PARAGRAPHS 216-219-BEET SUGAR. Under justifying conditions, which, as we contend, exist in this case, it may be the part of good statesmanship to give as much consideration to the development of the Nation's agricultural resources and its industrial interests as to following a theory of economy or a party pledge looking to a possible reduction in the ultimate cost of sugar, a theory whose outworking results are exceedingly problematical. Third. Nothing in the history of the sugar business will warrant the belief that a reduction of the duty will permanently work a corresponding reduction in the selling price of sugar. The world's production and consumption are so nearly in balance that any changes in the expected or predicted yield from any of the important points of supply are immediately reflected in the world price, which is fixed at Hamburg and London. The cost of raw sugar dominates the selling price of the refined product. If the tariff be reduced so as to make the domestic sugar business of the United States unprofitable, then to the extent that the domestic supply is reduced to the same extent must we draw increasingly from foreign sources, subject to the speculative conditions in European markets, whereas if the beet-sugar industry is permitted to develop, then, as the domestic contribution to the national demand increases, the foreign producers and speculators will be rendered negligible and the working of the law of competition among the local producers that are so widely scattered will eventually result in a lower and more stable level of prices to the consumer than is possible where the foreign influence is felt. This statement has been and is now being verified, and as a result the eastern cane refiners have been spurred into activity to accomplish, if possible, the abolition of the present sugar duty, because they find that the invasion of their markets and the diminution of their volume increases annually, and while the cry is to reduce the cost of sugar to the ultimate consumer, when the mask is torn off this specious plea it will be found that their real purpose is to use Government legislation to cripple a competitor that, under existing conditions, has grown beyond their control. Fourth. A combination among the few eastern refiners of imported cane sugar has been found to be possible, and the fact is that, owing to the exposure of methods pursued by some of them, the public mind seems to have become so inflamed against the sugar business that hostile legislation is welcomed under the mistaken idea that in some way it will correct evils growing out of what is commonly termed a "Sugar Trust." But the legislation proposed will not have this effect; on the contrary, it will lead to a renewal of the concentration of power in the hands of eastern refiners. Combination among 70 beet-sugar factories, scattered over a wide area in 16 St tes, is inherently impossible, and the future safety of the public lies in this fact. Fifth. The refining of imported cane sugar contributes nothing to the development of our resources, save the investments in refineries and in the labor used in decolorizing the raw material. The contributions by the beet-sugar industry to the material wealth of the country have been already shown at the various hearings before congressional committees, but we beg to attach to this some statistics relating to our own enterprises, with the further general statement that there are now 11 beet-sugar factories in the State of California, whose output during 1912 reached 165,000 tons. It is a well-attested fact that local prosperity has followed the institution of each factory. Land values have increased, farmers have a ready market for their beet crop at a predetermined price. Banks and merchants and railroads have been greatly benefited, and above all, and this is not the least important consideration, farmers have been taught such lessons in the cultivation of the sugar beets as to greatly increase the yields of other crops in the process of rotation. The great value of this has been absolutely proven in Europe and in this country wherever the facts have been reliably recorded. As it appears to us, the important questions to be determined in this matter are: 1. Is it desirable that our country, in following the example set by European nations, should raise an amount of sugar equal to our annual consumption and thereby in the development of our agricultural resources and industrial enterprises disburse among our own people the vast sums annually spent in the purchase of sugar from foreigners? If so 2. Does our domestic sugar industry give promise of an ability to supply the quantity needed? If s 80 3. Does the industry require any tariff protection against the productive capacity and the low wage rates in the cane-producing Tropics, or the low labor costs in the beetproducing countries in Europe? And, if so, to what extent? PARAGRAPHS 216-219-BEET SUGAR. 