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A large quantity of that is consumed by confectioners, and the families of the wealthy consume a great deal more sugar than the families of the poor, but just whatever is consumed by each individual he in just that proportion contributes to the public Treasury or pays that proportion of the impost tax placed thereon.

Suppose the poor man thus consumes his whole 77 pounds per annum, and suppose that by placing sugar upon the free list he would buy it for a price per pound less than the difference between the present price and the tariff thereon. Practically all the sugar that we consume in the United States is either produced in the United States or is imported from her dependencies or from Cuba. Cuba gets a reduction of 20 per cent. The regular duty is 1.685 on 96 test. Therefore the import duty on Cuban sugar would practically be 1.34 cents per pound. The 77 pounds consumed by each inhabitant at 1.34 cents per pound would amount to $1.04, which sum each inhabitant of the United States would pay in excess of the amount that he now pays, granting that he would get the full benefit of the tariff if the same was removed. But, in actual practice, everyone knows that sugar is not consumed equally by all inhabitants of the United States. The families of the wealthy indulge themselves in all character of luxuries made from sugar-expensive candies, sweet desserts, and in numerous other ways whereas the families of the poor will content themselves with using but small quantities of sugar in their tea or coffee, and if the family is very poor, only able to buy bread and meat, they can, and frequently do, buy no sugar at all.

Is there another commodity upon which any amount of revenue is derived that the tax thus imposed would be so equally distributed in proportion to ability to pay? Let us compare a few. Suppose that a heavy tax was imposed upon brogan shoes, overalls, cotton shirts, then the workingman, the poor man, would pay the entire tax. Suppose the tax was imposed alone upon silk hats, broadcloths, fine jewels, etc., then the tax would be paid exclusively by the rich; but sugar is a commodity that is used by almost every family in the United States and used by such families just in proportion to the ability of the family to buy the same, and therefore the impost tax, if considered as paid by the consumer, is ultimately paid by that consumer just in proportion to his ability to pay.

Therefore, viewing sugar from this standpoint, we must conclude that it measures up fully to the standard laid down in the third rule by which the imposition of such tax should be judged.

IV. Would the tax thus imposed have the effect of benefiting or injuring the persons engaged in producing or manufacturing the particular commodity upon which the imposition is levied?

Synopsis of argument. Quotations from Democratic platform on tariff— Quotation from speech of President Woodrow Wilson-Free sugar means not only to injure but to destroy the sugar industry, which means the destruction of an annual crop of $96, 250, 000-A pledge in the Democratic platform not to injure or destroy legitimate industry-Is the sugar industry legitimate?

As suggested by a member of the committee, is it economically legitimate?-Discussion.-The cost of production and price to public has gradually declined. Sugar worth 13 cents in 1870.-Worth 4 cents to-day.

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This reduction steady despite high tariff most of the time.-No persons save the sugar refiner and trust demanding reduction of tariff on sugar.-The great American public not making the demand.-World's price of sugar controlled by Brussels agreement, which is itself a gigantic combine.-All nations deeply interested in protecting the industry-Why should not the United States?-The duty should remain specific.-An ad valorem duty is greater the higher the price of the commodity and lower correspondingly.— An ad valorem makes the amount of the revenue uncertain.-Opens door to fraud by giving opportunity for undervaluation.-Gives producer more when he needs it less and less when he needs it most.-The price of every other commodity for man's consumption except sugar has increased in the past 10 years. The price of sugar has decreased.-Table showing increase given.

We ask the foregoing question for the reason that the Democratic platform declares—

We recognize that our system of tariff taxation is intimately connected with the business of the country, and we favor the ultimate attainment of the principles we advocate by legislation that will not injure or destroy legitimate industry.

In connection with the above we quote a declaration made by Gov. Woodrow Wilson, the Democratic President-elect, which enunciates the rule of right. He says:

There are two great things to do. One is to set up the rule of justice and of right in such matters as the tariff, the regulation of the trusts, and the prevention of monopoly, etc.

