PUBLIC RECORD OFFICE
Reference :→→→→
C.O. 885
24 PUBLIC RECORD OFFICE, LONDON
ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH—NOT TO
28
BRITISH Guiana.
"Schedule.
"Bleeders, balances of wages, Superintendent's commis-
sion, boathands' wages, salaries, etc.
"Rent of licences
"Royalty on balata
Agency commission
CC
'Upkeep of rubber properties
"Current accounts
$55,000
11,000
2,800
3,000
1,200
2,000
$75,000"
2. This motion was adopted without opposition, although you will observe from the enclosed copy of the debate that several Unofficial Members spoke against it.
3. I deemed it desirable to stipulate for the security of 1 lb. of balata for each 74d. advanced, instead of the lower security of 1 lb. for each 10d. advanced, which you reported to me was considered a safe limit.
4. I have the honour also to transmit a copy of a memorandum received from the General Manager of the Consolidated Rubber and Balata Company on the sub- ject of Government assistance to enable the Company to carry on operations during the year 1915, although on a smaller scale than hitherto. This matter is under con- sideration, but I do not think that I could advise the Combined Court to approve of the proposals in the form they are now made. Mr. A. F. White sent a copy of his memorandum to the Royal Bank of Canada, and I enclose a copy of the reply of the local manager of the bank.
I have, &c.,
Enclosure 1 in No. 19.
WALTER EGERTON.
THE BALATA INDUSTRY ANd the War.
MEMORANDUM BY THE GENERAL MANAGER of the Consolidated RUBBER AND Balata ESTATES, LIMITED.
(With suggestions for 1915 working.)
OWING to the effect which the war has had, and is likely to have, on this Com- pany's business, it has been decided by the Directors to suspend all operations next year unless we can see our way to locally finance operations on a small scale. This would not be an unusual proceeding, as it was the system on which part of the balata business was carried on in the past, before the Consolidated Company was formed.
If we remain idle it will mean that about 2,000 balata bleeders and foremen will be out of employment, and, in addition, there will also be idle about 1,000 boathands, who are employed for short periods all through the year.
About three-fourths of the bleeders belong to the Berbice district, the other fourth being scattered over the east coast, west of Abary, Demerara River, and West Bank. The boathands are only casual labourers, and will, no doubt, find other employment. In addition, there will be a lot of unemployed men returned from Dutch Guiana.
Our annual expenditure in the Colony is between £80,000 and £90,000, of which amount £10,000 goes to the Government in the form of direct revenue (in round figures, £7,000 to the Lands and Mines Department, and £3,000 to the Customs on goods we purchase). We pay to the men, in cash, about £35,000, a large part of which is spent on dutiable goods, certainly not less than 10 per cent., making the revenue derived from the balata business of this Company £13,500.
It would be a great pity if, owing to being unable to sell cur balata, our busi- ness should come to a standstill and the Government lose this revenue, as we should not be able to pay our grant licences.
* Not reprinted.
27
BRITISH GUIANA.
It is almost certain that the stocks of balata now held will have disappeared before the end of next year, but we may not be able to sell in time to finance operations, which should begin in April. If, as is supposed, these stocks are disposed of, there will be a demand for balata at the end of 1915 and early in 1916, to meet the ordinary trade requirements, and any balata then produced ought to find a ready market at good prices, as the world's production next year will be very small. There will be practically no work done in Dutch Guiana, and, as the Venezuela trade has been chiefly financed by Germans, it is expected that 1915 will show a very small output.
Our balata this year has been produced at a cost slightly under 18. 8d. per lb., and we estimate that, under more stringent conditions and only working our most profitable near grants, we could produce a small crop, say, 300,000 lbs., at an all-in cost landed in Georgetown of 1s. 6d. per lb. This would employ our best men- about 600 during the season-and would give assistance to about 200 more men working short periods. If we assume that balata at the end of 1915 would sell at 2s. 2d. per lb., and if we allow 2d. per lb. as the difference in cost Georgetown and London, a net profit of 6d. per lb. would be realized-£7,500. The average selling price of balata for years 1906-1913 inclusive is given on table attached.
Our expenditure on this amount of balata would be £22,500, of which about £10,000 would be distributed in cash to the labourers. This expenditure would include the payment of Government licences, £3,500; royalty, at 2 cents per lb. on 300,000 lbs., $6,000, say, £1,250. Thus, on advances by the bank of £22,500, the Government would be paid £4,750, the bank would earn 6 per cent., and the Com- pany make a profit of £7,500. If the balata was even sold at 18. 10d. the Company would still make a small profit, but the Government and the bank would make the same. Thus, in the event of a very low price, the one that would make least would be the Company. If, on the contrary, the balata was sold at a higher price than that mentioned, which is not unlikely, the profit to the Company would be increased proportionately.
It is thus to the interest of the Government, purely from a pecuniary point of view, to assist the Company in carrying on its operations next year, even on a small scale, apart from the question of giving employment to so many people. The bank and the Government, being interested parties in our operations, would be kept fully informed of what is being done, and, if required, could check expenditure.
The question now arises, who is to finance the operations? In ordinary times, as has been stated, the bank has done so, and if the Company were able to sell their present stock of balata they could finance themselves; but under present conditions brought about owing to England being at war with a country who is the largest consumer of balata, it is impossible to say when the war may be over and what would be the demand for balata when the crop was harvested. In case, therefore, of the bank or the Company deciding to finance operations on the scale suggested, there would be an element of speculation which neither might be prepared to meet. The matter, therefore, resolves itself into one of finding employment for a large number of men and to provide sustenance for their families. If other employment can be obtained, will it be of such a nature as will bring in the same amount of revenue to the Government?
If the Colonial Government were to guarantee the bank against loss on a loan of, say, £22,500, and a loss was made of £4,750, the Government would not be any worse off than would be the case if the Company did not work at all, but if no loss was made and it is not likely there would be, seeing that the balata produced could be held as security-the Government would make over 20 per cent. on the amount they had guaranteed. If the Colonial Government cannot undertake this it should be possible to obtain an Imperial loan, on which interest would be paid, or an Imperial Government guarantee given to the bank.
Some such system of providing work for the unemploved would be better than instituting relief works, which would probably be much less remunerative to all con- cerned, and would not come within the reach of the great majority of balata labourers.
If nothing is done, there is no doubt that there will be much poverty, if not actual want, especially in the county of Berbice: there will be illegal bleeding and destruction of trees, and a great deal of illicit trading which it will be very hard to detect.