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ARE TYRE PRICE INCREASES JUSTIFIABLE?

11th August 1925, Page 15
11th August 1925
Page 15
Page 15, 11th August 1925 — ARE TYRE PRICE INCREASES JUSTIFIABLE?
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Which of the following most accurately describes the problem?

The Ill-effects of the Present Increases upon Motorbus Undertakings and the Passenger Transport Industry.

By An Official of a Prominent Provincial Bus Company.

VIEW with increasing concern the present fluctuating rubber market and its apparent tremendous effect on the prices of pnuematic and solid tyres ; and, without being able to visualize when tyres will again be back to their original prices and the rubber market stabilized, the position of large consumers of tyres is anything but to be envied.

The recent percentage increases in the cost of tyres are already sufficiently large to warrant a careful reconsideration of passenger fares for omnibus companies and increased rates for road haulage, whilst, if there are further increases in the cost of tyres, the deliberations of all companies concerned in motor work of all descriptions will have to be put into force.

It is more or less an easy matter (apart from competition) for haulage contractors to cover themselves by increasing their rates, but it is quite a different matter for omnibus companies whose operations are classified as "public services" to do the same thing. There are many instances. throughout the British Isles where the small difference between profit and loss will be more than absorbed through the extra prices bus undertakings will have to pay for their tyres. In the comparatively new industry conducted by rural omnibus companies this is a very serious matter indeed. The industry is just feeling its feet after some years of experimental and costly work, and suddenly to have to cope with a heavy item of expenditure in its first year of stabilization (and hoped-for profit) is to suffer a very disheartening set-back at the worst time.

It may be argued that the ether necessitous items of expenditure have had a tendency to decrease during the past two years, and the profit there could very well meet the present increased cost of tyres. So far as this is concerned, I would hasten to explain that what small profit has been made out of decreased expenditure has been more than overspent in experimental work. In many Instances, had it not been for this small amount of profit, a goodly number of companies in the new industry would have been compelled to close down for want of money to pay for their early, experience. Starting after the war, as the indiWtry did, times could not have been worse for a beginning, and, after the natural embryonic struggle, together with the tremendous cost of everything needed in the industry, this sudden increase in the cost of tyres is bound to be received everywhere with bitter complaint.

I do not think the transport companies would mind so much If the increases were in justifiable proportion to the increased cost of raw rubber. It is bad enough to be the direct sufferers of the speculators in the rubber business, but to find out that the present high cost of rubber should only make a difference in the tyre prices of about one half of the increase asked by the manufacturers is more than can be relished. Even this is only part of the complaint. Many of the manufacturers, knowing of the intended rises in prices, deliberately held over customers' orders in order to reap the benefit of increased prices on tyres made from rubber at the old prices!

[The incidence of an overlapping period is surely unavoidable. When the converse happens and the prices of rubber begins to fall, the public instantly demands a reduction in the price of tyres, oblivious of the fact that raw rubber is bought for forward delivery and that, even many months later, tyres will be in process of construction from rubber bought at the earlier high prices. It is thus not unfair to base current retail prices upon prices of raw material to be paid in the future.—En., C.M.1 What can the consumers do? They are, in the main, compelled to bow before the Tyre Manu facturers' Association, which controls the prices for all the firms belonging to it. Very few English tyre companies are unaffected by this association.

and patriotic consumers whose wish it is to buy British tyres are faced with either helping the foreigner and losing their reputation for patriotism or else supporting the tyre companies of England and losing their profits.

The only solution appears to be for the consumers to band themselves into an association to fight against these unjust impositions. Such an association could then dictate fair terms to the manufacturers and, if the manufacturers remained adamant, the companies represented in the consumers' association could turn en bloc to the foreign market and administer a sound lesson until the home manufacturers came to their senses. Hard as these measures may appear to be, concerted and severe retributive action is-the only way effectively to deal with the matter and to the ultimate benefit of the poorer sections of the pliblic which have eventually to pay for these impositions in increased prices.,

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