The Bemidji daily pioneer. [volume] (Bemidji, Minn.) 1904-1971, 1913-06-20
And Is Being Financed BY Sugar
Manufacturers Being
Spent Like Water.
CRIME OF MODERN FINANCE
Is Overcapitalization, Says Charter
= Granted to Watered Concern
] Robs People. =.
By Congressman Clyde II. Tavennef.

washington, June 1V.-"Ay Aee
continue the tariff tax on sugar in
order to protect the suger beet in
'dustry? >~"
This is the query raised by the
sugar Hobbies. Here is the answer.
It is unfair to require 90,000,000 SUI
gar consumers to pay two cents a
pound more for sugar than it is
worth in order to protect the sugar
beet industry, because, although the
sugar beet factories are overcapital-
lied approximately SS0,000,000, or
81 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, Z. and the
senate investigation has shown q
scandalous misuse. Of :puhliGity and
the postal fran ks Of certain special
privilege senators. If money can do
it, this lobby will defeat free sugar,
not because the industry faces ruin,
but because the sugar barons wish. to
continue to pay enormous dividends
in the worst watered 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 with
out parallel in American financial
history.
The total capitalization of all the
beet sugar companies is $141,000,-
900. The industry is peculiar in
that it is possible to estimate very
closely the actual cost of building fac
tories. 1t has been worked out that
it costs to build factory $1,000 for
each ton of beets to be consumed by
the factory per day. Thus a mill
with 100 tons of beets 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 to-
tai actual investment is not over
$63,55O,OOO. Indeed, the Hardwick
sugar committee estimated the actual
investment at $60,712,00O.
Thus, of the beet sugar capitaliza-
ton, from 78 to 80 millions of dol
lars is pure water, or 81 per cent. J.
Pierpont Morgan in his prime never
poured water into stocks at this rate.
Even the steel truth achievement
could not equal it.
Some of the individual companies
exceed even this figure. The Great
Western Sugar Co., capitalized at
$30,OOO,O00 is worth $10,600,O00.
The American Beet Sugar Co. with
S2O,OOO,OOO capitalization, represents
an Investment of $5,SO0,00O. The
plants Of the Michigan Sugar Co.,
which issued over $l1, 900, 900 capital
stock, can be duplicated for $5;-
100000.
But in spite of these fictitious val
uations, the2 sugar companies have
been able to pay high dividends on
all their capital stock. The sugar in
vestigation showed that the Great
Western Sugar Co., besides paying
Z per cent. dividends on its preferred
stock, and per cent ON common,
amassed a surplus of s9,000,000 in
five eyars, making an annual net
profit on actual investment of Sc per
cent or 1872 per cent in FIVE years.
This company actually had to ,juggle
it's figures to keep down dividends on
stock over half of which was water.
The American Beet Sugar Co. made
100000 on an actual investment
of $5,300,000 in. seven years. The
Michigan Sugar Co., paid back in
Continued on last pagel.