With this declaration in the Democratic platform, and this patriotic assertion of policy by him who is to preside over the destinies of the Nation for the next four years, we feel perfectly at liberty to appear before this Democratic committee with every assurance that if we succeed in convincing it that the placing of sugar upon the free list, or any appreciable reduction in the tariff now existing thereon, will have the effect of not only injuring but destroying this great sugar industry which has been intimately connected with the business of the country and received recognition in every tariff law enacted since the organization of the Government, that this committee will halt before saying the final word that will wipe out of existence an industry that produces an annual crop worth $96,250,000, the most of which is expended in the production of the commodity, in tools, implements, machinery, and labor-yes, American labor.

Mr. DIXON. What do you think of that branch of the platform that says: We indorse the action of the Democratic House of Representatives in the Sixty-second Congress in its tariff legislation?

Mr. MILLING. The rule of construction with regard to a law is that every portion thereof must be construed together; and a mere inference of that character written into a law would hardly be considered when the law itself is directly written and written so plain that it can not be misunderstood. It says, "will not injure or destroy legitimate industry."

I will go further, if the platform is so written as that what you have said is fairly inferable therefrom, and this was written in the platform for the purpose of enabling the party to take either horn of the dilemma, I should still say that the direct and positive declaration should control. Furthermore, gentlemen, we do not believe that the party will attempt to resort to thimblerigging methods in dealing with the people. Our Representatives in Congress and our leaders of

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the party in Louisiana told us that the declaration above quoted meant what it said, and that is what Louisiana relied on. We then believed that if we were able to come to a Democratic Congress, if it was ordained by the American people that there should be a Democratic House and Senate and a Democratic President, and we were able to present our cause, show that sugar was a maximum revenue producer, that it had been recognized by every Democratic administration from time immemorial as a commodity peculiarly fitted for the imposition of a tariff tax, and we could show further that to curtail or cut off the tariff and especially to put sugar upon the free list would have the effect of destroying our industry, that you would remember the promise in the platform and would not attempt it.

What do we understand from this declaration of the Democratic platform that the tariff system is "intimately connected with the business of the country" and the pledge that the party will bring about a just adjustment of the tariff in such a way as not to injure or destroy legitimate industry? We understand that the industry must be legitimate. An illegal or illegitimate industry, one that is carried on in violation of the law, will have no standing before the Democratic administration. In other words, will have no right to be heard.

I heard some witness say here this morning that it was an illegitimate industry; that the sugar growing and manufacturing in the United States was illegitimate. If you, as judges, to whom this matter has been referred, determine that it is illegitimate, that it is outlawed, that we have no standing before you, why then, gentlemen, you will place it upon the free list and wipe out the industry. But let us consider further.

IS THE SUGAR INDUSTRY LEGITIMATE ?

Is the grower of sugar cane in Louisiana, who toils the whole 12 months in producing a crop of cane and harvesting it, who hardly receives a fair margin of profit under the existing conditions, engaged in a legitimate industry? Is the manufacturer of that cane, who in many instances is also the producer, who tends his crops in season and out, and who runs his factory day and night to harvest the same; who has his all invested in this industry; who is a grower and manufacturer of cane, by the force of circumstances perhaps; who is schooled to that occupation and knows nothing else, engaged in legitimate industry?

Mr. HARRISON. Mr. Milling, if you will allow me to suggest, the word "legitimate" as used in the Democratic platform, was interpreted, I think, by the committee to be economically legitimate; and we do not want you to understand that the word was put in in an offensive sense, or sense in which you seem to interpret it.

Mr. MILLING. Well, I interpret it in this way: That our party has claimed that there are great criminal combinations in the United States that are oppressing the people and practically destroying democratic government, and that is the sense in which I construe it.

I have heard it asserted that the cane planters and manufacturers of Louisiana and the beet growers and manufacturers of the West

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were combined with the Sugar Refining Trust of the United States, and the argument is advanced that, since this Sugar Refining Trust is the worst of all the bad trusts, as it has in many instances defrauded the Government, bribed its employees, and committed every other variety of high crimes and misdemeanors, no one connected therewith deserves any consideration at the hands of the Government. Our answer to this charge is that it is absolutely untrue as to the sugar planters and manufacturers of Louisiana.

