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"The Proposed Tyre Plant") practically all rubber grown and
produced in the country is exported as crude rubber (76).
Because all rubber purchased from Liberian farms and plantations
is valued according to the Firestone rubber pricing system at
least 75 per cent of the total Liberian production is subject to
Firestone's pricing policy. The lower the price fixed by Firestone,
the less income taxes the company will have to pay to the
Government and the less revenue Liberian rubber growers will
receive (also the country's trade - export - figures and G.N.P./
G.D.P. data will be affected). Although the importance of the
system of rubber pricing is obvious, the Government of Liberia
has no say in this complicated issue as there is in fact no agreement
nor has there been any since the early 1950's between the
Firestone company and the Government as to the calculating and
controlling of the rubber price.
Determining the rubber price is not done in Harbel (the main
plantation of Firestone in Liberia) but depends on the decisions
taken in Akron, U.S.A. In 1975 the U.S.A. company described the
pricing method as follows:
"The selling prices for Liberian rubber are based on the
average of the Noon 708 market prices quoted by the Rubber
Association of Singapore for comparable grades of
International natural rubber, for each of the trading days
during the calendar months preceeding the month of shipment
from Liberia, less one-half cent per_ pound. If there
are no price quotations on the Singapore Exchange for latex
or a particular grade of rubber, prices are. established
for the sale at prevailing competitive prices," (77)
The 1926 Planting Agreement originally provided that the company
had to pay a revenue tax calculated on the value of the rubber in
the New York market at the time of the arrival of the shipment in
New York whereas the 1935 Amendment expressly denied Firestone the
right to deduct from the New York price "any costs or expenses
whatsoever" (see above).However, in the early 1950's the revenue
tax was replaced by an income tax so that it was no longer
necessary for Firestone to apply New York prices. The company
deliberately switched to Singapore prices and the method described
above as a basis of calculating the value of its rubber.
Therefore, the actual Firestone rubber pricing policy presumably
originated in the early 1950's.
The Firestone Plantations Company started buying rubber on a
regular basis from Liberian producers in 1943 when it introduced
the "Rubber Purchase Program", Before that year the company has
also bought from Liberian farms thoug-h not on a regular basis (the
war probably precipitated the institutionalizing of these
purchasing activities). 100 per cent of both dry rubber and latex
is sold by the Firestone Plantations Company to the Firestone Tire
& Rubber Company. 10 to 20 per cent of the latex is then sold by
the parent company to export markets in Europe and Mexico and the
remaining latex is sold to third parties in the U.S.A. Small