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PARAGRAPHS 216–219-CANE SUGAR, ETC. education in English, is making first-class American citizens out of the second generation of these immigrants. With the opening of the Panama Canal it is hoped that this work will be greatly facilitated.

The attitude of the Hawaiian Sugar Planters' Association toward this movement can best be summarized by the following quotation from a recent report made by the Bureau of Labor under the act of Congress requiring that the labor conditions of Hawaii shali be investigated and reported upon every five years:

"Meantime a bona fide effort is being made by the Territorial.government, backed by the large employing interests, to settle a larger proportion of Caucasian workers and settlers in Hawaii. It is doubtful if any large industry upon the mainland has in the past been willing to disregard the economic demand for cheap labor, in consideration of what are at least partly civic motives in securing more costly labor, to the same extent as have the Hawaiian planters. They are willing without reserve to employ all the Caucasian workers the Government can bring to the islands at a wage one-third larger than they pay for nearly as efficient labor brought from Asia." (Department of Commerce and Labor, Bulletin of the Bureau of Labor, No. 94, May, 1911, p. 763.)

The effect of these endeavors to Americanize the Hawaiian Islands has been a steady increase in the rate of wages and in the cost of producing sugar. At the time of annexation the minimum wage of unskilled field hands was $12.50 a month. By 1911 this figure had advanced to $18 a month for Asiatic field hands and $24 a month for Caucasian field hands. On January 1, 1912, the present scale was adopted, with a profit-sharing bonus, depending on the price of sugar. The minimum wage is $20 for Asiatics and $24 for Caucasians, in addition to which the laborer receives at the end of the year 1 per cent additional for every dollar of the average price of raw sugar over $70 a short ton (3.5 cents a pound). Thus a price of 4 cents a pound, or $80 a short ton, would net each laborer an additional 10 per cent of his wages. The actual distribution for the first year of this system was 13 per cent, or more than six weeks, extra pay:

In addition to the money wage every laborer receives free house rent, free water and fuel, and free medical attendance. Ci especial importance, however, is the fact that the laborer is given a house and steady employment the year round. The Hawaiian wage rate can not fairly be compared with that paid by other agricultural communities during a harvesting season where the laborer is left to shift for himself the greater part of the year.

The increase in wages is not the only factor in the increased cost of production. European immigration has resulted in higher standards of housing, sanitation, etc., affecting the laborers of all nationalities. Another important factor is the decrease in the number of laborers receiving the minimum rate of wages. With the extension of the system of cultivating cane on contract the proportion of day laborers has diminished, and the number classed as unskilled is smaller still. The driver of four mules, for example, gets an advance of $4 over the minimum rate.

A typical illustration of the increase in the cost of production was given by a plan. tation manager who testified before the Senate Finance Committee last year. On his plantation the cost of producing a short ton of sugar from 1893 to 1899 was $43.11, or 2.15 cents a pound; from 1899 to 1905 it was $59.85, or 2.99 cents a pound; and from 1905 to 1910 is was $62.41, or 3.12 cents a pound. The average cost for all the plantations in Hawaii for 1908 was $51.681 a short ton, or 2.58 cents a pound; for 1809, $52,878, or 2.64 cents; for 1910, $56,426, or 2.82 cents; and for 1911, $58.28, or 2.91 cents. It is already apparent that the cost for 1912 under the new scale of wages will reach 3 cents a pound.

In dealing with an average cost like this, however, it must be remembered that hali of the entire production is at a higher figure, and that if the average cost is given a bare profit half the plantations would be forced out of business and the production diminished in proportion.

It is impossible to estimate in advance exactly what reduction in the tariff would enable even half the plantations in Hawaii to survive, because the basic price of sugar, irrespective of the tariff, is itself fluctuating and impossible to forecast. It is certain, however, that any material reduction would at once diminish the production of Hawaii and that the extent of the damage would depend upon the extent of the reduction. In order to survive, moreover, Hawaii would be compelled to abandon its efforts to introduce a higher class of labor and return to the days when cheapness was the only consideration. Should the application of a literacy test to our European immigration accompany a material reduction in the tariff on sugar, Hawaii would be left permanently and hopelessly orientalized.


