Institute of Pacific Relations

Netherlands India Joins Ranks of Nickel ProducersAuthor(s): Alvin BarberSource: Far Eastern Survey, Vol. 8, No. 13 (Jun. 21, 1939), pp. 156-157Published by: Institute of Pacific RelationsStable URL: http://www.jstor.org/stable/3021731 .

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156 Netherlands India Joins Ranks of Nickel Producers June 21

sides slope abruptly; there have already been fatal ac- cidents from cars slipping off the road. A further haz- ard is added by frequent landslides, which are not only dangerous in themselves but have caused serious delays. There are also numerous detours to allow the recon? struction of bridges?of which there are said to be a thousand between Kunming and the Burma border. As far as weather conditions are concerned, heavy rain- falls begin in late May and last until October, and it remains to be seen whether the road will be passable during the summer season.

In addition to transportation difficulties, there is the

problem of transit duty. Since 1894 the transit duty on

goods going into China via Burma has been one eighth of the customs duty. However, the present tariff on munitions is approximately 50%, and the Chinese claim that this makes the transit charges prohibitive. According to a detailed account by Gerald Samson in the China Weekly Review, T. K. Send, the Chinese Vice-Minister of Foreign Affairs, has succeeded in get? ting the transit duty halved and is now negotiating for further concessions.

Another problem faced by the Chinese Government has been a scarcity of trucks to transport material. One of the immediate consequences of the $25,000,000 credit authorized by the Export-Import Bank of Washington was the signing of a contract between the Universal

Trading Corporation and the General Motors and

Chrysler Corporations for 1,000 trucks to be used on the

highways of China. Presumably a large number of

these will be employed on the Burma road. Besides the

scarcity of trucks, there is a lack of drivers. These are

being recruited both in China and in Burma. Samson tells of having seen 2,000 Chinese chauffeurs in train?

ing in Kunming. A final complication emerges from reports of the

highway. It is said that the Burmese themselves are dis-

playing hostility to the new road. At present they fear involvement in the Sino-Japanese war, or that they might be subject to bombing because of the shipment of munitions. In the long run they object to the possible immigration of Chinese over the highway and say that it would increase their already acute labor problem. On the other hand the Burmese Government has given every assistance in the development of the road, not the least important aspect of which is the construction of large warehouses now being built at Lashio to store

goods to be transported into China. (See Far Eastern

Survey, Mar. 1, 1939, p. 55.) Predictions concerning the immediate helpfulness of

the road to China vary from the very optimistic to the

very pessimistic. American shipping interests, however, seem to share the more cheerful view. A number of

companies, including the American Pioneer Line, the Isthmian Line and the American President Lines, are now sending their boats to Rangoon. The cargoes of these ships are said to be of a general character, includ?

ing trucks, automobiles and machinery.

Dorothy Borg.

NETHERLANDS INDIA JOINS RANKS OF NICKEL PRODUCERS

In describing the rapid strides of the bauxite industry in Netherlands India in the previous issue of this jour? nal (p. 144), we pointed out that except for the large- scale development of tin and petroleum the mining industry of the country has been relatively unimpor- tant in spite of the known fact that it possesses a con?

siderable store of mineral wealth. Reports are now

available on the preparations under way for exploiting the low-grade nickel deposits located on Celebes. Sev? eral companies have been interested and a considerable

area is involved. In 1936-37 the East Borneo Co. was reported to have

applied for some fifteen concessions in the southwestern

part of Celebes. This company participated in the for-

mation of the N. V. Mijnbouw Mij. Bone, capitalized at 120,000 guilders, which was organized to develop nickel deposits in central Celebes east of the Gulf of Bon6. Recently the Billiton Co. entered the picture, forming a syndicate under the name of Mijnbouw Mij. Miden-Celebes to operate in central Celebes. The Rot-

terdam Bank Quarterly indicates that negotiations for a concession have been concluded and that the conces? sion is definitely to be granted this syndicate as soon as sanctioned by the Volksraad in Netherlands India and

the States-General in Holland. The Mining Journal

(London) reports that an area of 1,825,000 hectares is covered by the concession and that the syndicate in- tends to develop iron, manganese and chrome ores as well as nickel. Chimie et Industrie is authority for the statement that borings have shown important quanti? ties of low-grade nickel at several points and that the ore is markedly similar to that found in New Caledonia

(see Far Eastern Survey, Nov. 23, 1938, p. 274). The Boeloe-Balan deposits in central Celebes, the

largest so far reported, consist of a main ore body esti? mated to contain about 320,000 tons and above it some

500,000 tons of lateritic material one to five meters thick. The deposits are so situated as to make surface or open pit mining possible and thus permit profitable operation despite the low nickel content of the ore. Celebes ore assays 1 to 5% nickel. Sample shipments were made to Holland in 1937, and early in 1938 con-

signments of between 1,000 to 1,500 tons were made to

Krupp's for testing. Other shipments followed and in the course of the year about 20,000 tons altogether were

exported to Germany. From this ore about 800 tons of nickel were obtained?a small initial contribution to world production which in 1938, as usual, found Canada

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1939 Shanghai's Fiscal Position Still Sound 15 7

supplying 90% or more of total nickel output, or 93,500 tons out of approximately 106,000 tons. Other countries in the short list of nickel producers are New Caledonia, with 8,000 tons in 1938; Russia, with an estimated

2,000 tons; Norway, 1,000 tons; and Burma, 900 tons.

