosen as the best available synthetic rubber on hand during the emergency of 1942. Manufacture has since stimulated research, and who knows but that tomorrow we shall see a synthetic rubber which is both better and cheaper than natural? When that happens, the story of dyestuffs and drugs will be repeated, and the jungle will once again take over the plantations of the East. In the meantime, America continues to operate her $600,000,000 synthetic-rubber industry ; and we in Britain, with our eyes turned anxiously toward our most important customer, are doing all we can to exploit our $400,000,000 stake in natural rubber. Today, the demand for rubber is sufficient to absorb the joint supplies of natural and syn- thetic. But eventually, industry will have to make the choice between the two. Which is going to supply tomorrow's rubber—the test-tube, or the tree? Only time will tell.