The San Francisco call., 1910-01-25
REPORT OF THE BOARD OF
DIRECTORS OF THE AMERI-
CAN SUGAR REFINING COM
PANYt TO THE STOCKHOLD-

Sf1N OO0f1N OOM-
PANYt TO THE STOCKHOLD-
ERS.
The Directors herewith submit their re-
port for the year 1909. While the assets and
business of your company are the property of
Its stockholders, yet your Directors recognize
the legitimate interest which the public has
in a business organization which deals to a
large extent in a necessity of life. 4 further
motive for this report is found in the fact
that it seems to be the only method by which
this company can correct the widespread
misrepresentation and unjust criticism to
which it has been subjected. A business cor
poration can have no asset more valuable
than the goodwill of the public and that
goodwill can best be gained by explaining to
the public the nature of any existing mis-
apprehension as to its character and opera
tions.
/. Ownership of the Company.
1t is commonly supposed that the shares of
your company owned by comparatively
few residents of New York City. The fact is
that the average holding of stock by any in
dividual is less than fifty shares The ma
jority of the stock of your company is held in
New England, and its value and stability as
an investment is best evidenced by the fact
that your shares are largely held by executors,
administrators, trustees and other fiduciares.
Its stable value as an investment is also
attested by the fact that there have been no
substantial changes in the stockholders for a
very. long period. The number of our stock-
holders of common and preferred stock is
1S,4S4.
In view of the preponderant holding of
stock by New England shareholders, you will
be asked to increase the Board of Directors
by two members, and for these positions the
names of Mr. Edwin T. Atkins and Mr.
Samuel Carr, both of Boston. and both we'll
and favorably known in business circles, will
be submitted for your approval. Another
vacancy in the Board has been created by the
declination of Mr. Charles FL. Senff to serve
another term, and to fill his place a number of
influential stockholders have suggested the
selection of Mr.. e. s. Marston. the President
of the Farmers Loan & Trust Company of
New York one of our oldest and most con-
servative financial institutions. Among other
changes it may be noted that your Board
has selected James NJ. Beck. formerly Assis-
tant Attorney-General of the United States.
as the new General Counsel for your Com
pany.
II. This Company not Monopoly.
Another Misrepresentation TO which it seems
advisable to call attention. is the common
belief that your company exercises mono
poly in the sugar trade. When in 1894 the
Supreme Court of the United States authori-
tatively decided in United States VS.. Knight,
ct al. 156 u. s., j. that your company
not monopoly, under the Sherman Anti
Trust Law, this company had much larger
percentage of such trade, but with the
intense and ever increasing competition
which has since prevailed, the figures of
Messrs. Willett d Gray, the recognized sugar
statisticians. show that your company does
not now refine more than 49, per cent. of
the sugar consumed in this country. and this
notwithstanding the fact that the MEETINGS of
your company have been well maintained.
There are in the United States three es
Sentially different classes of establishments
producing sugar; firstly, the rehneries which
draw their raw sugar almost entirely from
foreign countries and the dependencies OF the
United States secondly, the beet sugar fac
tories. which make white granuated sugar
directly from beets; and, thirdly, the factories
of Louisiana and the South. which extract
sugar from cane grown locally. Your com-
pany is not interested in any way whatever IN
this third class of establishments. OF the 2l
cane sugar reineries. with an estimated max
imum capacity of daily MEETINGS of 33,QO0OD0
pounds, your company operates z rehneries
and has an interest Tin each case less than
majority in 4 refineries. and it has no in
terest whatever in 10 refineries. Between
these Independent rehneries and those oper-
ated by your company, the competition is
continuous and severe. While the number of
your refineries In operation is less than. at
times in the company's history, due to the
consolidation of some refining plants, yet
the increased capacity of our other rehneries
has caused substantial increase in the act
ual capacity of your cane retinerles This
increased capacity however, cannot at pres
ent be fully utilized. as the total capacity OF
much in excess of consumption The con-
sumption for the year 1909 shows approx
mately an increase of 1850 over the prrevi-
Gus year. The MEETINGS of the American
Sugar Refining Company show an approx
mate increase of 1,179o over 1908.
OF the 64 factories which produce sugar
from beets. with an estimated aggregate
daily capacity of 47,700 tons of beets and
period of operation of from 70 to 100 days
each year, your company is interested IN 80
factories, with daily slicing capacity OF
about 26. 500 tons, and has no interest IN 81
factories.
III. Tariff Duties on Sugar.
There also exists widespread belief,
which however, is a mistaken one, that the
refining of sugar derives large and excessive
benefit from protective duties.
An the raw and refined sugar imported
into the United States from foreign countries
is subject to duty. In this manner the Gov
ernment derives a very large revenue, and
Incidentally the domestic cane and beet n
dIstrv is benefited This Company alone has
Maid 10 the Government in duties on importa--
tions in fourteen years the large sum OF
$685.. 100000.
on raw and refined sugar is so adjusted as TO
leave to the refner a margin of projection
of only seven and one-half cents p0 1UU
mounds of refined sugar. or. barely more than
1i16 cent per pound. it is evident that con-
trarv to the general impression, the protection
to tbe refining industry is exceedingly small.
The duty paid on raw sugar imported into
tb;s country is substantially refunded by the
Government on any equivalent quantity OF
refined sugar produced therefrom which IS
exported A misunderstanding in regard to
this has given rise to unfavorable criticism,
as the company appears to sell sugar for
export at a price lower than that charged
tbe domestic consumer. This is not the case.