Makch I, 1921 



THE INDIA RUBBER WORLD 



457 



A more comprehensive extension of the income tax than that 

 alreadj' proposed will come into operation. 



The tax on the net profits of corporations will be raised from 

 4 to 6 per cent. .'\n e.Kcess profits tax of 6 per cent will be levied 

 on that part of the income that is higher than 10 per cent of the 

 paid up capital. 



The Batavia freight conference has fixed the rate for rubber 

 at 60 gilders per cubic meter. 



Official reports show that the western division of Dutch Borneo, 

 during the first half of 1920, exported 83,430 kilos of plantation 

 rubber and 1,149,393 kilos of wild rubber. The exports of gutta 

 percha, gutta jelutong and gutta hangkang were respectively 

 21,445 kilos, 371,216 kilos and 350,156 kilos. 



The prices obtained during this period were subject to a good 

 deal of fluctuation. Thus the highest price for gutta merah I, in 

 January was 450 gilders per picul (133J/^ pounds), and the low- 

 est 400 gilders ; but in March, the figures were 600 and 250 

 gilders. Gutta merah II brought 200-150 gilders in January. 

 Gutta jelutong reached as high as 18 gilders a picul in January 

 and Marcli but fell to 7.50 gilders in June. The highest price for 

 rubber was obtained in March and stood at 135 gilders a picul. 

 In January the range had been 130-100 gilders. 



MALAYA CANNOT UNDERSTAND AMERICA'S POSITIONi 



It is almost impossible to make even the most enlightened 

 Chinese and native rubber traders of the Malayan Peninsula un- 

 derstand America and the American conditions. They cannot 

 visualize the United States as anj-thing but a land where everyone 

 is rich and prosperous and where financial conditions are always 

 on the top wave. They do not understand, as we do, what is 

 meant by inflation of credits — or deflation. They sec no reason 

 why there should be any need of deflation in a land like ours. 

 They imagine the Yankee is depressing the rubber market for 

 artificial reasons rather than for reasons based upon sound 

 economics. "" 



"Rubber is worth more than it is fetching in the market. That 

 proposition cannot seriously be disputed. At a time when prof- 

 iteering and hard economic facts combined have boosted the 

 prices of most other things, Malaya's chief export is undergoing 

 a period of severe depression," complains the Straits Echo of 

 Penang, voicing the general sentiment of the Peninsula. "Many 

 well managed estates are unable to pay reasonable dividends tj 

 their shareholders." Forgetting the fact that all industry is now 

 suffering from severe depression from which the United States 

 is by no means exempt, the impression prevails in Malaya that the 

 world has treated it badly ; that rubber growers have not learned 

 the art of profiteering while others have, and are practicing it 

 to the limit. Malayans do not wish to be invested with halos, 

 however, .and declare themselves willing enough to take big 

 prices for their rubber if they can get them and they think they 

 might, were they not so absorbed in growing it that they art- 

 blind to the obvious means of securing redress from their real or 

 fancied grievances. 



"However, the price of the commodity may drop," still further 

 complains the Echo, "there is no lessening of the retail cost of 

 rubber tires, water-ibottles or tennis shoes. But the man who 

 gets most of the consumer's money is not the producer, who is 

 entitled to it if anyone is, but the manufacturer. He waxes 

 wealthy whilst men toil and sweat beneath the tropical sun to 

 provide him with the substance of his wealth. Your manufac- 

 turer is a wily bird, especially if he is an .American. He collects 

 a few other manufacturers and, after due cogitation, they form 

 a combine of water-tight qualities. In various ways, some de- 

 vious, others delightfully plain and unabashed, the combine decides 

 what the price of rubber shall be. The producer lashes himself 

 into a fury and cries out to Heaven for help." 



The Echo is quoted quite extensively because that journal seems 



to voice the general feeling held in certain quarters thereabouts — 

 a feeling that, because of its manifest unfairness, should be the 

 business of every American to dispel in every possible way. Fric- 

 tion of this kind is not beneficial tc good business relations. 



THE WAY OUT 



When there is a decline in the demand for manufactured goods 

 amounting to a practical cessation of buying on the part of the 

 public, it can hardly be expected that manufacturers will continue 

 to buy the raw product from which their manufactured goods 

 are made. This is a condition existing in America that the 

 Malayan producer should see and recognize. It cannot be ex- 

 pected that the manufacturer will finance the producer by con- 

 tinuing to buy a raw product for which he has no immediate use, 

 even if it is cheap — all the more so if his warehouses are crammed 

 to capacity, not only with a surplus of the raw product, but with 

 his own manufactured goods as well. 



The manufacturer has his remedy, which, in part, will reduce 

 his losses to a minimum. He can close down his mills, in whole 

 or in part, and hope for better times, pocketing his "overhead" 

 loss with as good grace as he can muster. 



The only logical way in which the producer can get square 

 with the game is to work for better prices and demand through 

 curtailed production, just as the manufacturers do. A similar 

 condition is seen with the cotton producers of the United States 

 who are doing that very thing. Before now the planters of rub- 

 ber of Malaya, the Netherlands, and Ceylon have been urged co 

 cooperate for the protection of their mutual interests by systematic 

 curtailment of production. Of those who cavalierly declare that 

 the idea of the Rubber Growers' Association is impracticable, it 

 can only be asked, "Has it ever been really tried? Is it not yet 

 too early to condemn it?" With a common understanding and a 

 common policy, a very strong position might be created. Sundry 

 experts estimate that all will be well with rubber in three or 

 four years' time — in fact, that there will be a shortage. But in 

 the meantime it is, with the producer just the same, if he only 

 knew it, as with the manufacturer — a ca.5e of the survival of the 

 fittest. 



•By Richard Hoadley Tingley. New York City. 



FOREIGN TRADE FINANCING CORPORATION 



Under the provisions of the Federal Reserve Act there has 

 recently been organized the Foreign Trade Financing Corporation, 

 backed by the business men, bankers, manufacturers and other 

 producers of the country, to extend long term credits to foreign 

 buyers of American goods and thus break the threatened paralysis 

 of our international trade. Under the law it may also invest in 

 securities, purchase bills of exchange, engage in foreign banking, 

 and may further, with the approval of the Federal Reserve Board, 

 issue and sell to the investing public its own notes and debentures 

 to an aggregate amount of ten times its paid up capital and sur- 

 plus. It may not engage in the general business of buying or 

 selling goods or commodities in the United States, nor engage in 

 domestic banking, except such as in the judgment of the Federal 

 Reserve Board may be incidental to its international or foreign 

 business. 



The corporation is designed not only to offer a sound invest- 

 ment but also to render a much needed public service. It will 

 seek to keep its loans and investments highly diversified among 

 many countries and in a large variety of enterprises. The cor- 

 poration will have a fully subscribed capital of $100,000,000 and a 

 surplus of $5,000,000. .Subscriptions to the stock are being re- 

 ceived at t!ie rate of $105 per share. 



The presidency has been tendered to W. P. G. Harding, gov- 

 ernor of the Federal Reserve Board. The board of directors of 

 the corporation will consist of not less than thirty-six, nor more 

 than sixty memliers, and will be representative of the sections 

 of the country as represented by the twelve Federal Reserve Dis- 

 tricts. The principal industries of the country, such as agricul- 

 ture, manufacture and banking, will have places on the board. 



