different localities, acco:ding as it may secure the greater economy in marketing its products.

Consolidation. The condition outlined in the last paragraph is precisely that affording the greatest promise of profit from consolidation-profit to be realized (1) from the economy of large scale production, and (2) from control of output through monopoly. The economy is for the public interest, the monopoly may well not be. Both, however, are for the interest of the industry, and the temptation to avail itself of the opportunity is strong. In the absence of positive legal enactments to the contrary it may be taken for granted that monopoly will be attempted. The industry with which we are dealing was, in fact, one of the earliest to make the attempt. The "Sugar Trust," organized in 1887, was a "trust" in the legal sense as applied to its form of organization, as well as in the derived sense of a monopoly. The consolidation having come under the condemnation of the courts, the management next attempted to accomplish the same purpose through a different form of organization. To this end a single new corporation, the American Sugar Refining Co., was chartered, representing the same interests as those concerned in the former "trust." Although, as stated, the conditions were such as to invite attempts at monopoly, the monopoly has never been able to maintain control of supply for any considerable period of time. There has always been not only potential competition, but on several occasions active competition; in 1889 with Spreckels, and in 1897 with the Arbuckles. At present there are a dozen or more competing refineries. The American still furnishes from 30 to 40 per cent of the output, but can not be said to occupy a monopoly position. in control of supply and prices. Later in this report a statistical study will be made with a view to determining what was, in fact, the effect of the monopoly on prices and profits.

Geographical distribution.-The supply of raw sugar for the refineries comes from Louisiana, Cuba, Porto Rico, the Hawaiian, Philippine, and Virgin Islands; and, to a small extent, from other sources. As all of these sources of supply, except Louisiana, involve ocean transportation, the location of refineries is thereby determined at points accessible to navigation. The refineries are found along the Atlantic and Pacific coasts, and in Louisiana and Texas. As, in this country, there are no separate establishments for refining beet sugar, the distribution of beet-sugar refineries may be said to be identical with that of beet-sugar factories. The industry centers in California, Colorado, Utah, Idaho, and Michigan.

Domestic output and consumption.-The total consumption in 1919 in terms of refined sugar was 4,555,792 short tons, which on a basis of 106,700,000 population makes a per capita consumption of 85.4 pounds. This exceeded the consumption of 1918 by 640,813 tons or

181697°-20-2

12 pounds per capita. Of the above, about 976,923 tons was beet sugar. The consumption in 1919 exceeded all previous records."

Exports. For the purpose of export, sugar refined from imported raws is always used. By taking advantage of the drawback, refiners can obtain such raws at a price of about 1 cent per pound cheaper than raws of domestic production and hence the latter are not refined for export. In normal times the export trade is not large, amounting to only about 1 per cent of the receipts, but during the war it attained a position of considerable importance. For the three-year period 1915-1917, about 12 per cent of the total annual receipts were exported. Even full-duty sugar which, in the years immediately preceding the war, had virtually disappeared from our list of imports, during the war was imported for the purpose of refining for export in considerable quantities. The drawback puts such sugars practically on a parity with Cubas.

Much of the sugar listed as exported in 1918 and 1919 was not, strictly speaking, an export. It was sugar purchased by the Royal Commission in Cuba and refined in the United States. In 1919 sugar so purchased amounted to 581,840 tons.

Imports of refined sugar are insignificant. The efficiency of American refiners and the net protection on refining (about 0.1 of a cent per pound) are sufficient to preclude foreign competition.

FOREIGN PRODUCTION.

The United Kingdom.-Several attempts have been made to introduce the production of beet sugar in the United Kingdom. These efforts have hitherto met with little success. As a result of the war, however, the matter is now being taken up with energy by the British Sugar Beet Growers' Society. Land has been secured, and is now in condition to begin planting. It is expected that a factory will be ready to begin operations before the autumn of 1921. The prospect is more favorable than that of previous attempts because of the preference of £64s. 51d. per ton on home-grown sugar over foreign imported sugar.'

a The figures in this paragraph are Willett and Gray's estimate reduced to short tons. See Weekly Statistical Sugar Trade Journal, Jan. 15, 1920, pp. 18-19.

