376 



The Supplement to the Tropical Agriculturist 



More so, for the above reasons, in the case of 

 rubber. And this it is that plays into the 

 hands of the bears ; they know that supplies 

 will continue to come forward, as before, or 

 even in increased quantities owing to the late 

 boom in price, and so they can continue to 

 scare the bulls. 



It will not, however, affect the Ceylon or Malay 

 industry seriously, as we now only produce a 

 negligible quantity. By the time we begin to 

 put into the market enough to affect stocks the 

 rebound from the present slump must inevi- 

 tably have come about. The Brazilian enterprise 

 with its 40,000 tons cannot goon bearing a loss 

 of £125 per ton. The quantity must fall off 

 to the benefit of the Eastern, and Mexican, 

 cultivated rubber. 



I am hoping to visit Ceylon and Malaya in 

 April or May this year.— Yours, &c. 



R. W. WICKHAM. 



Ebley Court, Stroud, Gloucestershire, Feb. 23. 



P.S.— As I am interested in rubber both on 

 one of the highest tributaries of the Amazon 

 and also in the East, mine may possibly be 

 considered "an independent opinion,' as desired 

 by Mr. Booth.— Local " Times.'' 



THE CEYLON RUBBER INDUSTRY. 



The "Scotsman" Pessimistic. 

 Rubber, as an industry, seems to have fallen 

 on bad times, but it may be doubted if it has 

 yet experienced the worst. In the autumn of 

 1905, when the boom in the promotion of rubber 

 companies was at its height, and new under- 

 takings were being poured out upon the public 

 in a broad stream, a note of warning was 

 sounded in these columns to the effect that, 

 favourable as the prospects of this branch of 

 enterprise appeared to be, there was grave 

 danger of its being overdone. The old- 

 established companies which were then in full 

 swing were in a highly prosperous con- 

 dition, making immense profits and paying 

 very handsome dividends. There was a steadily 

 growing demand for rubber owing to the general 

 industrial expansion that was taking place 

 throughout the world, and especially in those 

 branches in which rubber enters as an important 

 component of manufacture. Demand was for 

 the moment overtaking supply, and there ap- 

 peared to be, in the popular imagination, at all 

 events, not only no probability that the output 

 would increase for many years to come to such 

 an extent as would sensibly impair the price, 



but every likelihood that consumption would go 

 ahead at a much faster rate than production. 

 The then prevalent view was that there was room 

 for all. Most alluring statements were set forth 

 in the prospectuses of the new companies regard- 

 ing the acreage, climate, the number of trees 

 their respective estates could support; the 

 number of trees actually planted and to be 

 planted, the proportion of them which had 

 reached or were about to reach maturity; the 

 cost of production, the market price of rubber, 

 and the dividends that were to be anticipated 

 on the capital embarked in the business, this 

 last aspect of the case being pointed by refer- 

 ences to the dividends paid by old-estab- 

 lished companies. These concerns were 

 capitalised on an ambitious basis correspond- 

 ing to the estimates of the profits, no al- 

 lowance being made for the long period that 

 must elapse before the great bulk of the trees 

 would begin to yield, nor for the fact that when 

 they thould do so the whole position of the rub- 

 ber market would have undergone a radical 

 change in virtue of the immensely augmented 

 supplies. The shares of the old companies rose 

 to three and four hundred per cent, premium, 

 and those of the new companies were rushed up 

 to more or less giddy heights, both before and 

 after allotment, without much discrimination 

 and regardless of the question of the initial 

 capitalisation. The old concerns had been con- 

 tent with capitals of from ten up to sixty thou- 

 sand pounds sterling, whereas the new ventures 

 blossomed out with capitals ranging from one 

 hundred up to two hundred thousand pounds or 

 thereabout. 



At that time the price of rubber was about 5s. 

 6d. per lb., and it maintained, on the whole, a 

 wonderfully firm footing, with no serious fluctu- 

 ations, thanks to the activity of the motor, 

 electrical, and other industries, which flourished 

 greatly up to the end of 1906. In January, 1907, 

 the price went up to about 6s. per lb. Then a turn 

 for the worse began to be manifested. In October 

 the American crisis came, and the price fell 

 in that month to 4s. 3d per lb., and it is now 

 down to about 2s. 9d. When the price ranged 

 about 5s. 6d. promoters were able to hold forth 

 eloquently on the handsome margin of profit it 

 showed on the basis of Is. to ls.6d. per lb. for 

 cost of production, especially as no allowance 

 was made for loss of interest on capital during 

 the years of waiting while the trees were grow- 

 ing. Accompanying the fall in the price of rub- 

 ber there has been a severe depreciation in the 



