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THE INDIA RUBBER WORLD 



[July i, 1908. 



The Cost of Rubber on The Amazon. 



AN article on "The Cost of Amazon Rublier" was repro- 

 duced from this journal recently in La Chroniqiic Colo- 

 niale, of Brussels, in a later number of which we find the 

 matter which follows : 



THE COST OF AMAZON RUBBER. 

 In consequence of an article taken from The India Rubber World 

 [April I, 1908 — page 209] and published by us in our preceding issue, 

 we received the following letter, which we hasten to publish in our 

 columns, the more so because the opinions expressed therein concur 

 with our own. We confess, moreover, that we printed the previous 

 article in the hope that it would call forth a reply. 



To THE Editor: Allow me to discuss a paragraph of the 

 article on the cost of .Amazon rubber, published in the Chronique 

 Coloniale. The article in question states that the Brazilian 

 gatherer is compelled to gather rubber at any price, so as to 

 provide the necessaries of life. 



The contents of the said article, considered as a whole, might 

 cause your readers to conclude that Brazil will continue to 

 produce as much rubber as she does at present, independently of 

 the price which this product may bring in the market. 



It is true that a certain part of the settled population of 

 .■\mazonas will always produce rubber, even though prices should 

 show a considerable decline. This refers to the same class of 

 people concerning whom you state that they produced rubber in 

 the remote past, when that substance brought only from 3 to 5 

 francs per kilogram. 



However, it will be advisable to take into consideration that 

 the rubber production of the Amazon, which has continually 

 increased until it reached 6o,ooo.oco pounds in 1907 [The arrivals 

 at Para were 82.550,000 pounds. — The Editor I. R. W.l, is largely 

 due to the immigration of large numbers of laborers from the sur- 

 rounding territories, and more especially from the state of Ceara. 

 These laborers will undertake this long and disagreeable journey 

 only if they are sure to be very liberally rewarded by the pro- 

 ceeds of the work of rubber gathering. To this' must be added 

 the quite large traveling e.xpenses incurred by the laborers thus 

 drawn towards the places where the rubber is to be gathered. 



In order to attain the present production in Brazil, it was not 

 only necessary to attract new labor from outside districts, but 

 likewise to penetrate into territories hitherto little utilized, and 

 to which laborers and provisions can only be transported at an 

 exceedingly large expense. Therefore, even though it may be 

 considered an undeniable fact that Amazonas will always produce 

 rubber, no matter what its market price may be, it is, on the 

 other hand, evident that if prices remain on their present level. 

 the production would soon decrease to a considerable degree. 



.^n. H.'\LLET. 

 VIEWS OF THE LATE MR, WICKHAM. 



The question of the cost of .Aii:a2on rubber was very carefully 

 studied during his several visits to Brazil by Mr. Reginald W. 

 Wickham, f. b. c. s., of England and Ceylon, whose death, we 

 regret to learn, occurred recently in the Far East. Writing in 

 The Times of Ceylon something over a year ago, Mr. Wickham 

 declared : "There is no such thing as an average cost, as no 

 man working rubber on the Amazon has the vaguest idea what 

 it does cost." It would appear that the actual rubber tapper 

 in the forest camps is paid for his work in goods, which are 

 charged for by the merchant or employing classes at a rate 

 which they intend shall be high enough to protect themselves 

 against loss. 



More recently Mr. Wickham contributed some further articles 

 to the Ceylon Times on the cost of Amazon rubber, in which 

 he predicted that "Brazilian rubber will not cease to he har- 

 vested when the price falls to 3 shillings [= 73 cents!, nor even if 

 it fell to IS. 6d. [= 36^ cents]," for reasons which he proceeded 



to state — chiefly, that rubber is still coming forward, the goods 

 to pay for which went to the interior 18 months or more ago, 

 based upon calculations that the then prevailing higher prices 

 of rubber would continue. Evidently what Mr. Wickham meant, 

 however, was that rubber gathering on the Amazon would not 

 cease at once on accoimt of the most radical decline in price, 

 but that ultimately conditions would shape themselves to new 

 price levels, lower prices in the world's markets discouraging 

 the rubber workers and higher prices stimulating the industry. 



On general principles, Mr. Wickhani's position must be re- 

 garded as sound, the same principles applying to all forms of 

 human activity. But the point to be made is that Brazil's bed 

 rock producing rate for rubber remains yet to be shown. 

 Hitherto the chief rubber producing districts have been so re- 

 mote that ordinary considerations of supply and demand have 

 not had an immediate effect at any time upon the work of getting 

 out rubber ; it has only affected prices in the consuming mar- 

 kets, though, of course, fluctuations there have ultimately affected 

 the handlers of rubber back of the larger primary markets. 



In midsummer. 1902, Island's fine Para rubber at New York 

 was not quoted at above 70 cents per pound, having declined 

 from $1.10 at the beginning of 1900. Did this decline check 

 production? The crop season ending June 30, 1902, showed 

 arrivals at Para of 300,000 tons. In the successive years the ar- 

 rivals were 29,850 tons, 30,580 tons, 33,060 tons, 34.490 tons, and 

 38,005 tons. In no year following 1902 is reflected in the Para 

 situation any falling off in production consequent upon the ex- 

 treme low prices of that year. 



Naturally, all rubber gathering is not profitable to those en- 

 gaged in it. whether as principals or employes. But the failure 

 of one individual or group in the business may not prevent others 

 from profiting from it under precisely the same conditions. The 

 best evidence that there is some sort of profit in rubber gather- 

 ing in Amazonas is that it has continued for so many years, re- 

 sulting in a constantly increasing product, without regard to 

 prices in the outside world. To refer again to Mr. Wickham, he 

 wrote at one time that native rubber at is. 6d. per pound would 

 not and could not pay the producer. Yet in the same article 

 he says: "It did not pay to sell coffee at 27.^., but it was sold; 

 it did not pay to sell Ceylon tea at sVid., but it was sold." Who, 

 then, shall determine the minimum price at which rubber can be 

 produced without loss to those engaged in the business ? In 

 other words, what decline in selling prices will stop the export of 

 rubber from the Amazon ? 



If space permitted, more might be said about the conditions 

 under which trading in raw rubber is conducted. The head of 

 the largest firm at Manaos, handling millions of pounds of 

 rubber yearly, assured The Indi.a Rubber World that they were 

 not concerned about the price of rubber ; they only executed 

 buying commissions for American and European firms at a 

 fixed rate. The rubber importing houses in Liverpool and New 

 York do not get even so near to the local traders who induce 

 the natives to gather rubber, but buy rubber actually in sight at 

 Para or Manaos. Whether it has been produced at a profit or 

 a loss does not concern them. 



It may not be out of order here to reproduce the concluding 

 paragraph of The India Rubber World's article in the April 

 issue : "The real question is not '.'\t what low figures will Brazil 

 stop producing rubber?' but 'How cheaply can anybody else 

 supply equally good rubber ?' " 



Incidentally it may 'be asked, now that rubber is advancing, 

 is it because Amazon rubl)er is growing scarcer? 



The indications are that this year's "crop" on the .Amazon is 

 llie largest known, with (ine exception 



