Stevenson Plan
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The Stevenson Plan, also known as the Stevenson Restriction Scheme, was an effort by the
British British may refer to: Peoples, culture, and language * British people, nationals or natives of the United Kingdom, British Overseas Territories, and Crown Dependencies. ** Britishness, the British identity and common culture * British English, ...
government to stabilize low rubber prices resulting from a glut of rubber following
World War I World War I (28 July 1914 11 November 1918), often abbreviated as WWI, was one of the deadliest global conflicts in history. Belligerents included much of Europe, the Russian Empire, the United States, and the Ottoman Empire, with fightin ...
.


Background

In the early 1900s, increased reliance on the automobile and the use of rubber in common products such as boots were driving demand for rubber. At that time
rubber Rubber, also called India rubber, latex, Amazonian rubber, ''caucho'', or ''caoutchouc'', as initially produced, consists of polymers of the organic compound isoprene, with minor impurities of other organic compounds. Thailand, Malaysia, and ...
was made from naturally occurring
latex Latex is an emulsion (stable dispersion) of polymer microparticles in water. Latexes are found in nature, but synthetic latexes are common as well. In nature, latex is found as a milky fluid found in 10% of all flowering plants (angiosperms ...
extracted from certain plants. The most important of the plants for latex production is the rubber tree, ''
Hevea brasiliensis ''Hevea brasiliensis'', the Pará rubber tree, ''sharinga'' tree, seringueira, or most commonly, rubber tree or rubber plant, is a flowering plant belonging to the spurge family Euphorbiaceae Euphorbiaceae, the spurge family, is a large fami ...
'' whose cultivation is restricted to tropical climates. At this time about 75% of rubber was controlled by British corporations, spurring efforts in
Russia Russia (, , ), or the Russian Federation, is a List of transcontinental countries, transcontinental country spanning Eastern Europe and North Asia, Northern Asia. It is the List of countries and dependencies by area, largest country in the ...
,
Germany Germany,, officially the Federal Republic of Germany, is a country in Central Europe. It is the second most populous country in Europe after Russia, and the most populous member state of the European Union. Germany is situated betwe ...
and the
United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territorie ...
to reduce dependence on British rubber. All three countries were trying to develop methods of manufacturing synthetic rubber, and the
United States Rubber Company The company formerly known as the United States Rubber Company, now Uniroyal, is an American manufacturer of tires and other synthetic rubber-related products, as well as variety of items for military use, such as ammunition, explosives, chemi ...
began producing natural rubber in
Sumatra Sumatra is one of the Sunda Islands of western Indonesia. It is the largest island that is fully within Indonesian territory, as well as the sixth-largest island in the world at 473,481 km2 (182,812 mi.2), not including adjacent i ...
in 1910. However, synthetic rubber was not yet practical, and natural rubber sources develop rather slowly (rubber trees must grow for six or seven years before they are productive). Between 1914 and 1922, natural rubber prices fluctuated between $0.115 and $1.02 per pound for several reasons. One reason is a blight that affected rubber trees in
Brazil Brazil ( pt, Brasil; ), officially the Federative Republic of Brazil (Portuguese: ), is the largest country in both South America and Latin America. At and with over 217 million people, Brazil is the world's fifth-largest country by area ...
that reduced productivity and caused British and
Dutch Dutch commonly refers to: * Something of, from, or related to the Netherlands * Dutch people () * Dutch language () Dutch may also refer to: Places * Dutch, West Virginia, a community in the United States * Pennsylvania Dutch Country People E ...
rubber producers to start new plantations in
Malaya Malaya refers to a number of historical and current political entities related to what is currently Peninsular Malaysia in Southeast Asia: Political entities * British Malaya (1826–1957), a loose collection of the British colony of the Straits ...
and in the
Dutch East Indies The Dutch East Indies, also known as the Netherlands East Indies ( nl, Nederlands(ch)-Indië; ), was a Dutch colony consisting of what is now Indonesia. It was formed from the nationalised trading posts of the Dutch East India Company, which ...
. A second reason was that after the 1917
October Revolution The October Revolution,. officially known as the Great October Socialist Revolution. in the Soviet Union, also known as the Bolshevik Revolution, was a revolution in Russia led by the Bolshevik Party of Vladimir Lenin that was a key moment ...
, Russia renewed its effort to make synthetic rubber as part of two projects: 1) Project Bogatyr in which rubber is made from
ethyl alcohol Ethanol (abbr. EtOH; also called ethyl alcohol, grain alcohol, drinking alcohol, or simply alcohol) is an organic compound. It is an alcohol with the chemical formula . Its formula can be also written as or (an ethyl group linked to a hyd ...
, and 2) Project Treugolnik in which the feedstock is petroleum. These projects succeeded in reducing Russian demand for British rubber. A third reason is that during
World War I World War I (28 July 1914 11 November 1918), often abbreviated as WWI, was one of the deadliest global conflicts in history. Belligerents included much of Europe, the Russian Empire, the United States, and the Ottoman Empire, with fightin ...
(1914-1918), demand for rubber was high resulting in new sources of rubber being developed. Following the War, demand for rubber diminished, creating a glut of rubber on the market and very low prices. The world became keenly aware of the importance of a stable supply of rubber for containing and initiating a modern war.


