HISTORY AND DEVELOPMENT

of the

BEET SUGAR INDUSTRY

By Harry A. Austin Secretary,U. S. Beet Sugar Association

1180 National Press Building, Washington,D. C. 1928

HISTORY AND DEVELOPMENT OF THE BEET SUGAR INDUSTRY

By HARRY A. AUSTIN

What Is Sugar? When you pick up a lump of sugar and watch its tiny crystals sparkle under the ra~rs of the electric light, did you ever stop to think just what it was you were about to take into your system, or to consider just how that little sparkling crystal was formed and whence it came? Sugar is a product of the air. It is composed of wind, rain and sunshine, which Nature, in her own peculiar way, has formed into a congealed mass of sweetness. Nature places a little drop of water on the leaf of a plant, breathes upon it with the breath of the wind, touches it with a sunbeam wand, then hides it away in the heart of the plant. Later man cuts down or digs up the plant, opens its heart and finds what all mankind craves today-SUGAR. There are many wonderful things about Nature as a chenl­ ist. Man has developed the science of chemistry to a nlarvel­ ous degree; he has conceived and constructed intricate apparatus and through the application of this science has made ,vonderful discoveries. But Nature performs more wonderful feats in chemistry than the human scientist can ever hope to perform. Our chenlist takes a lump of sugar alld by chemical analysis tells us that it is composed of ,vater, air and sunshine. I He tells us that sugar is a carbollydrate and writes out his definition something like this:- "Sucrose == C12 H22 Ou" which means 12 parts of carbon, plus 22 parts of hydrogen, plus 11 parts of oxygen, equals "sugar." As carboll is congealed sunshine, and H20 is water, sugar is, therefore, 12 parts sunshine and 11 parts water. The layman is prone to look upon the scientist with nlore or less of awe-to marvel at his wonderful genius; but Nature as a chemist shows marked superiority over tIle hUrna!l chem­ ist. Our chemist can tell us of just what elements sugar is composed, but he can take those same elements in the same proportions and work with them for a lifetime alld never pro­ duce one atom of SUCROSE, such as is produced in Nature's laboratory. While great chemists have given years of study to the subject and have learned the formula by which Nature produces sugar, not one of them has ever been able to pro- duce sugar in his laboratory from that formula. The chemist has no difficulty in producing what may be termed "near sugar" or "glucose", which has only about 60 per cent of the sweetening power of sugar, but Nature has hidden from man­ kind the secret process by which she produces sucrose. This is rather a peculiar coincidence when we know that there is such a very slight difference in the composition of sugar (or sucrose) and glucose. Sucrose is composed of two molecules of starch, plus one molecule of water, and glucose is one molecule of starch plus two molecules of water. Ap­ parently there is very little difference-just one little molecule of water-and yet that little is all that stands in the way of producing sucrose by human science. Here is where Nature shows her versatility and her supe­ riority over the human mind. She is able to add one molecule of water to starch and produce sugar, or to add two molecules of water and produce glucose. Chemists add two molecules of water to starch and produce glucose, but they have never been able to add one molecule of water to starch and produce sucrose. Nature uses the plant as a storehouse for sugar, just as the bee uses the comb for the storage of honey. The soil fur­ nishes the means of building up the structure to be used as a container, but the sugar itself is collected entirely from the atmosphere on the outer edge of the leaves, whence it is carried down to the beet root or the cane stalk.

Nature's Sugctr Storehouses Almost all vegetable matter contains more or less sugar, but at the present time the only two sources of supply of any mangnitude are the sugar cane of the tropics and the sugar beet of the temperate zone. A few years ago, the United States Bureau of Standards discovered a method of crystallizing dextrose extracted from corn (commonly known as "corn sugar") and this product is now manufactured in commercial quantities in the United States. It is somewhat different from cane and beet sugar in its chemical and physical properties, having about 60 per cent of the sweetening qualities of sucrose. It is pronounced by chemists to be a pure food commodity, and if its commercial use can be expanded to the extent that is hoped by the man­ ufacturers of the product, it is believed it will be a great

6 factor in utilizing a large part of the surplus corn produced by American farmers. For many years man had discovered but one kind of plant used by nature as a storehouse for sugar-that is, the sugar cane. Centuries passed with the sugar cane as the only source of supply for the whole world. As time passed, however, and the craving for sugar increased, man began to search for other plants in which Nature might have stored her sugar in quan­ tities sufficient to pay for the trouble and expense of extracting it. Long and exhaustive experiments were conducted, and many attempts were made to extract sugar from fruits such as grapes, peaches, pineapples, watermelons, etc., but all these experiments resulted in demonstrating that while these fruitE' contain considerable quantities of glucose, they contain such a small amount of sucrose as to make it impractical to ex­ tract it for commercial purposes. But the indomitable will of man was not to be discouraged, and while all efforts to extract sugar from fruits proved unsuccessful, it was discovered that the juice of the garden beet contained a small amount of sucrose, which would crystallize when boiled and cooled. This discovery eventually led to the production of sugar from beets for commercial purposes, and while later experi­ ments proved that sugar could also be extracted from maple trees of the temperate zone, and a certain species of palm trees in the tropical zone, the principal sources of supply today are the sugar cane and the sugar beet.

The Value of Sugar as a Food Comnwdity Sugar is one of the most valuable food products taken into the human system. The human body is like an intricate ma­ chine. In order to function properly a machine must have fuel and worn-out parts must be replaced from time to time. So it is with the human body. It requires fuel to keep the intricate machinery running. The muscles and tissues al'e constantly being worn out and replaced by new ones. The fuel for the body is furished by the sugar, fats and starches which we consume. The worn-out parts of the body are re­ placed by the consunlption of proteins. Sugar is the most eco­ nomical and most easily consumed body fuel, for it is ready immediately for assimilatioll, whereas fats alld starches must first be converted into sugar by the digestive organs before they are ready for assinlilation.

7 Not only is sugar the most economical body fuel, but it is also one of the most energizing of all food products. It has been demonstrated beyond question that by feeding laborers with a liberal amount of sugar they are able to do more work in a given time and with less fatigue than those whose diet does not include sugar. In the German army, prior to the world war, innumerable experiments were conducted, the re­ sults of \vhich sho\ved that a liberal amount of sugar in the daily rations of the soldiers greatly Increased the marching and the working capacity of the men. As to the relative value of sugar as a body fuel, as C0111­ pared to other food commodities, it may be stated that a pound of sugar contains 1,814 heat calories;.a like amount of wheat flour contains 1,633 calories; graham flour, 1,627; corn meal, 1,613; rice, 1,591; roast beef, 1,559; Neufchatel cheese, 1,485; white bread, 1,714; eggs, 595; milk, 314; potatoes, 304. When the price of sugar and the price of other food prod­ ucts is compared, and the amount of nutrition or heat energy contained in an equal portion of each is taken into considera­ tion, we find that even at the 11ighest normal price of sugar it is one of the most econonlical foods we can purchase.