4. In an economic sense, will the advantages to the Nation, growing out of a protected development of the domestic sugar industry offset the amount of indirect tax imposed upon consumers by the tariff, assuming that such tariff rate will, to its extent, increase the selling price of sugar? We believe that an intelligent and unbiased study of these questions will unquestionably lead to the conclusion that, in any revision of the tariff, the industry should be preserved, and that a total abolition of present protection will destroy it. Very respectfully, [SEAL.] [SEAL.] ALAMEDA SUGAR Co., By JOHN L. HOWARD, President. By JOHN L. HOWARD, President. BRIEF OF THE GREAT WESTERN SUGAR CO., DENVER, COLO. To the COMMITTEE ON WAYS AND MEANS, House of Representatives, Washington, D. C.: The Great Western Sugar Co., a corporation engaged in the manufacture of sugar, respectfully submits the following statement for the consideration of your honorable committee: We are sensible of the vast amount of data which your committee will have to examine, and have endeavored to set forth, as succinctly as possibly, only a few of the most important facts pertaining to our industry. The above-named company owns and operates 9 factories in Colorado, equipped for the manufacture of refined sugar from beets, located at the following points: Eaton, Greeley, Windsor, Fort Collins, Loveland, Longmont, Sterling, Brush, and Fort Morgan. During the manufacturing season just closed, the company purchased from 5,400 growers a total of approximately 1,225,000 tons of sugar beets, harvested from 96,500 acres, this being the largest tonnage and acreage of beets ever grown in the territories tributary to our factories. It is also very gratifying to be able to state that of the total number of growers furnishing beets this season, 35 per cent had not previously grown beets, showing that in this community, at least, the direct and indirect advantages of this crop are being recognized. We paid this season to growers for all beets delivered an average price of $5.90 per ton, the total expenditure amounting to over $7,200,000. This is the highest price per ton we have ever paid, being 83 cents per ton above the average price paid the previous 11 seasons. It is a fact, universally recognized by careful students of the subject, that a successful agriculture demands, in rotation with other crops, a crop which not only requires deep plowing before planting, but also frequent and thorough cultivation during the growing season. This intensive culture results in the eradication of weeds and larvæ and in a wonderful improvement of the soil texture. But at the same time such a crop must return sufficient gross revenue to justify the additional expenditure involved in its production. Speaking particularly of the arid lands, few crops measure up to this standard. Corn seems to fulfill requirements in the Middle West, but its cultivation has not been successful under far western climatic conditions. The culture of potatoes is limited to sandy soils, and the price of this commodity is subject to violent fluctuations. It is noticeable, by the way, that in the celebrated potato-raising district of Greeley, Colo., more farmers are every year substituting sugar beets for potatoes. In a word, the beet crop with its price assured to the grower by contract before the seed is planted, and a definite time set for payment, has been the means of a wonderful agricultural progress in the communities where it has been established. This crop is a favored security with bankers and merchants, thus enabling farmers to readily secure financial aid during the growing season. This is of inestimable advantage in all newly settled western communities, where a lack of ready capital is generally one of the serious handicaps of a healthy expansion. It is an undisputed fact that agriculture, to be permanently successful, must be diversified; not only should crops of different character be grown in rotation, but the growing of these crops should be supplemented by fertilization. Here is a crop that not only possesses great value in itself as an improver of the soil and a creator of better methods of soil culture, but the by-products of the plant resulting from the manufacturing process furnish a cheap and nutritious stock food. The prevention of soil PARAGRAPHS 216-219-BEET SUGAR. exhaustion demands that the essential fertilizing elements be maintained, and in practice this means of course the return of such elements. The feeding of live stock in conjunction with the growing of crops must solve the problem in the West, at least, of soil conservation. The so-called arid lands of the West are rich in mineral fertilizing elements, and the use of commercial fertilizers is thus superfluous and undesirable, but our Western soils are deficient in water-holding capacity, due to a lack of humus, and nothing can approach the value of animal manures in supplying this deficiency. It is a fact worthy of note that while the average production of an acre of corn (43 bushels) in one of the largest corn-producing States of the Union, in this its banner year, is sufficient to finish one steer for market, the production of an acre of beets furnishes not only an average of 3,000 pounds of sugar, but also, in the form of factory by-products, sufficient carbohydrate feed to also equal the entire product of an acre of corn, and experience has demonstrated that the finished product commands a price from the packer equally as good as the corn-fed stuff, as the meat produced can not be excelled. The beet tops, beet pulp, and molasses from the acreage contracted by our company this year is sufficient to finish 45,000 head of cattle for market. It is being fed to cattle and sheep, and 10 sheep can be fed on the amount necessary for 1 steer. Basing our calculations on the amount of sugar eventually extracted from beets sliced, the sugar contained in the beets before being extracted therefrom cost us this year delivered at the factories 2.53 per hundredweight, this price being, we understand, higher than the actual cost of producing sugar in some foreign countries. While we are each year gaining efficiency in manufacturing, yet the decreased expenses resulting from this increased efficiency have not been reflected in a corresponding decrease in the total cost of producing sugar, on account of the increasing cost of raw material, manufacturing supplies, and labor. Commencing with the manufacturing season just closed, the wages of all factory employees of this company were