RUBBER COMPANIES.

New Zealand Herald, Volume XLVII, Issue 14326, 23 March 1910, Page 7

RUBBER COMPANIES.

BOOM STILL CONTINUES. By Telegraph.—Press Association.— 4 < v V; London, March 21. The prospectuses of ten rubber companies Were issued to-day,, the capital ' aggregating £2,500,000. Two oil companies, with capitals totalling £425,000, were also offered to ' the public. > • , , '■■' The Daily Telegraph says that the high price of rubber has made some Para cargoes so valuable that it is difficult to find a sufficient market to insure them. Fifteen shillings per cent, was paid on Saturday,' while the ordinary rate was four shillings. ,'. ' - THE RUBBER. BOOM. .' Rubber is apparently justifying its character for resiliency as far as market values are ■; concerned, 10s ,6d per lb having been paid last week in London, presumably for est Para. No other commodity has exhibited the same wide fluctuations as those displayed by , rubber in the last two years. As low as 2s 9d per lb was touched in 1908, a level of value that caused a sensible shrinkage \ in the supply of wild rubber. With the return of activity in the motor and other trades that use this product as their raw material, supplies could not keep pace with the demand, and a rapid advance in price naturally ensued. Whether the high cost will check consumption remains to be seen, but meanwhile producers of raw rubber are profiting enormously. When one realises that plantation rubber can be produced and marketed at a cost of from Is to Is 6d per lb, the margin of profit under existing conditions is large enough to warrant excitement on the Stock Exchanged It has been calculated that in the case of certain low capitalised rubber-producing comi panies, an increase of Id per lb in the profit on the rubber sold means an additional 1 per cent, in the yield on the capital employed." Since \ June 30.share values of 12 of the chief producing plantations in the Federated Malay States, taken as a whole, had, up to the time the last English mail left, advanced 50 per cent., and in the last month a further considerable appreciation must have occurred. The profits of the same concerns for the current year, estimated on the basis of the actual results of the preceding 12; months, taking a selling price of 6s 9d per lb, and a cost of Is 6d per lb, range from 29 to 283 per cent, on the paid-up capital. No wonder there is. a " boom" in company promoting, and, as our cable messages have from time to lime stated, new concerns are offered to the public every week, as many as 10 being put on the market in one day.