Sugar, 01~ce a Luxury, Now a Necessity Sugar is so universally used today and has become such a household necessity that few people realize the comparatively rapid metamorphosis of this article of diet from a luxury to a necessity. During the world \var, and at certain times since, when the housewife was smarting under the restrictions placed upon the consumption of sugar, or when the price seemed excessive, she did not stop to think that only a few generations back sugar was considered such a luxury that her great grand­ mother would never have thought of purchasing five, or even two pounds of sugar. It was too much of a luxury and too expensive to buy in more than very small quantities, and dur­ ing the preceding generation while her forebear was busying herself with the family budget, the item of sugar did not enter into her calculations, for sugar was used only as an ingredi­ ent in pharmaceutical prepartions. The housewife complains when under exceptional condi­ tions the price of sugar occasionally rises a cent or two per pound, and yet only a century ago sugar sold in some countries 8 for a dollar a pound, and to have sugar on one's table was a mark of affluence.

The History of Sugar With the exception of sugar, practically all of the more important food commodities consumed in the world today have been classed more or less as necessities since the beginning of civilization. The general use of sugar, however, as a house­ hold necessity is of comparatively recent date. There is some division of opinion as to the origin of the sugar cane, but it is quite generally accepted that India is the original home of this plant. Apparently there is no record of the date when sugar cane was first mentioned as a product of India, but it is known that the ancients had very little or no knowledge of sugar, depending entirely upon honey as a sweetening sub­ stance. So far as is known, sugar was first mentioned commercially about the middle of the 14th century, whell a Venetian dis­ covered the art of refining sugar and shortly thereafter refer­ ence was made in a commercial paper in London to the receipt of a 50-ton cargo wllich was exchanged for wool. But it was nearly four hundred years after that sugar was first intro­ duced as an article of diet by Queen Elizabeth of England. The high price of sugar, however, precluded the possibility of Queen Elizabeth's example being followed by her subjects, and the limited quantities of sugar produced in the seventeenth and eighteellth centuries were mostly used in the arts and sciences. By 1750 the LondoIl price of sugar had fallen to 17112 cents per pound, which brought it within the reach of the wealthy classes, but notwithstanding the fact that the world production of cane sugar had reached one millioll tons in 1806, the price of sugar in both London and Paris had risen to 311j2 cents per pound, an increase of nearly 100 per cent in fifty years. It thus will be seen that even as late as a century ago sugar was a luxury purchasable only.by the wealthy few. Yet since that time its evolution from a luxury to a l1ecessity has been so rapid and the price has been so lowered that today there is not a household in the civilized world which does not use sugar. Sugar is not only a household necessity, but it enters largely into hundreds of manufactured food products. It is an essential ingredient in the manufacture of condensed milk,

9 bakery products, confectionery, ice cream, canned fruits, pre­ serves and hundreds of other food products in daily use in every household. It is estimated that more than fifty per cent of the sugar consumed in the United States, the largest con­ sumer of sugar in the world, enters into manufactured prod­ ucts.

The Potent Factor in the Rapid G1~owth of the Sugar Industry During the Past Century Prior to the beginning of the nineteenth century the world obtained its sugar supply solely f:r:om the cane of the tropics. Four hundred years elapsed from the time the art of refining sugar was discovered until it was introduced to a very limited extent as an article of household diet. While from this time the world's production of cane sugar began to increase, even after the lapse of another century and a half the price still remained at such an exhorbitant figure as to make its use prohibitive in the ordinary household. It seems highly probable that although the cane sugar of the tropics is produced under the most advantageous condi­ tions, so far as soil, climate and labor are concerned, had the world continued to rely solely upon the tropics for its sugar supply, the price today would be such as to prohibit its uni­ versal use. Sugar cane is a grass which in the tropics will grow without cultivation, in many localities springing from the same root year after year for from 15 to 20 years without replanting. For centuries the cane sugar of the tropics was produced by slave labor, and even now the labor employed on tropical sugar plantations is the cheapest class of labor in the world. But notwithstanding these favorable conditions, for centuries cane sugar production without competition lagged behind the world's demands, and if today the world continued to depend solely upon cane sugar for its supply, the price of that commodity would be many times what it is, and sugar might still be classed among the luxuries of life, as it was a little over a century ago. Century after century elapsed after the method of refining sugar was discovered without any great scientific thought, re­ search, or methods being introduced either in the cane fields or the sugar mills of the tropics. Crude methods of crushing the cane, boiling the juice and separ~ting' the crystals from 10 the molasses remained in vogue in the principal cane-sugar producing countries of the world until after the middle of the last century. In fact, many of the cane-sugar producing coun­ tries are today using the antiquated methods of centuries ago. Like the tropical laborer, by whose efforts it is maintained, the cane sugar industry was improvident, lethargic, going along in its drowsy way from year to year without materially in­ creasing in magnitude and without any particular thought being given to improving methods of culture or manufacture., The tropical spirit of putting it off until "manana" permeated the industry in whatever part of the tropical world it was es­ tablished. The increasing world demand for sugar was no incentive to the tropical planter or manufacturer to study out new methods by which he could increase his yields either in the field or the factory. For decade after decade this condition continued to prevail. Just as their ancestors had done before them, the cane sugar producers continued to crush the cane between two stone or iron rollers, propelled by animal power, to boil the juice in open kettles and to separate the crystals by placing the boiled mass into a hogshead and draining off the molasses through a hole bored in the bottom. But the increased craving for sugar, the lack of progress in the cane sugar industry of the tropics, and the consequent continued high price of sugar, led to the makillg of a most important discovery in the eighteenth century, and at the beginning of the nineteenth century "a llew Richmond entered the field" in the form of the humble though potential sugar beet.

