Tire Gloom

Since the great days of 1919, booms and depressions have come and gone, but the tire business has remained overbuilt and generally unsatisfactory. Gradually the common dividends of the rubber companies have been suspended, and recently an acute attack of cutting preferred dividends has set in. U. S. Rubber has valiantly paid on its 8% preferred issue, but evidently with much effort. Now Kelly-Springfield has passed to 1 1/2% quarterly installment on its 6% preferred stock, and the stock-holders must in viewing the company's immediate future be stout optimists to obey the classic injunction to "Keep Smiling with Kellys."

Additional gloom in the tire business was occasioned by a renewal of price-cutting. Fisk Rubber commenced it by reducing prices sharply. U. S. Rubber and Firestone Tire have followed suit with cuts of between 10 and 15% in old style high pressure tires and of about 20% in the new balloon tires.

The cut comes after a generally unsatisfactory Spring, and according to well-informed writers, it means that for the rest of the year most of the tire companies must manufacture below the cost of production, and that only a few will manage to break even. The weak condition of the tire industry is due to overbuilding of productive capacities during the War-period, and to severe price-competition since 1920. Until the companies get together on a common and profitable management regarding prices, the business seems likely to continue in its present unsatisfactory condition.