PARAGRAPHS 216-219-BEET SUGAR. EFFECT OF TARIFF REDUCTION ON SUGAR PRICES. Free sugar means the absolute destruction of the beet-sugar industry, and the slightest reduction means to retard the development. A lower tariff, therefore, means lower prices for sugar only until the existing beet-sugar industry is destroyed or until further development of the industry ceases. After that, decreased production and lack of competition will tend to increase prices. At the present time about 80 per cent, or $300,000,000 worth of sugar consumed by the people of the United States, must pass through the hands of three separate refining interests, namely, the American Sugar Refining Co., the Arbuckles, and the Spreckles. These people have, through the public press and through manufactured petitions, made propaganda for a lower tariff on sugar. Inasmuch as a high or low tariff has but little effect on their business of refining imported sugar, they can only be interested in a lower tariff for the purpose of destroying the domestic sugar industry, which is now their only competition. It is an established business proposition that competition between several hundred beet-sugar factories located over an area covering the greater part of the United States will assure the consumer cheaper sugar than compulsory Sherman law competition between three sugar refining interests located in a limited territory on the seaboard. Because the American Sugar Refining Co. (Sugar Trust) is interested in some of the existing beet-sugar companies, these companies, under the influence of the Sugar Trust, may not object to some reduction in the tariff, but their only object can be to prevent further development of the industry in order to prevent further competition. EFFECT OF TARIFF REDUCTION ON GOVERNMENT REVENUES. The Government will lose all the revenue incidental to a reduced tariff, but the consumer will make no corresponding gain, because about 40 per cent of the sugar consumed in this country goes into manufacture of such articles as candy, confections, chewing gum, chewing tobacco, liquors, condensed milk, and others, the retail price of which will not be affected by a decrease in the price of sugar. This 40 per cent, which under only a moderate reduction amounts to a large sum of money, will go to the manufacturers and distributers of the above articles as increased profits. SUMMING UP, THE PRESENT TARIFF ON SUGAR SHOULD NOT BE REDUCED. Because it is building up an important and beneficial home agricultural industry of great value that with further development can eventually compete with foreign countries. Because the existing industry is not making excessive profits. Because it is no burden to the people. Because it is a large revenue producer for the Government. It is unfortunate that this question should be a matter of politics and adjusted by men elected to only a two-year tenure of office, who therefore can not have the knowledge or time necessary to investigate and decide such questions on their economic value to the Nation. There can be no question but what an impartial commission of expert economists would not only decide in favor of retaining the present tariff, but probably in favor of increasing it in order to hasten the development of such an important industry as beet-sugar production. MILWAUKEE, WIS., January 11, 1913. R. G. WAGNER, President Wisconsin Sugar Co. Mr. RUCKER of Colorado. Mr. Chairman, there are representatives of a number of commercial bodies from my district who have come here nearly 2,000 miles to be heard by this committee upon invitation. I do not know anything about who had the distribution of this time, but I would like one of these gentlemen, a constituent of mine, to be heard by this committee before it is through. The CHAIRMAN. Judge, was your constituent here this morning when this agreement was entered into? Mr. RUCKER of Colorado. I was not here, and I do not think they observed the distribution of the time. PARAGRAPHS 216-219-BEET SUGAR. The CHAIRMAN. The Chairman proposed to call the names of the witnesses and ask if they did not want, an agreement, and they entered into an agreement. The sugar men undoubtedly had the best of it. Mr. Palmer has the floor now. Mr. RUCKER of Colorado. We have heard a great deal from the manufacturers' standpoint, but we have not heard much from the farmers' standpoint, and that is what these gentlemen have come nearly 2,000 miles to talk about. Mr. OXNARD. Mr. Case, of California, wants to file a brief, I think. TESTIMONY OF F. B. CASE, OF CALIFORNIA. The witness was duly sworn by the chairman. Mr. CASE. Mr. Chairman and gentlemen of the committee, I have been engaged in the sugar industry in the State of Michigan and elsewhere, and subsequently in the State of California, and am at present a stockholder and manager of the Southern California Sugar Co. at Santa Ana. I came here as the accredited representative of our company and of the Los Alamitos Sugar Co. and the Newheim Sugar Co., independent corporations operating separate plants, and in no way connected with any other sugar company or any other corporation. I should have been satisfied to appear and simply make a protest against