Edible Ohs: a Proposed Project in United States
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EDIBLE OHS: A PROPOSED PROJECT IN UNITED STATES - LIBERIAN ECONOMIC COORDINATION A THESIS SUBMITTED TO THE FACULTY OF ATLANTA UNIVERSITY IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF BUSINESS ADMINISTRATION BY STEPHEN JOHNSON SCHOOL OF BUSINESS ADMINISTRATION ATLANTA, GEORGIA JUNE 1950 ii 3 *=> TABLE OF CONTENTS Part I Page INTRODUCTION vi General Review vi Arrangement of Subject Matter vii Source and Presentation of Data .... ix Chapter I. EDIBLE OILS 1 Composition or Structure 1 Derivation 1 Physical Properties 2 Chemistry of Fats . 3 Scope of the Central Theme 4 II. REGIONAL DISTRIBUTION OF PRIMARY SOURCES AND THEIR CULTIVATION 5 III. THE EDIBLE OIL AS A COMMODITY OF COMMERCE. 19 Size and Constitution of the Industry . 19 1949 United States Production 23 Prices 26 United Kingdom Edible Oil Situation . 26 International Trade in Edible Oils. • . 33 IV. ASSESSMENT OF THE EDIBLE OIL AS AN ECONOMIC COMMODITY 40 V. HISTORICAL SKETCH OF THE UNITED AFRICA COM¬ PANY (SUBSIDIARY OF LEVER BROTHERS), PRI¬ MARILY AS PRODUCERS AND DEALERS IN EDIBLE OIL 61 Part II I. LIBERIA IN INTERNATIONAL TRADE 66 II. SOCIO-POLITICAL STRUCTURE OF LIBERIA .... 71 III. PREVAILING ECONOMIC PATTERN OF LIBERIA ... 78 IV. LIBERIAN EDIBLE OIL PROJECT 87 iii TABLE OF CONTENTS Or Page JUSTIFICATION OF DIVISION OF FUNCTIONS: LIBERIAN FARMERS COOPERATIVE - AMERICAN CORPORATE MANUFACTURING ENTERPRISE 97 AZX 104 I. Excerpt a from G. W. Brown’a Economic "Plantation, Capitalism, Loans and Forced Labor * 104 II. Friendship, Commerce and Navigation Treaty Between the United States and Liberia 107 III. Principles Applying to Mutual Aid for Defense Agreement Between the United States and Liberia 120 IV. Construction of a Port and Port Works Agreement Between the United States and Liberia 123 V. Alien Land Law 125 VI. An Act Permitting Unrestricted Trade in the Hinterland of Liberia Both to Citizens and Aliens. ... 127 VII. Social Legislation 129 VIII. An Act Relating to the Construction and Regulations of Cooperative Socities 131 BrRAPHY 133 t iv LIST OF TABLES Table Page 1. Primary Materials - U. S. Factory Production And Consumption 27 2. U. S. Fats And Oils Production From Domestic Material 28 3. Average Wholesale Prices of Leading Fats and Oils - United States 29 4* United Kingdom: Consumption of Fats and Oils, by Types And Uses 32 5* Annual Production of Main Oil Seed Crops in Principal Producing Countries and Exports by Countries 36 6. Some Oils And Fats Used in Soap Manufacture in The United States 44 7. Oils And Fats Used in The Production of Margarine in The United Kingdom 46 8. Oils And Fats Used in The Production of Compound Lard in The United States 49 9. Estimated U. S. Production, Value And Per Capita Consumption of Commercial Salad Dressing and Re¬ lated Products 1937-1948 53 10. Use of Vegetable Oils in Commercial Production of Salad Dressing, Mayonnaise and Related Products - Specified Years 55 V LIST OF CHARTS Chart Page 1. Vegetable Oils Used in Commercial produc¬ tion of Salad Pressing, Mayonnaise and Related Products 1946, 1947 and 1948 50 2. Estimated Total Commercial Production of Salad Pressing, Mayonnaise, and Related Products 1939-1948. ... ..... 51 3. Average Monthly Price (Quotations, HYC Prums . 56 INTRODUCTION General Review:- In the following thesis the author has set as his. goal the justification of the economic proposition that the systematic coordination of the material and tech¬ nological resources of the United States and Liberia should redound to the well being of their respective peoples. To give a pragmatic significance to this economic ab¬ straction, it has been necessary to select a vehicle which not only has a broad social appeal, but strikes at the very vitals of the peoples involved, thus looming importantly in the social planning of the two countries involved. After an exhaustive exploration, edible oils was decided upon as the central theme. The universal culinary as well as industrial or technical demand for this commodity group in both peace and war, and the complementary character of American and Liberian resources germane - in proper combination - to its commercial produc¬ tion, finally determined the authorfs selection. Fats and oils are derived from oleaginous vegetable sub¬ stances, animals and marine life. Within the rather con¬ fining limits of a thesis, however, it has been thought advisable to restrict the discourse to vegetable and animal types; with specific treatment of hydrocarbons derived from peanuts, cotton seed, soy bean, copra, palm kernels and peri¬ carp (fruit), and of butter and lard. The significance of fats and oils may be readily assessed vi vii in terms of the global annual volume of output, the economic applications of this commodity group, and its geographical distribution as an industry. Moreover, it is perhaps of more than passing significance that the United States and British governments see the necessity of publishing official reports at regular intervals, treating in an exhaustive manner, the past behavior of the industry as well as current , while pro¬ viding a scientific evaluation of future trends. The author is not aware of any previous work which has attempted definitively to treat the subject matter handled in his present thesis. However, the social implications of an economic solidarity between the peoples of the United States and Liberia find a distinct place - by logical inference - in many socio-political treatises on Liberia by both American and foreign authors.'