How to Cut Prices

Just as some U.S. manufacturers were about to pump up the price of tires by 5% last week, the General Services Administration punctured the air hose by announcing a 14-c--a-lb. cut in the price of natural rubber. GSA Administrator Jess Larson wants the tiremakers to pass along their savings, $40 million in the next three months, to consumers. At 52-c- a lb., rubber is now 47% cheaper than last December, when GSA clamped the lid on skyrocketing rubber prices by taking over the buying of all natural rubber for the U.S.

Rubber was only one of many commodities which were sliding down last week from their price peaks. Malayan tin dropped to $1.14 1/2 a lb.--a 41% slump in four months--because the Reconstruction Finance Corp., buyer of all U.S. tin, had stopped buying. It is selling its stockpiled tin to U.S. users at $1.06 a lb. RFC Administrator W. Stuart Symington hinted last week that world prices have dropped about enough and the U.S. might soon start buying again. This would be a big relief to some U.S. State Department officials, who are worried that Symington's tin squeeze is putting unbearable economic pressure on Bolivia where tin represents about 75% of exports.

U.S. buying policies are also causing jitters in Australia, where high-grade wool tumbled to $2.19 a lb. at auction last week, compared to $3.73 in March. The U.S. Quartermaster touched off the market break when he stopped stockpiling wool for uniforms. The Australians, are also faced with a new threat to high wool prices. Defense Mobilizer Charles Wilson said that the Government might promote a big synthetic-wool industry by granting tax advantages for expansion to Du Pont (Dacron), Union Carbide & Carbon (Dynel) and other makers of wool substitutes. Such a program could eventually make the Merino sheep as obsolete as the Japanese silkworm.

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