Mr. COLCOCK. Afraid that when we come to sell the sugar, not to the American Sugar Refining Company alone, but the people who refine sugar independently also, will undersell us wherever we try to deliver our goods.

Mr. CLARK. A cutthroat game?

Mr. COLCOCK. Every business in the world is conducted on that principle-every business that I know of.

Mr. CLARK. Was there ever a time when there was refined in Louisiana the entire product of Louisiana?

Mr. COLCOCK. No; we have always made some sugar fit for immediate consumption.

Mr. CLARK. How much does one of these sugar refineries cost? Does anybody know?

Mr. COLCOCK. We are building one down there now, and I am afraid it will cost more than a couple of dozen of sugar plantations put together.

Mr. CLARK. Is there any climatic condition that keeps you from refining sugar at New Orleans, and causes it to be done at New York?

Mr. COLCOCK. There is nothing that keeps us from refining sugar, if the men can come together and subscribe the money to build the refineries. They are afraid they will succeed in raising the money; that is exactly the position they are in. I have known men to subscribe $25,000 to $40,000, and then withdraw it before the subscription is complete.

Mr. CLARK. Do they refine any considerable amount of sugar in Cuba?

Mr. COLCOCK. Very little.

Mr. CLARK. Did they ever?

Mr. COLCOCK. Never.

Mr. CLARK. Before the United States got into this reciprocity arrangement with Cuba, where was their sugar refined, in Spain? Mr. COLCOCK. No; principally in the United States. New Orleans was a large importer of Cuban sugar.

Mr. CLARK. În calculating how much sugar we make in the United States, do you take into consideration the beet-sugar proposition, too? Mr. COLCOCK. Mr. Underwood added that in.

The CHAIRMAN. I would like to ask why you do not refine this sugar? I understood you to say that you are afraid? What are you afraid of?

Mr. COLCOCK. Suppose we put, say, $1,000,000 into a refinery; we would have to have $1,000,000 of working capital besides. Now, then, we begin to sell the sugar, selling it to a company at Vicksburg, say, at 5 cents a hundred under the price offered by the American Sugar Refining Company; then they offer to sell it at 10 points lower; then the other company cuts them 10 points, and so on; and as there are only about 28 points that can be possibly cut, in two days we would be out of the game altogether.

The CHAIRMAN. All you are afraid of is the competition of the refining companies?

Mr. COLCOCK. Undoubtedly; we are afraid of that.

The CHAIRMAN. I understood you to say, in reply to a question by Mr. Underwood, that there had been a time when you did not get a fair price for sugar from the refining company?

Mr. COLCOCK. We did not get it last year, nor this year.
The CHAIRMAN. Not this year, but you did get it last year?

Mr. COLCOCK. No; we did not last year. There was a reason for it last year, but there is no reason for it this year.

The CHAIRMAN. Can you suggest any amendment to the tariff schedule that would enable you to get a fair price for your sugar! Mr. COLCOCK. I am afraid that I can not; I do not think I can. I would like to do it, but I do not know how.

The CHAIRMAN. You do not know of any way that we could amend the tariff to help you out in that matter?

Mr. COLCOCK. No, sir; I do not.

Mr. UNDERWOOD. I want to ask you again, if we took off the duty on the differential and put the same amount of duty on the raw sugar, if that would not force the American Sugar Refining Company, the trust, to buy the American sugar and make a better market for the American sugar, because it would be more costly for them to import, and at the same time it would not put up the price of sugar to the consumer?

Mr. COLCOCK. You are wrong, sir. The greater the advantage the refiner has, the more he can afford to pay for the raw sugar. If you gave him 3 cents protection on the raw sugar he could pay a better price than he could if you gave him one-eighth of a cent protection.

Mr. UNDERWOOD. If he could not buy his raw sugar from you, he would have to buy it all abroad, and he would have to pay 1.68

abroad?

Mr. COLCOCK. If there was no differential on raw sugar, the foreign refiners would send their sugar into the United States market. I am only speaking to the best of my knowledge and belief.

Mr. UNDERWOOD. You have not any facts to sustain it?

Mr. COLCOCK. Nothing but my observation of twenty-five years. Mr. FORDNEY. If the duty on imported raw sugar was put so high that it would not be sold in competition with sugar made from beets in this country, it would certainly stimulate the beet sugar industry in this country, would it not?

Mr. COLCOCK. I do not think you could build factories fast enough, sir.

