106 



THE INDIA RUBBER WORLD 



[January i, 1905. 



not make him twice as rich ; it only hastens the time when 

 he will become bankrupt. 



The same customs returns from which we quoted above 

 give the following as the import values of the rubber cov- 

 ered in the statistics of the two years under consideration : 

 1893-94 -^iS.oTT.po^ 1903-04 $40,444,250 



The chief significance of these figures is that the aver- 

 age import value of rubber — good, bad, and indifferent — 

 has increased, in ten years, from 44.6 cents to 68.4 cents 

 per pound. Is such an increase— amounting to more than 

 53 per cent. — explainable on any other ground than that 

 rubber supplies have not been developed at a rate com- 

 mensurate with the increase in the consumption of rubber ? 



It is quite possible that, somewhere or other, more rub- 

 ber may be produced next year than this. It is out of the 

 question to say in what year the highest output of rubber 

 will be reached. Possibly higher prices for rubber than 

 have been known hitherto are yet to be experienced. But 

 there is no room for uncertainty on two points : (i) A con- 

 tinued increase in the industrial demands for rubber ; and 

 (2) the hastening of the extinction of the natural supply 

 by every addition to the yearly production. 



THE FATE OF ONE MONOPOLY. 



nPHE career of the Dunlop tire company, reviewed at 

 * some length in another column, affords one of the 

 most interesting chapters in the history of monopoly in 

 trading. The outcome is of especial interest as illustrat- 

 ing the lack of foundation for the fears so often expressed 

 that the interests of the masses are endangered by monopo- 

 lies. The fact is that any commercial enterprise founded 

 upon an economic fallacy must soon succumb by reason 

 of its inherent weakness, as we have previously pointed 

 out in discussing the so-called " trusts." In industrial and 

 commercial development new forms of organization be- 

 come necessary from time to time, and in taking the first 

 steps in an untried field mistakes may be made, but no- 

 where are mistakes so speedily recognized and mended as 

 where large capital is involved. For which reason alarm- 

 ists over the evils of " monopoly" often find that the ob- 

 jects of their attacks have disappeared while they are still 

 shouting — but not on account of the noise made over 

 them. 



The Dunlop tire company was not a "trust," and the 

 monopoly which it was intended to exercise was one 

 deemed wholly legitimate, both in law and by public opin- 

 ion, being based upon a patent grant, and involving the 

 right of an inventor, for a term of years, to the exclusive 

 profits from his discovery. But the plans of the company 

 were based upon two assumptions, both of which proved 

 ill founded. The bicycle tire demand diminished, instead 

 of growing constantly ; and British patent law underwent 

 a new construction. There are business principles as old 

 as the world and that give no promise of change. So long 

 as there are human wants to be met, those who cater to 

 them honestly are entitled to a profit ; this is sound trad- 

 ing. The Dunlop company, however — and we refer to 

 this only as an illustration, and because of its one-time 



great prominence — involved something more than this. 



The bicycle tire being deemed a permanent necessity, 

 and the Dunlop patent impregnable, an almost fabulous 

 amount of capital was subscribed, with the idea that 

 throughout the life of the patent users of tires could be 

 taxed to pay dividends upon that capital, without regard 

 to the cost or actual value of the wares supplied to the pub- 

 lic. The first result was that the high prices charged af- 

 forded a constant temptation to rival manufacturers to in- 

 fringe the patent, from which they could not be dissuaded 

 wholly by hundreds of actions at law brought by the Dun- 

 lop company. Secondly, by reason of this constant litiga- 

 tion, em[)loying in one way or another the ablest legal and 

 judicial minds in the kingdom, practically new patent law 

 was created, as Chairman Du Cros recently told his share- 

 holders, the result of which weakened the position of the 

 company materially. 



The recent expiration of the Dunlop patent ended the 

 monopoly upon which the company was founded, but the 

 directors have managed to convert the company into a 

 manufacturing concern — which it was not, originally — pre- 

 pared to take its place in the rubber industry on equal 

 terms of competition, and where its profits will depend up- 

 on the amount of actual capital involved and the measure 

 of business ability displayed. 



As has been observed, the Dunlop monopoly was based 

 upon a patent grant alone, and, therefore, no question of 

 its legitimacy was raised. There has been no wiser pro- 

 vision of law in any country than that intended to secure 

 due rewards to inventors and thereby promote progress. 

 But any dividends paid upon the ^^2,000,000 in shares 

 which Mr. Ernest Terah Hooley obtained for his part in 

 promoting the Dunlop company — and which he subse- 

 quently disposed of at an advantage — could hardly be 

 looked upon as a reward to the patentee of the tire. The 

 manufacturing plants which the Dunlop company have been 

 able to create out of the profits of their tire trading during 

 the life of the patent are a subject for congratulation to 

 the company alone ; they are of little concern to the inven- 

 tor of the tire. 



We doubt not that in every country the question will 

 yet arise as to how far a monopoly can be maintained in 

 respect of an article of general utility, whether controlled 

 by the inventor or by his assigns, beyond paying him a 

 fair return, having regard to the value of the invention to 

 the public. The weak point in the great company above 

 referred to was in attempting to exact from the public a 

 heavy tribute for the benefit of persons who had not con- 

 ferred a corresponding benefit upon the public. The per- 

 manent success of such an undertaking for exacting ex- 

 cessive prices from the public would, of course, work great 

 injury. But by the company's own confession their mon- 

 opoly came to an end even before the expiration of their 

 patent, which is only another confirmation of our view 

 that the world is not in danger of going to the dogs be- 

 cause of " monopolies." 



It does not follow that any single individual concerned in 

 the matter from first to last, including Mr. Hooley, the pro- 

 moter, acted in any case otherwise than in perfect good 



