Down near the mouth of the Amazon, where the “white” rubber trees are most commonly found, it is not unusual for collectors to own sections of forest with their little homes at its edge; they, too, are almost independent—of everything except the industrial conditions upon the Amazon, and the rubber prices fixed far away in London or New York.
Nearly all South American States depend upon export and import taxes for their main revenues, and it is a fairly general rule that native products leaving the country pay heavily for that privilege. In Brazil all import dues are imposed and collected by the Federal Government, and are similar throughout the country without respect to the special conditions of separate states; the export taxes are imposed by the State Governments, without restraint. In some regions the “pauta” or export tax is changed every week or so in conformity with prices in world markets, a board sitting specially for the purpose of making these constant adjustments. Some Brazilian products are taxed to what may be called a reasonable extent, but in others exports have been bled out of existence, while still others are barely able to enter world markets, staggering under their load. How many exporting countries would put upon a product facing competition abroad a tax equal to one-third of its value? This is the weight with which Amazonian rubber went to market for many years: the combined charges of the State, municipalities, and other smaller items added up to over thirty per cent of the “official value” of the product.
In response to appeals, export taxes were reduced after the outbreak of the European War, and during the year 1916 State taxes, together with dues put on by cities, amounted to about twenty per cent of the value of the rubber—a sufficiently heavy burden, but which Amazonas proposes to increase again; at the same time the product of Matto Grosso pays only twelve per cent, an equal amount is imposed upon rubber originating in the Acre Territory, while that exported from Bolivia, Peru and Colombia, but finding its exit by the water highways of the Amazon, pays only five per cent. As a result of these lesser dues collected by sister countries, there is a certain amount of smuggling done: rubber originating near the boundaries is passed across, and exported as if coming from one of the three Republics named; that such evasion of taxes is limited is due to the lack of roads or of any communication means besides those of the rivers, all of which are watched by Government agents. At the same time that the Amazon imposes this burden upon her rubber, the Eastern (Plantation) product pays nothing at all when the market price is below 18 pence—say thirty-six cents—a pound, and when it stands above two shillings a tax of two and a half per cent of the value is paid.
Consumption of the entire supply of marketed rubber was, immediately prior to the European War, almost evenly divided between North America and Europe: one of the industrial adjustments made after hostilities began was the shifting of a larger share of rubber, and rubber manufacturing, to the United States, so that in 1914 she took fifty per cent of the marketed total, one hundred and twenty thousand tons, and in 1915 increased these purchases to nearly sixty-two per cent of the total marketed, or ninety-seven thousand tons out of about one hundred and fifty-eight thousand.
Distribution of the world’s crop in 1915:—
| United States | 61.5 | 97,000 |
| Great Britain | 9.6 | 15,072 |
| Russia | 7.6 | 12,000 |
| France | 7.2 | 11,500 |
| Italy | 4.8 | 7,500 |
| Germany, Austria | 3.8 | 6,000 |
| Canada | 2.5 | 4,000 |
| Japan and Australia | 1.6 | 2,500 |
| Scandinavia | 1.4 | 2,252 |
The course of the next few years may see Brazil herself on the lists as a rubber-consuming country. For fifty years she has exported rubber, crude, and such manufactures of rubber as she has used have been imported from the United States or Europe; she imported in 1915 about six hundred and eighty-three tons of rubber manufactures, chiefly tyres, worth a million dollars, which was less than the imports of 1913, and which might show greater diminution if the unfortunately conceived law intended to protect “fine hard Pará,” but which resulted in paralyzing rubber imports, were sustained. This alteration in the tariff, operating early in 1915, changed the old import tax of five per cent ad valorem to a scale with violent differences; rubber manufactures made with the Brazilian product were charged one hundred reis a kilo (a fraction over two cents U. S.) while articles made with foreign rubber were taxed ten milreis (say two dollars and sixty cents) a kilo.
An excellent idea, warmly applauded; but when the time came to apply the law it was found impossible to discover the real origin of the rubber, and in order to avoid any chance of letting in foreign material practically scot free the official valuers charged all entering articles at the high rate.
Thus a consignment of two hundred pneumatic tyres which under the old law would have paid about 2:200 milreis in duties for entry were under the new tariff charged 22:000—or let us say about $5,500 instead of the former $550, for import taxes alone. Needless to say, importing houses left rubber goods in the customs-houses while they appealed to the authorities for relief from this too paternal measure. Some of the Amazonian rubber merchants have defended the idea, which is good enough in theory, but in practice it seems to have been as little useful as that extraordinary commission charged with the Defesa da Borracha, which in the years 1912–14 spent about twenty-eight thousand contos of reis (over $7,000,000) in salaries, investigations, recommendations, experiments and printed matter, and has today not an iota of improvement of Amazonian conditions to show for the money.
Brazil has a few rubber factories of her own, generally small, but doing a satisfactory and increasing business; the Brazilian Government has also concluded an arrangement with the Goodyear Tire Company for the erection of a factory which should greatly increase national rubber manufactures. The first modern rubber factory in Brazil was established in São Paulo State, in 1913, by Theodore Putz and Company, where solid tyres, tubes, stamps, valves, and other articles are made; it has a capital of two hundred contos and an annual turnover of three hundred contos, paying twenty-five contos a month for labour. Five hundred kilos of Pará, and one thousand kilos of mangabeira rubber are used monthly. Another firm of recent origin is that of Berrogain & Cia. in Rio, turning out a variety of manufactures and prospering.