while Gothenberg is 7.7 cents per pound. The price for Spain is represented to be 12.2 cents per pound, this being the extreme price for that country at Madrid, Valencia being 8.7 cents per pound, Malaga 9.4 cents per pound, while the other two cities quoted are lower than Madrid. The retail price for the United States is alleged to be 5.7 cents per pound. This is arrived at by assuming that the New York wholesale price for July, 1911, was 4.90 cents per pound, to which was to be added 0.79 cent per pound ascertained as the average cost of distribution in New York between 1890 and 1907 by the Bureau of Labor. Now, the period between the last day of June and the first day of October in 1911 was an abnormal one in the history of the sugar trade. The New York wholesale price for granulated started at 5 cents per pound on June 29, and reached 5.65 cents per pound by July 31. The average for the whole month was 5.35 cents per pound. To this it is customary to add fully 1 cent per pound to allow for cost of distribution, including wholesalers' and retailers' profits, in order to arrive at an average retail price for the whole of the United States. If we follow out this method, the retail price for the month of July, 1911, would be 6.35 cents per pound instead of 5.69 cents per pound, as represented here. In contrast to an allowance of 0.79 cent per pound for cost of distribution in arriving at the representative retail price for the whole United States in this chart, in chart No. 24 Mr. Palmer makes an allowance of 0.875 cent per pound, and in chart No. 13 he admits to a New York wholesale price for granulated of 5 cents per pound on June 29, 5.10 cents per pound on July 6, and 5.45 cents per pound on July 27, 1911, but he now chooses to assume a price of 4.90 cents per pound for July, 1911, in arriving at this alleged retail price of 5.7 cents per pound for the whole United States during July, 1911.

It is only by selecting these very highest prices and including such countries as Italy, where the retail price is 14 cents per pound, of which 8.67 cents represents taxes; Spain, 12.2 cents per pound, of which 7 cents represents taxes; Greece, 11.04 cents, of which 7.9 cents is taxes; Portugal, 10.3, of which 7.26 cents is taxes; and Bulgaria, 10.1 cents, of which 6.56 cents is taxes, that he arrives at his average retail price for all Europe, 7.8 cents per pound, and alleges an average for the whole United States, 5.69 cents per pound. Now, the only fair way to arrive at a proper comparison is to deduct the combined taxes. of these various countries from the retail price and then compare the result with the average American price, less 1.6 cents per pound, the amount by which it is increased by reason of the tariff according to our calculations, or by 1.34 cents per pound, the amount claimed by Mr. Palmer, that the American price is increased by reason of the tariff. By such a method of comparison we would have an American average retail price for July, 1911, of 4.75 cents per pound, in accordance with our contention, and 5.01 cents per pound in accordance with Mr. Palmer's view, to compare with the following European retail prices.

European and American retail prices for sugar during July, 1911.

Retail price

per pound.

taxeslevied,
per pound."

Of course the deductions made for the United States do not apply to domestic sugar.

By such a method of comparison it appears that the retail price in the United States, despite the advantage it possesses of abundant sources of cane and beet-sugar supplies, was the highest of any place in the world except Rome and Madrid, where sugar is regarded as a luxury and where the general use of it is almost prohibitive on account of the price and where the per capita consumption is lower than any other country in the world."

These prices were based upon the retail prices of granulated sugar abroad, and Mr. Palmer's deductions are based solely upon quotations for granulated. Hence a discussion about loaf sugar in connection with such comparisons is entirely beside the question.

CHART NO. 9.

(Page 22.)

According to Willett & Gray, the per capita consumption in 1890 was 54.56 pounds, instead of 50.7 pounds, as represented in this chart; and in 1900 66.6 pounds, instead of 58.9 pounds; and in 1910 81.6 pounds, instead of 79.9 pounds, as here represented.