Establishn1ent of the Beet Su..gar Indu.stry 1:'n Europe The fact that beet roots cOlltained sugar was discovered in 1705 by Oliver de Serres, the famous French agronomist, but the discovery was not exploited. Half a century later Marg"­ graf, a Prussian chemist, obtained sugar crystals from the beet experimentally, but he failed to prosecute the work to a conclusion. After Marggraf'~ death his pupil, Achard, se­ cured the financial assistance of Frederick the Great in order to conduct experinlents ill sugar beet culture and mallufacture, but after the death of Frederick in 1776, Achard's work ceased for a time. Some years later, Frederic}\: William III became interested in Achard's enterprise and assisted him financially. In 1799 Achard invented a method of extracting sugar fronl 11 beet roots and in 1801, with money furnished by the Emperor, he erected at Cunern, Silesia, a small beet sugar factory in which he manufactured a small amount of sugar at a consid­ erably high cost. However, the beet sugar industry did not become impor­ tant until the Napoleonic wars, when commercial restrictions imposed by England's embargo cut off the importation of sugar from the West Indies, one of the principal sources of supply at that time. France in particular suffered from a shortage of sugar when the imports from the French colonies ceased, and it was with the personal encouragement of Napoleon that the production of beet sugar was first given its great impetus. Upon learning of Achard's success in manufacturing sugar from beets, Napoleon sent a Commission to Germany to in­ vestigate the practicability of the process and to ascertain if French soils were adaptable to sugar beet culture. Visiting Achard's factory, they found that his methods were successful, and returning to France, they conducted experiments in sugar beet culture. Aften ten years of experimental work, they re­ ported to the Emperor that not only could sugar be successfully manufactured from beets grown in France, but in their experi­ ments they had discovered that by planting cereal crops on the same land which had previously been planted to beets, the acreage yield of the grain crops waS' more than doubled. This latter discovery was a revelation to Napoleon as it was to his scientists, and the Emperor was quick to grasp its full significance. He issued an edict compelling the French farmers to devote at least 90,000 acres of land to the pro­ duction of sugar beets, appropriated one million francs out of the public treasury to aid in establishing beet sugar factories in that' country, and out of his private fortune erected two beet sugar factories in the environs of Paris. Within two years thereafter, 334 small beet sugar factories had been erected in France. Napoleon's action marked the beginning of a new and im­ portant epoch in the history of the sugar industry. The Gov­ ernments of Germany, Austria-Hungary, Belgium, The Neth­ erlands, Russia and other European countries soon began to encourage the establishment and development of the industry by the granting of bounties, subsidies, etc., with the result that prior to the outbreak of the world war, over 1,200 im­ mense beet sugar factories were scattered over Europe, pro- 12 ducing over 9,000,000 tons of sugar annually, or about one­ half of the world's supply. The advent of the beet sugar industry in the early part of the nineteenth century may be said to mark the beginning of the evolution of sugar from a luxury to a necessity. It entirely· revolutionized the sugar industry of the ,vorld, building it up from an improvident, happy-go-lucky business of the tropical planter, to a world-wide, up-to-date, thriving, scientific in­ dustry.. The beet sugar industry was conceived by scientific mil1ds, and from its inception scientific methods have been employed more or less in all phases of the industry. At the outset the industry called to its ranks the greatest scientists and me­ chanical engineers of Europe, who devoted their lives to the improvement of the sugar beet, to the devising of new meth­ ods of treating the raw material, and to the devising and ill­ venting of improvements in machinery and processes in the nlanufacture of beet sugar. Sugar cane grows almost like a weed, veDT little cultivation being necessary. On the other hand, the beet with ,vhich the industry started contained but a small percentage of sugar, so that the plants had to go through a long process of scientific breeding in order to increase the sugar content to a point where it was profitable to extract it for commercial purposes. The beet fields had to be reseeded each year, and it required infinitely more work to produce the crop. Not only was it necessary from its inception that sciel1tific methods be studied and applied to the manufacture of beet sugar in order to compete with tropical cane sugar, but compe­ tition between beet sugar manufacturers in the san1e and dif­ ferent countries has been so keen that in\Tentive genius has been constantly at work seeking new and improved nlethods and processes in both field and factory. Starting with a beet root which contained an average of five or six per cent of sugar, it has been bred up to a point where it now contains from 15 to 20 per cent or more than double the percentage of sugar contained in the sugar cane. The application of sciellce in the manufacture of beet sugar, together with the aid and encouragement extended the illdus­ try in Europe, soon made itself felt in the total world produc­ tion of sugar. For decades, the cane sugar productioll in­ creased but slightly from year to year, while the beet sugar 13 production increased by leaps and bounds. The growth of the beet sugar industry became so rapid that the cane sugar in­ dustry eventually awakened to the fact that unless it aban­ doned its lethargic attitude arid adopted some of the more up­ to-date, scientific methods of its competitor, it soon would cease to exist at all. The contrast ,ill the growth of the two indus- tries is shown in the following table:

World Prod'ttction of Cane and Beet Sugar

(In Tons of 2,000 Pounds)

Pet. Total Decade Increase Year Cane Beet Total Cane Beet Cane Beet ------Tons Tons Tons Pet. Pet. Pet. Pet. ------1841-42 1,288,000 45,420 1,339,522 96.2 3.8 - - 1850-51 1,365,905 141,478 1,507,383 90.6 9.4 6.04 211.40 1860-61 1,447,040 393,120 1,840,160 78.6 21.4 5".14 177.86 1870-71 1,862,560 1,008,000 2,870,560 64.9 35.1 28.72 156.41 1880-81 2,140,320 1,957,760 4,098,080 52.2 47.8 14.91 94.22 1890-91 2,989,168 4,139,035 7,128,203 41.9 58.1 39.60 111.41 1900-01 6,633,544 6,794,972 13,428,516 49.4 50.6 121.92 64.17 1910-11 9,433,141 9,587,587 19,020,728 49.6 50.4 42.20 41.10

This comparison is not carried up to date for the reason that on account of ,the world war, the annual production of beet sugar in Europe fell off over two million tons and the industry has not yet recovered from the setback.

As stated before, the cane sugar industry had become more or less stagnant, its production remaining almost stationery for more than a century. But the rapid growth of the beet sugar industry, through the application of scientific methods and processes, impelled the cane-sugar industry to assunle a more progressive attitude and adopt the more up-to-date meth­ ods of its northern competitors. It is therefore safe to say without fear of contradiction that the beet sugar industry is responsible for the present magni­ tude and the stabilized condition of the world's sugar indus­ try. It is also responsible for the fact that under normal con­ ditions the price of sugar is so low as to make it within easy reach of the humblest household in the remotest corners of the globe. 14 The Effect of Sugar-Beet Culture on the Acreage Yield of Other Crops Not only has the beet-sugar industry been a potent factor in increasing the world production, and lowering the price of sugar to such .an extent that it is now used in every home throughout the civilized world, but it has had an important and far-reaching influence in the national economy of all countries in which it has been established. In addition to saving hundreds of millions of dollars by substituting home-produced sugar for imported sugar, it has added other hundreds of millions of dollars to the national wealth by increasing the acreage yield of all cereal crops by the introduction of sugar beet culture into the cy·cle of rotation. It is a fact, established in continental Europe for more than a century and demonstrated in this country by our sugar­ beet farmers, that by rotating sugar beets with cereal and other crops, the acreage yield of the latter is illcreased from fifty to one hundred per cent. The proportion of our total cultivated area devoted to sugar beet culture is' so small that the effect of this culture is not perceptible in the average acreage yield of cereal crops for the entire country. However, in contillental Europe, where a more considerable proportion of the total cultivated area is devoted to beet culture, the result is shown in a very marked degree. For instance, in 1913, the seven northwestern countries of Europe, where the beet sugar industry has been established for more than a century, harvested an average of 24.7 bushels of wheat per acre to our average of 15.2 bushels; 28.4 bushels of rye to our 16.2 bushels; 36.2 bushels of barley to our 23.8 bushels; 47.7 bushels of oats to our 29.2 bushels; 210.7 bushels of potatoes to our 90.4 bushels. Of the five crops they pro­ duced an average of 61.4 bush.els per acre, while of the same crops the United States produced only all average of 23.8 bushels per acre. While the total average yield per acre of these crops in the United States is small compared to the acreage yield secured in the beet-sugar producing countries of Europe, American farnl­ ers who are engaged in sugar-beet culture have secured more wonderful results ill increasing their acreage yields of other crops by rotating them with sugar beets than have the beet­ grovving farmers of Europe. 15 Some time ago the United States Beet Sugar Association collated reports from 500 American farmers engaged in grow­ ing sugar beets, showing the average increase in the yield of cereals and other crops after injecting sugar beets into the cycle of rotation. The five hundred reports received showed an average increase of 49.87 per cent in the yield of wheat; corn, 29.81 per cent; oats, 50.49 per cent; barley, 56.88 per cent; rye, 120 per cent; peas, 71.72 per cent; potatoes, 45.15 per cent; beans, 40.18 per cent; and tame hay, 26.78 per cent. The average yield per acre before and after rotating with sugar beets and the average yield of all these crops in the United States are shown in the following table. It will be noted that while the farmers reporting secured more than the average yield per acre of these crops before rotating with su­ gar beets, by the introduction of sugar beet culture they were able to increase their already large yields to a very great extent.

