by Joe Jackson
Wickham was right about one thing: His seeds did change the world—with the help of Ford’s Model T. The first one came off the assembly line in 1908, the same year as Wickham’s book. It rolled along on four pneumatic tires made of rubber shipped straight from the Amazon. The “pool” of rubber barons in Pará and Manaus took notice and raised prices accordingly. In 1909, Amazon rubber sold for $2.22 a pound. In April 1910, it reached its peak at $3.06, and the world’s rubber consumers let out a howl.
The madness gripping the world’s rubber markets in 1909-1910 was like nothing previously seen. A proposal that the London Stock Exchange be closed for a week so that brokers and clerks could catch up with orders was drowned out in cries of derision. An office boy struck pay dirt with £19,000 in rubber shares. “The Rubber Market continued to astonish even its most enthusiastic supporters,” wrote The Times. Across the Atlantic, the New York Times concurred:It is a maddening revel of speculation by the multitudes who are investing their small savings in rubber and oil shares. Rapid profits are made when two shilling shares rise to fifty or seventy shillings, and fresh investments are made in new issues.
According to the New York Sun, each morning’s opening saw “riotous excitement” in that section of the floor devoted to rubber:New companies continue to be floated. The subscription list of three such companies will open tomorrow and they doubtless will be closed before the advertised time. . . . The brokers and clerks are becoming worn out. They rarely leave the City, snatching short spells of sleep at hotels.
The crash began in May 1910, though no one saw it initially. The price began to slip. Banks in Pará stopped accepting rubber land as collateral for loans, something that had never happened in the sixty years since Richard Spruce beheld the first effects of the world rubber trade. True, there were rumors from the East of possible competition, but the rubber barons in Manaus, Pará, and Iquitos were convinced that nothing could ever supplant wild rubber. This was the era of the fabulous wealth of Manaus, when Julio Arana’s peak production of 1.42 million pounds of smoked Putumayo rubber cost thirty thousand lives. Yet the bankers had glimpsed some disturbing trends. All the easily accessed trees had already been worked; the more remote regions could be exploited only at greater cost and the import of more labor. In 1909 and 1910, the rubber barons withheld rubber and let American and European buyers feud among themselves for the limited supply: this drove the price sky-high. In the face of such need, it seemed to the barons that rubber profits could only soar.
At the same time, the Eastern plantations were coming into their own. It had taken a long time. In 1900, the Asian plantations sired from Henry’s seeds produced 4 tons of domestic rubber against Brazil’s 26,750 tons of wild; seven years later, they turned out 1,000 tons, still a drop in the bucket to Brazil’s 38,000 tons. But a limit had been reached. The challenges of the jungle were too daunting, no matter how much one bribed, beat, flogged, or shot the seringuieros. By 1910, America produced 180,000 autos and her automakers prayed for a new source of rubber.
Their prayers were answered in 1913. That year, the British plantations turned the corner and produced 47,618 tons of high-quality, acetate-cured rubber compared to Brazil’s 39,370 tons. In 1916, Brazil produced as much as ever, but the game had now changed. In three more years, British plantations would produce enough hevea to fill 95 percent of the world’s need for high-quality rubber. Such fantastic supply seemed unimaginable just a few years earlier, and the price plummeted from the $3.06 high in 1910 to 66 cents per pound in 1915. By 1921, when Great Britain controlled the world market, plantation rubber sold for 12-21 cents a pound.
The indifference with which the rubber barons watched domestic rubber catch up seems suicidal today. By 1912, the world had 1.085 million acres planted in rubber, most of that in the East; each year saw increasing yields. But no one on the Amazon or in Rio de Janeiro seemed to care. Brazil had made millions at almost no expense. The region, which held one twenty-fifth of Brazil’s population, produced one sixth of its revenues. From 1890 to 1912, the federal government collected 656 million millreis more than it spent in the rubber states of Pará and Amazonas; Brazil collected 241 million millreis in rubber export taxes and spent it all on grandiose palaces and payoffs to politicians.
