In the last few years, however, owing to increased competition from the beet-sugar industry and the independent refiners, it has not been possible to operate the refineries at their full capacity. This condition, added to the higher prices paid for labor and material, has resulted in a smaller margin of profit and, consequently, greater need for protection.

APPENDIX I.

Comparison between the Canadian tariff of April 12, 1907, now in force, and the Dingley tariff of the United States of 1897, which is still in force.

The above comparison shows that the difference in the Canadian general tariff between refined sugar and 96° testing raw sugar is 0.425 cents per pound, whereas in the Dingley tariff the difference is only 0.265 cents per pound. The above difference does not represent the protection to the refining industry, inasmuch as it takes considerably more than 1 pound of raw sugar to make 1 pound of refined, and the duty on this excess of raw sugar has also to be paid by the refiner. When allowance is made for this, the difference between the two tariffs is even greater than the above figures indicate. The protection to the Canadian refiner is more than twice that to the United States refiner under the Dingley tariff.

APPENDIX J.

Although under the agreement reached by the Brussels convention all bounties previously paid by the participating countries were discontinued, a surtax amounting to 60 cents per 112 pounds was permitted on imported refined sugar. This was taken advantage of generally by all participants with the exception of Great Britain, with the result that the sugar-producing countries are in a position to maintain the price of refined sugar at home sufficiently high to enable the excess to be sold in open markets abroad at a slightly lower cost than that for which the same sugar could be refined there. Added to the surtax are the advantages of cheaper labor; the greater volume of business derived from the British in conjunction with the home markets, and the benefits which arise from refining at or near the point of production.

The following extracts from statements submitted to the British tariff commission (1907) show that the continental countries of Europe have advantages for exporting refined sugar which operate against the English refiner and would, to a very large extent, also operate against the refiner in this country if the protection now existing were disturbed:

(Mr. Robert Kerr, section 112 of the report of the tariff commission on sugar and confectionery, 1907, vol. 7.)

The foreigners have this advantage: While they can send their sugar into our country, we can not, under the surtax, send any into theirs. The surtax of 2s 6d. per hundredweight not only enables the continental refiner to exact a price in his home market which gives him the opportunity of securing a small kartell bounty, but it completely shuts out our refined sugar from his market, while he has free access to ours, thus providing him with a clientele double the size of that available for the British refiner. A larger market means a larger output, and the reduction upon charges following upon increased output is an overwhelming advantage. I attach the greatest importance to this aspect of the question, and consider it not unlikely that continental refiners may be able to undersell us by reason of this alone, and that without "dumping" in the usual sense of selling below cost.

(Mr. Charles Lyle, section 124 of the report of the tariff commission on sugar and confectionery, 1907, vol. 7.)

In view of all this it seems to me that in order to recover the huge trade we have lost it is necessary to have some protection to the home sugar refining trade, and as a matter of equity if 2s. 6d. per hundredweight was deemed by the framers of the convention to be a fair surtax allowed to the foreigner, it would only be fair to grant a like preference to British refiners. At the same time less would be sufficient to very quickly restore the trade to this country, say £1 per ton surtax on foreign refined sugar-that is to say, the excise should be £1 less than the customs rate.

(Mr. L. A. Martin, section 27 of the report of the tariff commission on sugar and confectionery, 1907, vol. 7.)

Taxes, local rates, higher rate of wages, etc., all tend to increase the cost of manufacture in England, and these, with the advantages obtaining in continental countries, make it extremely difficult for the British manufacturer to meet the competition in his own market.

APPENDIX K.

The following paragraphs taken from the summary of the report of the British tariff commission, 1907, volume 7, show the effect of competition from the continental countries of Europe on the refining industry of England. A reduction in the protective duty now in force in the United States would open the way to similar harmful competition from Europe in this country:

The annual consumption of sugar in the United Kingdom has increased enormously. Fifty years ago it was 291 pounds per head of the population; in 1885 it was 794, and in 1906 it was 954 pounds. But the British refining industry has not only failed to keep pace with this great increase in consumption, but has declined absolutely in the last twenty years.

While the British refining industry has declined, the refining industries of Germany, Austria-Hungary, France, and other continental countries have greatly advanced, chiefly through the increase of the population and the growth of the sugar consumption in the United Kingdom. Fifty years ago practically the whole of the sugar used in the United Kingdom was refined here; twenty years ago we refined only 70 per cent, and in 1906 only 45 per cent, the balance being made up by importations of sugar refined in continental factories.

The following table shows the meltings in British refineries, the imports of refined sugar, and the annual consumption for the past twenty years:

While the results shown by the above figures have been in part brought about by the bounty system prevailing in Europe, the meltings since the Brussels convention have increased but slowly and are now 229,000 tons less than they were twenty years ago, whereas the consumption during that time has increased 32 per cent.

APPENDIX L.

The refining industry can not flourish away from centers of production unless protected and encouraged by tariff. Unless such protection exists, refining will ultimately be all carried on at the point of production, inasmuch as it is far cheaper to make the sugar in the first instance sufficiently pure for consumption than to transport it in the form of raw sugar, with its accompanying impurities upon which freight must be paid and for which packages must be furnished, to a distant point where the material has to be rehandled and again submitted to every part of the process in its entirety.

