Carson City daily appeal. [volume] (Carson City, Nev.) 1907-1930, 1913-07-09
Sugar and the Tariff

WHY NOT continue the tariff tax o. sugar in order to pro-
tect the sugar beet industry?
This is the query raised by the sugar Hobbies. Here is the
answer: 1t is unfair 10 require 9oOOoooo 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 ovE-captalized approximately $sOOOO,m0, o 5 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 a scandalous
misuse of publicity and the postal franks of certain special priv
iege 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
overcapitalzation in this industry without parallel in American
The total capitalization of all the beet sugar companies is
mate very closely the actual cost of building factories. 1t has been
beetS to be consumed by the factory per day. Thus a mill with 100
tons of beet capacity per day costs 100000.
Now the total capacity of all the beet sugar Factories IN
America is $3.50 tons. showing that the total actual investment
is not over &63.55oooo. indeed, the Ilardwiek sugar committee
estimated the actual investment at 500. $4,000.
Thus. of the beet sugar capitalization, from IS to so mill
ions of dollars is 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
worth $10,6ooOoo. The American Beet Sugar Company, with
S2o,oooMo capitalization, represents an investment of $5,3ooooo:
The plants of the Michigan Sugar Company, which issued over
*11,OOoOOO capital stock, a be duplicated for $5,400oo0.
But in spite of these fictitious valuations, the sugar com,
panies have been able to pay high dividends on all their capital
stock. The sugar investigation showed that the Great Western
Sugar Company, besides paying per cent dividends on its pre-
$9,OOOOO0 in five years, making an annual net profit on actual in
vestment of sc per cent, or 1872 per cent in five years. This com
pany actually had to iuggle its figures to keep down dividends on
The American Beet Sugar Company made $eeooooo n a
actual investment of So 100000 in seven years. The Michigan
Sugar Company paid back IN four years every dollar OF real
money invested in it.
The great crime of modern finance is overcapitalization.
\ charter granted to a watered concern is simply a charter to rob
the poor and helpless, for either prices must be raised to an un.
natural level or wages must be reduced. The beet sugar industry
is one of the worst of offenders, yet its great lobby is demanding
that the working people of this country shall be taxed $40 per
head per year in order that they may continue to pay dividends
on Watered stock.-JohnstoWn CPa.) Democrat.