484 



THE INDIA RUBBER WORLD 



[September 1, 1911. 



On the other hand, Senhor Mendcs, while giving impartial 

 prominence to the foregoing extract, urges the uniform char- 

 acter of the Para article and the confidence in its use, which 

 manufacturers feel after long years of experience. Reference 

 is likewise made to the fluctuations which had, up to the time of 

 writing occurred in the relative values of the two descriptions. 

 These differences have, however, been more or less adjusted 

 by later market developments. 



Hence the statistical aspect of the case, apart from that of 

 quality, calls for the prominent attention it has received. 



THE QUESTION OF CONSUMPTION. 



From figures already quoted, it will be seen that consumption 

 in 1909 was 70,075 tons, as against production 69,372 tons. 

 Whether the surphis to be figured upon is 70,000 tons or a smaller 

 amount, at this point the question of consumption naturally arises 

 and has been dealt with by Senhor Mendes. Taking for the 

 future the basis of a 5 per cent, yearly advance on rate for 1909, 

 he estimates consumption on the following scale : 



Tons. 



1909 70,075 



1910 7i,S7i 



1911 ; 77,258 



1912 81,121 



1913 85,177 



1914 89,436 



1915 93,908 



Deducting from the estimated production 142,242 tons the 

 estimated consumption 93,908 tons, there would still remain in 

 1915 and 1916 a surplus production of 48,334 tons, should Sir John 

 Anderson's anticipations be realized, or of 12,064 tons on the basis 

 of Mr. Rutherford's predictions. The Asiatic supply is con- 

 sequently the dominant factor in the situation. 



ESTIMATED DECRE.\SE IN AMAZONI.^N PRODUCTION. 



Of more immediate interest is the estimate by Senhor Mendes 

 of the general result for the year 1910 and 1911, shown as follows 

 in almost the last page of his work : 



1909/1910 1910/1911 



tons. tons. 



World's production 70,000 70,000 



Increase from the East 4,000 



74,000 

 Decrease from the Amazon (lO'f' of 1909 

 amount as) 3,913 



70,000 70,087 



Consumption 70,000 73,500 



Shortage in production estimated 1910/1911 3,413 



Against this shortage would come the excess in Para stock, 

 which was on January 1, 1911, 5,852 tons as compared with 

 3,278 tons a year earlier. 



EFFECT OF ASIATIC INCREASE UPON BRAZILIAN RUBBER. 



With reference to general prospects of the Brazilian product, 

 it is remarked that the rubber from some scringacs or planta- 

 tions may be exported at a profit, owing to its special quality, 

 while the contrary may be the case with that from other loca- 

 tions, where labor is scarce and dear, should values decline 

 through Asiatic competition, or should there be a reduction in 

 demand concurrently with a large and increasing supply of the 

 article. In these last expressions, Senhor Mendes has answered 

 the question propounded by himself, of the probable outcome of 

 present developments in the Orient. The final result will be 

 decided by consumption. 



BRAZIL AND THE MIDDLE EAST. 



■W/Iil'X overtures were made to the Middle East plantation 

 rubber interests to throw in their lot with the Brazilians 

 by agreeing to a scheme for the marketing of the product, we 

 ventured to maintain that such an amalgamation would not serve 

 the best interests of the British investor. These interests are 

 practically wholly centred in the plantation industry, and mostly 

 in the industry as it exists in the Middle East. That these inter- 

 ests have suffered, and severely suffered, by the efforts made to 

 rehabilitate the market value of the South American product is 

 beyond question. That they would continue to suffer if any def- 

 inite scheme for the joint marketing of the plantation and the 

 South American products were adopted we most firmly believe. 

 We desire to see the plantation product marketed in such a 

 fashion as will admit of the highest legitimate profits obtainable 

 accruing to the producers, who in this case are the plantation 

 rubber companies primarily, but represent in reality thousands of 

 British investors, who have found hundreds of thousands of 

 pounds sterling. It will be seen b\' every Plantation Rubber 

 shareholder what danger the future might contain for him were 

 any selling agreement entered into at the present time with the 

 wild rubber interests. It would mean not only an ever-recurring 

 repetition of the state of affairs which has existed since the be- 

 ginning of this j'ear, but it would materially cripple the profit- 

 earning powers of the plantations in years to come. For it would 

 be inconceivable that the syndicate (regarding it as the Brazilian 

 industry for the moment ) would agree to any division of mark- 

 etable supplies unless this division w-as based upon South Ameri- 

 can potentialities in this connection existing at present and likely 

 to continue to exist for some time to come. Able, too, to insist 

 upon such a recognition, the syndicate would be, for it could al- 

 ways bring the out-of-hand marketing of its held-up supplies for- 

 ward as a threat if its wishes were not fully accepted in the 

 fixing up of such an agreement. 



Those who favor the adoption of a joint selling agreement for 

 rubber have been pointing out that the danger which we see in 

 such an arrangement could be obviated by a recognition of the 

 supremacy of the plantations as producers some years hence. 

 Without doubt, such a clause or clauses could be inserted in any 

 such agreement. But the value of them? Surely the wildest op- 

 timist among plantation rubber shareholders must acknowledge 

 the time will come when the selling price of the commodity will 

 fall to a level that will admit of the product being sold at a profit 

 only when working costs are low — say, at highest, about Is. 6d. 

 per lb. It has been alleged that when the time comes the Bra- 

 zilian collection costs can be reduced to at least the maximum 

 level we have just indicated. How far this allegation can be 

 said to have a basis upon truth it is not very easy to say, but 

 anyone at all acquainted witli existing Amazon conditions would 

 be among the first to admit that any such reduction is impossible 

 to contemplate as probable for years to come. Furthermore, 

 the prospects of remission of taxation being a factor in the bring- 

 ing about of reduced costs may be dismissed as chimerical. The 

 tendency, indeed, would be all the other way, since, without their 

 revenues from their rubber export taxes, .the Brazillian rubber 

 States would be in worse financial positions than they acknowl- 

 edge themselves to be to-day. and these positions are just as bad 

 as they very well could be. It would be, consequently, one of 

 the main objects of some of the partners in a joint selling ar- 

 rangement to maintain prices at levels which would admit of 

 their product being sold at a profit. The attainment of this end 

 could only be achieved to the detriment of the other partners' 

 interests; so it is permissible to ask, we think, how long such 

 an arrangement could be expected to continue. We 'have as- 

 serted — and they have accepted our assertion as fact hy their 

 silence— tliat, in scheming out the operations ft conntection with 



