CHAPTER XIII THE RUBBER BOOM

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The boom was a very big gamble, in which men and women of all classes and nationalities took part. The great game was to buy shares, which is to say, partnerships, in companies that went in for rubber-growing, and to sell them within a few hours, or days, at a profit. The game was played with great success by many people for several weeks. Two or three examples will show you in plain figures how fortune-making was possible.

At the beginning of the boom, the value of shares in a certain rubber company was 19s. each; during the boom the great demand for these shares forced their exchange price up to 70s. each. Suppose, therefore, someone had bought 4,000 of them at the 19s. price; if he was lucky enough, or smart enough, to sell them when they were fetching 70s. each, he would clear, roughly, about £10,000, after paying commission to a member of the Stock Exchange whom he had to employ to carry out the deal for him. Again, on a certain night shares in another company were selling at 27s. each. The next morning some favourable remarks about this company’s rubber plantations appeared in the newspapers, and so anxious were people to get shares in the concern that they at once offered 35s. apiece for them. Therefore, people who had bought these shares during the previous afternoon had the chance of selling them at a profit of 8s. apiece within a few hours.

Under ordinary conditions, people buy shares with a view to holding them, and receiving a proportion of the profits made by the enterprise in which they have taken a partnership. During the Rubber Boom, no one bought shares with this idea. The game, as I have told you, was to buy at to-day’s price, utterly regardless of whether it was a fancy figure, and trust to luck that very soon there would be some other people so anxious to get the shares that they would be willing to give a much bigger price for them. The Boom provided a fine opportunity for cheating, of which some people took advantage. The public were invited to buy so-called rubber plantations, that were mere tracts of jungle. And genuine plantations were offered to them for a sum much above their value. No one made any inquiries as to what he was buying—all that anyone wanted at the moment was a piece of paper which set forth that he was the owner of some rubber shares, so that he could sell his rights to someone else at a profit. But on the whole, seeing how big was the chance for cheating, the public were not made victims by many unscrupulous folk. They were their own worst enemies during the boom, for by their mad eagerness to gamble in rubber shares, they forced up the price of shares in the many thoroughly genuine plantations to a value that was out of proportion to the profits which could be made on the rubber produced—at any rate, for some time to come.

Of course, the day came at last when the public began to feel they were playing a reckless game. Newspapers were warning them of the risks they were running; rumours were abroad that certain shares were not worth a penny, since they represented partnership rights in land which had not been cleared of jungle, let alone planted up with a single rubber-tree; hints were going round that the rubber-trees on some of the genuine plantations were being overtapped in order that for the moment big profits should be made at any cost, to compare well with the present high price of shares. People saw themselves losing heavily, sooner or later, if their shares were left on their hands. Now everyone was feverishly anxious to sell, and hardly anyone wanted to buy. Prices which had risen so rapidly went down with a slump even more rapidly. More fortunes were lost in that Slump than were made during the Boom, and some of the folk who were most badly hit in the end were people who had won large sums at the beginning of the game, and had thus been tempted to go on playing more and more recklessly.

Among the few who profited in the long-run were men who had pinned their faith to plantation rubber long before the Boom. Some of them had brought the rubber plantations into existence, had worked hard at clearing jungle and planting rubber-trees, had struggled to pay their way whilst they brought up those trees to producing stage, in the days when the public would not have risked a penny on any such hazardous venture as rubber-growing, even if they had been wide awake enough to know that a few enthusiasts and a few hard-up planters were trying to establish this new branch of agriculture. When these men had been obliged to get a few friends to help them turn their property into a partnership concern, because they wanted ready money to go on with, they had taken some of the purchase price of their property in the form of shares, so that they themselves could be partners. Fortunes were also cleared by outsiders who had had enough faith in plantation rubber to buy shares when the earliest planted estates were turned into companies, for all the people who had taken over or bought shares for a small sum were able to sell their partnership rights at a big profit in the early days of Boom. Many of them bought back shares when prices fell, and bargain after bargain was picked up during the Slump by people who knew which companies possessed the best plantations. You must not imagine that the crash put an end to rubber-growing. True, the faith of the public in this industry had been roughly shaken at the critical time when that faith was just beginning to bud; but the industry was sufficiently well-established to withstand this check, and go on fighting to attain its main object—to become more popular than Wild Rubber with the manufacturer.


                                                                                                                                                                                                                                                                                                           

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