November i, 1909. 



THE INDIA RUBBER WORLD 



37 



is treated as of no worth whatever." The Journal does not 

 criticize the attitude of the nation's new chief executive, but its 

 comments which follow are worth quoting: 



"There was grave doubt about the wisdom of creating the 

 Department of Commerce and Labor when it first came into 

 existence, and this doubt has been renewed at various moments 

 since then. Originally it was charged that there was no relation- 

 ship between the bureaus which were gathered in the depart- 

 ment, and the problem was then, and has ever since been, 

 whether they could be correlated. But it has constantly been as- 

 serted that an important function, peculiarly pertaining to and 

 justifying the existence of the department, was that of extending 

 and studying trade and the working and application of foreign 

 tariffs, as well as the adjustment of our own duties to them. 

 Had it not been for this argument the doubt would probably 

 have been resolved against the creation of the department. It 

 would never, in fact, have'eome into existence. Now, when there 

 is work of the proposed sort to do, it is placed elsewhere, and 

 the department is even likely to be stripped of its chief dis- 

 tinguishing feature — the bureau of corporations," through which 

 the government may be expected to act in putting into effect the 

 new regulations for taxing corporations. 



Undeniably some able men in the new department have striven 

 to serve the public well, but always under the handicap suggested 

 in an editorial in The India Rubber World January 1, 1903 

 (page no), from which we may quote here: 



A FIFTH WHEEL NOT NEEDED. 



The proposal now being discussed seriously at Washington, to create 

 a governmental department of commerce, appears to us to be very much in 

 the nature of adding "a fifth wheel to a wagon" — a term widely used to 

 describe an appendage that not only is useless, but is likely to get in 

 the way and thereby impede progress. We are aware that the proposal 

 has the support of men of prominence in business affairs and in political 

 life, but this alone is not proof that the need exists for an additional 

 arm of the government. - - - 



It is probable, however, that the new measure has received the serious 

 support of some business men because they believe that a department of 

 commerce would help to extend our foreign trade, but it remains to be 

 pointed out what services in this direction could be rendered by a secretary 

 of commerce sitting in the President's cabinet better than by the existing 

 official bureaus at Washington. In fact, all the claims made for the new 

 department have been most vague and unconvincing, nor are the advocates 

 of the measure agreed as to what powers should be given to the new 

 secretary, or what he should be expected to accomplish. - - - In fact, 

 the proposal now being considered involves little beyond creating a new 

 office to which shall be turned over certain statistics now required by law 

 to be collected by several different bureaus, in which event they doubtless 

 would be made available for the public less promptly than now, on account 

 of passing through more hands. 



The manufacturers and others who look to the government, through the 

 creation of new offices, to sell more of their products abroad, labor under 

 a mistaken view of the laws of trade. At home, a manufacturer seeks 

 first to produce an article suited to the needs of possible buyers: he then 

 works to make them familiar with its merits: he next puts it where they 

 can buy it, and if the price appears too high he manages to remove that 

 objection, through decreasing the cost of production, eliminating middlemen's 

 profits, or otherwise, but without once thinking of asking for help from the 

 government. If the same manufacturer should desire to do business in 

 Europe, or Corea, or Patagonia, precisely the same procedure would be 

 necessary, and not one nor twenty new government departments could 

 relieve him of the necessity of making his own markets if he would sell 

 goods. 



We should welcome the excision of this superfluous arm of the 

 government, for at least two reasons : To render the public 

 service less complex and costly, and to remove one more tempta- 

 tion to business men to depend upon the government for sup- 

 port instead of standing firmly upon their own feet. 



The only rubber manufacturing country in the world to 

 place an import duty on crude rubber for consumption is Russia, 

 which country is reported now to tax plantation rubber five fold 

 on the ground that it is a manufactured product. The New York 

 customs authorities, after' considering a similar course, decided 

 that plantation rubber was a raw material in the same sense as 

 forest rubber. But it may be that Russia will in time reach the 



conclusion that all rubber, in whatever stage, is a manufactured 

 product, since india-rubber, as such, nowhere exists in nature, 

 but is brought into existence with the help of man. 



An IMPORTANT FIRM OF ENGLISH RUBBER MERCHANTS express 



the opinion, on another page of this paper, that there appears a 

 possibility of a basis of rubber prices being maintained at least 

 until next summer in the neighborhood of $1.70 a pound. This 

 figure is worth while keeping in mind until some other prophet, 

 able to show better credentials, is heard from. 



The astonishing information is published gratuitously in 

 the able New Haven Journal and Courier that "The new crop 

 [of rubber] which only recently began to arrive in this country 

 is not suitable for manufacturing purposes until the rubber has 

 been thoroughly seasoned." How is this for seasonable news? 



Anniversaries. — Concurrently with the India-Rubber Journal's 

 attainment of its Twenty-fifth anniversary, our American con- 

 temporary. The India Rubber World, reaches its Twentieth 

 birthday. We congratulate Air. Henry C. Pearson, its editor, and 

 his staff, and reciprocate the good wishes he extended to the 

 India-Rubber Journal in a recent number of the admirable New 

 Vork monthly. — The India-Rubber Journal ( London). 



The exports of rubber goods from the United States during 

 the first eight months of this year were greater in value than in 

 any preceding corresponding period, and 60 per cent, larger than 

 five years ago. This is only another straw which shows the 

 wind to be blowing in the direction of prosperity. 



THE NEW 7 CORPORATION TAX. 



TNDER the law of August 5, 1909, a tax is imposed on the net 

 *-^ income of corporations, beginning for and with the year end- 

 ing December 21, 1909. Returns must be made not later than March 

 1 next ; assessments will be made on June I, and payment must 

 be made during June. A tax of 1 per cent, is imposed on the 

 net income over $5,000 of every corporation or joint stock com- 

 pany formed for a business purpose. Messrs. Haskins & Sells, 

 certified public accountants, of New York — and by the way, 

 auditors for the United States Rubber Co. — have issued the fol- 

 lowing statement, covering suggestions likely to be of no little 

 interest, particularly to manufacturing corporations : 



"The Act imposing an excise tax against corporations, etc., 

 recently passed by Congress, prescribes a method for ascertaining 

 and reporting net income radically at variance with accounting 

 methods generally followed by industrial and trading corpora- 

 tions, with those prescribed for public service corporations under 

 federal and state laws, with accounting methods followed by 

 many insurance, financial, and banking institutions, and with 

 principles recognized by students of accounting. 



"The language of the law cannot be reconciled with anv proper 

 recording in the form of accounts of those factors which neces- 

 sarily enter into the ascertainment of net income, as it is gen- 

 erally understood, earned in any year. Especially is this so in the 

 case of corporations whose operations require materials and 

 supplies that are not used or consumed concurrently with their 

 purchase; also in the case of corporations engaged in the pur- 

 chase of raw materials, their manufacture, and the sale of the 

 product. The law undertakes to sever the natural relation 

 which exists between proceeds from sales and cost of goods sold. 



"It seems desirable to obtain from the commissioner of inter- 

 nal revenue, as soon as possible, interpretations and ruling as 

 to what will be required in the returns for the. year ending De- 

 cember 31, 1909, to the end that the reconstruction of accounts 

 or the compilation of data may be completed in time to avoid 

 penalty." 