We respectfully submit that the crippling or the destruction of the domestic sugar industry by a material reduction in the duty on raw sugar would not be counterbalanced by any lasting gain to the American consumer. The present tariff on raw sugar is essentially a competitive tariff, in that it has stimulated production from widely different and competing sources. Except for the admission of 300,000 tons of Philippine sugar by the act of 1909 and an immaterial change in the duty on refined sugar, the sugar schedule was put in its present form in December, 1903, when, by giving reciprocity to Cuba, Cuban sugar was accorded a protection of 0.337 cent per pound against all other foreign sugar. The increase in production from that time to the present has been as follows:

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Under the present tariff. therefore, the production of protected and partly protected sugars has increased until this year, in spite of the unusual shortage of the Louisiana crop. they exceed the total consumption of the United States, and henceforth, if allowed to continue, will permanently exclude full duty-paying sugars from the United States.

The influence on the price of sugar has been equally marked. Before Cuban reciprocity the average price of raw sugar was nearly, and sometimes fully, the world's price, plus the full duty. In the language of the trade, “The full-duty sugars made

With the gradual elimination of these sugars and the growth of the competition between the various domestic and Cuban producers, the price has been forced below the parity of the world's price. During the past year (1912) raw sugar sold in New York at 0.945 cent a pound below the cost of Hamburg beet sugar landed, duty paid, in New York, and the average for the year was 0.473 cent, or nearly half a cent below the full duty price. In recent years, in fact, the price of raw sugar has been at this parity only at infrequent intervals, caused by an unexpected shortage of the Cuban or some domestic crop. The Democratic Campaign Book of 1912 states (p. 149) that the average increase in the cost of sugar by reason of the tariff during the last seven years has been 1.03 cents per pound. This is not only less than the full duty of 1.685 cents but below the Cuban duty of 1.348. The consumer no longer pays the full duty.

It is the custom of those attacking the present schedule to treat each of the domestic producers individually and to endeavor to show how each, considered alone, has no economic claim to continued protection. The question takes a far different aspect when their combined production is considered, coupled with the fact that they are competing against each other.

Hawaii, with its production of half a million tons has an important effect on the price. Over one-third of its crop is refined in San Francisco and is marketed from the Pacific coast to the Missouri River, in direct competition with the beet sugar of California, Colorado, and Utah and with refined cane sugar from New Orleans. The remainder of the crop is sold to New York and Philadelphia refineries on the Atlantic coast. Should the forthcoming tariff be such as to permit the domestic sugar industry to continue on a profitable basis, the producers of Hawaii hope ultimately to bring their entire crop into competition in the refined market, either by controlling the refining of their entire output or by the production at the plantations of sugar suitable for direct consumption. As an earnest of this hope they have purchased and are holding a site at Baltimore suitable for a refinery, and are also experimenting on an extensive scale with methods of direct production of white sugars.

The effect of the present tariff on raw sugаr may be summarized as follows:

1. It has stimulated the production of protected and partly protected sugars to a point where the production is in excess of the entire consumption of the United States.


2. It has diversified production among competing producers, checking the tendency toward monopolization of the industry in the hands of the few.

3. It has kept the average price of sugar to the consumer from rising in spite of an almost universal increase in the price of other staple products.

4. It has steadily lowered the wholesale price of sugar in the United States with respect to the world's price of sugar as quoted at Hamburg:

5. It has furnished the Government with a steady, easily collectible revenue in excess of $50,000,000 a year—the largest revenue on any single item of import.

6. It holds out every expectation of continuing to stimulate production and competition and to lower prices.



New YORK, January 14, 1913. To the honorable the members of the House Ways and Means Committee, Washington, D.C.

HONORABLE Sirs: On behalf of the American Bottlers' Protective Association, representing the organized bottling trade in the United States, we wish to go on record as in favor of the removal of the duties upon sugar, and beg leave to submit the following reasons therefor:

In the manufacture of bottled beverages, cane sugar is used exclusively as one of the chief ingredients and is the principal item of expense. The greatest volume of business is done during the months of June, July, and August, when the price of cane sugar is invariably high, owing to the reduction of the Cuban crop, and the necessity of producing raw cane sugar supplies from other countries, against whom almost prohibitive tariff duties are imposed. In consequence of the high prices, brought about by such conditions, some manufacturers are tempted to resort to the use of substitutes in order to carry on their business at an average profit, and they thus have to use expedients that lower the standard of these products. They are forced to do this by reason of the fact that the usual profits from sales are very small. Such practices it is the main object of our association to discourage and prevent, in the interest of the trade as well as that of the public. The removal of the present high tariff on sugar would indirectly operate as a sanitary measure in improving the quality and in insuring the purity of the bottled beverages, which maintenance of the present rates now discourages.

