The Hawaiian star. [volume] (Honolulu [Oahu]) 1893-1912, 1900-10-27
THE SUGAR WAR RESUMED
STRUGGLE FOR SUPREMACY GOES
MERELY ON.
A Matter Which is Of Much Interest to
the Leading Industry Of These Islands
Plain Facts

The last number of "Bradstreets"
gives the following resume of the sugar
refinery war and the general situation:
For some months past the position in
the market of that prominent specula-
| tive security American Sugar Refining
! Company stock, has been mainly deter
mined by the prevalence of a belief that
! the competitive warfare among sugar
refining interests was a thing of the
| past. The fact that demands for SUI
gar during the spring and summer were
very large, and that the increased pro-
duction of the refined article was readi-
| ly absorbed was, of course, a factor in
/ the situation. Prices for sugar advan-
ced to a level which, with the refineres
running to their full capacity assured
good profits, and it was seriously argu-
ed that the American Company was in
all probability earning once more on a
scale which would Justify a restoration
/ of the dividends on its common stock
from a 6 per cent annual basis to the
| II per cent rate which was paid in the
series of years during which it COM
manded the field and had no serious
competition. At the same time, the
chief factor which gave support to su-
| gar stock was the belief that, directly
or indirectly, an understanding had
been reached as to prices and produce
ton by the American Sugar Company
and its competitors. The developments
which attended the creation of the new
National Sugar Company last spring
seemed to give the first practical indl-
cation that such course had been de-
cided on. That corporation was form
ed by combination of the new plant,
built by the Messrs Doscher, to COM
pete with the American Company and
other refining plants including that of
the Messrs Mollenhauer, the manage
ment of the National Company being
so constituted as to support the belief
that it would act in harmony with the
American Company. There was GER
tainly no indication of an open alliance
between the latter concern and the re-
naming outside competitors in the SUI
gar refining business, the Messrs. Ar
buckle Bros. But the increased de-
mand and advance of values for re-
fined sugar making their appearance
at this juncture, all interests in the
trade seemed to act in harmony with
reference to prices, so that in Wall
street, at least, there was a general
impression that the chief combatants
in the preceding competitive price war,
the American Company and the Ar
buckles, had come to some understand
ing. On this, and on the favorable
situation of the trade. American SUI
gar shares had marked advance in
dences OF speculative manipulation
that has been c common in that secu-
rity.
In sugar-trade circles, however,
there has been all along a good deal of
dissent from the belief that any tan
gible agreement existed, or that the
various interests were doing more than
take advantage of enlarged demands
and higher prices One circumstance
which agreed badly with the theory
of a new combination and lasting peace
in the trade was that the litigation be-
tween the Arbuckles and the coffee
concern controlled in the interests of
the American Company went or was
allowed to go on as q bitterly as ever;
another was the failure of the trust to
restore it's dividend rate to the old
basis, the last quarterly payment hav-
ing been merely Ia per cent instead
of IL per cent. This caused some mis-
givings in speculative quarters, and,
at the same time, with the end of the
summer season the demand for refin-
ed slackened and sugar prices suffer-
ed a gradual reduction. The new raw
sugar crop has also been backward
and new supplies of raw slow in arriv-
ing, thereby creating an idea that an
enforced closing of the refineries might
occur. The usual temporary shutting
down of such works for the necessary
OVefnaullng OF their machinery WAS re-
garded with more than ordinary inter-
est, and was a factor in producing
the declining tendency in the market
price of American Sugar shares, which
promptly made it's appearance.
This week, however, has brought de-
velopments which seem to show that
the alleged settlement of the sugar
trade war was a mistake. Cutting by
the National Company and reduction
of prices by the Arbuckles was follow
ed shortly by a cut of 40 points
in the prices for the principal standard
grades by the American Sugar Refin-
ing Company. This reduction, which
was from els cents to 5.75 cents, was
the heaviest ever made in single day
since the company was formed, and re-
suited at once in similar action by all
parties. To Wall street the inference
that the war is on again is plain one,
and, while sugar-company stock has
been held up by the presence of large
short interest in it, with the buying to
cover contracts put out by the bears, it
is considered that the stock in ques-
ton may again execute one of the
downward movements for which it is
just as famous as for its sudden and
remarkable rises.