Dislocation

Pacific War Causes Vast Trade

internotional Commodities Now Wholly or Portly Controlled by Japan

rE occupation by the Japanese of South-eastern Asia, the Philippines and the Dutch East Indies affects )rofoundly the position of nine comm°iities in general, international use ■our of them being of direct interest to he South Pacific territories. The nme jommodities are;—

The five things of direct interest to the Pacific Islands are rubber (produced in volume in Papua and in small quan tities elsewhere), copra, rice (the staple food of native labourers throughout the South Seas), quinine (essential to the maintenance of health in the Melanesian territories) and phosphate (produced in Nauru and Ocean Island).

A study of the above list shows how deeply the Japanese victories have disturbed the balance of world trade.

Prior to December, 1941, Britain and Holland had a virtual monopoly of the world production of rubber, and a par tial monopoly of tin and tea. Now Japan controls the rubber and jin, as well as the large East Indies production Previously, two-thirds of ~w Ol copra was produced in East Indies and Philippines. Japan now occupies both those great territories, and the United Nations must depend for a copra upon Ceylon, India, tropical Africa and South Pacific. .

Previously, Indo-China (French), Siam, Burma (British) and East Indies produced half of the world’s rice export surplus. Japan now controls the lot— though she cannot consume it. Probably, bv the time the war is over, our Pacific labourers will have found another staple food, and the great Bangkok-Saigon- South Pacific rice trade will have gone.

East Indies had a monopoly of quinine production. Now, it is all in Jap hands.

The Philippines are the only producer of v Manila hemp, used in high-class ropes. Japan has the whole mdustry, now.

ONE would be foolish to ignore facts.

Prior to last December, Japan (and occupied China) had a monopoly of only two commodities—silk and cam phor—and both can be done without, in wartime. Rayon takes the place of silk.

Japan, for her part, was wholly dependent on Britain, America Hol land for such vital wartime materials as oil, tin and rubber.

To-day, Japan not only has a full sup ply of those commodities, but she also, while she occupies the territories she has conquered, has virtually a world mono poly of rubber, tin, rice, quinine, Manila hemp, silk and camphor, while she has added to her national larder very wel come supplies of copra and tea. In i act, she now controls so much copra that sne really has a world monopoly of tnat, for her, she cannot sell any of those things. But what a change in six months! How Japan must wish

that the war would cease, and she could settle down permanently with her new, stolen empire, and control over inter

nana”whuf examining the posi

tion of some of these commodities m detail to see how vital it is to our future welfare that Japan be defeated, and our territories regained The economic world will be dislocated and poor after this war, whatever the result: but if the control of the markets of all the commodities named were to nass into Jap hands our lives would be very greatly changed for the worse.

Raw V. Synthetic Rubber

THE rubber position is very interesting, not only because of its strategical significance, but because of what probably will happen after the war P Prior *to the Pacific war, production was as follows (the figures show actual shipments in 1940): ? 4 ° 0 n 17 British Malaya n’e23 North Borneo Sarawak co fi ’ 740

Dutch East Indies g 4 437

Indo-China 4 0’q 40 Thailand (Siam) 9668 Burma 2267 Philippines and Oceania ’

Total Far East 1,250,258 _. 11,510 India 88,894 Ceylon Total India and Ceylon 100,404 South America .. l l’lo6 Mexico (guayule) .. .. ’

Total Latin America 21,707 ... 7,223 Liberia 2 ,903 Nigeria 7 2 00 Other Africa Total Africa -•• •• 17,326 World Total 1,385? ’ 695 Rubber production has grown with the motor car, thus—l9lo: 11,000 tons, 1920. 317,000 tons; 1927: 567,000 tons; 1940. 1,389,000 tons. , .. .

Production started in Brazil, from the wild tree, Havea Braziliensis. The tree was transferred to Malaya and East Indies, and cultivated, and became the chief industry there. In recent years, because they resented the squeeze of the Anglo-Dutch rubber monopolists, Ameri can motor manufacturers started vast new rubber plantations—Ford in Brazil, near the industry’s original home, and Firestone in West Africa.

America, also, like Germany, has been encouraging the production of synthetic

rubber But America’s biggest synthetic pre-war yearly g was, 12,000 consumption was just under 618,300 tons.