Our organization has quite uniformly gone on record at its annual meetings as either in favor of a substantial reduction or the entire removal of the duties on sugar; we prefer the latter.

We believe that neither the sugar refiners nor the domestic sugar industry generally requires any protection in order to thrive, as is evidenced by their uninterrupted prosperity and their ability to pay substantial dividends upon their stock. We feel that Congress should legislate in favor of such industries as are struggling for existence and at best manage to work but ordinary returns upon their investments, as is the case with the bottling industry.

Trusting that your honorable committee can see your way clear to grant substantial relief from the exacting rates of the existing sugar schedules, I remain, Very truly, yours,

Wm. T. PHILLIPS, Secretary.


Boston, February 5, 1913. Hon. 0. W. UNDERWOOD,

House of Representatives, Washington, D. C. Dear Sir: About two years ago a central sugar factory in Porto Rico leased a plantation of 750 acres for 15 years at $20,000 per annum. This means—I would be glad to send you the figures should you wish them- a minimum of 0.57 cent in land rental alone on every pound of sugar the central factory can make from cane cultivated on the plantation in question.

At time of the establishment of the above central factory, which took place shortly after American intervention, this plantation might have been worth $40,000-certainly

PARAGRAPHS 216–219-CANE SUGAR, ETC. at very outside not over $50,000—as against a value of, say, $200,000 to-day, as represented by the $20,000 annual rental. This $20,000 a year goes to foreigners, who live abroad, and have precious little interest in either Americans or so-called Porto Ricans. It is in just this way that under existing tariff conditions no inconsiderable burden is borne by our American consumer, without benefit to either our sugar makers or our Government.

Of course such enormous land rental could only be brought about by most excessive tariff protection, coupled with a tendency of sugar makers to take advantage of it too quickly, and to a greater extent than warranted by their capital, to the neglect of that most vital consideration, i. e., an assured ample cane supply at reasonable cost.

Although at present I have no financial interest whatever in sugar making, I have had occasion to give considerable study to the respective merits of Porto Rico and Cuba along this line, and would be glad to send you briefly my views in this connection, if you would care to have me do so. Very respectfully, yours,



NEW ORLEANS, LA., January 23, 1913. Hon. Oscar W. UNDERWOOD,

Chairman Committee on Ways and Means, Washington, D. C.
DEAR SIR: For no other motive than one of real interest I write you.

The sugar planter of Louisiana could not succeed as planter if the tariff is reduced 33 per cent ad valorem; my appeal is not confined to a particular race.

There are hundreds of white men with whom the bread of their children depends on the success of the sugar industry.

It would be the gravest calamity that ever overtook our section of the country to reduce the tariff upon sugar. I am in hope the Louisiana delegation in Congress will have full opportunity to discuss the sugar industry or the sugar schedule and the rice grower and the lumber people and, in fact, all of the industries that are to be protected.

The Government owes to the sugar producer a debt of gratitude, and it could not destroy the sugar industry without stustifying itself, from the fact that $50,000,000 or $60,000,000 as revenue is secured through the energy of the sugar planter now cultivating the sugar cane.

In 40 years there are over $2,000,000,000 come to the Government through the energy of the sugar producers.

I hope this appeal will not come to you as a political argument, but as one of interest for the children, the widows, and the orphans and their homes and firesides.

Congratulating you for having been able to preside over the destiny of the committee and give a fair and impartial hearing to all of the interests of the country, knowing that the committee over which you preside is the strongest arm of our National Government.

There is something to discuss that might be in keeping with a certain policy, but the time is not ripe yet. I am, respectfully, yours,



WASHINGTON, D. C., February 21, 1913. Hon. Oscar W. UNDERWOOD,

Chairman Ways and Means Committee, House of Representatives, Washington. DEAR SIR: Permit me to address the Ways and Means Committee, through you, relative to the impending revision of tariff Schedule E, specifically on behalf of the Cuban sugar producers.