Credit was the system’s Achilles’ heel. The entire Amazon rubber trade was built on perilously overextended credit, a fact that the bankers recognized when rejecting rubber land as collateral in May 1910. In 1913, when the bottom fell out, the truth was revealed to all. The business was based on a forward billing on the expectation of continuously rising prices. When the price plummeted, the import houses demanded payment from owners and aviadors, but there was no actual money, just a paper promise of “inexhaustible natural supplies” and the “unrivaled quality” of “Pará fine.” The houses tried to pay in rubber, but as its value shrank, week by week, then day by day, no bank would take it. Although the aviador houses were supposedly worth hundreds of thousands of dollars, they folded overnight when the loans were called. The entire rubber system, from Pará to the remotest corners of the Amazon, was based on irreversible debt, and in 1913, it collapsed like an enormous house of cards.
Imagine if, in one month, the oil-consuming world switched suddenly from its addiction to petroleum to the use of solar power or some clean and cheap hydrogen-based fuel. Suddenly the OPEC nations would find that their natural riches meant nothing. The Amazon powers were loathe to blame themselves for their ruination and accused the federal government of lavishing its attention on coffee, or blamed “Yankee speculators” for causing the disaster. Amazon banks blamed American manufacturers for engineering a price drop. Even in their distress, they disparaged plantation rubber. Not until later would they turn their wrath on Wickham.
In the resulting panic, ruin rolled up the Amazon Valley like a giant tidal bore. Except for the floating docks in Manaus, British capital was mobile. The ubiquitous steamships were the first to vanish, gone in a puff of smoke over the horizon as they were rerouted east to where all the new money lay. With the end of shipping, the little trading towns along the rivers sank back into the jungle. The Sephardic houses in Boim closed one by one; the families moved on. Although David Riker had wisely sold his rubber plantation at Diamantino to an “English firm of gilt-edged bond folk” before the bubble burst, he lost a Santarém trading house inherited from his father. The town of Obidos, west of Santarém on the Amazon, dropped from thirty thousand residents in 1907 to three thousand in 1920. There were tales of seringuieros starving upriver because supplies never reached them, of others retreating to their hammocks to drink and commit suicide. Production continued at a trickle during the war years, 1914-17, but after that, the Amazon was finished as the world’s rubber center. Singapore was king.
Manaus became a shadow of its former self. The commercial houses went bankrupt; the Opera House closed. The docks and warehouses deteriorated; the foreign merchants moved away. Before they left, the yachts and diamonds, the thoroughbred race horses, and Steinway grand pianos were sold for what they could bring. At the Zoological Gardens, the cages stood empty. The trolley tracks meandered through an almost unbroken jungle. The suburbs at its edges were empty and soon overgrown.
At the end of the line sat Iquitos, the last great rubber metropolis. The Malecon Palace—a three-story hotel erected for Julio Arana and his guests—was nearly vacant. Warehouses stood empty, and cows grazed in the boulevards near rusting fleets of autos. Most of their owners drifted away.
Sometimes those who remained tried to recapture the ostentatious dream. In the evenings, when the tropical sun dipped beneath the horizon, the few remaining café owners on the central plaza dragged their tables to the middle of the street, safe now that it was devoid of cars. They sat and sipped an aperitif, always donning a stiff white collar for the evening ritual. In the barren plaza, a band played romantic ballads. The café remnant would think of how yet another cycle of boom and bust had played itself out in the Amazon Valley, and how rub
ber was merely the last in a procession starting with dyewood and promenading through sugar, gold, tobacco, cotton, and cacao. They remained loyal to the memory, like survivors bearing witness to the end of the world. On Sundays, they mounted the town’s one remaining trolley. It took them around and around the plaza, along the riverbank’s precipice, and to the jungle at the far edge of town.
If Henry’s theft ruined the economy of one of the lushest regions on earth, it seemed to prove an oft-debated point during the runup to the Great War.