Average Bushels per Bushels per Increase Percentage u. S. yield acre before acre after in of per acre, beet c'lt're beet c'lt're bushels increase 1923 - Wheat .. 15.2 29.98 44.93 14.95 49.87 Corn .... 23.1 55.41 71.93 16.52 29.81 Oats .... 29.2 45.65 68.70 23.05 50.49 Barley .. 23.8 42.26 66.30 24.04 56.88 Rye (1) 16.2 25.00 55.00 30.00 120.00 Peas ... (2) 39.18 67.28 28.10 71.72 Potatoes 90.4 196.56 285.31 88.75 45.15 Beans ... (2) 15.28 21.42 6.14 40.18 Tame hay, tons 1.31 2.71 3.49 .78 28.78

(1) Three reports only. (2) No data.

If, through the expansion of the beet sugar industry in the United States the total production of our agricultural food products could be doubled, without any additional expense and with very little additional labor, the boon it would be to this country in lowering the high cost of living is apparent. The consumer would be benefitted by the reduced cost, and while the farmer would obtain a lower price for his products, this \VOuld be more than offset by the greatly increased yields.

Gr01vth of the Beet Sugar [Industry in the United States There is probably no industry in the United States which ill its initial stages of development faced so many difficulties

16 and handicaps as did the beet sugar industry, and which has, notwithstanding, made such wonderful progress during the last quarter of a century. The first successful attempt to grow sugar beets in the United States for sugar-making purposes was made in the vicinity of Philadelphia in 1836. The seed was imported from France, from which a small acreage of beets was produced, but no attempt was made to erect a factory and the enterprise soon petered out. The first beet sugar factory was erected in Northampton, Massachusetts, in 1838, and the following year this factory produced 1300 pounds of sugar. However, the project proved a financial failure and was abandoned in 1840. No further efforts were made to establish the beet sugar industry in this country until 1852, when the Mormons of Utah conceived the idea of erecting a beet-sugar factory to supply their own requirements. This undertaking was a strik­ ing illustration of the difficulties encountered by the pioneers in the beet-sugar industry. The machinery for the factory was purchased in France, transported in a sailing vessel across the Atlantic and up the Mississippi River to Leavenworth,. Kansas, whence it was hauled by ox team all the way from Kansas to Utah, a distance of over one thousand miles. l\Ionths were required to haul the heavy machinery overland by this slow method, and all the hardships incident to a journey of this nature were encountered. The machinery was finally in­ stalled in an adobe building in Salt Lake City, but through lack of experience and technical knowledge on the part of the operatives of the factory only syrup was produced. In 1858 the project was aba11doned. From 1852 to 1879 twelve beet-sugar factories were erected in this country, five in California, two ill Illinois, two in Wis­ consin, and one each in Maine, Massachusetts alld Delaware. All of these projects proved unsuccessful, however, and it was not until 1879 that a small factory erected at Alvarado, Cal­ ifornia, proved a commercial success. With the exception of one or two years, this factory has conti11ued to operate up to the present time, and its erection may be said to l11ark the~ transition of the American beet-sugar industry from failure~ to success. The causes of these early failures are obvious. TIle sugar industry in continental Europe had been built up OIlly after 17 four or five decades of intensive effort on the part of the high­ est scientific minds of that continent. While continental farm­ ers for nearly two generations had been trained in the many intricate ramifications of sugar beet culture, the pioneers of the American industry had neither theoretical nor practical knowledge of the growing of sugar beets or of the manu­ facturing of sugar. Another thing, to erect a factory in this country, all the machinery had to be imported from Europe. Agricultural and technical staffs had to be drawn from European sources. In most cases these foreign experts were temperamentally unfit­ ted to handle American labor; American farmers were en­ tirely unfamiliar with sugar beet culture, the great amount of hand labor required during the growing and harvesting season was irksome to them, and so, of the dozen or more factories erected from 1852 to 1887, all but one-the plant at Alvarado, California-succumbed to the difficulties and ob­ stacles which confronted the early development of the industry in this country. To digress for a moment: It may be stated that during this period of unsuccessful attempts to establish the beet sugar industry in this country, it had been growing by leaps and bounds in continental Europe. European economists and agronomists had become convinced of the wonderful effect of sugar beet culture in increasing the yields of other crops, their worn-out soils were becoming rejuvenated, and not only were these countries self-sustaining as far as their sugar require­ ments were concerned, but they were able to export sugar in very considerable quantities. High tariff walls were built up to protect the home industry against tropical cane sugar, gov­ ernmental aid and encouragement were freely extended to the industry, liberal export bounties and subsidies ,vere granted by the governments to such an extent that beet-sugar manu­ facturers in continental Europe were able to export sugar to Great Britain at a price below the cost of production and still make a handsome profit. This practice, however, played such great havoc with the cane-sugar industry of the British col­ onies that finally the British government threatened to pro­ hibit the importation of beet sugar from continental Europe unless these bounties and subsidies were abolished. In 1903, she succeeded in bringing about what is known as the "Brus­ sels Convention", at which it was agreed that all of the beet- 18 sugar producing countries of continental Europe would abolish the bounty system. While the British expected that this action would curtail the growth of the European beet sugar industry and bring her colonial sugar industry back into its own, it did not have this effect. The European governments, as well as their economists and farmers had become so imbued with the great value of the industry from a manufacturing standpoint and its bene­ ficial effects upon the productivity of the soil, that the industry still continued to expand, notwithstanding the abolishment of the bounty system. Instead of the British colonies regaining their lost sugar trade with the mother country, prior to the outbreak of the world war, Great Britain was still dependent upon continental Europe for more thall 75 per cent of her sugar requirements. It is somewhat interesting to note, in this connection, that, notwithstanding Great Britain labored for years to secure the abolishment of the sugar bounty system of continental Euro­ pean countries, succeeding in accomplishing this result only by threatening to prohibit the importation of all bOullty-fed sugar, she has now completely reversed her policy, by granting a bounty of approximately 4.25 cents per pound on all beet sugar produced in the British Isles. This bounty has resulted in the erection of nineteen beet sugar factories and an increase in beet sugar production from slightly more than 26,000 tons in 1924 to over 200,000 short tons in 1927.

