Another Bond-Selling

Plan This Time Based on Papuan Rubber

RESIDENTS of Papua and especially those connected with the rubber industry, will be interested in the prospectus issued by a newly-registered company—namely, British Papuan Rub ber Estates, Limited, which proposes to establish a rubber plantation in the Yodda district, where a 99 years’ lease over 5,200 acres was secured in 1938 by Mr. Alfred Kingsley.

The plan is based upon an old ac quaintance of Papuan industries— namely, bond selling. The “Pacific Islands Monthly”, after a careful examination, is bound to say that the prospectus has about it most of the features which rendered the other Islands bond-selling plans undesirable as investments.

It appears that the 5,200 acres were taken over by Mr. Kingsley, in 1938, on a 99 years’ lease from the Crown; that Mr. Kingsley has already raised seedling rubber trees and planted them out in 500 acres; that seed beds are now sown for raising plants for a second area of 1,000 acres; that Mr. Kingsley has given an option over his leasehold interest in the 5,200 acres of land for £5OO, and has agreed to clear the land and plant and maintain rubber trees thereon on conditions that are not disclosed; that Frederick James Lett, company director, of Pitt Street, Sydney, has obtained this option and has made these agreements with Mr. Kingsley: and that, in consid eration of Mr. Lett passing over these options, etc., to the newly-registered British Papuan Rubber Estates, Ltd., Mr. Lett is to receive 3,000 fully paid £1 shares in the said company—which is now offering 5,000 £1 shares to the public for sale. The total nominal capital of the company is 15,000 £1 shares. Seven thousand shares are to be held for future issue. This means that the public is being invited to buy 5,000 shares while Mr. Lett is to receive 3,000 fully paid shares for his services to the com pany up to date.

The company, however, is not actually to be the owner of the rubber plantation.

It is proposed to divide the 5,000 acres into half-acre allotments; and these allotments are to be sold to the general public for cash, or on terms, for £3O each. Each holder of a certificate of title” is to be paid 5 per cent, per annum on the value of the amount subscribed, “until the trees on his half-acre are tapped and he is able to receive the pro ceeds of same”. It appears that £lO from each £3O subscribed is to be put aside into a special fund, and is to be handed over to the company when it has carried out its “obligations” to the title-holder.

So far as can be seen from the prospectus, the company’s obligations end when the rubber trees on the planted half-acre begin to produce rubber. There is no guarantee that the rubber will be profit ably sold. The company is to have com plete charge of all planting operations and of the management of the enter prise, and there is nothing in the pros pectus to show that there is any check over this expenditure on behalf of the people who are providing the money for the enterprise—namely, the purchasers of half-acres at £3O each.

There is a great deal of “blurb” about the success of the rubber industry in Papua in general and about the fertility

of the Yodda Valley in particular—and not one word of this can be challenged.

But it may be also pointed out that there is no road into this area and that the practicable means of transport be tween the Yodda Valley and civilisation is by air—and, up to date, the only in dustry in the South Seas which has been rich enough to carry on under the burden of aerial transport costs is the gold in dustry of New Guinea. There is not one word about this in the prospectus under review.

Another point which cannot be too strongly emphasised is that the rubber plantations of Papua have been success ful only because they represent the in tensely hard work and close personal supervision of experienced men. The doubtless well-meaning and optimistic directors of British Papuan Rubber Estates, Ltd., perhaps will pardon us if we venture to express a doubt as to whether a rubber enterprise could pos sibly succeed under the double disad vantage of aerial transport costs and a plantation management carried on under the remote control of a beard of Sydney

directors, operating for their part in the somewhat vague interests of a body of unorganised ‘title-holders .

During the past few years we have seen attempts made by Sydney share selling and bond-selling speculators to establish planting interprises in Papua and New Guinea in relation to sisal hemp, sugar grass production for paper pulp, co ffee etc., and in every one of these cases the ignorant, trusting investor in Australia lost his money, There is nothing wrong with growing rubber, or coffee, or any of these other things in Papua and New Guinea. On the contrary, if those industries are established and supervised by practical, hard-working men, they are almost cer tain to be profitable. But not one of those gilded Sydney flotations, based on such planting enterprises, has been success ful. That is because the Sydney share seller, completely ignorant of tropical conditions, loses sight of the vital factors of management and control—which are much more important in the tropics than elsewhere.

Mr. Kenry S. Nobbs, a Norfolk Island-

janela°n MsS

ad" Mn ?M nd Smy h\s teten aS ov e e r Sl tS; i t^son, 91 Hon. E. P. Holmes, Secretary of the Department of Lands, Surveys, Mines Australia from Rabaul, New Guinea, in ?o^efX U £Zl. He WaS aC -

Mr. “Tommy” O’Dea arrived in Port Moresby from Wau, T.N.G., in mid-Octo er, to take charge of Guinea Airways’ operations in Papua, relieving Mr. N.

Fader.

Brother W. Siemers, of the American Lutheran Mission, Madang, returned to New Guinea early in November after spending furlough in the United States of America. He has been in the Man dated Territory as a missionary-builder for 17 years.