The record-union., 1897-11-04
THE QUESTION OF PROFIT.

build into its foundation no fundamen-
tai errors. To the end that the whole
subject may be understood, the Rec
pains in its full, free and fearless eluc-
idation AT many places in the state,
propositions have been mooted to FUR
nish the product of from five to ten
thousand acres of sugar beets at the
factory at 81 per ton, upon assurances
that the supply of that quantity viii
insure the construction of factory to
work UP the beets.
Some six years ago, this proposition
was made to a large landed proprietor
in San Francisco and related to 5000
acres of beets to be cultivated at the
town of Merced. The subject was then
thoroughly examined and it was found
that the terms of the contract were
such as that the grower of the beets
guaranteed the minimum percentage
of saccharine in the root and engaged
to deliver beets containing only that
percentage.
The question of the profit of working
the beets at the factory was then thor
oughly investigated and the results
have not since that time been in doubt.
1t was found that a factory costing
S4oO,000 would possess a capacity Of
1000 tons of beets per day, and that
the beets could be reduced at the cost
of 81 % per ton, which when added
to the cost of the beets at $4 per ton
made the cost Of reducing to refined
sugar Sc 90 per ton. The product of
beets at a minimum of II degrees of
'saccharine is 800 pounds of refined
sugar to the ton worth four cents per
duct in each ton of beets worth S12
per ton, or a net profit of $500 per day
to the factory in a run of $50 days,
equaling net profit Of SS25. 900 in a
single season; and this on an invest
ment of S450,000.
A factory with a capacity of 1000
tons of beets per day would cost $780,
COO. The cost of reduction would be
- per ton, which when S4 per ton is
added for the beets would make the
cost of the raw material and the work
ing So per ton, or a profit of $12, 900
per day, which for $50 days would be
SIS00.00 for the season, upon an in
vestment of 100000.
factory with a. capacity of 1900
tons per day would cost 5000. 900. and
would reduce the cost of working a ton
Of beets into sugar to 81 so, which
when added to 81 per ton for the beets
would make So 80, leaving Sc 30 per
ton, or a net profit Of $19, 500 per day,
which for a seasons run would be So
925,000 on an investment of $4,000
Apply this to 10000 acres of beets cul-
tvated and delivered at the factory.
Ten thousand acres at fifteen tons to
the acre would produce 10000 tons of
beets. For this the growers would receive
$600,0O0; but at the average of 81 per
facturer would receive 100000 net
profit, after subtracting the cost of
beets and the cost of their manufacture
into sugar. The minimum estimate Of
the cost of producing the beets and
delivering at the factory would give
100000, leaving to the grower a net
profit OF $500, ,000 as against net profit
to the manufacturer OF S900,000 or
four and a half times the profit which
accrues to the grower.
In the beet sugar factory being erect
ed at Salinas by Claus Spreckels, all
these elements are solved. Claus
Spreckels owns the land upon which
the beets are to be grown. He has
divided the land into holdings and is
cultivating by a commendable system
OF tenantry. He becomes capitalist for
the tenants. They furnish their own
implements and horses. He has con-
rtructed residences and barns for their
use on each subdivision. and has set in
motion a system worthy Of imitation
everywhere. He is carrying the risk
and the hazard of liberalization. and
he can afford to do this because he is
sole beneficiary of the large profit aris-
Ing out of the manufacture Of the beets
into sugar. In this instance Claus
Spreckels has illustrated the best meth
cd OF establishing this industry so far
as its capitalization is concerned.
This is in consonance with the idea
OF cooperation. What number of
farmers would do if their credit and
capital We're united in the construction
OF factory in the profit Of which they
We're all to be sharers. Claus Spreckels
has done in an individual way.
For the past six years propositions
have been mooted relating to the culti-
walton Of given number of acres 10
beets accompanied by a promise tc
erect a factory to work the beets. pro-
vided that beets of a given per
centage of saccharine We're delivered
to the factory at 81 per ton. Many OF
the cities of the State of California
have this proposition before them now
and the nonotonous offer of 81 per ton
has a significance which should not es-
cape public attention. Four dollars pei
ton is the minimum price at which the
grower can raise beets and be encour-
ager TO raise successive crops. II con
e4itutes about one third Of the ultimate
value Of a ton OF beets when reduced
to sugar. but 10 the 81 must ht
added an average cost of 50 per tor
for working, leaving TO the manu-