2 Table 1.-The following table shows the increase in exports during the war and also the increase in drawback payments:

The Colonial preference on the same grade of sugar is £4 5s (31 per leng ton. Hence the preference on domestic beet sugar exceeds the colonial preference by £1 18s 1031. See International Sugar Journal, October, 1919, p. 478,

Moreover, the Government is to subscribe £250,000 of the capital, provided a like sum is secured by public subscription and is to guarantee 5 per cent dividends on the private stock for 10 years. The refining of cane sugar, however, is already an important industry. Before the war about half the domestic consumption was refined in British refineries, and the other half was imported already refined. Taking 1913 as typical, 1,172,321 tons of raw sugar were imported, which after deducting the comparatively small portion consumed as brown sugar, Demerara sugar, etc., were refined in British refineries, and 1,033,250 tons were imported already refined. Of the above importations, 708,830 tons of raw sugar and 743,139 tons of refined sugar were imported from Germany and Austria-Hungary.

From these figures it will be seen that Great Britain was dependent for nearly two-thirds of her supply of sugar upon the Central Powers. The deficit from this source caused by the war was in part made good by increased importations of cane sugar, especially from Cuba and other American sources, and in part it was not made good at all. The importation of raws in 1917 was 1,364,203 tons, of which 57.4 per cent was from Cuba; and of refined, 189,805 tons, of which 22.2 per cent was from the United States. It will be seen that the total supply was over 650,000 tons, or nearly 30 per cent, less in 1917 than in 1913. As one means of meeting the enormous war liabilities, the Government has imposed heavy import duties, graded with reference to the centrifugal test, upon sugar, and in order to become less dependent in the future upon foreign sources of supply, has granted preferential rates one-sixth less than the full duty upon all sugars imported from British possessions. For 96° centrifugals the full duty is 22s. 4.5d. per hundredweight (4.8 cents per pound). The preferential rate is therefore 18s. 7.75d. per hundredweight (4 cents per pound).

The Central Powers.-Germany, before the war, was the largest beet sugar producer in the world. Part of the output was refined and part exported raw. In 1913-14 the total production was 2,993,704 tons. In 1913 the exports of raw sugar were 581,060 tons and of refined sugar 649,603 tons. The total production for 1918-19 was 1,581,298 tons, less than 53 per cent of the prewar production.

Austria-Hungary, in 1913-14, was second to Germany in the production of beet sugar-1,854,169 tons. The preceding year the output was even larger-2,093,796 tons. Her exports in 1913 were 206,627 tons raw and 977,756 tons refined. With the war Austria-Hungary, as a single nation, ceased to exist. Willett & Gray estimates the production of "Czecho-Slovakia, etc.," in 1918-19, as 784,000 tons.

* All foreign data for 1913-14 are from "The Cane Sugar Industry," Department of Commerce, Miscellaneous Series, No. 53.

British data for 1917, from the International Sugar Journal, February, 1919, p. 99 (reduced to short tons). • Foreign production data for 1918-19, Willett & Gray's estimate (reduced to short tons).

Russia, in 1913-14, was third on the list of beet-sugar producing countries-1,681,247 tons. Like Austria-Hungary, it is now split into several States, the production of which for 1918-19 was 784,000 tons.

France also suffered heavily. In 1913-14 her production was 790,790 tons; in 1918-19, 123,307 tons. The beet sugar region in France was, in the main, the region occupied by the German armies. Of 208 factories in operation in 1914, only 65 remained in 1917. It was at first thought that the tearing up of the soil by shell fire would render it infertile for many years. This conclusion is now questioned, at least for some crops.

