Los Angeles herald., 1910-03-15
INDIA RUBBER
JUMPING UPWARD
SUBJECT OF BOOM ON THE
LONDON EXCHANGE
ENGLISH BROKERS SURPRISED
AT WAY STOCKS ARE TAKEN
Investors Sell Old Securities and
Rush to Put Their Money
in New Fashionable
Favorites

LONDON, March 14.-In commenting
on the big rubber boom now in prog
ress on the stock exchange the Times
says:
For some weeks past the rush to
buy the shares of India rubber COM
panies has been a marked feature OF
business on the stock exchange. The
market for these shares would per-
haps have attracted less attention
than has been given to it if there had
been more activity in the older de-
partments but even when allowance
has been made for comparative apathy
in other directions and for the spirited
novelty of the new market, the boom
in India rubber shares is remarkable
phenomenon. The market itself is OF
recent origin. so far as the stock eX-
change is concerned; and even now
the business is being done mainly for
cash, most brokers being unwilling to
arrange for carrying over bargains
But dealing in rubber shares has been
going on for a good while in Mincing
Lane, where it originated, and the
Mincing Lane interest is still the most
influential force in the market. This
is natural, for rubber, the commodity,
is a Mincing Lane article, and the few
companies which produce it in regions
other than Para were not much known.
1t is only of late years that the
brilliant possibilities of Ceylon and the
federated Malay states as rubber pro-
ducers have been recognized even by
experts, many of whom at the outset
of the experiment expressed grave
doubts as to whether the transplanted
Brazilian tree would thrive and yield
a crop in those regions. More than
two-thirds of the rubber companies
that were in existence at the end of
December last had been created after
the end of 1905. The steady upward
movement in the shares which had
been going on for over year mas
within the last three months developed
into a "boom" which has created a
certain amount of uneasiness among
the more conservative members of the
stock exchange, who found that some
of their clients were selling out older
securities and buying the new fash
jonable faVorites without apparently
being at all particular what they were
putting their money into, provided
ihev were rubber shares of some sort.
This. readiness of numbers of people
tn buy any class of security which has
been persistently rising for some time
is no new thing in the natural history
of markets. Cynics have been known
10 saw that il is one Of the most Nalu-
able characteristics of the public from
the point of view of stock brokers'. 30
fan those who have shown confidence
in rubber companies have in the ma
iority of cases been justified by re-
suits: they have enjoyed large IN
MANY cases very large, dividends, ana
they have also had the beneht OF see
ing a large profit on their investments
at any rate on paper.
OF late many of the more pruoenV
holders of these shares have been re-
Of
NAV or may not have been surprised
that their realizations produced SO lit
tle effect on the prices of the shares,
but some of their brokers were rather
surprised. for the market was, in their
opinion, not of a kind TO bear mncn
selling and they were afraid that II
once profit-taking became general |
there would be nobody ready to buy !
except at much lower prices. Their /
anticipations have, so far, proved |
wrong, owing apparently to the great |
recent increase in the public which |
wants to purchase rubber shares, ana |
also owing to the continued high price |
of rubber
Rubber trees do not begin to produce |
for about five years after they have /
been planted: after that, if properly |
and considerably treated, thay may go |
on yielding rubber for many years. 1t |
is evident that as the first year in |
which q really large number of COM !
panies was started to grow rubber in |
Ceylon and the Malay peninsula was |
1906, there can hardly be any serious |
expansion of the output before 1912, |
and good judges think that owing to |
the greatly increased demand for the /
article resulting from the rapid in /
crease of the number of motor vehicles /
in use, production is not likely to over |
take consumption before 1914, when in |
addition to those of each year since |
1906, the trees planted lest year will be /
coming into bearing. That calculation /
may be perfectly sound. al regards the |
product; estimates of the yield Of rub |
ber trees are much more safely made |
than estimates of the produce of most /
mines
Rubber trees if well managed. can
hardly fail in due time to produce
rubber. But, unfortunately it is per
fectly possible, when a boom" is go
ing on, to float companies which have
little chance of solid success, either
because they have been oyer-capita,,
lied or, as Benjamin Franklin would !
have said. have paid too much for
their whistle" or have blundered by
planting their trees i'll or in insult
able situations. There is one other
contingency that might destroy the
prospects of an otherwise promising
company that was late in the field.
1t might find labor difficult to obtain.
There is not an infinite supply of la
Dor either in Ceylon or in the federat-
ed Malay states.