:=0 PAN '1 EETANG

UNITED SUA BETONG RUBBER ESTATES

RECORD OUTPUT AND PROFITS RUBBER INDUSTRY AND THE WAR EFFORT SIR JOHN HAY'S REVIEW The thirty-second annual general meeting of the United Sua Betong Rubber Estates, Ltd., was held on 8th July at 19, Fenchurch Street, London, E.C., Sir John Hay (chairman of the company) presiding.

The chairman said: The great struggle in which we are now engaged, with its daily recurring events with all that they portend to every one of us, overshadows all other interests. It is with a con- sciousness of that fact that I now propose on this occasion to review only very briefly the company's affairs.

Sir John pointed out that the company's output of rubber and profits for the year under review were the largest in its history but that the benefits to stockholders were not to be measured by the extent of the profits. The chief beneficiary was the public revenue. The company's estimated accumulated liability for taxes exceeded kzoo,000, and out Of a net profit of approximately £300,000 the net amount to be distributed to stockholders woutd be little over £7o,000.

Reports received from all of the company's estates were uniformly good, particular etriphasis being laid on the growing strength of the company's position through its replantings and new plantings. The improvement in its rubber producing capacity was being acknowledged in a steadily increasing assessment which for 1941 was fixed at over 17,000,000 lbs.

Sir John then spoke of matters of general interest to the industry as follows:— AMERICAN RUBBER SUPPLIES The first agreement with America for rubber supplies in volume sufficient to provide for the accumulation of a reserve stock and at the same time to meet current needs was concluded in June, 1940. This was followed by a second agreement in the same year, and just before I left America in November last a provisional agreement was reached for a further increase in the reserve stock. This latter arrangement was subsequently adopted and formalised in March of this year. These three agreements provided in total for the eventual

accumulation of a reserve stock of 430,000 tons. In this way America's policy in the matter of rubber supplies both for defence and industrial purposes was gradually unfolded and her needs dearly defined. Without this open declaration of policy, expressed as far as was practicable in terms of a definite tonnage for delivery in specified times, it would hardly have been possible for the I.R.R.C. to have performed satisfactorily its task of regulating world supplies of rubber to known demands, nor to have won so readily the willing and understanding co-operation of producers in providing for abnormal requirements.

THE EXPORT POSITION As you know, permitted exports during this year have, for the first time in the history of the regulation scheme, been at the rate of too per cent. At the time of preparing these remarks the figures for June are not available, but taking the six months December, 1940- May, 1941, the amount of permitted exports was equivalent to over 800,000 tons—or nearly double the quantity permitted in the last corresponding pre-war period. Due to adverse seasonal influences and, in a lesser degree to some labour unsettlement in certain of

the territories where degree, supervision had been largely with- drawn for training in defence duties, actual exports fell below that figure, but, even so, as between the two periods mentioned they were increased by no less than 300,000 tons. Having regard to the growing and serious shortage of shipping, the hazards and uncer- tainties of overseas transport, and all the difficulties inseparable from a state of war—from the influence of which rubber producing terri- tories are by no means immune—such an increase in production and exports to a figure which exceeds anything hitherto attained, is remarkable and is the measure of the co-operation which has been given so readily in fulfilment of the agreements, the terms of which have been generally accepted as being fair between the parties.

In accordance with our agreements, all the rubber required con- tinues to be purchased in the open market within a stipulated price range, and the essential functions of the market and distributing intermediaries continue to be utilised and exercised by those who from long knowledge and experience are best qualified to do so. Our experience so far has confirmed the belief on which the agreements were based, namely, that these abnormal demands will be best Fat isfied by allowing supplies to flow along channels worn by long usage, rather than by resort to expedients which, however apparently simple and plausible' when put to the practical test invariably encounter unexpected difficulties and hindrances and in the end prove to be much less efficient.

AMERICA'S RESERVE STOCK Notwithstaiiding the great increase in exports to the extent which I have mentioned, the accumulation of America's reserve stock has not proceeded at the rate anticipated. This is due primarily, but not

solely, to an increase in American consumption well beyond what was estimated. As a corrective to this situation, America has announced her decision to take measures to restrict current consump- tion to the more normal figure of 600,000 tons per annum and thus set free a greater surplus for the more rapid accumulation of a reserve stock. Simultaneously, and as a natural consequence of that measure, it has been decided to centralise all purchases for America through the Rubber Reserve Company and it is only for purchases made by the Reserve Company or its agent that export licences to America are now being granted. In more normal times this concentration of such great buying power might be regarded with some alarm, but these are by no means normal times, and since the purpose which the measure is designed to serve is none other than the more equitable distnbution of supplies and the more rapid accumulation of stocks, the continuance of our ready co-operation is assured along lines which maintain unimpaired the essential functions of the market.