the reduction of the tariff on sugar and submit our case upon the statements of the other gentlemen who have spoken in behalf of the beet-sugar industry, were it not for the fact that imputations have been made against the California industry, pointed particularly at the sugar factories of that State. California is the largest beet-sugar producing State in the Union. We produce sugar, and while at San Francisco we have large refineries that refine the imported product, our State is the largest producing State in the Union. We have been charged with selling our sugar to our own people at a higher price than we receive from the people of other States. In California we produce and manufacture five and six times the quantity of sugar that is consumed upon the coast in the States of California, Oregon, and Washington. Our surplus product must find its market in some consuming community. We therefore ship the sugar which is not consumed at home to the Missouri River, the Mississippi River, Chicago, and as far east as Cincinnati and Pittsburgh. To ship our sugar this long distance requires the payment of an excessive freight rate. Were we not permitted to receive more for our sugars at home than we receive in Cincinnati and Pittsburgh we would go out of business entirely. It is our profitable market, and in enjoying our own profitable market we are doing no more than every other producer in the State of California is doing. Mr. OXNARD. Your three minutes have expired. Mr. CASE. I simply wanted to refer to a remark made concerning the employment of celestials in southern California. I want to say-and I am conversant with the employment of labor in all the PARAGRAPHS 216-219-BEET SUGAR. sugar factories in southern California-that none of them employ any more celestials than they are compelled to. The factory with which I am connected does not employ an Asiatic in any capacity either in the factory or in the field, and I do not believe that to-day 3 per cent of the sugar factories of southern California employ celestials, and they are not employed by any other factory except as a matter of necessity. I thank you, gentlemen, very kindly. Mr. Case, at a later date, filed the following communication with the committee: CAPITALIZATION OF SOUTHERN CALIFORNIA SUGAR Co. Hon. OSCAR W. UNDERWOOD, Chairman Ways and Means Committee, SANTA ANA, CAL., January 28, 1913. House of Representatives, Washington, D. C. DEAR SIR: On looking over the statement filed by Mr. Lowry giving the capitalization of beet-sugar factories, I note that that of the Southern California Sugar Co. is placed at $1,000,000, and it is included with other sugar factories with the intent to show that the stock of beet-sugar factories is largely watered. The stock issued by this company is $500,000; the plant cost originally $600,000, and there was a mortgage indebtedness of $100,000. While we are permitted to increase the stock issue to $1,000,000, it can not be done until improvements, enlargements, and extensions are made to the value of every additional share of stock issued. To-day there is not and never has been one drop of water in the stock of the Southern California Sugar Co. We desire to have the record show the truth, and would thank you to incorporate this letter in the printed copy of the hearing. Yours truly, SOUTHERN CALIFORNIA SUGAR CO., Mr. OXNARD. Mr. Chairman, Mr. O'Donnell, of Montana, a beet grower, would like to address you for seven or eight minutes. TESTIMONY OF I. D. O'DONNELL, OF BILLINGS, MONT. The witness was duly sworn by the chairman. Mr. O'DONNELL. Mr. Chairman and gentlemen of the committee, I hope in this very short time to give you a little change. The question has been the tariff and the price of sugar. I would like to speak for a few minutes along the line of strictly farming from the beet-sugar standpoint. I am located at Billings, Mont., in the Billings sugar district. I have been in that settlement for 31 years next spring on a continual line of farming under irrigation; I have farmed it practically every year, under irrigation. As my neighbors tell me, I graduated from the swamps of Michigan, in the Hon. Mr. Fordney's district. The early days in our section saw the growing of blue joint, followed by a series of grain farming. Then came alfalfa, and we thought we had solved the problem with alfalfa. Then came the sheep panic, and we could not sell hay. In 1906 came the sugar factory, and with that our prosperity apparently started. Our market began to build up. We had better markets for our grain, alfalfa, and stock. The county in which I live has shown a remarkable growth in population. In 1906 the population of our county was 9,000; in PARAGRAPHS 216-219-BEET SUGAR. 