292 



THE INDIA RUBBER WORLD 



[June i, 1905. 



two combinations have been able hitherto to earn divi- 

 dends on their ciipital, but meanwhile many independent 

 companies, large and small, have likewise been able to se- 

 cure customers and to make profits. The fact that the 

 two companies have seen fit to join hands does not neces- 

 sarily alter the position of the outside companies, many of 

 which possess some special advantage over a great cor- 

 poration, heavily capitalized, and managed by a board of 

 directors of necessity removed from direct contact with 

 the consuming trade. 



Naturally the newly constituted combination will seek 

 to obtain prices for mechanical rubber goods in keeping 

 with the cost of production, and such [lolicy will pr<jve 

 beneficial to the outside competing companies, just as a 

 like policy in the rubber shoe interest has benefited 

 everybody in the trade. Any other policy on the part of 

 the big company will prove detrimental to it, in prevent- 

 ing the earning of the promised dividends on its capital. 



One point to be considered is that ultimately the whole 

 business of obtaining supplies of crude rubber must be 

 revolutionized. How far the United States Rubber Co. 

 has profited from its purchases of rubber in the primary 

 markets can only be surmised, but no doubt its experi- 

 ence in this direction has been a potent force in bringing 

 about the merger with the leading combination in the me- 

 chanical goods trade. It is not reasonable to suppose, 

 however, that any combmation can long buy rubber at 

 any great advantage over the outside consumer. In other 

 words, if the United States Rubber Co. should in time 

 bring about the elimination of several middlemen between 

 the producer and the consumer of crude rubber, it would 

 not be long before the same advantage would be open to 

 any enterprising independent manufacturer. 



By way of conclusion, it is to be noted that the exports 

 of American rubber footwear have been largely increased 

 since the United States Rubber Co. succeeded a dozen 

 factories each acting on its own account. This is natural 

 and logical. One European agency, for example, can be 

 conducted more economically than a dozen. The same 

 thing may prove true of mechanical rubber goods, after 

 the merger. But the domestic sale of goods in all 

 branches must always prove more important — in volume 

 and profits — than the export trade. Besides, whatever 

 tends to advertise American goods favorably abroad 

 widens the market for them. Whenever the United States 

 Rubber Co., for example, has opened a new market for 

 rubber footwear, its competitors have found it easier to 

 gain a footing, and the same is likely to prove true in case 

 the big company should begin an active campaign in the 

 exporting of other lines of rubber goods. 



CEYLON RUBBER PLANTING COMPANIES. 



T^ HE ownership and control of plantations by joint stock 

 ■*• companies is no longer an experiment in Ceylon ; it 

 is the established order of things in a colony which has be- 

 come wealthy within a half century mainly through agri- 

 cultural development. The production of tea is the largest 

 single interest on the island, though not representing the 



whole of agriculture there. Almost without exception the 

 Ceylon teas are produced by corporations, some of them 

 of long standing, and the details of whose business are reg- 

 ularly compiled and tabulated and made public as fully as 

 those of American banks and railroad and insurance com- 

 panies. The shares of these tea jilanting companies have 

 recognized market values and all who are interested can 

 learn the acreage of the various companies, the amount of 

 tea produced, the gross and net earnings, and the details 

 of dividends and surpluses. 



These facts are mentioned here because they have a cer- 

 tain bearing upon the newer enterprise of rubber culture 

 which has been developed so successfully in Ceylon and 

 more recently in the Federated Malay States, where simi 

 lar conditions are coming into existence. Since the prime 

 movers in most of the rubber planting companies in these 

 countries have acquired their capital through planting tea, 

 in which business rhey are still interested, it is to be pre- 

 sumed that the rubber companies will be managed on the 

 same conservative lines as the tea companies, and that if 

 there should be failures to realize adequate profits the fault 

 will not be in the management. 



There are numerous reasons why the cultivation of crops 

 which require years of preparation, and each of which re- 

 quires some effort of a special character, should be managed 

 better on a large scale than those which are planted by in- 

 dividual farmers under the system of diversified agriculture 

 which obtains, for example, in the United States, and rub- 

 ber perhaps is a crop which is adapted particularly to cul- 

 ture on a considerable scale, by a large company, under 

 capable management extending through long periods of 

 time. It certainly cannot be commended to small growers, 

 attempting to live in the rubber growing regions, since 

 these as a rule are not suited for the homes of the natives 

 of temperate zones. 



The success of the joint stock plantation companies in 

 the Far East is referred to for the further reason that their 

 existence, as the regular order of things, after so long a 

 time, must indicate that the method has merit, and if it 

 has on the other side of the globe, it probably will prove to 

 have merit on this side, and for similar considerations. But it 

 must be understood that the profitable planting of any crop 

 in any region implies the actual investment of capital — 

 whether of a company or of an individual — in a plantation, 

 and not in extravagant administration expenses at points 

 remote from the land to be planted. 



Not all the " fren/ied finance " of our country, with its 

 boasted progressiveness, would be a match for the bewildered 

 finance of some capitals nearer the equator, where life is pre- 

 sumed to be less strenuous. Two years ago the state officials 

 at Manaos (Brazil), after estimating a balance at the end of 

 the fiscal year of a paltry few thousands, were surprised to find 

 one of nearly 4 millions; the next year they prepared for a 

 balance of fewer thousands, and it actually worked OJt at over 

 S'A rnillions. So they feel that something ought to be done. 

 Governor Nery proposes that the state borrow a lot of money 

 — the unfailing source of relief at South American capitals 

 when the financial equilibrium is upset. Which reminds one 

 that when Manaos last borrowed a lot of money it was to buy 