Commodity Produced In . Malaya, East Indies :“ n .. Malaya, East Indies, isiam ronra' .. .. East Indies, Philippines „!r„ • • East Indies, South-east Asia East Indies Mineral oil • • • Phosphate Manila hemp .. .

East Indies, Borneo, Burma Central Pacific , Philippines

Germany began making synthetic rubber in 1916; and, in this present war, she produces huge quantities of a synthetic called buna. While not as good as raw rubber, it serves the purpose, but is expensive.

America has been experimenting with other types, and claims to have virtually solved the main problems-—which are, finding sufficient quantities of raw materials, and getting the cost down to that of raw rubber. But that was before the Malayan-Indies supply of raw rubber was cut off.

If the disasters had not occurred in Malaya and East Indies, it is unlikely that raw rubber would readily have been displaced. Manufacturers would have been slow in altering their plants and processes.

Now, the whole position is changed.

Rubber is a vital material of wartime.

Practically the whole area of raw production is now in Jap hands. The Allies

are known to have accumulated stocks of raw rubber: but they must secure adequate new sources of supply, The United States, in January,, set aside 400,000,000 dollars wherewith to build plants capable of producing 400,000 tons synthetic plants per annum; and the rubber, oil and chemical companies agreed to pool formulae, processes and resources in order to help the nation in this crisis. An output of 63,000 tons of synthetic rubber had been expected in 1942, and 120,000 tons in 1943; but that estimate was compiled before the Gov ernment made its appropriation of 400,000,000 dollars for new plants, Experts said in January that there are very great technical difficulties in the way of the US Government’s plan. Syn thetic rubber can be made, and great factories can be built; but they doubt if sufficient raw materials can be found quickly wherewith to produce 400,000 tons of synthetic per annum.

Neoprene is one synthetic, with a coal base. Buna and similar synthetics have an oil base. Other synthetics require lime and charcoal, and other chemicals which are in sharp demand for war purposes.

An Australian Associated Press mes sage from New York on May 22 stated that the Standard Oil Company had perfected a process by which the pro duction of synthetic rubber could be speeded-up by 100 per cent.

Too much credence should not be placed in this, however. There has been a close connection between the Standard Oil Company and certain great German concerns which specialise in synthetic rubber. In that connection, Standard Oil has been undergoing a most gruelling investigation by a United States Con gress Committee in recent weeks, and the result of this may hamper the syn thetic rubber development.

As Japan cannot consume or sell any thing like the full production of Mala yan and East Indies rubber plantations, it is likely that plantations and factories in the occupied countries will be neglected and allowed to deteriorate.

When the world tries to return to nor mal, after the defeat of the Axis, it is probable that the Anglo-Dutch rubber monopoly will have disappeared; that the rubber industry of Malaya and East Indies, in any event, will be crippled by damage and deterioration; and that the industrial world will have turned over, to a very large extent, from raw rubber to synthetic.

World’S Tin Position

THE following figures show the world production of tin in 1940:^-

There is no substitute for tin. For tunately, the Allies accumulated at least one year’s supply prior to the Pacific war, and there is time to organise new production in parts of the world still free from war.

Obviously, by the time the war is over, and the ruined tin mines of East Indies and Malaya are returned to their owners, much of the world demand will have been diverted into other channels.

Copra Position

THE copra position already is well known to “PIM” readers. Here are the last recorded figures of pro duction:—

The 1938 total is about normal. By 1939, the effect of the fall in copra prices was seen; in 1940, this and war conditions combined to reduce production greatly, and world war con ditions made 1941 production abnormally low.

British Malaya Dutch East Indies Thailand (Siam) Indo-China China Tons Japan Burma Total Far East Bolivia 37,940 Belgian Congo Nigeria Australia ■ 3 500* United Kingdom

Moo

Portugal 1,600* Others World total

1940 1939 1938 Tons Tons Tons Philippines .. .. 327,168 395,460 342,631

Dei

266,271 528,506 553,367 Straits Settlements 93,142 157,429 166,177 Oeylon 78,284 52,920 75,265 Pacific Islands .. 75.009 120,000 150,000 East Africa .. .. 35,000 53,000 60,000 Total .. .. 874,865 1,307,315 1,347,440