THE world's supply of crude rubber formerly came from the wild rubber industry of South and Central America. Today, over nine-tenths of all the rubber produced comes from plantations in southeastern Asia and the East Indies, -- from areas controlled by Great Britain, Holland and France. Over two-thirds of these areas are in British possessions; and the Stevenson Restriction Act passed by the British Parliament in 1922, regulating their production and exportation, tends to maintain rubber prices at an artificial level. Further, researches by the Rubber Association of America have indicated the probability of a world shortage in 1928 and of a rate of consumption exceeding production by 1930. The United States imports three-fourths of the world's rubber output. The need of American industry to develop fresh sources of supply of its own has led to special studies by public and private agencies, in the Philippines, Hawaii, Florida, Latin America and Africa. A plan to establish plantations in Liberia totalling a million acres has recently been reported in the press.

As one part of a survey of essential raw materials for which funds were appropriated in 1923, Congress instructed the Department of Commerce to investigate and report on the possibilities of developing the rubber plantation industry in the Philippine Islands and Latin America.

A lack of adequate supplies of labor has usually been believed to preclude the establishment of large-scale plantations in South America. H. N. Whitford, Chief of the Crude Rubber Section of the Department of Commerce, wrote in FOREIGN AFFAIRS for June, 1924, in an article entitled "The Crude Rubber Supply, an International Problem:" "In the Latin American republics investigated there is a shortage of labor. No production of rubber on a large scale is possible in them without resorting to imported labor, which can be obtained cheaply only in China."

Later investigations, described in a report on "Rubber Production in the Amazon Valley" which the Department of Commerce published in November, have thrown new light on the situation. Out of a total population of about 1,500,000 in the Amazon Basin, this report contends, a force of 30,000 laborers well qualified for plantation work could be brought together without great difficulty. This number is estimated to be sufficient to plant and care for an area of 150,000 acres.

The accompanying map shows the distribution of wild rubber trees in the Amazon Valley. Level, well-drained land, suitable for plantations, is located close to navigable rivers, such as the Tapajoz. The best combination of conditions for the artificial cultivation of rubber is found in a zone extending from the Madeira River east across the Tapajoz River to the Tocantins River, with the region of the lower Tapajoz offering the greatest advantages.

South American production has been based mainly on the tapping of wild native trees, although there never has been any doubt that natural factors would favor artificial cultivation. It was from Brazilian seeds that trees were grown by Sir Henry Wickham in Kew Gardens, London, for the first British plantings in 1876 in India, Ceylon and the Malay States. When the British experiments had demonstrated that rubber trees could be cultivated successfully in the Middle East, plantations were established and extended, mainly in British and Dutch colonies and a few in French colonies. Their mounting production began to displace that of the wild rubber industry of South America. "The Eastern plantations," says the report, "have furnished a cleaner and more uniform product . . . at a price below which wild rubber cannot be produced profitably except in certain favorable localities." The output of Asiatic plantations passed that of the Amazon area in 1913 and in the next two years left it far behind.

The effect on the South American industry is made most clear by comparing production for the peak year of 1912 with that for 1923. The total output of the

Amazon region for 1912 is given as 45,067 metric tons, to which should be added 4,114 metric tons for Brazil outside the Amazon region. In 1923, competition of Asiatic plantations and the business depression of 1920-1921 had cut down the total output, including all Brazil, to 21,537 metric tons. Improved business conditions and high prices for rubber have stimulated production somewhat since then. But steady future production depends on the possibility of developing well-managed plantations, able to compete with those of the Middle East with their abundant cheap labor.

The report analyzes this problem comprehensively from the point of view of topography, soil, climate, health, costs of establishing plantations, land tenure and taxes, export duties, and transportation, especially navigability of rivers. But particular interest attaches to the sections which deal with the recruiting of labor. Careful surveys were made in the areas of the lower and upper Amazon and its tributaries, and in Bolivia, Peru, Ecuador and Colombia.

The investigators found that labor was most easily procurable in the State of Para, in Brazil, and progressively difficult to secure in the upper river areas. Regarding the sources and quality of labor, the report says: "The decline in the wild rubber industry has lessened the demand for laborers, and so has created a potential source from which a very considerable number of men might be drawn for new plantation projects . . . . Others could be attracted from the Brazil nut industry, which is only a seasonal occupation and where conditions of employment often leave much to be desired. Still others could be engaged in the small river towns or drawn away from the desultory pursuit of agriculture and fishing, in which many are engaged for lack of more satisfactory occupation. If additional laborers were required for any undertaking in the Brazilian part of the Amazon Basin, the northeastern coast states, the traditional recruiting ground of that region, could be resorted to." These states are Maranhao, Piauhy, Ceara, Parahyba and Rio Grande do Norte, with a total population of 4,300,000.

The labor available in the Amazon Valley and nearby states of Brazil is reported as being probably as good as any body of tropical workers in the world, and man for man possibly superior to those employed on the rubber estates of the Orient. The native workers are usually of mixed Portuguese, Indian and Negro blood. Contrasting the types in the Amazon area and in the East, the investigators rate the South American laborer as superior to the Javanese and Indian, and more like the Chinese, the most intelligent laborer on Asiatic plantations. They think the South American, more independent in spirit and more difficult to control, could not be worked in gangs on day wages as well as the Eastern laborer, but would do excellent work under a task or piece-work system. Peruvian and Bolivian laborers are found to be better disciplined and more tractable in disposition than Brazilian. "The best class of laborers in the Amazon Basin are the immigrants from the State of Ceara. These people are hardy, ambitious and inured to hard work. American employers stated they found them excellent workers, some even going so far as to say they secured as much and as good work as from the average laborer of the United States."

Comparing wages in South America and the East, the report gives the basic daily labor wage scale in the East as 20 cents U. S. for Indians and Javanese and 35 cents for Chinese. Other expenses for housing, sanitation and recruiting bring the cost of Indian and Javanese labor up to that of the Chinese. In South America, wages depend on locality. Basic wages in Brazil are given as varying from 25.75 to 41.2 cents, with wages lowest in the State of Para where the average is about 30 cents a day.

In spite of the need to develop sources of future supply, the tendency of men in the rubber trade is to doubt that much capital will be invested at present in South American enterprises, both because of the long-term risk involved (since rubber trees take from four to six years to come into bearing), and because of other projects, already under way, for developments in Africa. But the evidence in the report of the Department of Commerce, that considerable labor forces could be secured for plantation work in the Amazon Valley, provides a new basis for estimating the possibility of large scale production there when the demand becomes sufficiently pressing.

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