increased 10 per cent. We are not only devoting our energies to promote efficiency in our manufacturing process, but are continually investigating and experimenting with a view of cheapening the cost of production to the farmer. At each of our factories we maintain a small staff of trained agriculturists, whose work lies largely in teaching better and more efficient methods of farming, not only as regards the culture of beets, but in all the varied activities of a successful, diversified agriculture. The company owns a few small tracts of land in different territories devoted entirely to experimental work. One of these experimental farms, for instance, is in charge of a skilled entomologist, who is propagating and studying the life histories of insect enemies of the beet crop and of other crops; at another farm stock feeding and the proper application of fertilizers are being studied and investigated; and so on. The results of these experiments will be compiled, printed, and distributed to growers throughout our territory. One of the important factors in the cost of producing a crop of sugar beets is the expense involved in plowing the beets out of the ground and cutting off the tops just below the crown of the plant. To encourage inventive genius in the problem of reducing this cost, the company last year offered a prize of $10,000 for the invention of a machine, the market price of which was limited to a figure within the reach of the average grower, which would properly plow out and top beets, doing away with the excessive cost of hand labor for these operations. The company has no intention of acquiring any interest in such a device, all patent rights, royalties, etc., to inure to the inventor. Another feature, which, because of the comparative newness of the industry in this country, has received but scant attention up to the present time is the production of beet seed on a commercial scale. The great bulk of the seed furnished the beet growers of the United States is imported from Europe. This company has been experimenting with seed production on a small scale in widely separated territories for a number of years, and the results have exceeded expectations. During the coming season over 600 acres of land in territories tributary to our factories will be devoted to growing seed beets, from which should be harvested seed enough to plant 60,000 acres of beets. It is hoped that at on very distant date the country's beet seed requirements will be supplied by domestic production, adding a new source of agricultural wealth. Now permit us, in closing, to make a short statement concerning the sale and distribution of our product-refined granulated sugar. Since the 1st of November we have been offering and selling sugars in practically all territory east of the Rocky Mountains, sales having been made at points in every one of the Southern States and in New York City, Philadelphia, Baltimore, Albany, etc. In a season such as the PARAGRAPHS 216-219-BEET SUGAR. present one, when our production is heavy, it is necessary to market a large proportion of our sugars in territory east of the Mississippi River, where the consumptive demand is much greater than in the Western States. The impression has prevailed in some quarters that manufacturers of beet sugar located in the Western States are benefited by reason of their location. Our strongest competitors are of course the cane-sugar refiners located at points on the seaboard. Their prices at inland points are combinations of prices quoted f. o. b. refineries and freight rates from refineries to such inland points. In all territories in which we sell we do so in competition with cane refiners, and must necessarily meet their prices in order to effect sales. While it is true that the freight rates from seaboard refining points to certain points at a limited distance from our factories are higher than from our factories to the same points, the fact is that only a very small proportion of our sugar is sold in this near-by territory, we being compelled to dispose of the major portion at large eastern distributing points and pay higher freight rates than are used by the cane refiners from seaboard in naming prices at the same points. Competition with both beet manufacturers and cane refiners is unusually severe, and prices at which our sugar is offered range anywhere from 10 to 60 cents per hundred pounds below the price of cane granulated. Although our records are not in such shape as to indicate the exact figures, sales of this season's product to date will net us from 50 to 60 cents per hundred pounds less than we have netted on our product for the past 11 years, and as far as one can prophesy, judging from conditions in the world's sugar market, extremely low prices will continue for the next six or eight months, during which time it will be necessary for us to dispose of the remainder of our present season's production. To sum up, we sincerely feel that the short record of the beet-sugar industry in this country has been distinctively one of progress. Speaking particularly of this company, we are striving in every way possible to reach the ideal condition of highest efficiency under American standards of living. The Congress of the United States has encouraged the settlement of large areas of heretofore unproductive land, the occupants of which have in good faith, as their means permitted, slowly developed varied lines of agricultural activity. These interests have been developed in such a way as to be mutually interdependent. In many communities the establishment of the sugar-beet industry, has been the fundamental basis of other development. Enormous financial obligations have been assumed by settlers the liquidation of which is