We do not believe there is a sugar planter in Louisiana, unless he be a spy of the Sugar Trust, who is in any manner connected with that giant monopoly or in any manner under obligations to it. To the contrary, the Sugar Trust-the sugar melting combinations of the United States have been absolutely the master of the raw sugar producers in the United States. At one time, the sugar producers in Louisiana manufactured most of their product into what was known as prime yellow clarified sugar-sugar commonly called Y. C. sugars, which were sold to the grocery trade and went into direct consumption; but the trust lowered the price of granulated sugar until the difference between granulated and Y. C. was so small that the consumer quit using the Y. C. sugar, and the result was that the Louisiana sugar producer had to sell his sugars to the refineries, and the difference in the price the refiner would pay for raw sugar and Y. C. was so small, that the producer is now manufacturing raw sugar almost entirely and selling to the American Sugar Refining Co., which is practically the only purchaser on the New Orleans market; I have heard if any planter gets independent and makes an effort to sell his raw sugar elsewhere, then his commodity is blacklisted on the floor of the exchanges and he has difficulty in disposing of it at all.

We will not halt here for the purpose of proving this assertion, but will refer your honorable committee to the evidence taken at the hearing in the case of the United States v. The American Sugar Refining Co. in the city of New Orleans a short while ago. The evidence produced at that trial shows that the sugar interests of Louisiana are in no manner connected with the trust, but, to the contrary, the trust has been practically the master of the sugar manufacturers and bought their raw product almost at its own price. A further fact which disproves this assertion is that the sugar refining or melting concerns of the United States are demanding at this time free raw sugar. growers and manufacturers are demanding a tariff upon sugar. The trusts are not demanding something that would be to their disadvantage. We, however, will enlarge upon this idea further along in our argument.

The

In this very connection we desire to say that in our judgment there is not a corporation in the State of Louisiana that is operating a manufacturing plant or sugar plantation that is overcapitalized; in fact, in the great majority of cases they are undercapitalized. The stock is not bartered or sold upon the exchanges. If the prospects for a sugar crop are bright, the property is considered valuable; if we have an agitation of the tariff, with bad crop seasons, then the property is little sought after. The sugar producers of these United States certainly can not be classed as engaging in other than a legiti

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mate industry; therefore we are within that class of industries which you declare shall not be injured or destroyed by a readjustment of the tariff. If this committee, however, persists in the action taken with reference to sugar last spring, when it reported the free sugar bill, we declare then that the party will not be able to make good this pledge. We are hopeful, however, that you have long since seen the injustice of your reporting such a bill and that in your coming report sugar will receive the just consideration that its position as a great agricultural product entitles it.

We have confidence that you, as a committee and as leaders of the party, not only have seen the error of your way, but you, with the other great Democratic leaders in convention assembled, gave evidence of this fact in the sentiments expressed in the declaration above quoted, which, as we interpret it, assures the American citizen that the party, if intrusted with the affairs of the Nation, would not enact legislation that would injure or destroy legitimate industry. The production of sugar in the United States being a legitimate industry, the next question that presents itself in logical sequence is:

WOULD THE REDUCTION OF THE TARIFF UPON SUGAR INJURE OR DESTROY THE INDUSTRY?

This is the crux of the case. If your honorable committee finds that it will injure or destroy this industry and that the retention of the duty upon sugar will be no great imposition upon the American people, then in order to make good your pledges you should not in any manner interfere with the existing sugar tariff.

What does it cost to produce a pound of raw sugar in Louisiana ? We have evidence taken before the committees in the various hearings on sugar. which is conclusive, that cane sugar can not be produced in continental United States under 3 to 3 cents per pound net, nor do we believe that the beet industry can thrive if it is forced to produce sugar for less than that price.

The matter of the cost of production of cane sugar in Louisiana was fully gone into by the Senate Finance Committee when it was considering the free-sugar bill that passed the House. Messrs. Jules Godchaux, E. A. Pharr, B. A. Oxnard, Mr. Dickerson, and others gave evidence upon this point, and they all concur that it costs from 31 to 3 cents per pound to grow and manufacture sugar in Louisiana.

From this evidence your committee must be convinced that since the average price of foreign sugars sold to the sugar melters or refiners of the United States in 1911 was 2.60 cents per pound, if the American sugar producer is forced to sell at that price immediate ruin will be his lot.

I know what comes in the minds of the committee at this time, and that is, "If that be true, you never will be able to raise sugar in Louisiana without a tariff."

Mr. HARRISON. Does not that raise the question whether or not it is economically legitimate?

Mr. MILLING. I do not think so; that is not the way we construe the law-I mean the platform. But I believe that I will be able to