PARAGRAPHS 216-219-CANE SUGAR, ETC. In conclusion, therefore, I desire to urge upon you as chairman, and through you upon members of the Ways and Means Committee, an attentive consideration of the inclosed. Some indication of your disposition in the premises would be greatly appreciated. If so desired, such a reply will be considered as confidential. It would, however, be of great service in advising my Cuban clients. With respect, I remain, CHARLES D. WESTCOTT. Yours, very truly, EXHIBIT A. [Washington Post, Friday, Dec. 27, 1912.] SUGAR MUST BE FREE-CUBAN PRODUCERS BEGINNING A VIGOROUS FIGHT PEOPLE WANT PLEDGE KEPT GROWERS JOIN WITH CONSUMERS IN REMINDING DEMOCRATS THAT VOTERS GAVE MANDATE FOR TARIFF REDUCTION-LEADERS IN CONGRESS IN SYMPATHY WITH DEMAND FOR RELIEF FROM HIGH PRICES. EDITOR POST: A representative of the Cuban Agrarian League, the association of Cuban sugar producers and their American consignees, has requested our office to publish a statement of "what we plan to do, and through what channels, to favor Cuban sugar before Congress." Briefly, we propose to free their product from the refining tentacles of the American Sugar Trust by securing the repeal outright of existing duties on such imports and placing Cuban sugar on the "free list" in the revised tariff to be enacted at the special session of Congress after March 4 next. To that end we shall present the legal, economic, and political aspects of Cuban sugar-in oral argument and by brief—at hearings before the House and Senate committees, and supplement this by an assiduous propaganda through the press and other available channels in support of the interests of Cuban producers and our own consumers. We are under no misapprehension as to the magnitude of that task. Nor do we underrate a particle the combined opposition of American refining, beet sugar, Louisiana, Porto Rico, Hawaiian, and Philippine interests. That combination-highly organized, strategically led, and energized by unlimited financial resources-maintains eternal vigil at the Capitol. Its outposts never slumber. It is armed with a thousand subtle expedients, such as the Dutch color, branding, and high polarization provisos, heretofore successfully employed as "jokers" to nullify every attempted tariff reduction on Cuban sugar. Nevertheless, the producers, allied with our consumers, have an exceptionally strong case at the present time. Their common cause is a supremely just cause. It is backed by the mandate of the American people, registered in overwhelming majorities at the November election, to abolish import duties on the necessaries of life, of which sugar is an essential article of universal consumption. Our people, therefore, are vitally concerned in the success of the Cuban producers. The majority which will control the next Congress is pledged unconditionally to carry out their mandate. It can by no subterfuge be disregarded, evaded, or misconstrued without drastic consequences to the dominant political party. But the Democratic leaders in Congress have declared unequivocally their intention of carrying out preelection promises. Therein lies the inherent strength of free Cuban sugar, and that factor should be decisive in the premises. There is nothing to be gained by a policy of concealment. The interests of Cuban producers can be most effectually subserved by double shotting our guns, unmasking our batteries, and delivering a frontal attack along the whole line, in the reasonable hope of carrying free sugar by assault, or at least by forcing our opponents into the open and compelling a show down. We want the opposition to "stand up and be counted" and to "put down their names,' " in order that the American and Cuban people may know through the press exactly who are attempting to thwart the avowed intention of the Democratic party to place sugar imports on the free list. Finally, our people should realize that right now the hour of free sugar is striking and the psychological moment is upon them. The opportunity may not occur again for a decade. Free sugar, or even a material reduction in existing import duties thereon, means literally a decrease of millions annually in our sugar bill, which otherwise will continue to flow as an unearned increment into the coffers of the American PARAGRAPHS 216-219-BEET SUGAR. Sugar Trust. Our case is made up and we shall submit it with supreme confidence to the Democratic majority of the next Congress. WASHINGTON, December 26. CHARLES DRAKE WESTCOTT, Thereupon, at 1.30 p. m., the committee took a recess until 2 o'clock. AFTER RECESS. The hearing was resumed at the conclusion of the recess, Hon. Francis Burton Harrison presiding. Mr. HARRISON. Mr. Oxnard, we will open the session in the absence of Mr. Underwood. Mr. OXNARD. Mr. Chairman, Mr. Francis K. Cary, of Baltimore, would like to address this committee for half an hour. BEET SUGAR. TESTIMONY OF FRANCIS K. CAREY, OF BALTIMORE, MD. [President National Sugar Securities Co. and vice president of the National Sugar Manufacturing Co. of Colorado. The witness was first duly sworn by the presiding chairman. Mr. CAREY. Mr. Chairman, while I am a member of the Baltimore bar, I am not representing professionally any beet-sugar interests but those of the companies of which I am an officer. A large part of my personal resources is invested in the plant and property of the National Sugar Manufacturing Co., which owns and operates a 550ton beet-sugar plant in Crowley County, Colo., adjoining the factory town of Sugar City, which is located on the Missouri Pacific Railway about 56 miles east of Pueblo. Our plant has been an entirely