New-York tribune., 1901-02-22
RUSSIA'S SUGAR BOUNTY.
GROUNDS on WHICH SECRETARY GAGE
BAsED HIS COUNTERNAILlNG
DUTY ORDER.
[BY 1uuEeRArH TO THr rDIBUNE.l


he Russian bounty system last April Is haseo
m grounds not fully understood by the general
nublic The object Of the countcrvailing duties
,roviaea for in the present tariff law is 10 place
All imports produced under Government bounty
m the same footing in the American market
The law applies to any import, from axes 10
,ebras. providing a bounty is received by the
nroducer from his Government, but II has had
practical importance only I'm the case of sugar
mportations. Foreign exporters TO tins country
as well as American producers, are equally IN
,erosted in seeing that the law is imparuaHy
enforced and that no favors are shown to any
particular nation The question involved there
FORE, is simply one OF fact Does Russia pay
either directly or indirectly. a bounty 20 her
sugar producers and Il Sc. how much?
Furopean experts have always held ihat
Russia paid a higher sugar bounty than any
other nation. When The duties were suspendco
last spring il WAS dua 10 representations made
M Russian interests that this 7ertion was not
Justified The a-tuai provisions 4 the Russian
.aw are as follows. and are evidently calculated
20 secure three objects:
First-To prevent competition or combination
from lesseuiug the numrcr ot factories
Second-To encourage production beyond 'he
demands of the home market.
Thra-To facilitate expectation.
A Government estimate q: the probable home
consumption is made al the beginning OF every
year and upon this as a basis the total output
% each factory is DIVIDED into four parts;
F.rst-rirsi or fixed quota-about one thou
sand tou5-Nh-b each factory may place on
he home marR't irrespective ot lts t1l4I
product TINS amounts 10 a guaranteed market
for this amount Of sugar for every factory IN
operation gt the high pront secured thfoosh
Cover nmcnt regulated competition. and prevents
he combination or closing of plants. How strong
motive this proft affords is seen from the fact
n. tn .ffn ne
cost OF uruductiln. ln the last year The kiett
sugar quotations have been from 2is 10 100
rubles pood uairty- siN pounds. after deduct
ng tho Government tax. lhe cost 81 lfpouc-
tion is civsn ass llO rublcs q pood.
SecCnG-Secon5 OF variable quota The esti-
mated total domestic consumption. less tn ag-
yrerate Of thc fixed quotas. is appOrtioned 10 all
he factories pro rata. according TO their entire
annual output above the fixed quota already
mentioCed. The fact that the fixed quota Is
irst deducted from the output of each factory
before making the apportonment gives slight
advantage 10 the large producer But besides
this the desire TO secure large a share as
possible Of the home market al the high profits
already mentioned stimulates the production of
each factory.
Third-R5serve. Each factory is obliged 10
hold q certain per cent Of its product in reserve,
20 be placed on the market by order Of the Gov
ernment in case domestic prices rise above a
certain fixed maximum
Fourth-Free surplus. which is all sugar pro-
iuced not included in the three above items, and
/ Is available for export.
There IS an internal revenue inspector at each
factory, and all sugar sold in the domestic mar
ket is subject TO eXise tax Of slightly over
cent a pound. or course. the measures al
ready mentioned are tantamount TO bounty
For expectation paid by the home consumers.
But there are two other regulations directly in
tended 10 further this movement of the surplus
product:
Ffrst-In case Of exported sugar the excise tax
S RENTED.
Second-A privilege exists, which is stated in
he Government instructions 10 be Ito facilitate
sNportation' by which factories conveniently
situated for exporting permitted assign
heir FIRST and second quotas-the right 10 sell
he whole amount they may place upon the
home market under normal condtiOns-to re-
motor factories Tor sufficient consideration. If
they export their total output AT cost Of produc-
ton, or even less, they clear q profit derived
rom their transactions with the interior factory
Russian sugar reaches this country from the
port of Dantzig. in Eastern Prussia, passing over
the German frontier 10 Bremen and Hamburg
AS Germany herself is a sugar exporting com
Try, she absorbs little. if any, OF the Russian
product in transit The sudden increase Of the
Russian expectation by this route on The sus-
pension Of countervailing duties last April is
sufficiently indicated by the following table
TTs, TTnss ten First ] ten Per cent
~, ,.-.-..s - ls's-T5ns lsoo-Tons. increase.
fG,sl S1.D esBo,'e5 .s2o,'e5 ove' Ger . .
MAN frontier -.-.-------- 10 80 4oeNb 10
Russia produces about 92l. 600 tons Of sugar
annually. OF which 100000 tons is available for
export About j. per cent Of this is absorbed by
The Asiatic market The amount that might con-
seivoby reach the United States under as favor
able conditions as have heretofore existed is
therefore considerable and probably is fully
twice the entire product OF Porto Rico The
accumulated reserve from last year is 5000
tons
In defining boun;ies the Brussels conference
declared;
Advantages similar TO those resulting from the
boCntles can be derived from the dsproportion
between tho rates of customs duties and excise
taxes, especially in places where public authori-
ties enforce, suggest or encourage combination
among sugar producers
To collect prohititory import duty and re-
NIT the internal tax on sugar exported would
seem 10 be the extreme case Of the many in
cuded under this statement Moreover, as al
ready indicated, the express object Of the meas
ures enacted by the Russian Government is 10
facilitate transfers between mills or 70 encourage
entry into outside markets. The exact title Of
this paragraph in the instructions. translated
verbatim, is,
On the transfer Of free sugar between mills
IN order 10 facilitate expectation OF surplus 10
foreign countries.
IL would seem. therefore that a strict interpre-
tation OF the present tariff law compels the con-
struction given by the recent order