The plan

Around 1920 the British Rubber Growers Association turned to then
Secretary of State for the Colonies The secretary of state for the colonies or colonial secretary was the Cabinet of the United Kingdom, British Cabinet government minister, minister in charge of managing the United Kingdom's various British Empire, colonial dependencies. Histor ...
,
Winston Churchill Sir Winston Leonard Spencer Churchill (30 November 187424 January 1965) was a British statesman, soldier, and writer who served as Prime Minister of the United Kingdom twice, from 1940 to 1945 Winston Churchill in the Second World War, dur ...
, for help. Churchill initiated a committee of inquiry, the Rubber Investigation Committee, consisting primarily of Association members and chaired by Sir James Stevenson, to come up with a plan to stabilize rubber prices. The committee came up with the Stevenson Plan which would stabilize prices by limiting the tonnage of rubber exported. The plan was enacted by the governments of
Ceylon Sri Lanka (, ; si, ශ්‍රී ලංකා, Śrī Laṅkā, translit-std=ISO (); ta, இலங்கை, Ilaṅkai, translit-std=ISO ()), formerly known as Ceylon and officially the Democratic Socialist Republic of Sri Lanka, is an ...
and
British Malaya The term "British Malaya" (; ms, Tanah Melayu British) loosely describes a set of states on the Malay Peninsula and the island of Singapore that were brought under British hegemony or control between the late 18th and the mid-20th century. U ...
. The
Federal Legislative Council The Federal Legislative Council (also known simply as the Legislative Council) was the legislative body of the Federation of Malaya and the predecessor of the Malaysian Parliament. It was formed in 1948 after the abolition of the Malayan Union and ...
of the
Federated Malay States )Under God's Protection , capital = Kuala Lumpur1 , religion = Islam , legislature = Federal Legislative Council , type_house1 = State level , common_languages = , title_leader = Monarch , leader1 ...
passed the ''Export of Rubber (Restriction) Enactment'' in October 1922, to take effect on November 1.


The outcome

In 1922, British interests controlled about 75% of rubber production and the United States consumed about 75% of the rubber produced. The British were still paying
war debt War reparations are compensation payments made after a war by one side to the other. They are intended to cover damage or injury inflicted during a war. History Making one party pay a war indemnity is a common practice with a long history. R ...
to the United States following
World War I World War I (28 July 1914 11 November 1918), often abbreviated as WWI, was one of the deadliest global conflicts in history. Belligerents included much of Europe, the Russian Empire, the United States, and the Ottoman Empire, with fightin ...
, and needed to have a profitable rubber industry. The Dutch refused to go along with the plan out of a philosophical reluctance to regulate their industry and because they would profit from a unilateral action by the British. In the United States tiremaker
Harvey Firestone Harvey Samuel Firestone (December 20, 1868 – February 7, 1938) was an American businessman, and the founder of the Firestone Tire and Rubber Company, one of the first global makers of automobile tires. Family background Firestone was born o ...
reacted angrily to the act as did Secretary of Commerce
Herbert Hoover Herbert Clark Hoover (August 10, 1874 – October 20, 1964) was an American politician who served as the 31st president of the United States from 1929 to 1933 and a member of the Republican Party, holding office during the onset of the Gr ...
. By 1925 high prices resulting from the Stevenson Act were beginning to threaten the "American way of life", so Hoover informed the British that if the Stevenson Plan stayed in effect, the United States would try to protect itself in any way it could.
DuPont DuPont de Nemours, Inc., commonly shortened to DuPont, is an American multinational chemical company first formed in 1802 by French-American chemist and industrialist Éleuthère Irénée du Pont de Nemours. The company played a major role in ...
, under the direction of
Elmer Keiser Bolton Elmer Keiser Bolton (June 23, 1886 – July 30, 1968) was an American chemist and research director for DuPont, notable for his role in developing neoprene and directing the research that led to the discovery of nylon. Personal life Bolton wa ...
had been working on synthetic rubber since 1920. Thomas Edison, along with several tire companies, was trying to create American-based rubber production, but with little success. By 1928, the Stevenson Act was repealed, but not after expanding Dutch rubber plantations had successfully captured most of the rubber market in the United States.