Mr. HENRY T. OXNARD. Mr. Chairman, I would like to say that we do refine sugar in Louisiana. My brother and myself have a cane sugar plantation at Adeline, La., and we are now making refined sugar there.

Mr. COLCOCK. The stenographer has that in his report from me.

STATEMENT OF HENRY T. OXNARD, OF OXNARD, CAL., REPRESENTING THE AMERICAN BEET SUGAR CO., OPERATING IN COLORADO, NEBRASKA, AND CALIFORNIA.

MONDAY, November 16, 1908.

Mr. OXNARD. Mr. Chairman and gentlemen of the committee, I represent our domestic sugar interests, in part, as vice-president of the American Beet Sugar Company, operating six beet sugar companies located in Colorado, Nebraska, and California.

As I understand it, for the past two or three years certain interests have been agitating for lower duties on certain products, principally those that enter into manufactured articles. This demand, artificially created, I believe, has caused a sentiment to grow up that calls now for a readjustment or a revision of the Dingley tariff schedules. The call is for Congress to look into schedules of the law of eleven years ago to see what need there may be for lower or higher duties, in view, perhaps, of changes in conditions which may have come since 1897. The Dingley bill has brought great prosperity to this country, and its life has only been equaled by the tariff act of 1846, when in 1856-57 there was a call for lower duties that brought disaster to the country.

We understand that, whatever demand exists for revision of the existing rates of duty, no necessity exists for a radical reduction of rates of duty on products at large. On the contrary, it seems desirous of having Congress investigate the matter, and raise, or lower, or maintain the present rates wherever advisable and just. In other words, the sentiment spoken of does not proceed so far as to assume that existing rates of duty are too high generally on all products. These hearings, then, are to determine where inequalities exist; where, because of change in conditions, the rate now may be too low or too high, and where it has not yet outlived its usefulness; and then it will be proposed, as I understand it, that when a harmonious determination is arrived at, to add to the whole a higher or maximum or retaliatory rate that we may use as against nations that treat our products unfairly.

From that standpoint I wish to hold the attention of this committee briefly on the subject of sugar; to show why there should be no change in the rates on that product, or if any, an increase.

The duty that should be placed on sugar depends on several factors. I know it is contended by some that reduction increases duties, because inciting larger importations. The idea is a theory. More revenue from lower rates depends, in the case of sugar, on whether a given reduction would be enough to displace the domestic product. Lower-dutied sugar would not displace our domestic sugar, nor that free sugar that comes from Hawaii and Porto Rico and the Philippines, nor that from Cuba, unless the reduction were sufficient to overcome the grant of tariff favor to sugar from that island. Hence there would be no room here for larger foreign importations. need only about so much foreign sugar, and hence lower duties on it could only reduce our revenue.

We

How much of our revenue should come from sugar is a serious question; so serious, for several reasons, that the schedule has invariably given committees and Congress more or less trouble, so that the Treasury is interested from a revenue standpoint; and we have for many years-save from 1891 to 1895, when there was practically free sugar and a bounty-collected very considerable revenue from sugar. This worked favorably for sugar producers, while our consumers have enjoyed reasonable prices for a necessary of life, but it has not always been easy to reconcile these often conflicting interests. To-day, as I see it, the task is fairly easy.

Not to go back too far into ancient tariff history, in 1883 a high duty was placed on sugar and on other entries, so high along the whole line that in 1890 we had such dangerous "surplus" of revenue

that Congress determined to place raw sugar on the free list, lopping off about fifty millions of revenue, and giving our sugar producers a bounty as a greater stimulus to production than a duty had been.

In 1894 Congress went back to a duty on sugar, but the rates then fixed were found too low for either revenue or protection. The evil effect of ad valorem rates on sugar being demonstrated, the 40 per cent rate on raw sugar, then valued at an average of 3 cents, was supposed to be ample for revenue, and a rate tending to give our consumers cheaper sugar. It did neither. It came to pass that the world's price of raw sugars fell down, say, from one-half to threefourths cent below 3 cents, which produced a very considerable loss of the protection granted, affecting the revenue as well.

Then came the higher tariff of 1897, the sugar rates in which were designed to return enough revenue, insure to consumers sugar at a reasonable cost, and fair protection to our producers, and hoped for development of the sugar industry. Our producers, however, were promised, in addition, a bounty of one-fourth of a cent a pound to increase the development of sugar production-a more stimulating agency than the duty had proved to be; but the pressure for the speedy passage of the Dingley law was so great that in the face of the threat of the minority in the Senate to protractedly debate the bounty proposition, the latter was withdrawn, and so our domestic sugar producers did not get what the majority conceded sugar was fairly entitled to to increase the development of sugar production.

