September 1, 1915. J 



THE INDIA RUBBER WORLD 



685 



tions today arc quite different and the capacity of Far East rn 

 plantations is too great to allow of a rubber boom; but the 

 height "I nur financial crisis was no doubt reached in the 

 autumn of 1914, and we have every reason to believe that the 

 government will help us in organizing our rubber production 

 on sunn possible basis. Tile country has been Struggling 

 through a terrible crisis. It is now on the road toward health. 

 but the financial situation will continue to be full of diffi- 

 culties until the natural resources of the country can be or- 

 ganized solidly enough to exercise a beneficial influence on 

 commercial conditions. Rubber is qualified to do more to- 

 waid this than any other of our exports. 



AMERICAN RUBBER MANUFACTURING PLANT IN BRAZIL. 



In 1912 the Brazilian government enacted certain laws intended 

 to induce foreign ami domestic capital to invest in the establish- 

 ment of rubber refining plants and rubber goods factories in 

 Brazil. A premium of $130,000 gold was to be awarded to the 

 lirst rubber refining plant established in that country, and another 

 premium of $106,000 gold to the lirst company establishing, under 

 certain conditions, a rubber manufacturing plant in Manaos, 

 Para, Pernambuco, Bahia and Rio de Janeiro. Materials and 

 supplies necessary for the construction and complete installation 

 of the factories, and chemical substances, fabrics and various 

 materials necessary for the operation and maintenance of the 

 factories during a term of 25 years, were to be admitted into 

 Brazil free of import duty. 



In order to have a right to the premiums, the factories would 

 have to represent an actual investment of capital equal to four 

 times the value of the premiums ottered. The company satisfy- 

 ing the requirements and willing to accept the government's 

 offers would have the right of appropriating lands required for 

 the development of the factory. In addition, the government 

 would give the factory preference in purchases of products used 

 in the service of the army and navy and the federal public de- 

 partments, as soon as the factory could compete in quality with 

 similar foreign products. A Department of "Rubber Defense'' 

 (Defesa da Borracha appointed a committee to pass on bids 

 submitted. 



Taking advantage of these overtures of the Brazilian govern- 

 ment, several companies, foreign and domestic, submitted pro- 

 posals, among them The Goodyear Tire & Rubber Co. of South 

 America — subsidiary of The Goodyear Tire & Rubber Co. of 

 Akron. Ohio — organized under the laws of the State of Maine, 

 with a capital of $3,000,000. for the declared purpose of operating 

 rubber plantations and manufacturing rubber in South America. 

 This corporation sent its director to Brazil to investigate condi- 

 tions and decided on erecting a rubber manufacturing plant in 

 Rio de Janeiro. Credentials presented to the Brazilian Rubber 

 Defense Committee established the company's technical and finan- 

 cial capacity. 



The bid of the Goodyear company covered the erection of a 

 modern rubber manufacturing plant at Rio de Janeiro, to consist 

 of ten 3-story buildings covering an area of over 150,000 square 

 feet, to manufacture rubber tires, mechanical goods, combinations 

 of rubber and asbestos, insulated wire, druggists' sundries, water- 

 proof fabrics and different industrial preparations of rubber. The 

 ownership of the real estate and other property involved in the 

 factory was to revert to the Brazilian government in ninety years. 

 The Defesa da Borracha committee accepted the Goodyear pro- 

 posal, but the Brazilian government was apparently unable to 

 carry out its part of the agreement and the contract remained in 

 abeyance until June last, when it was ratified with some modifi- 

 cations. 



A factory will be erected following the lines proposed by the 

 Defesa da Borracha committee, in 1913. as modified by recent 

 proposals made by the Goodyear company. The company re- 

 linquishes all its rights to premiums, while the Brazilian govern- 



ment loses its right "i i tpropriation. The working of the fac- 

 tors is to begin within tlm ears oi thi dati -I ratification of 



the agreement, and in case of non-compliance with the terms of 

 the contract the company will forfeit whatever real estate it may 

 have acquired and any buildings erected for the use of the fac- 

 tory, as also the security of $100,(XX) it dep. Miol. 01 course the 

 whole agreement is subject to cases of "force majeure," of which 

 the Brazilian government shall be judge. 



THE BRAZILIAN VALORIZATION OF RUBBER. 



V cording to late advices from Rio de Janeiro, the Chamber 

 of Deputies of the Federal Government of Brazil has approved 



an issue of 350.000 contos I ^XXOOO.OOO ) paper, thi I part 



of which is intended for use in financing coffee and rubber. 



Ibis valorization scheme was worked out more than a year 



ago, alter the election of the new president. Dr. YYcnceslau Braz. 

 It lias the approval of all the militant parties of Congress. In 

 fact, the president himself, in his message at the opening of the 



sessions, recommended this measure as a remedy f< >r the finan- 

 cial depression in Brazil. 



A part of the $90,000,00b is intended for the payment of treas- 

 ury debts, both gold and paper, prior to 1915; but most of the 

 issue will lie deposited in the Bank of Brazil as a fund to I 

 loans to holders of coffee and rubber. 



The former valorization schemes, especially that for rubber, 

 proved to be failures, in which the Hank of Brazil lost about 

 $10,000,000. This gave the actual administration of the bank a 

 lesson as to the means of employing valorization of the products, 

 without the sacrifice of money deposited bj the government for 

 this purpose. 



I he idea is to deposit the products in warehouses. The bank 

 will make loans to the producers up to about SO per cent, of the 

 value of the day's price, in the case of rubber. Coffee will have 

 another plan of valorization. Thus the producers of n 

 will not be forced to sacrifice their product by selling it ti 

 intermediary, the exporter, at a price lixed two or three mi 

 before. I Generally the Amazonian rubber is sold for future 

 delivery from two to four months ahead, i 



The rubber having been deposited, the producer will offer it 

 to the consuming markets. Receiving a price which will of course 

 be in accordance with the supply and demand, the producer will 

 sell it. This will do away with the actual speculation to which 

 rubber is subject and which is so harmful to both producer and 

 consumer. If by chance the price of rubber goes down, thi 

 ducer will sell it in the same manner a- at present namely, have 

 it sent to New York or London on consignment and n 

 SO per cent, in cash. The only difference will be that the 80 

 cent, will be advanced by the bank on the deposit of the rubber. 

 settling the balance when the sale is made, instead of shipping 

 it to the importing market and receiving SO per cent, from the 

 consignee. If the producer intends to speculate the bank will 

 force him constantly to maintain a margin of Jo per cent, for its 

 protection. 



RUBBER IMPORTS FROM VENEZUELA. COLOMBIA AND HONDURAS 



During 1914. rubber exports from the port of Ciudad Bolivar. 

 Venezuela; to the United States, amounted to $173,959. against 

 $153,021 exported during the previous v ear : an increase of 

 $20.93S. 



Balata exports from the same port to the United States 

 am. tinted, in 1914. to $292,482. as compared with $2.'i < i 

 ported in 1913; an increase of $71,986. 



Rubber exports from Colombia to the United States amounted 

 in 1914 to $89,104, as against $178,476 during the previous year; 

 a decrease of $89,372 



During 1914 Honduras exported crude rubber to the value of 

 $21,925 to the United States, against $17,417 during the previous 

 year ; an increase of $4,508. 



