The Donaldsonville chief. [volume] (Donaldsonville, La.) 1871-current, 1916-04-01

one stops to think of the cause, and
even the sugar tasiF is forgotten,
though it may have been largely in
strumental in causing the gratifying
price reduction.
The reason for these attitudes is
easily explainable Il is because the
consumer does not kIsoW how the price
of sugar is fixed, aSid also because
continued agitation, intended for pub
lie consumption, hasbeen carried on
by selfish interests Ia the sugar in
dustry, to brand the tariff on inn
ported sugar as a factor that con-
stantly increases the price of all su-
gar under all conditinns
In order to arrive Sta clear under
standing of what THE true effect Of
the tariff is on sugar prices an equally
clear understanding Is essential of
what factors operate ID fixing the ulti-
mate figure which the householder
pays for sugar.
Some products are sold to the con-
sumer on basis arrived at by adding
to the cost of prodacticn fixed profit.
This is true in general Of articles that
are nationally advertised and sold at
fixed price. In tie case of sugar
this method Of price siaking does not
apply. Sugar is the most sensitive Of
all food products 81 the influences
produced by the T1GEia economic law
of supply and demand, and under.
present conditions Is sold wholly on
that basis, with d favorable or un-
favorable turn on either side reflected
in the price the consumer pays.
The price of sugar from day to
day bears no relation either to cost
OF to reasonable piofit. When the
representative Of q Cuban producer
sells raw sugar to a NaW York refiner,
the price is negotiatAsl ON a cost and
freight basis Withoursile import duty.
At present this price is III cents
pound The cost To the Cuban of
producing this raw sugar was general
ly estimated before the war at 2
cents pound or less Under present
conditions it undoubtedly is higher,
possibly 5a cents. is evident that
no stable relation e the cost of the
raw product to the price the con-
sumner pays for refined sugar exists
here. On the ea due to the re
lation of supply and demand created
by the war, the Cuban producer is in
position to force the refner to pay
all the latter can afford, notWithstand-
ing the high profit which this yields
the planter, and in the end the CON
sumer must pay accordingly.
All raw sugar is sold on this basis.
When the worlds supply is curtailed,
raw sugar prices go up, and the plant
ers reap as large profits as the buyers
of sugar will stand. When supplies
exceed demand, raw sugar values
drop, the planters profits shrink or
perhaps entirely disappear, and con-
suners reap some of the benefits, but
not all, as between them and the pro-
ducer stands the refner, who plays an
important part in the making of sugar
prices.
Every refiner knows to the fraction
of a decimal how much his refined SUI
gar on hand has cost him, but no re-
finer knows how much he will sell
that sugar for next week The cost
of raw sugar now represented by re-
fined may have been so low that to-
days market price for refined will
yield five times a reasonable profit,
or it may have been SO high that the
refner is selling at loss. In either
case he must sell sugar at a price that
will keep his sugar moving"
IF news should come Of devastat-
ing hurricane passing over the entire
island of Cuba, the refiner would at
once mark up the price of refined fifty
points or more. II he did not, the
big jobbers would clean out his ware
houses within twenty-four hours and
would themselves clean up large
profit on the inevitable rise. Should
news come of the termination of the
European war, the refiner would mark
down the price of sugar even though
the mark set reduced his profits to a
vanishing point. Otherwise the sugar
would remain unSOld.
Under existing conditions the re-
finer sells his sugar for what it will
bring. This does not mean forced
sales or that prices or profits cannot
be reasonably estimated. What it
does mean was explained by c. A.
Spreekels. of the Federal Sugar Re
fining Company, in testifying before
congressional committee, in the
statement that he charges for his su.
gar sall the traffic viii bear"
In fuller explanation. he said:
'tThe Federal Sugar Refining Com
pany produces all the sugar it pos
sibly can and markets it's product
every day at q price it will bring, and
iif it does not bring the price, tn.
lprice is Immediately lowered, whiel
frequently happens. We get tn
price, but we move eur product ever,
day. Our mill has to run day an,
night, and we never stop. That i
the competition we have
In this reiner's statement there
no mention Of cost or tariff, or o
| any limit based on a fair return D
invested capital. Sugar is sold i
every market for the price it Wi
] bring" This price, in the absence G
an effective monopoly, is based who
Ily on supply and demand. There hs
been no effective monopoly in tn
United States once held by the 4,
4 finers since the domestic productio
of sugar, under the stimulus of
4 protective tariff. became an impor
/ ant factor in the sugar market.
| The law of supply and demand i
| self has its pecuiiarities when apple
to sugar. Sugar is not an artie
which may be manufactured in al
desirable amounts from an indafni
quantity of raw material. On Il
contrary, when the worlds Gro