This is what was said:

Mr. ALLISON. I offer this morning two or three amendments to the bill, which I do not ask to have considered at this moment, but I offer them now in order that they may be sent to the printer immediately and returned at an early hour during the morning. I offer the amendment which I send to the desk.

The VICE-PRESIDENT. The Secretary will read the amendment. The SECRETARY. On page 200, after line 14, insert as a new section: "SEC.. That on and after July 1, 1898, and until July 1, 1903, and no longer, there shall be paid from any moneys in the Treasury not otherwise appropriated, under the provisions of section 3689 of the Revised Statutes, to the producer of sugar made from beets grown within the United States during the calendar year 1898 and each succeeding calendar year until July 1, 1903, a bounty of onefourth of 1 cent per pound."

Mr. JONES, of Arkansas. On what many of us hoped would be the last day of the consideration of this bill the committee comes in with what is unquestionably the most radical departure from what has been the practice of the Government for a century in tariff taxation as an amendment.

There was considerable debate, Mr. Jones saying, “There must be time, it seems to me, to look into the question."

Page 2255:

Several SENATORS (to Mr. Allison). Withdraw it.

Mr. ALLISON. In view of what has been stated by Senators on the other side of the Chamber, that the amendment will lead to a prolonged debate, I withdraw it. I agree with what has been so well stated by the Senator from Nebraska [Mr. Thurston], that it is not the purpose or wish of those who wish to pass the bill to introduce into it any new question which will prolong the debate. Therefore, if in order, on behalf of the committee, I ask leave to withdraw the amendment.

This was in the Fifty-fifth Congress, first session, volume 30, part 3, pages 2244 and 2255.

It is not for us to say what our national expenditures may be, nor what our revenues must consequently be. I have only pointed out some reasons why we shall need very considerable income to meet

our necessities, making the continuance of existing rates on sugar wise, necessary, and fair, unless by much lower rates on other products we invite larger foreign importations for revenue, too low to be sufficiently protective.

The following shows our consumption of sugar, the duties collected thereon, the per capita consumed, the average price of refined sugar in New York, and rates of duty on refined sugar under the tariff acts of 1883, 1892, 1894, and 1897. In the year 1884 shall I read this, gentlemen? If you are not interested in these figures I will pass them by.

Mr. CRUMPACKER. I suggest that you read them.

The CHAIRMAN. Yes; I think you had better read them as you go on.

Mr. OXNARD (reads):

Mr. BOUTELL. That was free sugar?

Mr. OXNARD. Sugar under the bounty. The per capita consumption was 63.8 pounds, under free-trade conditions, practically what it is to-day. [Continues reading:]

Eighteen hundred and ninety-five consumption, 1,949,000; duty collected, $15,350,000; per capita consumed, 63.4; price of refined in New York, 4.15.

Mr. CLARK. What year was that before that you just read?
Mr. OXNARD. 1892.

Mr. CLARK. That was the year when there was not any tariff on sugar, but a bounty?

Mr. OXNARD. Yes, sir.

Mr. UNDERWOOD. There was a tariff

raw sugar?

Mr. ÖXNARD. Yes.

Mr. CLARK. That was when we were paying the bounties?
Mr. OXNARD. Yes; under the McKinley bill.

The CHAIRMAN. The tariff on the raw sugar was the same as the differential?

Mr. OXNARD. Yes, sir. Now we come to the Wilson bill. In 1895 the consumption was 1,949,000 tons. The revenue collected was $15,350,000. There was a 40 per cent ad valorem duty that year. The duty collected was $15,350,000. The per capita consumption was 63.4, and the price of refined sugar in New York was 4.15 cents, practically lower than it had been under free conditions. [Reads:]

In 1896 the consumption was 1,960,000; duty collected, $29,800,000; per capita consumed, 62.5; price of refined in New York, 4.53.

Now we come to 1907, under the Dingley bill, last year. [Reads:] Nineteen hundred and seven, consumption, 2,990,000; duty collected, $60,130,000; per capita consumed, 76; price of refined in New York, 4.8.

We have been going on and buying more sugar, showing that the people were satisfied with the price. That is the end of my table.