Conclusion

Tired of regulation, rubber producers returned control of rubber prices to the free market. That worked well until the
Great Depression The Great Depression (19291939) was an economic shock that impacted most countries across the world. It was a period of economic depression that became evident after a major fall in stock prices in the United States. The economic contagio ...
in the 1930s lowered demand for rubber, and again rubber prices plunged. Rubber producers once again turned to regulation to maintain prices. This time it was done under the auspices of the International Rubber Regulation Agreement which was signed by all major rubber producing countries. This law succeeded in governing the price of rubber to the satisfaction of producers and most consumers. However,
Japan Japan ( ja, 日本, or , and formally , ''Nihonkoku'') is an island country in East Asia. It is situated in the northwest Pacific Ocean, and is bordered on the west by the Sea of Japan, while extending from the Sea of Okhotsk in the north ...
was a consumer of rubber in the 1930s, using rubber to support its war effort in
Manchuria Manchuria is an exonym (derived from the endo demonym " Manchu") for a historical and geographic region in Northeast Asia encompassing the entirety of present-day Northeast China (Inner Manchuria) and parts of the Russian Far East (Outer Manc ...
and
China China, officially the People's Republic of China (PRC), is a country in East Asia. It is the world's most populous country, with a population exceeding 1.4 billion, slightly ahead of India. China spans the equivalent of five time zones and ...
, and its leaders were not happy with the price of rubber. This was one of the provocations said to motivate the Japanese attack on
Pearl Harbor Pearl Harbor is an American lagoon harbor on the island of Oahu, Hawaii, west of Honolulu. It was often visited by the Naval fleet of the United States, before it was acquired from the Hawaiian Kingdom by the U.S. with the signing of the Re ...
, which caused the United States’ entry into
World War II World War II or the Second World War, often abbreviated as WWII or WW2, was a world war that lasted from 1939 to 1945. It involved the vast majority of the world's countries—including all of the great powers—forming two opposin ...
.


References

{{more footnotes, date=January 2009
Dr._Jean-Luc_Sandoz
,_''The_Indian_Rubber_Tree:_An_Ally_for_a_Real_Sustainable_Development?''.html" ;"title="Jean-Luc Sandoz">Dr. Jean-Luc Sandoz
, ''The Indian Rubber Tree: An Ally for a Real Sustainable Development?''">Jean-Luc Sandoz">Dr. Jean-Luc Sandoz
, ''The Indian Rubber Tree: An Ally for a Real Sustainable Development?''br>''Rubber Restricted'', Time Archive, Foreign News, Monday, May. 07, 1934Phillip James Johnson, ''Seasons in Hell:Charles S. Johnson and the 1930 Liberian Labor Crisis'', Chapter 2: ''The Gentlemen of Akron'', Doctoral Dissertation, Department of History, Louisiana State University (March 31, 2004)
*Eugene Staley, [http://www.lib.byu.edu/~rdh/wwi/comment/investor/Staley04.html ''War and the Private Investor'', Chapter 4: ''How Investments Serve Diplomacy'', Doubleday (Garden City, New York, 1935)] ASIN B00085BXLM *Fred P.M. VAN DER KRAAIJ
The 1926 Firestone Concession Agreement
Rubber 1920s in the United Kingdom 1920s economic history