In 1891 it was 67.46 pounds. This was the first year of free raw sugar and shows an increase of 22.96 per cent over 1890, the year that Mr. Palmer selected for his purposes. Seven years later, in 1898, it had dropped to 60.3 pounds, during which year the effect of the present tariff rates began to be felt. In 1899 it was 61 pounds; in 1894 it was 66.64 pounds; 1895, 64.23 pounds. The effect of the rate fixed in the Wilson bill of 40 per cent ad valorem was then beginning to be reflected in the consumption. This was more noticeable in 1896, when the per capita consumption had fallen to 60.9 pounds. In 1897, the year the present rates went into effect, the annual per capita consumption was 63.5 pounds, which in 1898 had dropped to 60.3 pounds. All of these figures illustrate to what extent the consumption of sugar is affected by the tariff. As a matter of fact the per capita consumption in 1900 was 0.86 of a pound less than in 1891, when the period of free raw sugar went into effect, thus showing that an increase in consumption during a period of nine years was altogether negatived by increases in the tariff.

Mr. Palmer did not make use of the reliable figures of Willett & Gray, though they were available, and are the authority in the United States. He was also careful to select convenient periods, so as to show contrasts that would support his argument without taking into consideration the various tariff changes.

CHART No. 10.

(Page 22.)

We call your attention to the fact that the prices quoted are not the prices consumers pay for their sugar. They are the New York wholesale prices as quoted by refiners. As the New York price now is the lowest price of anywhere in the United States and has been for the last 25 years, to arrive at an average price to the consumer fully 1 cent per pound would have to be added to this figure. The periods of 1870 and 1880 are too remote to afford any correct basis of comparison with prices of the present day. Those prices were largely governed by tariff conditions and supply and demand.

Mr. Palmer selects convenient 10-year periods in order to mislead. Now, in 1890 there was a duty of 2.24 cents per pound upon 96° test raw sugars, which was entirely eliminated in 1891. Hence the price in 1890 was affected to the extent of 2.24 cents per pound by the duty. To illustrate the effect of the removal of the tariff, the wholesale price in 1891 declined 13 cents per pound in one week. As the effects of the removal became apparent the price dropped to 4.346 cents per pound in 1892, 4.12 cents in 1894, and 4.15 cents in 1895 as the immediate result of the removal of the duty. The price in 1900 selected for comparison is the very highest in the 20-year period between 1890 and 1910 and is only exceeded by the average wholesale New York price for the year 1911, which was 5.345 cents per pound, which Mr. Palmer was careful not to mention, though the data was available, for fear he might upset his argument and charts. Now, the average price for the 20 years between 1891 and 1910, inclusive, was 4.718 cents per pound, which shows that in 1910 the cost of sugar was 28 cents per 100 pounds above the average price for 20 years, and rather explodes the claim for reduction due to domestic production. We print herewith the New

York wholesale prices for granulated sugar from 1891 to 1911, inclusive, showing that the price in 1911 was the highest during that period and that the price used by Mr. Palmer for his purposes of comparison in order to illustrate a reduction was the highest during that 20-year period with the exception of 1900, 5.32 cents; 1901, 5.05 cents; 1905, 5.256 cents; and 1911, 5.345 cents. The following are the New York wholesale prices: 1891, 4.641 cents; 1892, 4.346 cents; 1893, 4.842 cents; 1894, 4.12 cents; 1895, 4.152 cents; 1896, 4.532 cents; 1897, 4.503 cents; 1898, 4.965 cents; 1899, 4.919 cents; 1900, 5.32 cents; 1901, 5.05 cents; 1902, 4.455 cents; 1903, 4.638 cents; 1904, 4.772 cents; 1905, 5.256 cents; 1906, 4.515 cents; 1907, 4.649 cents; 1908, 4.957 cents, 1909, 4.765 cents; 1910, 4,972 cents; 1911, 5.345 cents; and 1912, 5.04 cents.

TABLE PAGE 22.

