The_Open_Door_deel1

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As regards the transportation of rubber within Liberia, Firestone
uses the services of the Lone Star Transport Company, a subsidiary
of the Firestone Plantations Company.
The Firestone rubber pricing system,In particular with reference
to buying practices, is discussed in more detail below. The first
example relates to the Firestone Plantations Company buying
coagulum from Liberian farmers in July 1973 whereas the second
example concerns the buying of latex. The choice of the date was
determined mainly by the availibility of data although the
continuation of Firestone's pricing practices in 1978 makes the
selection of it less relevant. An advantage of the use of the
July 1973 data is that they refer to a situation which is to a
large extent characteristic of a longer period. After December
1973 considerable cost increases occured as a result of an
accelerated international inflation (after the steep increase in
the price of crude oil).
TABLE 2
COAGULUM DEDUCTIONS MADE BY FIRESTONE - PER LB. (1973)
Item U.S.dollars
Selling Expense 0.50
Purchase Rubber Department 0.13
Factory Processing 3.44
Administrative Costs 1.07
Interest on Funds 0.13
Profit before Tax 1.27
Total of all deductions $ 6.54
Source:
Concession Secretariat, Ministry of Finance,
Monrovia.
The first deduction of one-half cent per pound for selling
expenses is evidently a duplication of the one-half cent
commission fee, covering the costs of Harbel's sales office, as,
before Firestone arrives at a rubber price (the noon FOB market
prices in Singapore less one-half cent per pound) it has already
deducted these selling expenses.
The Liberian rubber producers were charged 0.13 cents per pound
to cover the expenses incurred by the Rubber Purchase Department
of the Firestone Plantations Company. In fact, this means that the
Liberian farmer has to pay Firestone to buy his rubber. A very
strange situation indeed, and it would have seemed more logical if
the expenses of the Rubber Purchase Department would have been
covered by the "Profit before Tax".