The F-irst Great In1petus Give'n the Beet Su.gar Ind1.lstry i-n the U'nited Sta,tes While the efforts of our pioneer beet-sugar men had re­ sulted in failure after failure, they did not lose heart. The United States Department of Agriculture became interested in the industry. European nlethods of sugar-beet culture and sugar manufacture were given careful study alld considerable time and thought given to th~ir adaptation to the conditions existing in this country. State governments awakened to the potentialities of the industry; state ulliversities and technical schools ,vere dravvn upon to secure scientific men to instruct the farmers in sugar beet culture and to' operate the factories. Manufacturers of nlachinery and construction companies sellt representatives abroad to study the nlanufacttlre of beet-sugal~ 19 machinery and the construction of the beet-sugar plants in Europe. The result of these increased energies was that in 1896, six small factories were operating in this country, with an annual production of between 35,000 and 45,000 tons of sugar. As the interest of our National and State governments began to increase in the expansion of the beet sugar industry, as the interest of American business men and American farm­ ers began to be aroused, more and more thought was given to the economic value of the industry. While European govern­ ments had from the inception of the industry in that continent, amply protected the home industry from competition with cheaply-produced tropical cane sugar by levying high tariff duties, no particular thought had ever been given by our Con­ gress to levying a tariff on imported sugar for protective pur­ poses. It is true that when additional revenue was needed, the tariff on sugar was increased, but after the exigency passed, the tariff usually was lowered again, with little thought being given to the protection of the home sugar industry. In 1897, however, Congress decided to follow the lead of European governments and establish a definite policy of pro­ tection to the domestic sugar industry, with a view to making the United States independent of foreign countries for its sugar supply. In hearings before Congressional committees, in speeches on the floor of Congress, and in the. final passage of the so-called Dingley Tariff Act, the country was given to understand that Congress and the Government were commit­ ted to this policy. With this change of attitude on the part of the Govern­ ment, capital began to flow into the domestic beet sugar in­ dustry, and by 1903 the number of factories had increased from 6 to 39, while the production of sugar had increased from 45,000 tons in 1896 to 240,000 tons, or over four hun­ dred per cent in six years. By this time the industry was no longer dependent upon foreign machinery or foreign experts. With the aid of Amer­ ican inventive genius our machinery manufacturers were pro­ ducing more efficient sugar machinery than that in use in the beet sugar factories of Europe. Scientific men, trained in the agricultural and technical colleges and universities of this country were drafted into the industry, and by 1903 there ,vas every indication that if the industry continued to expand 20 with the rapidity with which it had expanded during the pre­ ceding six years, within twenty or twenty-five years this coun­ try would be independent of foreign countries for its sugar supply.

Effect of Adverse Tariff Legislation O'n Growth of the Ind'UStry After the Spanish-American war, however, the growth of the industry received a very serious set-back. Porto Rico and the Philippine Islands, whose sugar-producing possibilities were greatly feared by the domestic sugar producers, came under United States control, and subsequently the sugar pro­ duced in those islands was granted duty-free admission into our ports. In 1903, the United States entered into a reciprocity treaty with Cuba by which all sugar imported from that island was granted a concession of 20 per cent in our tariff rates. At that time the domestic beet sugar producers were fear­ ful of the results of this action on the part of the Government for the following reasons: Sugar could be produced in Cuba more cheaply than in any other country in the ,vorld, with the possible exception of Java. Potentially, Cuba could produce enough sugar to more than supply the entire consumption of the United States. With a 20% preferential in our tariff rates and an exceedingly low freight rate on sugar, Cuba would eventually drive out all other foreign competition and dom­ inate our sugar markets. With all these advantages American capital would be attracted to the Cuban sugar industry, and a great rival foreign sugar industry would be built up at our very doors, with which the domestic sugar illdustry would have to compete at a very great disadvantage. That this dis­ advantag'~ could not be overcome unless adequate protection was granted the home industry, and, with the frequent changes in the political and economic views of our Congress, the do­ mestic industry faced the uncertainty of having this protection removed or curtailed at any- time. It may be stated, parenthetically, that subsequent events proved these fears to have been well founded. Imports of sugar from our so-called insular territories have illcreased from 313,381 short tons in 1900 to 1,881,115 tons in 1927. Since 1902, the year previous to the ratification of the Reci- 21 procity Treaty with Cuba, imports of sugar from that island have increased from less than 500,000 short tons to over 3,600,000 tons in 1927. Cuba has shut out all other foreign sugars from our markets, as demonstrated by the fact that in 1902 76.2% of our total imports of sugar came in under full duty rates, while in 1927 less than three-quarters of one per cent of our sugar imports paid full duty. The American mar­ ket is now controlled by the price of Cuban sugar. On ac­ count of Cuba's low cost of production, and her tariff prefer­ ential, over one billion dollars of American capital, which otherwise might have gone into the domestic sugar industry, the benefits of which would have accrued to American labor and American industry, is now invested in the Cuban sugar industry. Today the cost and freight price of Cuban sugar at New York is considerably less than the cost of sugar in the beets, before the process of extraction and manufacture has begun. Soon after the passage of theTariff Act of 1897, many fac­ tory projects were in contemplation or in the process of form­ ation, but most of these were abandoned after the negotiation of the Cuban reciprocity treaty. However, during the period from 1903 to 1913, a number of new factories were erected, mostly by those who already had their capital invested in the industry. By 1913 the total number of factories had increased to 78, scattered over six­ teen States, and the annual production of beet sugar had in­ creased to more than 700,000 tons. During the year 1913 Congress passed the so-called Un­ derwood tariff act, by which the duty on sugar was reduced twenty-five per cent, effective March 1, 1914, and providing that sugar should automatically go on the free list on May 1, 1916. The result of this adverse legislation was that seven­ teen of the 78 factories were idle in 1914 and general depres­ sion reigned throughout the domestic sugar industry. Free sugar, of course, would mean the death-knell of the domestic beet sugar industry, and those who had spent their lives in building up the industry, who had invested many mil­ lions of dollars in the erection of beet sugar factories, saw their life work gone for naught, their fortunes wiped out, and the seventy-eight immense beet sugar plants discarded to the scrap heap.

22 In the summer of 1914, however, the outbreak of the war in Europe forced the price of sugar up throughout the world and thereby unexpectedly annulled the effect of the 25 per cent reduction in the sugar tariff. By 1916, the revenues of the Government had fallen off to such an extent that just prior to the date when sugar was to be placed on the free list, Congress was compelled to repeal the free-sugar clause of the Underwood Act and the domestic beet sugar industry was saved from annihilation. The repeal of the free-sugar clause of the Underwood Act and the firmness of the sugar markets, due to the effect of the world war, put new hope into the hearts of the domestic beet sugar producers and in 1917 fourteen new factories were erected and many of those which had closed their doors in anticipation of free sugar renewed operations, making a total of 98 factories that year, with a production of 761,000 tons of sugar.

