Honolulu star-bulletin. [volume] (Honolulu [Oahu, Hawaii]) 1912-2010, 1913-10-04

| Senator Reed. Following the sug
gestion of SehAtor Cummins, for
which thank you. / viii ask you, Dc
You think the American Sugar Rein,
ling Co. is powerful enough so that
these smaller companies fear to in
cur its dispIeasnre by cutting the
price Of sugar below its price?
! Mr. Ballou. No. ~
| Senator Reed. Or do you think
| that the motive which impeIs them is
Sirnply one of profits! "a
Mr.. Ballou. think the latter.
Senator Reed. IL the motive which
impels them is simply one of profits,
then is II not certain that whenever
there is a surplus of sugar and they
have ii on hand. they will sell IL as
long as they can make some money
| by doing so?
hand. they will take care that there
is not surplus OF sugar
Senator Reed. DO you thing they
have an agreement or understanding
now to take care of that?
Mr.. Ballou. do not
! Senator Reed. How would 1t be
possible for them to maintain the pro-
duction just so as to equal the con-
sumption unless there was an agree
ment or understanding, expressed or
implied. and means of communica-
ton with one another? Have you
ever known Of thing Of that kind be-
ing done?
Mr.. Ballou have never known Of
any. The combination of the differ
ent refineries which are in the trust
is one thing, but as between those
you have mentioned. I know of no
combination. Yet do know that
some of the independents do not melt
up to their capacity. Now, my own
idea of that Is that they fear, not the
resentment Of the trust, but they fear
break In the market They fear
that If they begin to do that the trust
might put its reserve refineries into
operation. or melt up to its capacity.
That Is as far as ! think.
Senator Reed That Is true Of every
business man in the world.
Mr.. Ballou Yes; they do no want
to break the market.
Senator Reed. What I want to get
at is whether they are under a species
OF coercion. To use Senator Cum
mins's illustration. It is frequently al
legged how truly lido not know--that
the steel trust is so powerful that its
small rivals are afraid TO drop the
price below its price to any consider
able extent lest It invade their mar
ket and drop the prices lower than
they can produce their product, aud
thus destroy them, and that they
exist In a manner by sufferance. You
do not think that Is true of these SUI
gar companies, do you?
Mr.. Ballou. No; do not.
Senator Cummins. That Is not quite
my idea about Il T. think the indie
pendents, so called, are always glad
to follow the price up and have not
power enough to reduce the price
When the trust puts the price down
the independents must 60 down, ans
when the trust puts the price up the
independents are glad to follow It up.
Senator Reed You think, in addi-l
ton to that, do you not. Senator, that
they practically understand that they
have to do 1t?
Senator Cunniins. Selfinterest
leads them to PITT the price up when
ever they can. but necessity compeIs
them to put the price down whenever
they must.
Senator Walsh. Why, then. when
the. trust puts the price UP do they
not drop below 1t a little and get the
business?
ganotor n,rrins Thav IL rot
some business, but they want to get
all they can In price. That was what
was developed in an inquiry here of
the steel trust affairs. think 1t very
truthfuliy represents q very large
part of the commercial and Industrial
situation of the country.
Senator Reed. will ask you one
further question. Suppose that sit.
liation should develop. the one you
fear, and the beet-sugar business is
destroyed, and therefore these five
institutions would have the melting
of all sugar. to use your term, and
suppose that the trust should put the
I,rice up pretty high and these others
should follow, how long do You sup
pose it would be until somebody else,
seeing that condition of affairs, would
begin to refine little sugar?
Mr.. Ballou. It would be long
time, because a man would know that
IL he got up his $2,00o.000 or $5,0O0,-
GOO refining capital and built his re-
finery, If the price was artificially
high and he was depending on that,
they would have the power to put ii |
down long enough to put him out of
business. and the mere existence Of
that power would keep him from put
ting his capital into building an ex.
pensiye refinery on the theory that
the price was to remain artificially
high. ~..a.~..- >.s, -: -.:s
Senator Reed. He would not build |
It on the theory that it was to remain |
artifieially high, but on the theory
that it would be profitable business?
Mr.. Ballou Yes : =
Senator Reed. What you have Just
said, however, Is true of every line of |
business today, is II not? " /
Mr.. Ballou. Yes.
= Senator Reed True in the iron and |
steel business and other lines.