General statement as to foreign production.-Without discussing the situation in other sugar-producing countries in detail, enough has been written to indicate some of the main features in the world sugar situation produced by the war. At its outbreak the world's sugar supply was made up of beet and cane sugar in not far from equal proportions-54 per cent cane and 46 per cent beet. The great center of beet sugar production was Europe, especially those parts of Europe directly involved in the war. Hence, as a result of the war the production of beet sugar was reduced about 4 million tons. Το make good this enormous shortage in the world's sugar supply, cane sugar production, especially in Cuba, has been greatly stimulated, the present output being some 24 million tons in excess of the prewar output. Even this increase, however, is insufficient to make good the loss, and the world is still over 2 million tons short of its prewar production. From a position of approximate equality the beetsugar production is now only about 26 per cent of the world production, while cane sugar is 73 per cent. As the refining of cane sugar is more universally carried on as a separate industry than the refining of beet sugar, such a situation tends to increase the business of the refineries. Moreover, cane sugar is a tropical product, while beet sugar is a product of the temperate zone. The increased emphasis upon cane sugar therefore tends to increase trade with the tropics. More important to the average consumer is the effect of the world shortage upon his accustomed supply and the price he pays. for it. Prices have risen greatly, and would doubtless have risen more had it not been the general policy of the several Governments to intervene and modify the normal operation of the law of demand and supply by regulating price and distribution.

TARIFF HISTORY.

In the United States refined sugar has always been subject to a higher duty than raw sugar, thus affording it a net protection. In early acts various terms were used to designate the higher grade sugars, such as white, clayed, or powdered sugar, and refined, loaf,

lump, crushed, or pulverized, and the trade name of the sugar determined the rate of duty. An attempt at a more scientific classification was made in the act of August 5, 1861, by the introduction of the Dutch standard, in accordance with which the different grades were judged by color, the darker the color the lower the grade. The Dutch standard continued to be used until the act of October 3, 1913. In the act of March 3, 1883, however, the polariscopic test was combined with the Dutch standard. Sugars not above No. 13 Dutch standard, and not above 75° by the polariscope, paid a duty of 1.4 cents per pound, with an additional duty of 0.04 of a cent per pound for each polariscopic degree above 75. By the act of October 1, 1890, sugar below No. 16 Dutch standard was placed on the free list with a bounty in lieu of the former protection. Sugar above No. 16 Dutch standard was granted a protective duty of cent per pound. In the act of August 27, 1894, a uniform ad valorem duty of 40 per cent was imposed upon all sugars, to which was added on all sugars above No. 16 Dutch standard a specific duty of of a cent per pound. In the acts of July 24, 1897, and July 4, 1909, the combined Dutch standard-polariscopic test was restored. Sugars not above No. 16 Dutch standard and not above 75° by the polariscope paid a specific duty of 0.95 of a cent per pound, with an addition of 0.035 of a cent per pound for each additional polariscopic degree. If, however, the sugar was refined or above No. 16 Dutch standard, a specific duty of 1.95 cents per pound in the act of 1897 and 1.9 cents per pound in the act of 1909 was imposed irrespective of the polariscopic test. By the act of October 3, 1913, the Dutch standard test was abandoned. All sugars testing not above 75° by the polariscope paid a duty of 0.71 of a cent per pound with an additional duty of 0.026 of a cent per pound for each additional polariscopic degree. In this act refined sugar is given no specific mention and receives no higher rate of duty as such, but only as it shows a higher polarization. In the two preceding acts the wording is such as to imply that a raw sugar might be above No. 16 Dutch standard and a refined sugar below. An objection to the Dutch standard test was that a sugar of high sucrose content might be artificially colored so as to bring it into a lower class, and hence pay a lower rate of duty than other sugars of equal sucrose content. The coloring matter might be of such a nature as to be easily removed after importation, and hence a high-grade sugar would be admitted at a rate too low for its grade. One of the most important acts in connection with the tariff history of sugar was the Cuban reciprocity act of December 17, 1903,

• The origin of the term "Dutch standard" lies in the fact that the graded samples used for making the color comparison were prepared by two Dutch firms and generally accepted as standard by merchants and custom-house officers throughout the world.

7 The act of 1913 as originally passed provided that all sugar should be admitted free of duty after May 1, 1916. This proviso was repealed by special act of April 27, 1916.