Prese1~t Magnitude of the D011Lestic Beet Su,gar lndu.stry Today there are 102 beet sugar factories erected in this country, located in seventeen States, some of thenl the largest and finest in the world. During the early stages of develop­ ment of the industry in this country, the daily beet-sugar ca­ pacity of the plants had averaged fronl 10 to 60 tons. After the industry had become fairly well established nlost of the factories erected had a daily slicing capacity of from 300 to 350 tons of beets. The average daily slicing capacity of the 102 factories no,v in existence is approximately 1,000 tons, while one of these, the largest beet sugar factory in the world, has an average daily slicing capacity of 4,500 tons of beets. The total production of domestic beet sugar illcreased from 45,000 tons in 1896, to over 1,000,000 ill 1927, valued at over $120,000,000, the proceeds from the sale of which all reve.rts to American labor and American industry. At the present time over $'250,000,000 is illvested in the beet-sugar industry in this country, including~ plants, lands, irrigation works, etc., but not including the value of the 800,­ 000 acres of farm lands devoted to sugar-beet culture/ Fl'"om $40,000,000 to $60,000,000 are paid each year to farmers for sugar beets, and a like anlount is expended each year in rail­ road freight rates, supplies, etc. 23 Wherever a beet sugar factory has been erected it has brought general prosperity to the community for a radius of many miles. Each factory gives employment to from 300 to 500 men; it furnishes the farmer an opportunity of growing a cash-paying crop, the minimum unit'price of which he knows before his seed is planted in the ground; each month it dis­ tributes thousands upon thousands of dollars to Anlerican farmers in payment for sugar beets; it furnishes the means of employment for thousands of farm laborers; it enhances the value of farm lands in its vicinity, and builds up prosperous, thriving towns where they did not exist before; it increases the freight business of the railroads; it increases the business of the small-town banks and merchants; and the knowledge, experience and advice of its scientific agricultural staff are available at all times to every beet grower, not only in the culture of his'beet crop but of all other crops grown in ro­ tation. As an example of the effect upon a local community of the establishment of a beet sugar factory, we quote from the re­ marks of the President of the National Sugar Manufacturing Company, of Sugar City, Colorado, made before the Senate Comm.ittee on Finance: "When the construction of our plant at Sugar City, Col­ orado, was begun 21 years ago, its surrounding territory gave life only to coyotes, antelope, prairie dogs and lean kine. The soil had never been upturned, and if I may use a jocular ex­ pression of the West, it was a barren prairie on which the 'hand of man had never set foot.' The men who backed this plant went 10,000 miles above the tide-water near Leadville and built a great dam in front of the Twin Lakes where we now impound over 53,000 acre-feet of water and bring it 200 miIes­ as far as from Baltimore to New York-to aid in the irriga­ tion of 56,000 acres of irrigated land, of which in the neigh­ borhood of 42,000 acres are being successfully cultivated with alfalfa, sugar beets, canteloupe, wheat, corn, beans, apples, cherries and, indeed practically all other farln products. From absolutely wilderness conditions the construction of our plant has built up the bright little town of S,ug'ar City, with a pop­ ulation in and tributary to it of 2,000 people, with a snappy little newspaper, a sound little bank, two hotels, a little thea­ ter, five churches and public school buildings which would do credit to an Eastern town of 20,000 people." This is but one of the many instances where thriving, prosperous towns have sprung up after the erection of a beet sugar factory, and barren prairies have been turned into fer- 24 tile, productive fields. Most manufacturing industries must of necessity establish their plants in or near thickly-populated and congested cities. The beet-sugar industry, however, is primarily an agricultural industry, depending solely upon the farm for its raw product, which cannot be shipped great dis­ tances without deterioration. The industry must, therefore, establish its plants in farming communities where it furnishes employment to farmers, farm laborers, mechanics, etc., living in the district, and promotes general prosperity in the rural community.

The Far1ne1rs' 111terest in, the Beet Sugar 111d1-l,Strll The beet sugar industry being essentially and fundament­ ally an agricultural industry, depending upon American farmers for its supply of raw material, the domestic beet sugar companies have endeavored from year to year to evolve a method of purchasing beets from the farmers whicll would encourage them in sugar beet culture and at the same time assure them a reasonable share of the profits from the manu­ facture of sugar from their beets. The contract price of beets is always agreed upon between the farmer and the company before the seed is planted. For many years beets were contracted and paid for at specified prices, and this form of contract proved entirely satisfactory to the farmer. Debarring unforeseen unfavorable climatic conditions, he knew in advance of planting the seed the price per ton he was to receive for his crop and could estimate ap­ proximately the average tonnage per acre he nlight expect to harvest. The sugar beet being a cash crop, the farmer could to a certain extent detennine in the spring the amoullt of cash he would receive in the fall for his beet crop, whereas, with the uncertainty of market prices for his other crops, he had no assurance whatever as to what his returns would be when they were finally sold. However, during the period from the time the farmer signed his contract to grow beets for the sugal~ COlnpany and the time the sugar was actually marketed by the company (usually from a year to a year and a half), there were opportunities for more or less fluctuations in the prices at which the result­ ant sugar was sold. If the price of sugar dropped so low that the price of beets guaranteed to the farmer ,vould not 25 have been warranted had these circumstances been foreseen, the farmer had nothing to lose, as the sugar company was compelled to pay the contract price. On the other hand, if the price of sugar rose to a height which would have war­ ranted a higher price for beets had it been foreseen, it nat­ urally caused a sore spot in the heart of the farmer, and he felt that the company was making more than it should, in comparison with his profits. In order to encourage the growing of sugar beets, and to eliminate, as much as possible, any cause for grievance on the part of the farmers, the method of contracting for beets has, within recent years, undergone a very radical change. In­ stead of the contracts specifying a permanently fixed price, payment is now made upon a sliding scale, the farmer being guaranteed a minimum price, in order to insure him against loss, and in addition, he shares in the net proceeds from the sale of the sugar manufactured from his beets. This sliding scale is based on the sugar content of the beets as well as on the net price received for sugar. In some instances the com­ panies share the net proceeds equally with the farmer under what is termed a "Fifty-fifty" contract; that is, the farmer receives the equivalent of the value of one-llalf of the quantity of sugar extracted from his beets. It thus will be seen that the beet sugar manufacturer and the b€et grower are partners in the business, and that their interests are so corelated that the prosperity of tile manufac­ turer is directly reflected in the financial returns of the farmer. The latter, however, has the advantage of being insured against loss by the minimum price guarantee. In no other country, and with no other crop that we know of, does the farmer have the advantage of sharing ill the proceeds of the sale of the finished product manufactured from his crop.

PopuJar Fctllacies Regarding Cane a'nd Beet Sluga", There is a popular fallacy existing in the minds of some people that beet sugar is inferior to cane sugar in sweetening qualities, and that beet sugar cannot be used in making con­ fectionery, preserves, jellies, jams, etc. This prejudice, how­ ever, is now fast disappearing. As a matter of fact there is absolutely no difference between cane and beet sugar when both are refined to the same degree of purity. We often hear