This matter of rubber supplies to America is one of many transactions with that country which, in present circumstances, are fraught with tremendous consequences. We were never in doubt as to the side on which America's sympathies lay; that sympathy, happily for us, has developed to a stage of material aid ever- increasing in volume and in power and expressed in ships and all the modern equipment of war. It is largely on the reliance of the con- tinuance of that great and powerful aid that our hopes of victory are based. We as an industry have an opportunity of supplying to America one of the products now necessary for defence as well as for the conduct of modern war—an opportunity we should embrace readily. It is in this larger setting that we should view the matter of rubber supplies to America and, by the ready manner in which we discharge our obligations, and by our resourcefulness in overcoming any incidental difficulties that arise, demonstrate our gratitude for their great and vital aid which becomes daily more potent. .

This is the first time I have had occasion to speak to you since I returned from America and I would like to take the opportunity of saying publicly how greatly I appreciated the sympathetic and understanding manner in which my representations were received. Since I returned to this country I have been the medium through which suggestions have been made and criticisms offered regarding operations under the agreements, and I need hardly say that these have been received in the same spirit of friendliness.

SUPPLIES TO THE UNITED KINGDOM Almost simultaneously with America's decision to centralise through one agency the buying of the whole of her rubber require- ments, there has been put into operation in this country a similar measure under the designation of rubber control. From henceforth, therefore, for the world's main requirements of rubber there will be only two buyers. One of the many functions of the London rubber market was to act as a distributing centre for the rubber requirements of Europe. Owing to the misfortunes of war, this func- tion has for the time being ceased, whilst speculative business, per- missible in peace time, is no longer appropriate to present war-time conditions and has been gradually eliminated. The weight of these losses has become increasingly felt, and in these circumstances, and despite the fact that rubber control in this country relates only to a quantity of rubber which is a mere fraction of what America uses, it is not surprising that the decision to control and all that it implies is viewed with great apprehension in the London rubber market. It is appreciated that in the circumstances in which the appointment was made the chief function of the Rubber Con- troller must be to discourage all unnecessary trading and to bring rubber supplies in the most direct line from the producer to the consumer. None the less, this involves a great deal of hardship and loss which falls upon intermediaries who, in normal times, exercise a useful function and make their valuable contribution to the general trade of the country. That these problems should arise without any prior consideration for their treatment is but another example of the many distressing consequences of our piecemeal and department- ally-minded approach to war economy. Those who by present cir- cumstances are deprived of their livelihood should not be left to the haphazards of war. Total war has its casualties in the field of com- merce as well as on the field of battle. The former require treatment as well as the latter.

THE WAR EFFORT The measures taken in relation to our own industry, as well as all other measures affecting industry as a whole, must be considered in their larger context and they can only be judged in relation to how they serve the supreme purpose, which is the successful prose- cution of the war. Our war effort, with its countless examples of courage, endurance, devotion and sacrifice, has in part been magnifi- cent, but in other respects, even at this advanced stage, it still is inadequate and deficient. In the economic sphere, using that phrase in its widest sense, there has been a too evident lack of the vision to conceive and the courage to apply the measures that are necessary for the effective mobilisation of our manpower and for the direction of our efforts towards our one overriding purpose.

We contend against an enemy superlatively equipped by long years of preparation, endowed with exceptional powers of organisation, possessed of high executive capacity expressed in swift and skilful action, and sustained by the fanatical devotion of a people whose numbers greatly outstrip ours. The fight against this formidable Power demands our utmost exertions, which can only be rendered fully effective by a thorough-going organisation which brings to bear in the proper place and in full measure the services of every one of us, inspired and sustained by a single-minded devotion to the State in this time of crisis.

(Continued on page 46) COMPANY N.EETING

UNITED SUA BETONG RUBBER ESTATES

(Continued from page 45) You will probably recall the closing passage of Shakespeare's "King John," with its brave boast that:— "This England never did, nor never shall, Lie at the proud foot of a conqueror," but then there immediately follows this qualifying line:— " But when it first did help to wound itself."

Any and every diversion from the war effort, neglect or inefficiency, are wounds on the body politic, weakening our resistance and leading to infirmity of purpose: In present circumstances, we can no longer have "business as usual," and whether in Government or in trade or commerce we must be prepared to abandon our peace-time prac- tices and forgo all activities other than those which contribute to the war effort. Immersed and engrossed in the performance of our daily peace-time tasks, we are often too apt to think of the imme- diate dangers to our own particular interests. We have to remind ourselves that far greater issues are involved, and it is only in so far as we make the sacrifices adequate to safeguard our security and liberty that our more immediate and lesser interests can be preserved. The report and accounts were unanimously adopted.