Ottumwa tri-weekly courier. [volume] (Ottumwa, Iowa) 1903-1916, 1913-06-21

not continue the tariff tax on sugar
In order to protect the sugar beet in
dustry?
This is the query raised by the
sugar Hobbies. Here Is the answer: II
Is unfair to require 10000, 900 sugar
consumers to pay two cents q pound
more for sugar than 1t Is worth In
order to protect the sugar beet in
dustry. because, although the sugar
beet factories are overcapitalixed ap-
proximately $4,000, 900, or ST per cent,
they are paying large dividends and
making millions In profits.
The greatest lobby ever known in
Washington Is now being financed BY
the beet sugar manufacturers Money
Is being spent like water, and the
senate Investigation has shown
scandalous misuse Of publicity and tho
postal franks Of certain special privil
ege senators. II money can do It, this
lobby will defeat free sugar, not b.
cause the industry faces ruin. but be.
cause the sugar barons wish to con.
tinue to pay enormous dividends In
the worst wate1ed Industry In the
United States. The high sugar duties
Of the successive Dingley and Payne
tariffs have, made possible an over.
capitalization In this industry without
parallel in American financial history.
The total capitalization Of al the
beet sugar companies IL $4,000, 900.
The industry is peculiar In that 1t ID
possible to estimate very closely the
actual cost Of building factories It has
been worked out that 1t costs to build
q factory $1,000 for each ton Of beets
to be consumed by the factory per
day. Thus min with 100 tons OF
beet capacity per day costs 100000.
Now the total daily capacity Of all
the beet sugar factories In America
is $3.50 tons. showing that the total
actual investment Is not over $685..
$4,000. Indeed, the Hardwick sugar
committee estimated the actual In
vestment at $60,712,000.
lions Of dollars 10 pure water, or 81
per cent. j. Pierpont Morgan in his
prime never poured water into stocks
at this rate Even the steel trust
achievement could not equal It.
Some OF the individual companies
exceed even this figure The Great
Western Sugar Co., capitalized at
$30.000,000, is worth $1O,6OO,0oO. The
American Beet Sugar Co., with 500.
100000 capitalization, represents an In.
vestment Of $5,3OO,00O The plants OF
the Michigan Sugar Co., which issued
over $11 100000 capital stock, can be
duplicated for $5,450,0O0
But in spite Of these fictitious
valuations, the sugar companies have
been able to pay high dividends on all
their capital stock. The sugar investi-
CATION showed that the Great Western
Sugar Co., besides paying per cent
dividends on its preferred stock, and
per cent on common, amassed sur.
plus Of 100000 In five years, max.
ing an annual net profit on actual In
vestment of sc per cent, or 1872 per
cent in five years. This company
actually had to juggle It's figures, to
Thus, of the beet sugar capitalize.
tion, from seventy-eight to eighty mil.
keep down dividends on stock over
half of which was water.
The American Beet Sugar Co. made
$9,600,000 on an actual investment of
$5,3O0,000 in seven years. The Michi.
gan Sugar Co. paid back in four years
every dollar Of real money invested
in it.
The great crime of modern finance
Is overcapitalization. A charter grant
ed to a watered concern is simply a
charter to rob the poor and the help
less, for either prices must be raised
to an unnatural level or wages must
be reduced. The beet sugar industry
is one of the worst Of offenders, yet
it's great lobby is demanding that the
working people of this country shall
be taxed $3.50 per year in order that
they may continues to pay dividends
on watered stock