*' Arrangement of Subject Matter.- For purposes of clarity and preservation of logical sequence the present work is divided into two parts. The first part defines the central theme of the thesis following this order: 1. Definition of Edible Oils - in terms of the character of the commodity, and of its primary and secondary sources. ■*"Among these may be cited: Brown, S. W. The Economic History of Liberia; Huberich, C.H. The Political and Legisla¬ tive History oi Liberia; Buell, R. L. Liberia. A Century of Survival; Uewland, Captain H. 0. West Africa (or Handbook for Traders, Financiers, et cetera). viii 2. Regional distribution of the raw materials constituting the primary sources of the product. 3. The edible oil as a commodity of commerce imro lving : a. Description of the processes of pro¬ duction from the plant stage to the finished product. b. Constitution and size of the producing industry. c. Marketing of the finished product. d. Economic applications of the commodity. 4. Assessment of edible oil as an economic commodity. 5. Historical sketch of the United Africa Company (subsidiary of Lever Brothers) primarily as producters and dealers in edible oil. In the second part of the thesis, the author endeavors to prove - on the basis of the edible oil industry - the validity of the economic proposition described in the first paragraph supra. The following salient features are accordingly emphasized: 1. Liberia in international trade. 2. Socio-political structure of Liberia, stressing political stability over a sustained period. 3. Prevailing economic pattern of Liberia, including: a. Description of alien comraerieal rights. b. Forms of business organization and ix existing relationship between state and private enterprise. o. The Liberian currency. d. The labor situation and labor legis¬ lation. e. Existing financing facilities. f. Treatment of a hypothetical Liberian Edible Oil Project. g. Justification of division of functions between Liberian Farmers 1 Cooperative and American Corporate Manufacturing Enterprise. Sources and Presentation of Data;- About the only primary source on which the author has been able to draw is his own personal experience and observations in the two countries. For documentary data he has had to depend in the main on United States public documents and authors, while coloring his re¬ search with some material from British sources. Throughout the work there has been a sustained effort at preserving objectivity of treatment, while opinions, wherever expressed from necessity, have been couched in language calcu¬ lated to convey a genuine impression of logic and frank dis¬ couragement of any subjective tendency. The statistical presentation has been minimized in terms of technicality, in order to achieve a direct and arresting ap¬ peal for the theme embodied in the "economic" proposition under treatment. Statistical data have therefore been presented in terms of percentages for relative measures and tables for indication of absolute trends. Figures employed are con¬ fined to pie and bar charts. The series being in all cases discrete, it has been thought advisable to utilize the arithmetic mean as the sole measure of central tendency, the median being discountenanced for lack of suitable "array" anl because of the depiction of data on the basis of chronology rather than magnitude. CHAPTER I EDIBLE OILS Part I Composition or Structure»- It is usual to confine the term fat (or vegetable or animal oil, if liquid) to "esters” of fatty acids formed from the esterification of glycerol. Esters, except those of high molecular weight are liquids. They are neutral substances, colorless, usually of pleasant odor. In general they are lighter than water. The lower esters are somewhat water-soluble; solubility decreases with rise of molecular weight. Esters are freely soluble in alcohol and ether. Esters have low boiling points, often lower than those of the acids and alcohols involved in their preparation. The structure of an ester is such that it cannot associate as can either acid -, or alcohol; hence it has a 'normal' boiling point. The fats and fixed oils are esters of a special class, in-as-much as all are derived from glycerol. Ordinarily by the term fat one refers to a substance which is solid at room temperature, liquids being termed oils. Dérivât ion.- Pats and oils are obtained from vegetable tissues (seeds, fruits) by breaking the tissues and applying pressure. Solvent extraction is also used. Some fats can be "Spieser, Louis P.