The Minneapolis journal. [volume] (Minneapolis, Minn.) 1888-1939, 1903-06-13
SUGAR, TRUST
LOSES A CINCH
Will Make No Attempt to Rule
Prices in the
Future.
It Also Prepares to Sell Direct to
Retailers When Nee
essary.
The New Attitude Due to Growth of
Competition Promoted by
Monopoly.

SASSASbA SSA
no attempt will be made by it to restrict
the price Of that great staple. Mercantile
circles are discussing the new program
and wondering if it will result in a partial
revolution Of grocery trade methods.
To have a great trust say that 1t is
ready to pass by the jobber and sell the
retailer direct wherever it may be neces-
sary for its own interests Is hanging
cloud Of possibilities over the present
system of distributing merchandise the
effect Of which only the future can tell.
Among western wholesale grocers. opinion
is divided, but a large number moline to
the belief that it is likely to result in a
partial revolution in the wholesale grocery
business.
p Since the big trusts or combinations
were formed with the object of controll-
ing the market on various staple articles
Of food, there has been much discussion
about wiping out the jobber or middle
man. In the past few years this talk died
out, as it has been the policy Of the
trusts to use the jobber distributor
Of their goods wherever they could con-
troll the situation or get at least a fair
share of the business. But the argument
which has been advanced in various quar-
tiers that the trust problem contained
within it the elements for its own regula-
ton or solution, seems to have been well
demonstrated in the case of, the sugar
trust. It now has fierce competition
which it has been forced to respect by
throwing its old equality plan of dis
tribution away and going after the BUSH
ness in free-for-aH fight with the sew
eral other factors in the sugar field with
out respect to the jobbers' position.
This naturally means lower sugar for
the consumer than would be possible
under a harmonious situation among the
sugar refiners.= At the same time it
tends to smaller profits in the buying and
selling Of sugar which hits both jobber
and retailer whose best and surest
profits in sugar have been made on
stable market. )
The Standard Oil company was the first
of the big trusts to go direct to the re-,
taller with its product and in some cases
in the northwest where the retailer has
not been dilfgent in protecting its
products it has gone direct to the con-
sumner. The Standard OIL company has
competition. but its methods Of fighting
competition are directed toward getting
all Of the business it can without regard
to other factors In the distribution Of
merchandise. That the sugar trust is
gradually getting around to that position
thru the pressure of competition is far
more interesting to the wholesale grocer
because sugar constitutes large per-
centage Of his sales. What the effect
will be on other lines Is a problem.
- Origin Of Equality Plan"
When the trust was formed, it con-
trolled 70 per cent Of the output. To
make its position commanding it needed
the friendship OF the distributors Of the
country. This was not hard to get, par
ticularly in the west, where sugar had
been sold practically at loss for years
Out of that arrangement grew tho
equality plan Of selling sugar whereby the
retail dealer paid the New York card
price with the freight to his town added
This gave a stable market. The trust
increased. its percentage Of the total OUT
put Of the country by acquiring more
plants and for a time was in absolute
control.
The effect on prices was quickly seen by
close students Of the situation, altho the
fall in raw material prices disguised the
true situation from the consumer. Before
the trust was organized the difference be-
| tween the cost of raw sugar to the re-
finer and the figure at which the retailer
purchased from the sjobber was not more
than three-quarters Of cent per pound.
Seven years later, in spite of the extra
| ordinary cheapening Of transport ip the
| preceding few years, and the big decline
in prices Of raw material, which would
make the old market an exorbitant one
| in 1894; the difference east of the Rocky
| Mountains between the price paid for
raw by the ref1ner and that paid by the
|
lated was 1ss cents per pound in addition
to freights and charges. Competition had
gone glimmering. The equality plan was
an arrangement between producer and
distributor for mutual protection, in which
Of course the public was not included.
Monopoly Fostered Competition.
But this long profit in refining sugar had
its disadvantages. 1t promoted compe-
tition for the trust and this development
| Is Of special interest to the student of
Americas development who is endeavor-
| ing to solve the trust problem. Independ-
ent ref1neries were built, among the new
factors in the trade being Arbuckle, be-
tween whom and Havemeyer has de-
veloped hatred which has been factor
in sugar prices during the past few years.
This makes competition. Arbuckle in
sists on selling sugar without regard to
card prices or the equality plan. The job