BOOM IN RUBBER

Otago Witness, Issue 2927, 20 April 1910, Page 29

BOOM IN RUBBER

NINE NEW COMPANIES. LONDON, April 18. The prospectuses of nine rubber companies, with capital aggregating £1,250,000, were issued to-day. MERCHANT MAKES £1,000,000. WILD 'CHANGE SCENES. Scenes of the most extraordinary character have taken place recently on the London Stock Exchange as a result of the great rubber boom. Notwithstanding that greatly increased space has been devoted to rubber operators, there is still insufficient room for buyers and sellers. Day after day (says a London paper) there has been a surging, howling, seething crowd aTound the jobbers, who have made themselves hoarse with shouting prices. Brokers have had to fight their way to the sides of the dealers, and clerks who wanted to reach the jobbers have had to make then- way through the equivalent of half a dozen Rugby scrums. It has been a fine time for these clerks, for though they have had to practically work night and day they have had their reward in vastly increased rates, of payment. In fact, competent clerks have been able to command almost any price they liked, and a guinea an hour has been quite a common honorarium. At all the neighbouring post offices the staffs have had to be considerably increased in order to cope with the tremendous amount of correspondence. Though the real effects of the boom are only now beginning to be felt, it really started .18 months ago with the motor car boom in America. As the demand for automobiles increased, so did that for rubber for tyres, and the price began to rise. At that time the price of rubber was 2s 6d per lb, but it went up until it touched 10s. With the increase in price came speculation in shares. New companies are now forming at the rate of one a day, and the newspapers are full of advertisements asking for subscriptions, and extolling the' merits of this or that l'ubber estate.

Prices of shares have Increased byleaps and bounds. Holders, as a rule, will not sell, and this Has naturally hardened the market. The shares of one company, the nominal value of which is 2s, were within the week worth 335. One man invested £7OO before Christmas. He has just sold out at a profit of £IO.OOO. But greater fortunes than that have been made. Some men have cleared aquarter of a million, others half a million, "but they are left far behind by one investor, who during the 18 months has increased his banking account by £1.000,000. This man is an elderly'importer and dealer, who at the age of 65 is still one of the keenest business men in London. His habits are of the simplest. He has no children, and he does not believe in having a private office. Instead he sits all day in the midst of his clerks, keepi ; ng the threads of his varied interests j in his own hands.

The more steaay and reliable of the companies do not hesitate to point out that the price of rubber must eventually fall again, and are basing their estimates of profits on the likelihood of rubber dropping once more to the price of 2s 6cl a lb. It is on this estimate that they are working, and some of these companies are actually paying from 50 to 300 per cent.

Indirectly, the prosperity of the rubber market is making itself felt in different parts of London. There has been a marked inerease in the demand for motor cars, and many of the purchasers declare that they have to thank rubber for their being able to afford an automobile. Rubber dinners of the most luxurious order are quite a feature just now.