In the years of Victoria’s reign, Britain’s foreign policy was based upon the assumption that international amity could exist between the nations that mattered most to her—the other European powers. But with Victoria’s 1901 death, Britain began to realize she had hardly a friend in the old coterie. Some blamed it on the Boer War. Outside Britain and her colonies, the war in South Africa was almost universally despised. Her aggression was a threat to others, warned critics, and it was what had turned others against her. But this was probably unlikely. As historian Bernard Porter pointed out, nations do not generally raise more than perfunctory complaints about the aggressions of others unless the offending state is already regarded with hostility—as became clear when the United States invaded Iraq in March 2003.
The “new imperialists” who rose to power in Britain in the early twentieth century sound very much like the American neocons who rose in the early twenty-first. Both saw threats from without, believed that control of the world’s resources was a battleground, and concluded that the means of survival was a preemptive will to empire. Great Britain’s naval power was no longer exclusive: she was vulnerable, even at sea, especially if two or more great powers became allies. The “scrambles” in Africa and Asia were bellwethers of the coming conflict, which at its heart would be a war over raw materials. “The fight for raw materials plays the most important part in world politics,” the president of the German Reichsbank would declare in 1926. “Germany’s only salvation is her acquisition of colonies.” In effect, he stated his nation’s rationale for two world wars. The world was an unfriendly, predatory place, warned the new imperialists: Maintaining the resources and allies intrinsic to empire was the only way to survive.
When war came in 1914, the increased use of material transport by combatants made rubber an essential war material. The European armies depended on cars, motorcycles, and insulated cable for lines of communication, and on railroads and trucks to move troops and keep open the lines of supply. When Lawrence of Arabia was not riding around on a camel, he sped across the desert in a fleet of nine armor-plated Rolls-Royces, blowing up trains. This was total war, each side trying to strangle the other to death by cutting off sea routes that brought war material for the forces and food for the populace—and the German submarines and British dreadnoughts engaged in the fight needed rubber for the seals and gaskets of their engines. The first Battle of the Somme saw the introduction of gas, as a million French, German, and British soldiers died in the mud. By the end of the war, American factories would churn out 3.9 million gas masks; French factories, 35 million; English industries, 50 million. One of the prime materials was rubber. The face piece, the gaskets around the goggles, the breathing tube and exhalation valve, the hose feeding into the canvas bag that contained the canister of chemicals filtering gas from the air—all were made of rubber. Observers in balloons watched overhead as men were being gassed. They were held aloft by hydrogen trapped in giant bags of rubberized fabric. Their telephone wires, insulated in vulcanized cables, passed through the center of steel umbilicals tying the balloons to the ground.
One new weapon was the embargo. In December 1914, the British government banned the shipment of rubber to any country not allied to Britain, the United States being the sole exception. The target was Germany, for whom the embargo turned into an emergency of the greatest scale. In 1901, the Russian chemist Ivan Kondakov had made a synthetic rubber by heating potash with dimethyl butadiene, which could be produced on an industrial scale from acetate, made from potatoes. But civilians needed potatoes, or they would starve. Instead, German chemists found they could synthesize dimethyl butadiene from calcium carbide. If they left the prepared dimethyl butadiene in huge drums in cold storage for several months, the resulting ersatz rubber was about a third as stretchable as natural rubber; if they kept the drums hot, the synthetic product was as soft as its natural cousin, but only a tenth as strong. The synthetic was spongy and cheesy but could still be used for insulation, observation balloons, and dirigibles, and for an inferior but usable tire. By the end of the war, Germany had set up plants making eight thousand tons of ersatz rubber per year. If not for the discovery, Germany would have been forced to surrender earlier.
