COST OF PRODUCTION 115 



suppression of the export duties infers a drastic re- 

 trenchment of all public expenditure, and a compromise 

 with all creditors in regard to the partial suspension of 

 interest payments on foreign and home indebtedness. 

 If the Federal Administration offer to guarantee the 

 principal of the internal claims and external loans, and 

 one-half of the subsidy be devoted to the debt service, 

 any hardship incidental to reduced cash payments 

 could be mitigated to a very large extent. 



The suspension of duties on imported merchandise 

 is entirely within the province of the Federal Govern- 

 ment, and in no way affects the State revenues. A 

 special Act of Congress may be necessary to allow this 

 step to be taken without any infringement of the Con- 

 stitutional Law of the Republic ; but no serious objec- 

 tion could be raised to the passage of the measure in 

 view of the existing situation, and it is unlikely that 

 any strong opposition would be offered to such a pro- 

 posal put forward by the Executive as an immediate 

 and urgent necessity to save the rubber industry from 

 partial ruin in the present, and possibly total extinction 

 in the near future, at a loss of revenue to the Federal 

 Exchequer of approximately 650,000 annually. 



The effect of the suspension of the export duties 

 would benefit the rubber producers to the extent of 

 fivepence per pound ; the suppression of the Customs 

 charges on the necessities of life imported from abroad 

 would diminish by not less than 25 per cent., the 

 average cost of maintenance for the collector. Together 

 these two items permit the substantial reduction of 

 eightpence per pound in the average cost of production, 

 bringing it down to twenty pence per pound. On this 