In the event of a reduction in the differential tariff on refined sugar, the refiners of the United States have mostly to fear competition from the beet-sugar industry in Europe, as granulated, the standard form of sugar consumed in this country, can be very cheaply made in the numerous factories scattered throughout the sugar-producing districts of Europe. It has been demonstrated not only in Europe, but also in this country, that it costs very little more to convert the entire output of a beet-sugar factory into white granulated sugar than to place the product in the form of raw sugar upon the market. For this reason the factories of the United States now make almost exclusively granulated sugar. The additional cost does not compare with the expense involved in the conversion of the raw sugar into granulated in a separate establishment.

C. R. HEIKE,

Secretary American Sugar Refining Co.

F. M. HATCH, OF HONOLULU, REPRESENTING THE HAWAIIAN SUGAR PLANTERS' ASSOCIATION, SUBMITS STATEMENT RELATIVE TO HAWAIIAN SUGARS.

WASHINGTON, D. C., November 19, 1908.

COMMITTEE ON WAYS AND MEANS,

Washington, D. C.

GENTLEMEN: F. M. Hatch, of Honolulu, on behalf of the Hawaiian Sugar Planters' Association, submits to the committee the following statement:

The statement made by Mr. C. A. Spreckles that Hawaiian sugars are sold at a rebate of three-eighths of a cent a pound is not correct. Hawaiian sugars are, in fact, sold in New York at one-tenth of a cent a pound off. This covers two-thirds of the Hawaiian output. Onethird is sold in San Francisco, being all that that market will take, under a rebate of one-quarter of a cent a pound. The Crockett Refinery, an independent refinery controlled by Hawaiian interests, is the purchaser there. The rebate in New York of one-tenth of a cent, or $2 a short ton, is not in any sense a result of the tariff. It is a concession which it is considered reasonable to make in consideration that the purchaser, the American Sugar Refining Company, binds itself for a term of years to take all Hawaiian cargoes on arrival at the market price less this rebate. The Hawaiian producers are thus saved the danger of having to store cargoes awaiting a purchaser and the alternative of being obliged to make sacrifice sales in periods of a glut of sugar in the market. This course of trade has grown up in consequence of the great distance of Hawaii from market and the impossibility of selling the crop in Honolulu.

Mr. Spreckels's statement or intimation that the trust is directly or indirectly an owner in Hawaiian plantations is without a shadow of foundation of fact, so far as the undersigned is informed and believes. F. M. HATCH. Representing Hawaiian Sugar Planters' Association.

THE CARVER COUNTY SUGAR CO., CHASKA, MINN., STATES THAT FREE SUGAR WOULD CRUSH BEET-SUGAR INDUSTRY.

Hon. S. E. PAYNE,

CHASKA, MINN., December 3, 1908.

Chairman Ways and Means Committee,

Washington, D. C.:

Free trade in sugar would crush the domestic beet-sugar industry. Reduction in the tariff would cripple it seriously. We protest against the argument of eastern refiners for the first and against arguments of Cuban planters for the second. Sugar refined in this country from imported raws pays American labor half a cent per pound; that made from home-grown beets pays American farmers and laborers nearly 4 cents per pound. Taking the duty off sugar and putting it on teas and coffees does not relieve the consumer, but only destroys a great home industry and builds up none other here. Please incorporate this protest in your regular printed hearings.

CARVER COUNTY SUGAR Co.

Letters and telegrams of similar purport were received from the following: Iowa Sugar Company, Waverly, Iowa; St. Louis Sugar Company, St. Louis, Mich.; Holland Sugar Company, Holland, Mich.; Mount Clemens Sugar Company, Bay City, Mich.; C. M. McLean, Holland, Mich.

PIERRE J. SMITH, NEW YORK CITY, SUBMITS BRIEF RELATIVE TO REMOVING DUTIES FROM SUGAR.

Hon. SERENO E. PAYNE,

NEW YORK, December 3, 1908.

Chairman Ways and Means Committee,

House of Representatives, Washington, D. C.

SIR: The present import duty on sugar was imposed for the purpose of raising revenue and for protection to domestic sugar industries.

If for raising revenue, I believe it would be better to have duties raised on the imports of tea and coffee, and, if necessary, reimpose the stamp tax on checks, etc.

By the present excessive duty on sugar, we prevent most advantageous reciprocity treaties with foreign countries, who are anxious. to exchange their sugar for our manufactured goods and farm products. Cheap sugar would also benefit our farmers and increase largely our manufactures of preserved and canned fruits, candy, and other numerous articles in which sugar is used.

As a protection to our home industries, it seems entirely out of all proportion for us to raise about $50,000,000 per annum duty on sugar for this purpose, especially as the total production of about 750,000 tons Louisiana and beet sugar every year is not worth much over this amount in actual value. The protection is supposed to benefit the eastern refiners, Louisiana and domestic beet sugars, as well as sugars from Porto Rico and the Sandwich Islands.

For the eastern refiners it would be much better if they had free raw sugar and a duty of about one-eighth of a cent on imports of refined and raw sugars over No. 16 Dutch standard in color, or even free raw and refined, rather than the present duty, as far as the refiners outside of the "trust" are concerned.

As regards Louisiana, it seems almost a joke to protect these sugars, as they are so much under the control of the "trust" that the planters have to accept almost any terms and prices the local manager of the "trust" names. Outside independent refiners have at times endeavored to secure Louisiana sugars on reasonable terms, without result. In fact, the Louisiana planters would be better off in the end if they would dispose of their machinery and give their time to raising other crops.

As far as the domestic beet industry is concerned, it seems to me that an industry which after so many years still requires a protection of 100 per cent has proved itself unwarranted and detrimental to the general good of the country, especially when a large proportion of it is controlled directly or indirectly by the sugar trust. The advantages to the country from this industry have been very small, while the disadvantages have been very large and costly.