26 people say they can tell the difference between the two sugars, but it has been adequately proven that this is impossible, for even a chemist, with all his scientific apparatus, is unable to do so. There is no difference. This statement is corroborated by well-known chemists of the highest reputation who have no interest whatever in either the cane or beet sugar industry. While chief of the Bureau of Chemistry of the United States Department of Agriculture, Dr. Harvey W. Wiley said: "It is impossible to distinguish between refined beet and refined cane sugar. Chemists cannot do it." Dr. Carl L. Alsberg, late chief of the Bureau of Chemistry of t~nepartment of Agriculture, says: /The ordinary sugar of commerce, regardless of whether it is 'made from beets or sugar calle, consists essentially of sucrose, and contains such extremely small amounts of sub­ stance other than sucrose that it is practically impossible to chemically differentiate cane sugar from beet sugar in such cases, especially in the case of high grade sugars. "This Bureau has conducted certain experiments relating to the manufacture of apple and grape jelly, using commercial granulated beet sugar and commercial cane sugar under iden­ tical conditions, and no difference was found to exist in the fin­ ished products in any of their characteristics, so far as the use of cane sugar and beet sugar was concerned. "The highest grades of granulated sugar on the market reach an ideal state of purity so far as all practical purposes are concerned, and it is believed that where the highest grades of commercial granulated sugars are used there is no choice between beet and cane sugar." Prof. E. O. von Lippman, in his book on "The Chemistry of the Sugars" says: "It is impossible to distinguish 'beet sugar' and 'cane sugar' from each other if both are in a per­ fectly pure form." Farmers' Bulletin No. 535 of the United States Department of Agriculture, says, "By no chemical test call pure crystall­ ized sugar from the different sources be distillguished." Farmers' Bulletin 329 of the Department of Agriculture says: "It has often beell said tllat beet sugar is not as sweet as cane sugar, notwithstallding tIle fact that chemists have known that, provided the two sorts of sugar are of equal de­ grees of fineness of g~ranulation, and hence alike as to the ease 27 or quickness with which a given quantity will dissolve, tllere is no difference in sweetness, for instance, when a spoonful is added to a cup of tea." Dr. C. O. Townsend, as pathologist in charge of sugar beet investigations for the United States Department of Agricul­ ture, has said: "There is no reason why beet sugar, if prop­ erly made, should not be as satisfactory for all purposes as cane sugar, especially when we remelnber that the composi­ tion is the same in the two cases." In the government's Farmers' Bulletin No. 93, its author, Mary Hinman Abel, discussing "Sugar as Food" stated that sugar refined from cane, beet, sorghum, maize, palm or maple, is "identical in chemical composition, appearance and proper­ ties." "By no chemical test," she says, "can pure crystallized saccharose from these different sources be distinguished." Some time ago the State of California appointed a com­ mission to investigate the relative merits of beet and cane sugar for canning purposes. The commission took eighteen months for its investigation after which they reported that they had put up tIle same number of cans of the same kind of fruit with cane sugar as with beet sugar; that these cans were kept the same length of time and then opened. They found one more can spoiled \vhere cane sugar was used than they did where beet sugar was used, and in every case of a spoiled can, they traced the trouble to improper sealing of the can. The c011clusion reached and stated in the report is that for canning purposes they consider cane and beet sugar of equal value. (Circular 33, 1907, University of California.) \ In 1925, the Foods and Nutrition department of the Iowa State College conducted tests in jelly and cake making to as­ certain if different results would be obtained by using beet and cane sugar. In Extension Service Bulletin No. 135 (April, 1926), it is stated: "When submitted to the judges the samples were found so much alike that the judges were utterly unable to detect any difference between the jellies and cakes made from beet sugars and from cane sugars." To further substantiate the fallacy of the statement that there is a difference between cane and beet sugar, or that the latter cannot be used in making confectionery, jellies, etc., it is pointed out that before Cuban cane sugar supplied us with the bulk of our sugar imports, hundreds of thousands of tons 28 of raw beet sugar were imported from Europe, refined in this country and placed upon the market, either as cane sugar, or without any special designation of its origin. It might not be amiss to state: That during the world war, when it was impossible at times to obtain cane sugar, consumers, retailers, jobbers and manu­ facturers of all kinds used beet sugar for all purposes, with the same success as they had previously had with cane sugar. That England produces the finest jams, jellies and pre­ serves of any country in the world, and that prior to the late war, two-thirds of all the sugar used in Great Britain was beet sugar. That in Great Britain and other European countries, where beet sugar is used almost exclusively, the prejudice of the housewife is against 'CANE sugar for canning and jelly-mak­ ing purposes. Such conclusive evidence as cited above should eliminate any doubt as to the relative merits of cane and beet sugar. That these two sugars can be used for all identical purposes with the same degree of success has long since been established not only by leading chemists, but in the actual experience of housewives and manufacturers of food products.

Effect of the Dornest'ic Beet Su,gar C'r'op 01t the Price of Su.gar to the Co-nsunter Aside from the fact that beet sugar always sells from ten to twenty cents a hundred POUllds less than cane sugar, al­ though the two are identical, the domestic sugar industry stands as a bulwark between the American consumer and the manipulations of foreign sugar producers, who have shown themselves ready, whenever the opportunity presents itself, to compel the American people to pay extortionate prices for thi.s necessary food commodity. The sugar market, not only in the United States but all over the world, is so sensitive to the slightest fluctuations in supply and demand, that a prospective shortage of the sugar crop in Europe, Java, Cuba, or any other sugar producing country, causes an immediate rise in the price of sugar throughout the world. Innumerable instances might be cited in which the domestic beet sugar crop, coming onto the market at an opportune time,

29 has played an important part in saving American consumers from extortionate prices. In the summer of 1911, reports were circulated of a prospective shortage in the European beet sugar crops. On June 29th the New York wholesale price of granulated sugar was quoted at five cents per pound. At that time the domestic beet sugar crop had been all sold and the new crop was not due on the market until the latter part of September. When it became evident that, due to drouth, there would be a serious shortage in the European sugar crop, the New York wholesale price of granulated sugar began rapidly to advance from 5 cents per pound on June 29th, until Sep­ tember 21st, when it reached 71/2 cents per pound, or an increase of 21j2 cents per pound in three months. However, as soon as the domestic beet sugar crop began entering the mar­ ket; the latter part of September, the price began to recede, and by January 11, 1912, the price had fallen to 51/2 cents per pound, or about the normal price. The following table shows the weekly fluctuations, during the period mentioned, in the New York quoted wholesale price of standard granulated sugar from June 29, 1911 to January 11, 1912:

1911 CENTS PER LB. 1911 CENTS PER LB. June 29 5.00 September 28 7.25 July 6 5.10 October 5 6.75 July 13 5.15 October 11 6.75 July 20 ...•...... 5.25 October 19 6.75 July 27 5.45 October 26 ...... 6.70 August 3 5.65 November 2 ...... 6.50 August '10 5.85 November 9 6.30 August 17 5.95 November 16 6.20 August 24 5.95 November 23 6.10 August 31 6.35 November 29 6.00 September 7 6.60 December 7 to 28 5.75 Septemher 14 7.25 1912 September 21 7.50 January 4 ...... ••.... 5.65 (1911-12 domestic beet sugar January 11 ,... 5.50 crop entered the market) In referring to this situation before a special comn1ittee of the House of Representatives in 1912, the late Mr. Wallace P. Willett, of Willett & Gray, Publishers, Weekly Statistical Sugar Trade Journal, New York, said: "If it were not for the domestic sugar industry, sugar in this country would be today very considerably higher. ** 'it I would not be surprised if it would not be a cent a pound more but for the beet and cane sugar produced in this country. * * * There is no question whatever, Mr. Chairman, that the coming onto the market in October of the Michigan sugars