inde pendent plant from its organization and has no connection with the American Beet Sugar Co. or the Great Western Co. or with any other sugar company. The men who organized the National Sugar Manufacturing Co. do not consider that they are under any obligations to the Government or people of the United States, nor have they any favors to ask of them of any description. I will be surprised if I am not able to satisfy this committee before I get through that the favor is on the other side. The men who are responsible for the establishment of our company have had a strenuous time in the mountains and on the plains of Colorado. They climbed 1,100 feet above tidewater into the fastnesses of the Pikes Peak range of the Rocky Mountains for the purpose of harnessing the great Twin Lakes, which Helen Hunt Jackson's beautiful poem has made famous, into irrigation reservoirs, using for that purpose a very large sum of money. The water which they impounded in these lakes they brought 160 miles down the Arkansas River, using the river under the laws of Colorado as a common carrier, and at this point took this water into a canal 40 PARAGRAPHS 216-219-BEET SUGAR. miles long, terminating in a large reservoir, which they constructed on the prairies of Colorado, which they had set out to subdue and civilize. They connected this local reservoir with the present factory site of the sugar plant with a 30-inch pipe line 4 miles long. In other words, they brought the water to irrigate the prairies a distance almost as great as the distance between Washington and New York. Before they entered upon this bold and difficult task there stretched from the little hamlet of Boone, on the Arkansas River, to what is now Sugar City, between 40,000 and 50,000 acres of desert prairie land-silent, unpeopled, and barren-giving sustenance only to prairie dogs, coyotes the contemptible hyena of the Colorado plain-stray antelope, and lean range cattle, the last named being one of the most miserable members of the animal kingdom and too often destined to a terrible death by hunger or thirst. If we were trying this great case before a nonpartisan business commission instead of being compelled to try it on a political basis in a town meeting under the circumstances which have attended this and similar hearings, and 2,000 miles away from the source of information, we would be glad to show such a commission to-day what we have substituted for these wilderness conditions, and we could with pardonable pride point to a smiling, prosperous, and fertile agricultural country, peopled by industrious, prosperous and contented American citizens. The little town of Sugar City, which is the creation solely of our beet-sugar operations and entirely dependent upon them, has a population of about 1,200 people. It has an attractive appearance. Its enterprising citizens have financed and put in operation admirable sewerage and water plants; it is lighted with electricity; it has 3 churches; an enterprising newspaper; a prosperous bank; and best of all it has a large brick school building, Mr. Chairman, which would be a credit to the city of Washington, where over 400 children are enrolled for the purpose of being trained to the duties and responsibilities of American citizenship. Free sugar would send our property and plant to the auction block, the scrap heap, and the bankrupt court with such certainty and celerity that even men of courage and experience who have had some training in disaster, and who know many ways of averting or delaying it, would not even have the poor privilege of gasping and struggling along for a year or two for the purpose of showing the American people that they are good sports. A radical reduction in the sugar tariff would head us for the same goal, but I am willing to admit that our death would be by a process of strangulation and much more painful than a sudden one, because those of us who can command money and afford to lose it would have the courage, which could be better called the desperation, to try to save our investments and might struggle along for a brief period in the hope that better national counsels would prevail. If this committee has no sympathy with the pioneers who have given the best years of their lives to the establishment of the beetsugar business in this country, and if they share the prejudice which now seems fashionable with the man on the street, who seems to PARAGRAPHS 216-219-BEET SUGAR. resent the progress of his enterprising fellowman, and who has never found it necessary himself to take any more desperate chances than those which are involved in riding on a suburban street car or a hotel elevator, perhaps you will be able to appreciate the tragedy which awaits the population whose prosperity is tied up with the prosperity of our company and the current of whose life is bound to stop the moment the fires are drawn for the last time from under our boilers and our giant Corliss engine makes its final revolution. For example, perhaps you can measure to some extent the tragedy which would await the entire population of the prosperous little town of Sugar City, whose citizens surely deserve a better fate than that which the friends of free sugar are so insistent upon providing for them. Our plant has this year made about 6,000 tons of absolutely pure and wholesome standard white granulated sugar. We will consider ourselves very fortunate indeed if we are able to sell this output for an average f. o. b. price of $4.25 per 100 pounds. As a manufacturer of beet sugar, who has been engaged in the business for over 12 years, I feel absolutely certain