1910, 23,000; showing a remarkable gain. From away back in 1890 to 1901 we only gained a couple of thousand. The sugar-beet business in our country has brought on diversified and intense farming, under which 40 acres produces more than 160 acres under the old order of business. The result of growing 1 acre of beets with us now is twice or three or four times the gross proceeds of farming before that time which was $10 or $12 an acre. The factory paid us last year $1,200,000 for our sugar beets. The pulp, sirup, and tops-by-products of the factory-are fattening this winter $1,000,000 worth of stock, and especially has made a market for a class of cattle and sheep that used to be a loss-the old ewe and the old cow. The pulp and the tops have found a place in fattening that class of stock. It has made new markets. We used to ship our cattle and sheep to Chicago and then have them shipped back to us as meat. Now we are fattening at home and supplying the home market. Our market now is almost entirely Seattle and Portland. It means crop rotation, diversified farming, and stock feeding. Rotation means better farming. On my own farm-I have a farm of 640 acres under irrigation-the rotation has increased my grain yield, alfalfa yield, and other yields fully 50 per cent. Where we used to grow 30 to 40 bushels of wheat to the acre we are now growing 50 to 60 bushels. During the last year as high as 126 bushels of oats were raised per acre. Mr. KITCHIN. Do you think the beets are increasing the fertility of the soil? Mr. O'DONNELL. They undoubtedly do. Mr. KITCHIN. That would seem to compensate for some reduction of the tariff, would it not-the growing of these beets? Mr. O'DONNELL. It might in a way, but the growing of the beet itself has no great profit. But in the increased yields of crops following is where we make our best profits. Mr. KITCHIN. About how many tons to the acre do you make of beets? Mr. O'DONNELL. We are averaging 10 to 12 tons. Mr. KITCHIN. And you got last year, or this season, how much? Mr. KITCHIN. Do you use any fertilizers at all? Mr. O'DONNELL. Yes, sir; we feed sheep and cattle and have the fertilizer put back on the farm. The diversified farming eliminates losses. If we lose on alfalfa we make it up on beets, and so on. So we have practically three firstclass crops to rely on. The top feeding means more fertilizer. On my farm I put out 2,000 loads of fertilizer a year. It makes a market on the farm for all of our roughage. The stock feeding means better stuff. Before this when we raised stock on the range and pastures and shipped it to the markets, we did not know good stock from poor stock. We never got to realize the difference between a first-class feeder and a poor feeder. Now, with the feeding proposition we are beginning to learn the advantage of good stock for the purpose of feeding. PARAGRAPHS 216-219-BEET SUGAR. Every acre of beets, as a neighbor of mine puts it, when we grow 40 acres of beets, it means a market for another 40 acres, making a home market for that much more. It solves the labor problem on our farms. The help that work in the beet fields work right along. The work seems to come just right for them to handle our hay and harvest and our winter feeding. On my farm I used to haul the men from town out and back; now we keep the entire help. I have not had to go to town for five years for my farm help. The average on my farm used to be six men. Now we have 75 people on the farm during the summer work and 12 during the winter work. Mr. KITCHIN. Do you work the whole 640 acres with 75? Mr. KITCHIN. You work 75 men during the summer when you are cultivating beets? Mr. O'DONNELL. Cultivating beets. Mr. KITCHIN. And about 8 or 10 at what other times? Mr. O'DONNELL. In stock-feeding times, in the wintertime. Mr. KITCHIN. When do you harvest your beets? Mr. O'DONNELL. We harvest the beets in October; the feeding starts in November. Mr. KITCHIN. You cultivate with those men about Mr. O'DONNELL. Two hundred and thirty to forty acres of sugar beets. Mr. KITCHIN. And how many acres in grain and wheat? Mr. O'DONNELL. Three hundred and twenty acres in alfalfa, only about eighty acres of grain, some potatoes, and a small orchard. Mr. KITCHIN. What kind of labor is that? Mr. O'DONNELL. I will touch on that in just a minute. This solves the labor problem. It is the only crop in which we have an assured market price, known before we sow the seed. Last year, as a comparison with the wheat business, wheat was 90 cents a bushel in our country. Our farmers sowed an immense acreage of wheat. When we got to the market with our wheat we were offered 53 cents a bushel. It is the same way with flax. When we sowed flax the price was $2.50 a bushel, and when we took it to market we were offered $1.25. Potatoes were $2 a hundred, but when we reached the market with them we were offered 50 cents. It is the same way with the apple proposition. The season before apples were $2 a box, and this year we could hardly give them away. That shows the splendid advantages of the sugar-beet business-the assured market, knowing the price. The other things practically all went to pieces. The farmer who did depend on wheat has practically gone behind on this season's returns. The beet grower is furnished by the factory with practical experts. There is a difference between the expert and the practical expert. They furnish practical experts. In our district there are eight men under a supervisor. They rotate around among the farmers, explain to us, and give us general ideas, and we have their assistance at any and all times practically free. Mr. KITCHIN. The factories furnish those? Mr. O'DONNELL. Yes, sir. |