30 and other domestic sugars dropped the price from 6.57 in October down to 6.1 in November, and December 5.63. * * * The momentour American beet- sugar production became avail­ able on the market the rise stopped, and, owing entirely and totally to this American production, refined sugars were a cent and a half lower than they were at the highest point. But for that American production, we today would be buying sugar at the world's prices. Y*. * "In all these analyses I reach the same conclusion-that to decrease the price of sugar to the consumer, increase the domestic production as. rapidly as possible." Again in the year 1917, the domestic beet sugar industry played an important part in saving the~omestic consumers millions of dollars in their sugar bills. / When the Food Administration was appointed in the sum­ mer of 1917, one of its first acts was to make a careful study of the sugar situation in this country, from which the follow­ ing facts were disclosed: That the world production of sugar had decreased several million tons on account of the war; the stocks in this country were at low ebb; several months would elapse before the new Cuban cane crop would be available, and the only immediate source of supply of any magnitude was the domestic beet sugar crop which was due to come onto the market about the first of October of that year. This meant that, left to the law of supply and demand, the price of sugar in this country during the last three months of the year would have risen to unprecedented heights. The Food Administration had 110 power under the law to fix prices, and the only course open to it was to appeal to the patriotism of the beet sugar producers to forego large profits which could have been secured by charging the high price which the sugar market ,varranted under the circumstances. The domestic beet sugar producers met this appeal in a pa­ triotic spirit and entered illto a voluntary agreement with the Food Administration to charge not to exceed 71ft cents per pound, seaboard basis (less 2%) for their entire forthcomil1g crop, estimated at that time at between 800,000 and 1,000,000 tons. The pr,ice agreed upo'n was abo'ut 11/2 cents below the the11~ prevailing market p14 ice of i'mported can.e suga'r. Not only did this voluntary action on the part of the do­ mestic beet sugar producers meall a saving to the public of millions of dollars in the reduced price at which the beet sugar crop was sold, but it also had the effect of stabilizing the cane

31 sugar market which became active in the latter part of De­ cember, when the cane crops became available. The effect of this voluntary action on the part of the do­ mestic beet sugar industry is set forth in an official statement by Hon. Herbert Hoover, then head of the Food Administra­ tion, in the New York Times of August 27, 1917, in which he said: "The beet sugar producers of the country have patriotic­ ally agreed with the Food Administration to limit the price of their sugar to a basis which should result in a reduction of about 10 cents per pound from the present price, effecting a saving of $30,000,000 to the consuming public between now and the first of next year. This patriotic action of the do­ mestic beet sugar industry in acting as, a control over the price demanded for imported sugar will not only make the saving mentioned above between now and the end of the year, but will contribute largely to establish a lower price for iln­ ported sugar throughout the year." A most striking illustration of the effect of the domestic beet sugar crop on the price to the consumer, occurred in 1920, the year in which the price of Cuban raw sugar rose to the exorbitantly high price of twenty-three and one-half cents per pound. The following tabulated statement shows at a glance that, while the domestic beet sugar crop was competing with Cuban cane sugar, the price was kept \vithin reason; that as soon as the domestic crop became exhausted, the price of Cuban sugar increased by leaps and bounds, until it rose to such a height that it attracted sugars from allover the world to our mar­ kets, compelling a decline; and that as soon as the new do­ mestic beet crop came on the market in the fall of 1920, the price began rapidly to recede until, by the end of the year, the price had again reached normal.

32 EFFECT OF BEET SUGAR CROP ON NEW YORK PRICE OF CUBAN RAW SUGAR IN 1920 NET CASH NET CASH 1920 CENTS PER LB. 1920 CENTS PER LB. Jan. 2...... 12.79 June 16 19.56 5 . 12.34 23 18.51 6 = 12.275 28 18.26 7 ;a 12.92 29 18.31 8 e;,:a ••••••••• 13.04 July 9 18.56 23 : 13.00 15 18.31 Feb. 5 u 12.79 19 18.06 7 = 12.54 20 17.55 9 " ••• ~ ..••.....12.04 21 16.55 16 .a 11.03 27 16.30 18 ~ 10.28 Aug. 6 16.05 24 ••..•..• til •••••••••10.16 9 ...... •....15.26 26 ~ 10.28 12 13.04 Mar. 2 i 11.29 19 12.04 3 ~ 11.41 Sept. 8 10.76 4 11.54 13 10.78 9 : 11.03 28 10.00 12 e;,:a •••••••••11.29 (Domestic beet sugar competition 15 t 11.54 resumed from new crop, further 17 ~ 11.79 forcing down price) 18 ·i 12.04 Sept. 30 9.06 19 12.54 a Oct. 1 9.00 22 ~ 12.79 4 8.00 27 13.04 6 8.00 30 . 13.34 (Domestic beet sugar crop 8 7.76 Exhausted) 13 8.00 15 8.03 Apr. 1 14.04 18 8.76 3 14.79 19 9.03 5 15.30 20 8.78 8 16.55 25 8.51 9 17.30 26 8.26 10 17.43 27 8.53 12 17.81 29 " 8.26 13 18.31 30 8.03 14 18.56 Nov. 5 7.52 15 19.06 8 7.27 17 19.56 10 7.02 May 12 20.01 12 6.51 13 20.06 16 6.52 14 21.57 18 6.26 17 22.57 19 6.14 18 23.07 22 5.77 19 ...... •...... 23.57 7 " 5.51 (Sugars from allover world be­ Dec. coming attracted to our market 8 .. " 5.32 9 5.27 by high price of Cuban sugar, forcing down price) 10 5.01 13 4.76 May 26 22.07 14 4.63 27 20.56 18 5.01 June 3 20.31 21 5.14 4 20.01 22 5.38 7 ...... •...... •.•...20.06 27 ...... •...... 5.31 31 " 5.32 Dates and figures from Willett & Gray's 11reekly Stati-stfoal Suga.r Trade J01l1"nal, January 13, 1921 (p. 23). Notations interpolated by author. Dates ,are given only when a change in price occurred. 33 Summary

To summarize, the domestic beet sugar industry furnishes a remunerative, cash-paying crop to approximately 100,000 American farmers, the minimum unit price of which is guar­ anteed before the seed is planted. Above and beyond this, the farmer shares in the net pro­ ceeds from the sale of the sugar manufactured from his beets. The industry gives employment to nearly 75,000 farm la­ borers during the growing and harvesting season. It employs about 35,000 technicians, mechanics and agri­ culturists in and about the factories. It annually distributes to American farmers from $40,000,­ 000 to $60,000,000 for beets. It produces over seven million tons of beets grown on ap­ proximately 800,000 acres. It produces a farm crop from A'merican soil valued at over $120,000,000, the proceeds from the sale of which are all dis­ tributed to American farmers, American labor, and American industry. It pays annually to the railroads for freight fronl $20,000,­ 000 to $25,000,000. It pays annually in salaries and wages over $20,000,000. About $20,000,000 are annually expended for supplies, such as machinery, coal, coke, lime-rock, bags, chemicals, etc., all products of American industry. Aside from all these benefits, the domestic beet sugar in­ dustry might be likened to an accident insurance policy. We. never fully appreciate the value of such a policy until an emer­ gency occurs, and then its benefits stand out in bold relief. And so with the domestic sugar industry, when plenty of sugar is available and the price is low, little thought is given to the economic value of the industry by the public, but when emer­ gencies arise, as in 1911, 1917, 1920, and at other times, the value of producing on American soil at least a sufficient quan­ tity of this necessary food commodity to stabilize the price 34 and protect the consumer from extortion by foreigners, be­ comes instantly apparent. As Mr. Wallace P. Willett has said: "TO DECREASE THE PRICE OF SUGAR TO THE CONSUMER, INCREASE THE D.OMESTIC PRODUCTION AS RAPIDLY AS POSSIBLE."

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