New-York tribune., 1918-03-14
Holds Congress
Responsible for
Sugar Shortage
Babst, of American Sugar
Co., Tells Stockholders
Why Supply Failed

Reviewing conditions in the sugar in
dustry following the entrance Of the
United States into the war, Earl D.
Babst, president of the American Sugar
Refining Company, in his annual re-
port to stockholders issued yesterday
stated that legislation proposed in Con-
gress last June was largely responsible
for the sugar shortage SO acute last
fall in the East. "While no one of the
three proposals eventually became
law" said Mr.. Babst, "yet they came at
time of extreme delicacy in the bal
ance of supplies between Europe and
the United States. Europe bought so
heavily and seemingly in anticipation
of the proposed export war taxes that
Cuban supplies were exhausted. These
facts, coupled with greatly increased
domestic consumption and railroad con-
gestion, brought in the fall months
decided sugar pinch, especially to the
New England and Atlantic Coast
states"
The formation of an international
sugar convention between the United
States, England, France, Italy and Can
ada as buyer on the one side and the
Republic of Cuba on the other will, in
the opinion Of Mr.. Babst, not only sta
bilized profits to producers and rehners,
, we'll. Under the contracts made by the
company with the cane refiners at the
request of the United States Food Ad-
1ninistrator the operating difference to
loss in conversion Of the raw product
and profits is limited to 1.3 cents
pound over the approximate average
cost Of raw sugar supplied through the
Intervention of the food administration.
Mr.. Babst said there was widespread
| appreciation of the fact that sugar un-
der war conditions has been compara-
lively cheap despite the influences at
work last Ecar to bring about greater
consumption.
Gross Business $200,00O,0O0
Total business of the company in
1917 amounted to $200000,00O and
profits resulting from operations after
provision for war, income and other
taxes were S10,055,29l, compared with
$9,756,379 in 1916. Other income added
S4157 ,496 TO the years net, bringing
the total before depreciation charges
and reserves UP to s14,212,7S7, an in
crease of S509,344. There was charged
off to depreciation s2,O0O,oOO and for
reserves 100000 including $500,000
for insurance, $4,000 900 for improve
ments of plants, 81 100000 for trade
mark advertising and $5OC,000 for pen
SlOnS.
Profits last year available for the
S45,000,000 common stock were equiva-
lent to $11,25 a share, compared with
Sl1.l8 a share earned on the same
amount Of stock in 1916. The effect of
the sugar shortage in 1917 was reflected
in decline of $9,512,766 in the value
Of raw and refined sugar stocks on
hand on December 81 last, the amount
standing at $9,142 ,07l.
Cash on hand showed the remarkable
increase from s22. ,453 in 1916 to
S40,493,252 last year, while there was
an increase in accounts payable Of only
81 ,541 ,152. Despite The excellent tinan-
cial condition of the company at the
close of the year Mr.. Babst was not
optimistic about the future He said
in the report: "The cost of refining
operations end of packing materials is
on the highest basis known. The high
range of refining and distributing costs.
as we'll as the uncertainty of volume Of
business for the coming year, makes
for doubt as to the amount of future
operating profits"
The company's large cash balance at
the end of the yea, Mr.. Babst ex-
planned, was partly due to liquidated
inventory and partly because Of de-
sire to be in a strong position "during
the period of uncertain conditions"
Help Y. M. c. A.
At the annual meeting yesterday the
retiring directors were reelected Stock
holders ratified the action of the di-
rectors in contributing $4,000 to the
Y. M. c. A. War Fund and $236,496 to
the Red Cross. Of this amount $36,A96
represented a / per cent Red Cross
dividend on American Sugar holdings
of common stock of the Great Western
Sugar Company.