The world came out of the war crippled and diminished, but not the rubber industry. In 1918, the United States imported 333.8 million pounds of rubber from the Far East at a price tag of $181.6 million; that year, the ten leading plantation companies paid enormous cash dividends, ranging from 30 to 150 percent. In the years after the Armistice, the United States realized it had entered its own Rubber Age. It took a war for Americans to grasp how big a part rubber played in their lives. The center of the domestic rubber industry was Akron, Ohio, a brash, noisy city perched above the Little Cuyahoga River. By 1920, half the rubber manufacturing in America was located here: B.F. Goodrich Tire and Rubber, followed by Goodyear, Firestone, and others. Since Akron’s economy was hooked to one commodity, its booms and busts were larger than life, just like the fortunes of the one-crop Amazon.
As early as 1914, the public relations machines of Detroit and Akron began spinning out films and copy they grouped under the rubric “The Romance of Rubber.” This was a purely male mythology set in an infernal world of sulfur and sweat, where sixty thousand muscular modern-day Vulcans wrestled great rings of rubber into submission amidst suffocating heat and chemical fumes. In 1914, Detroit required 1.8 million tires, and most came from Akron. In April 1914, the Ford Motor Company alone received 87 railroad cars filled with tires, each car carrying 400 sets; the following month, this increased to 110 cars. This meant that in two months alone, Ford required 78,800 sets of tires. Akron had the same boom-town flavor as Singapore or Manaus—bars, brothels, silk suits, and music halls.
The United States and Great Britain were joined at the hip in the rubber business, but they pulled in opposite directions by the forces of supply and demand. In 1921-27, Great Britain produced 67-71 percent of the world’s total rubber supply and almost all of the high-quality rubber from hevea. At the same time, according to different estimates, the United States consumed two thirds to three quarters of exports from Great Britain and the world, and most of that went directly to the tire and auto industries.
British producers believed they were in a position to control the world market—an echo of the Brazilian “pool,” though the price per pound would be much lower. In November 1922, they took a step in that direction by introducing the Stevenson Rubber Restriction Plan, a unilateral British response to the falling fortunes of the plantation rubber industry after World War I. The withdrawal of ships from the East Asian ports in 1918 to add to the war effort curtailed the shipping of rubber. The resultant glut in the Singapore market drove the price down to fifteen cents per pound. The planters screamed that they could not survive under such conditions, and they were probably right. Therefore the act restricted output to 60 percent of 1920s production, permitting an increase of 5 percent if the price averaged thirty cents per pound and a decrease of 5 percent if the price was lower. Consuming nations might not like the Stevenson Plan, but there was no one else to turn to but the British for vast quantities of hevea. By now, the once proud Amazon was so decimated that it barely supplied 4.6 percent of the world’s rubber.
Most Americans were not worried, but angry voices rose out of the tire and auto industry. Harvey Firestone was the loudest: No government had the “moral right” to withhold exports of a vital world commodity “for the benefit of a few s
tockholders,” he roared to his senior executives in Akron:I am going to fight this law with all the strength that is in me. . . . It is a vicious plan, which will result in making Americans pay exorbitant prices for their automobile tires. If we submit meekly, it will cost the car owners of this country millions of dollars and do the rubber industry irreparable harm. The time to break up this monopoly is now.
The quest to find a new rubber source was wrapped in the flag. Early in 1923, Firestone called a conference of rubber- and auto-industry captains to meet in Washington and organize the opposition. He turned to President Warren Harding and Secretary of Commerce Herbert Hoover, both personal friends. Firestone wanted to whip up public opinion. Although Harding was lukewarm, Hoover was sold on Firestone’s scheme. In his letter of invitation to Henry Ford, Firestone ranted that the price of rubber had risen from fifteen to thirty-seven cents a pound in three months: That meant a $150 million increase “to the crude rubber bill to the United States for 1923,” he warned. The only recourse was to meet “an invading nationalism with a defending nationalism—and by taking steps to make sure that in the future Americans can produce their own rubber.”
Rubber grown under the flag spelled “resource independence,” a theme that echoes from Clements Markham’s theft of cinchona to national oil politics today. Firestone vowed he would give “the play an Olympian cast of characters, mustering the household gods of the nation, Hoover, Ford, and Edison, to the defense of America in distress.”