According to the Deutscher Bergwerks Zeitung, ne-

gotiations are currently in progress between the East Borneo Co. and German interests, and a long-term con? tract for delivery of Celebes nickel ore is anticipated. Previous deliveries have indicated that the ore can be

expected to carry about 4% nickel after water content

has been reduced by drying to 15%. Savings in trans?

portation costs will be effected through production of an 18 to 20% nickel concentrate in a plant now being erected for treatment of the ore at the mine.

Japan, which has manifested great interest in New Caledonia nickel, is also interested in the Celebes ore, and negotiations between Japanese interests and Neth? erlands India producers are expected to begin at once. An active market for Netherlands India nickel seems

indicated, with favorable prospects for the industry as a whole. Alvin Barber.

SHANGHAI'S FISCAL POSITION STILL SOUND

The recent fiscal problems of the International Set? tlement reflect the strain experienced by the Shanghai municipality during the past two years. By suddenly decreasing income and increasing expenditure, the Sino-

Japanese hostilities made impracticable the carefully planned budget for 1937. At the beginning of 1938 even increased taxes and drastic economies seemed inade-

quate to cope with the new emergency situation. But the normally optimistic foreign inhabitants of the Set? tlement had underestimated its recuperative powers, and the end of the same year found the financial out- look appreciably brighter. The deficit has been steadily increasing, rates and taxes have been mounting, desired and necessary public works have been postponed; but the sums involved are so insignificant, especially when

compared with Shanghai's great wealth, that the main- tenance of financial stability is a simple task. The Set? tlement has not yet consumed the reserve accumulated

during more prosperous years. The most difficult period for the International Settle?

ment was the latter part of 1937. Revenue losses for that

year in respect to rates, license fees, wharfage dues, roy- alties, etc, amounted to approximately Ch.$2,375,000, while emergency expenditures of Ch.$642,642 had to be incurred for such things as the Volunteer Corps, police specials, transport, refugees, barricades and sandbag defenses. Economies in expenditure and savings result-

ing from the impossibility of providing full municipal services in the northern and eastern districts during the latter part of the year had led to a total underexpendi- ture of Ch.$l,000,000 as compared with the sum pro? vided for in the budget, yet the Council was faced at the beginning of 1938 with a deficit of Ch.$2,357,329 in the ordinary budget. The loan indebtedness of the

Council, however, had been decreased during 1937 by Ch.$l,891,608. The final deficit would have been in the

neighborhood of Ch.$ 1,000,000, had not the Ratepayers' Meeting of April 1937, in deference to the wishes of the

Chinese, postponed from July 1, 1937, to January 1, 1938, the increase in rates for which provision had been made in the proposed budget for 1937.

The budget adopted for 1938 provided for increased

taxation. The tax on the value of all land within the

limits of the Settlement was raised from 7/10 to 8/10 of 1%. The general municipal rate, the most important

single source of revenue, levied on the assessed rentals

of buildings within the Settlement, was increased from

14% to 16%, and the special rate on the assessed rentals

of buildings beyond Settlement limits enjoying Settle?

ment services from 12% to 14%. Ordinary income, how?

ever, was estimated at Ch.$22,166,680?Ch.$l,684,120 less than the comparative figure for 1937, or about

Ch.$635,000 less than the actual ordinary income

in 1937. Ordinary expenditure was estimated at

Ch.$24,809,620 as compared with Ch.$26,207,300 for

1937, or about Ch.$349,795 less than the actual ordinary

expenditure in 1937. Thus, even with increases in taxa?

tion and reduced expenditures, a deficit in the ordinary

budget of Ch.$2,642,940 was anticipated. The extraordinary budget for 1938 also anticipated

a decrease in income and expenditure. Whereas in

1937 the anticipated extraordinary income had been

Ch.$24,451,610 and actually had been Ch.$l7,666,839, the estimate for 1938 was Ch.$14,591,300. Ch.$12,000,- 000 was to be raised by debenture or temporary meas?

ures; Ch.$2,500,000 from the Loan Suspense Account

as cover for the 1937 deficit; Ch.$100,000 from the

sales of surplus land; and Ch.$20,000 from miscellane-

ous receipts. The extraordinary expenditure was esti?

mated at Ch.$14,497,370. This included the deficit of

Ch.$6,613,300 brought forward from the extraordinary

budget for 1937 (a deficit was a normal feature of the

extraordinary budget); Ch.$2,148,570 for capital out-

lay and emergency requirements; Ch.$2,642,940 for

the deficit on the ordinary budget for 1938; and allo-

cations for loan redemption, sinking fund and pension fund, amounting to Ch.$3,092,560. The actual extra?

ordinary expenditure for 1937 had been Ch.$24,280,140 as contrasted with the total of $14,497,370 for 1938.

The sharp decline in extraordinary income and expendi? ture was due mainly to the repayment in 1937 of the

Municipal Loans of 1925 and 1927, ending the existence

of the sinking fund established for this purpose. The

1937 extraordinary budget had allotted Ch.$16,395,320

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