In 1912 Cuba produced approximately 1,900,000 tons of cane sugar. The estimated crop for 1913 will be 2,100,000 tons. Practically all of that output is exported to the United States in the form of sugar 96° test. In 1912 there were on the island engaged in the manufacture of said tonnage 183 active plantations, centrals or ingenios. Of that number only 37 estates are owned or controlled by the so-called American Sugar Trust, producing annually about 32 per cent of the crop, or approximately 672,000 tons. One hundred and forty-six of the Cuban plantations are not trust controlled, but independent, and produce about 68 per cent of the total crop, or 1,428,000 tons per annum.

PARAGRAPHS 216–219-CANE SUGAR, ETC. Hence it is obvious the great majority of the above producers (independents) are vitally concerned in obtaining free Cuban sugar in the revised tariff to be enacted by the Democratic majority during the special session of Congress after March 4 next. But, as you yourself are aware, the Cuban producers failed to appear, by counsel or otherwise, or to file a brief in support of their interests at the hearing before your committee on January 15 last.

Nevertheless, on or about December 15, 1912, our office received an apparently reliable intimation from Habana that the Cuban Agrarian League (an association of sugar producers) desired to be represented by counsel and to file a brief at the hearing in question; that a delegation of said producers would arrive in Washington in ample time to perfect their preliminary arrangements; and that they proposed to urge upon your committee the advisability, economically and politically, of placing Cuban sugar upon the free list in the subsequent tariff bill to be reported to the House. Their program, as outlined to me, was substantially as published in the Washington Post of December 27 last, under the caption "Sugar must be free, a copy of which article is attached hereto and marked "Exhibit A.'. Notwithstanding this, however, the Cuban producers subsequently failed to authorize my appearance as counsel at hearing, and their delegation did not arrive in Washington as expected. If it actually left Habana, it got no farther than New York, but returned from there to Cuba.

As a possible explanation of the otherwise inexplicable failure of those producers to appear, please refer to the testimony of Mr. Edwin F. Atkins, vice president American Sugar Refining Co., Ways and Means hearing of January 15, 1913.

"Mr. FORDNEY. You would be willing to have free sugar from Cuba if we would retain the duty on sugar from foreign countries?”

“Mr. ATKINS. I would not ask such a thing.”

In other words the “trust,” allied with the American beet interests, apparently were most vitally concerned in preventing the independent Cuban producers from appearing at hearing before your committee and urging free Cuban sugar; on the theory that such nonappearance would create the intendent impression that said producers did not really desire that legislation in their favor, thereby enforcing the “trust” argument against any material tariff reduction on sugar. We submit the foregoing as the inevitable and logical conclusion in the premises.

But in the confident expectation that the producers of the island (independents) will shortly open a vigorous campaign here in spite of “trust” opposition, permit me to urge upon the Ways and Means Committee the following considerations:

1. It is vitally essential to the ultimate success of the Cuban propaganda, and the resulting benefit to the American consumer, that Schedule F as finally reported to the House shall provide for free Cuban sugar, raw and refined, but retain the present tariff on sugars from foreign producing countries; that is, Germany, Austria, France, Belgium, Holland, and Russia (beet), and Argentina, Australia, Brazil, Formosa, Java, Mauritius, and Peru (cane). Such legislation, while providing free entry of Cuban sugar, would at the same time protect it from destructive competition on the American market with the foreign product mentioned. There would then remain only the domestic competition from Louisiana, Porto Rico, Hawaii, Philippines (limited to 300,000 tons annually), and the American beet.

2. Free Cuban sugar, as proposed, would not affect adversely our domestic industry; because the latter, with its combined output of cane and beet, is inadequate to supply our present home consumption. Hence free entry of the Cuban product would be an economic benefit by (a) introducing a healthy competition, thereby reducing the price of sugar to our consumers, and (b) developing and conserving the producing industry of the island, which is the most important source of sugar supply to the American market.

3. Legislation proposed in (1) is urged specifically on the ground of Cuba's exceptional political and economic relation to the United States; which relation, under the established principles of international law, would estop the countries referred to from objecting thereto as discriminatory, or in contravention of the “most-favored-nation" cause in treaties with themselves.

4. In return for free sugar, Cuba would unquestionably continue in force the existing preferential reduction in duties on American exports to the island, a most important desideratum.

5. Free Cuban sugar, if enacted by the House as urged, would be of the greatest tactical advantage to the producers of the island in combating the united “trust" opposition at hearing before the Senate Finance Committee.

6. Free Cuban sugar would be in conformity with principles of the Baltimore platform, with preelection promises of the Democratic Party, and with the insistent demand of the American people for the abolition of duties on the necessaries of life.

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