Here we have another example of the desire to present misleading figures. Perhaps no one knows better than Mr. Palmer that the average price per ton of beets in 1909 was not $6, as here represented. According to the Department of Statistics, the average price was $5.35 per ton. This represents an increase between 1899 and 1909 of 22 per cent, instead of 36 per cent, as here represented. It is interesting to note that Mr. Palmer now claims that in 1899 the cost of production of beet sugar was 4.25 cents per pound. In contrast to this, reference to the record shows that when the beet sugar men were trying to interest capital the claim was freely made that beet sugar could be produced under 3 cents per pound, some figures being as low as 2 cents per pound. We see here the difference between claims made when fooking for financial assistance and when looking for tariff assistance. We would call your attention to the fact that in Germany the average price per long ton paid for sugar beets in 1900 was $4.76; in 1911-12, it had advanced to $6.07, so it will be seen that prices in the United States have not advanced to the same extent as in Europe. In addition the German farmer received the beet seed free from the factory and had returned to them 40 per cent to 60 per cent pulp. In the United States the farmer buys his beet seed from the factory and none of the pulp is returned to him for feeding purposes, but it is sold as a by-product by the factory at a nice profit.

Now let us see whether the factories in the United States really did pay more in 1909 than in 1899 for what the farmer delivered to them. In the first place, our beet sugar factories do not buy beets, in a strict sense, as the beet is only a "container." They do buy the sugar in the beets. Now the amount of beet sugar extracted per ton of beets in this country increased from 199.6 in 1899 to 252.8 pounds in 1909, or 26 per cent. So, as a matter of fact, the American farmer was delivering the factory 26 per cent more sugar in 1909 than in 1899 and only receiving an increase in price of 22 per cent, or 4 per cent less on the basis of sugar content.

The Hardwick committee, in a unanimous report, taking good, bad, and indifferent factories, showed an average cost to produce beet sugar of 3.54 cents per pound. Mr. Palmer now tries to stretch this to 3.67 cents per pound. None of these prices represents a "proper cost" for producing beet sugar in the United States. Where

a factory is properly located, thoroughly equipped, and competently run, as was the case with the Spreckles Sugar Co., of California, the cost of producing beet granulated is reduced to 2.70 cents per pound, as their returns show. It is well known that around 3 cents per pound should be the "proper cost" of production in the United States, and when the figures are stretched, even to 34 cents, it moves into the "illegitimate industry" class.

In this connection it strikes us as significant that the domestic beet sugar factories who are asking Congress for the privilege of taxing American consumers are reluctant to show an honest statement of the cost of production. With the exception of the American Beet Sugar Co., no yearly statements are issued, and every effort is made to conceal profits. Not in the entire record of testimony will be found an itemized statement of cost in a well-equipped and properly located factory, and nowhere is the admission made that beet sugar is being produced at a low cost in this country, although it is well known that this is a fact. The idea seems to be that the higher they can make their cost appear, the higher Congress must make the tariff bounty.

Before the Hardwick committee the American Beet Sugar Co., in order to make their cost appear high, even went so far as to include as a part of their cost of production the freight which they paid on sugar from the factory to destination. This freight, of course, was charged to the customer, the shipment being "prepaid" instead of being sent "collect" for convenience.

Perhaps the nearest thing we have to an itemized statement of cost was that given by Mr. Combs for six factories of the Great Western Sugar Co., of Colorado. This showed a stripped cost of 2.59 cents. Mr. Combs stated that his figures were authentic and were obtained from an inside man. They appear reasonable and were never contradicted by the factory. He was representing the farmers, who complained that the beet sugar factories of Colorado were not treating them fairly in the matter of prices paid for sugar beets. On his return to Colorado the farmers got the advance asked. Mr. Palmer also misrepresents in his attempt to conceal the overcapitalization of the beet sugar factories. His data was prepared in 1912. He goes back to 1909 and "approximates" the capitalization at $71,275,000. Reference to the commercial agencies will show that the beet sugar companies were capitalized in 1910 at $130,000,000 and produced 457,000 long tons of sugar; in 1911, capitalization $142,000,000, production 541,000 long tons of sugar. Based on their present capitalization, the beet sugar factories sufficient to produce all the sugar we consume would be capitalized at $852,000,000. How could dividends be earned on this enormous capitalization and the price of sugar be reduced at the same time? The cane sugar refiners, with a capitalization of $110,000,000 invested in cane refining, produced in 1912, 2,922,957 tons. The contract cost of a beet sugar factory is $1,000 per ton of daily slicing capacity and in 1889. the capitalization was on the normal basis $1,097 per ton, but by 1909 this had been extended to $2,458 per ton, or about 24 times their cost, the increase representing "capitalization of the tariff."