24 



High Prices and the Result. 



The pity is that the high prices of 1905 and 1906 ap- 

 pear to have been taken as the standard by many planters 

 in assessing the value of their interests in companies 

 and their own plantations. In several offices and bunga- 

 lows, however, the chart of the " India-Rubber Journal " 

 is nailed to the wall; a study of the information thereon 

 depicted will perhaps help to dispel illusions. Not only 

 have high prices led many to conceive fictitious values 

 for their properties, but they have caused some to imagine 

 that the industry is likely to be one of the most profitable 

 ever known in the tropics, and as one which can therefore 

 stand generous salaries and coolie wages. There is no 

 doubt about the estates being valuable in the opinions of 

 the majority of rubber planters; their convictions on that 

 point are firm. The faith in the rubber Industry which is 

 held by planters whom I have so far met has been very 

 inspiring, but I would rather that their basis of calcula- 

 tions be 2S. 6d. per lb. for plantation rubber than any 

 of the prices realised during previous years. It might 

 lead to the necessity for caution and economy being more 

 deeply impressed on their minds. 



Effect of Id. in Price. 



The majority of rubber companies now in existence are 

 not affected by a small fluctuation in the price of rubber, 

 because they are not in bearing. How far the raw 

 plantation product will vary in value from day to day, 

 when once it has gained prominence, in virtue of its 

 quantity and constancy in composition, cannot be fore- 

 told, but it is quite likely that the price for rubber will 

 change from time to time as does that of most other 

 tropical products. What, then, will be the effect of a 

 difference of one penny per lb. on the annual available 

 dividends of properties in bearing? What such a fluctua- 

 tion would mean can readily be calculated. 



Let it be granted that the estate is 1,000 acres in ex- 

 tent; that the capital cost, when the property is in bear- 

 ing, is £30 per acre; that the rubber costs is. per lb.; 

 and that the price of raw rubber is 2s. 6d per lb. There 

 is nothing unreasonable in any of the four conditions thus 

 enumerated. 