dependent on the success or failure of the beet-sugar industry. The Congress of the United States can not, acting with integrity, withdraw adequate protection to this industry at one fell swoop. Respectfully submitted. DENVER, COLO., January 15, 1913. THE GREAT WESTERN SUGAR CO., BRIEF SUBMITTED BY A. V. OFFICER, MANAGER SCOTTSBLUFF SUGAR CO., SCOTTSBLUFF, nebr. WASHINGTON, D. C., January 15, 1913. To the Chairman and Members of the Ways and Means Committee, House of Representatives. GENTLEMEN: We desire, in submitting this our final appeal to your committee, having under consideration the revision of the existing tariff schedule, to present a brief statement of facts regarding the beet-sugar industry in this section of Nebraska; to call your attention to the part this industry has played in the development of the farming resources and furthering the commercial interests of this section, what, therefore, its expansion means to this section of Nebraska, and what the possibilities for its expansion are if the protection now afforded is continued. We desire to submit this data in order that you may know just what this industry means to the prosperity of this State, irrespective of our own personal interests, and what it must mean to the farming and commercial interests of any other State in which a beet-sugar factory is located. In connection with the above, we present for your information a statement of what it costs this company to make sugar; the net price we are getting for our sugar. The cause, as we view it, for the present low price, and our reason for the belief that these low prices will continue; the narrow margin of profit that the industry affords the manufacturer under existing conditions, and the evident necessity for its con PARAGRAPHS 216-219-BEET SUGAR. tinued protection to the extent of existing duty if the business is to expand or continue to be profitable. We desire to present this data for your earliest and careful consideration so that when final action is taken by your committee it will be done with these facts before you and with the full knowledge and understanding that any material reduction in the existing tariff will not only check any further growth of the beet-sugar industry but will render the business unprofitable, thus in effect destroying our investment. We believe from the facts presented in this brief setting forth the cost to this company of making refined sugar, and from similar testimony presented to your committee by others as well as the testimony previously submitted at the hearings of the Hardwick committee, all of which is a matter of public record, that it would be apparent to your committee that the prevailing notion existing in the public mind of enormous profits realized by the beet-sugar manufacturer is largely a myth and that, on the contrary, it would be evident to your committee that any material reduction made in the tariff will eliminate the manufacturer's profit. From testimony furnished at previous hearings of the Hardwick committee, we believe it has been clearly shown that the profit made by the farmer on the beet crop is only a normal one, proportionate only to the work and burden the crop imposes and the hazard the grower assumes. FACTORY CAPACITY AND LOCAL CONDITIONS. The Scottsbluff factory is a modern factory in every respect. Constructed but three years ago, it is equipped with all the latest and most improved type of machinery, including what is known as the Steffens process, which was installed in order to effect the highest possible extraction of sugar from the beet. This plant has a capacity for working up daily 1,400 tons of beets, and since the first year of its construction has enjoyed a long campaign of operation owing to the generous support given it by the farmers. The campaign for 1911-12 covered a period of 93 days, and for the campaign 1912-13, 108 days. The quality of beets grown in the North Platte Valley, in which this factory is located, is up to a normal average standard, the sugar content for the respective seasons, as shown by the analysis of the Cossettes, being as follows: I wish to draw your attention to these facts so that they may be in the mind of the committee when later a presentation of cost data of our finished product is made. WHERE THE SCOTTSBLUFF SUGAR FACTORY IS LOCATED. The Scottsbluff factory is located in the extreme western portion of Nebraska in what is known as the North Platte Valley, a section of the State that is now attracting the attention of many of the citizens of the State owing to the construction of our irrigation enterprises and consequent farming developments. The normal annual precipitation in this section of Nebraska rarely exceeds 15 inches, in consequence of which the attempts of the early settlers who endeavored to farm the table and bench lands resulted in failure, due to insufficient rainfall, until, by artificial means (the construction of irrigation ditches), this shortage was supplemented. The need of irrigation by the early settlers was recognized and practiced by those whose farms were located on the river bottom or first-bench lands, but it was not until the large irrigation enterprise of the Tri-State Canal Co., and later the undertaking of the Reclamation Service, known as the North Platte interstate project, was brought to completion that the people began to realize the possibilities of the lands of the North Platte Valley for diversified farming, for it was by reason only of these two undertakings, involving an outlay of between $6,000,000 and $7,000,000, that 160,000 acres of barren waste land was reclaimed. This great work and service done by the Reclamation Department will stand as a lasting monument to the credit of our Federal Government. |