that the business can not stand a lower average price for standard granulated sugar than that which now prevails. I assume that we are at this hearing endeavoring to talk practical common sense to each other, and on that basis I do not believe that any member of the committee will dispute the fact that if the proposed cut in the duty does not result in diminishing the price of granulated sugar to the consumer, it would be perfectly foolish to make it, because it would simply mean that the Treasury of the United States Government would be out of pocket without giving any benefit to the consumer. If, on the other hand, the cut is large enough to reach the price of refined sugar; in other words, if it is so great that it can not be absorbed, as a large part of it is bound in any event to be absorbed, either by the cane refiner or the Cuban grower or by both, and the net result is the reduction of the average price of standard granulated sugar, I feel absolutely certain that this reduction would be both unnecessary and unfair. I say it is unnecessary because I believe it will be everywhere conceded that the people of the United States are to-day buying a very excellent and pure sugar at a very moderate price, which compares favorably with the price charged throughout the world, and is lower, as I understand it, than the average world price to the consumer in what may be called the nations of the first and second class. It is also true that the price of sugar has not responded to the influences of the so-called high cost of living, because while other food products have shown a tendency to advance in price, sugar has shown a consistent tendency during the past 10 years to decline in price, and when you put these facts alongside of the most important fact of all, that the Government is collecting a revenue of over $50,000,000 from the sugar tariff, it does seem to me that the energies of the national administration might be profitably devoted to some more pressing subject than that of the sugar tariff. Take, for example, a cut of 50 per cent in the present sugar tariff, which seems to be the fashionable conclusion which many people have reached, and which has no more scientific or intelligent basis PARAGRAPHS 216-219-BEET SUGAR. than an alleged compromise between free sugar and the maintenance of the present tariff. I believe it will be conceded that such a cut would enable the cane refiner to safely reduce the price of standard granulated sugar for a period of, say, two years, to less than 4 cents a pound, and that his business interests would justify such a temporary reduction. Now, such a reduction for such a period would inevitably first of all stop instantly the threatened rapid development of the beet-sugar industry, which it is, of course, the duty of the cane refiner to stop if he can; and secondly, a period of two years of 4-cent sugar would be quite long enough to put out of business every beet-sugar plant which was not possessed of a very long purse and a very courageous board of directors. The beet sugar business can not to-day get bank credit or finance. its operations on 4-cent sugar. Now, do not understand that I am for one moment joining in the bitter attitude toward the American cane refiner which has been manifested at an earlier part of this session. I have the greatest admiration for his skill and enterprise. If some of the refiners have made mistakes they have been surely severely punished for them. But when a man of the standing and character of Mr. Jameson comes before this committee, he is entitled to the respectful consideration which the creator of a great and distinguished business is at all times entitled to; and, personally, I resent the treatment which some of the cane refiners have received this morning from the Republican side of the committee. I have no personal criticism to pass upon the American refiner for having sold his sugar this year for the price and at the time which he selected for selling it, any more than I blame him for going off the market when the fierce competition of the beet sugar plants of Colorado proceeded to drive him off the great market between the Ohio River and the Rocky Mountains, and I cast no reflection upon him when I say that after he had made use of a 50 per cent cut to throttle his competitors by putting the beet-sugar man out of business, he will then follow the laws of supply and demand and put his sugar prices up to a price as high as if not higher than those which prevailed before the cut was made. And in this connection let there be no confusion as to what really did happen in the markets east of the Ohio River during the last few months. While my plant was one of the victims of the demoralized market caused by the fierce competition of the beet sugar interests amongst themselves, we can all take a little bit of pride in the fact that we sold sugar in the Missouri Valley 30 and 40 points below the price of cane and made it absolutely impossible for the cane refiner to get into those markets at all. I absolutely misunderstand the platform and policy of Mr. Wilson and the Democratic Party if either he or it can find any pleasure in making this wholesome competition, with its resultant decrease in prices to the consumer, a business impossibility. In approaching the conclusion of my brief argument I find it necessary to refer to my own political affiliations. I take the liberty of assuming that no member of the committee who is now looking me in the face will believe that I am so lacking in ordinary good taste or so little understand the political attitude of the incoming President |