The Washington times., 1920-05-13
FINDS FAIR PROFIT
IN Il l-2CT. SUGAR
w. lett lauck Tells Labor Board
Profiteers Make II Cost
Public More.
CONTINUED from First Paxe)

producers for the same year showed
earnings OF 27.2s on their capitai
stock; 23s.34 per cent on their capitai
actually invested, and lOl.O4 per cent
on their actual invested capital after
deduction OF taxes.
1T 10 worth noting" said Lauck'
that these producers showed such
amazing earnings when the wholesale
price OF sugar was TT cents per
pound and their margin ranged from
90 OF one cent to % cents per pound
What must be their earnings To-Day
with the price to the consumer hover
ing about 20 cents a pound''
Selecting a group OF twelve OF the
largest sugar producers, Mr. Lauck
showed that the average net income
for the pre-war period OF 10l2-lf was
sl1 .306.923. or a return of about oh
per cent on their claimed capitaiiEa-
ton.
I'm 1915, when the pinch OF war Of
fered greater opportunity for pront-
eering In Europe and America. the
net income of these twelve COM
psnies." said Mr.. Lauck. had risen TO
$24.549.547. Finally for the years
1916-1S. the average profits OF the
group had risen to S34174,I0i. a re-
turn OF 10 per cent on the claimed
capitalization. This means that
profits were approximately three times
the pre-war ngure.
Exculpates Labor.
"The usual contention that the in
creased profits of war years were due
to greater production is conclusively
dIsproved. for the actual production
of these companies was less during
the war than in preceding years. The
net income expressed per pound was
one hundredths Of a pound
in 1914, sixty-three one hundredths OF
a pound in 1915. and more than one
cent a pound in 1916 and 1917. This
ngure seems small, but each cent
pound marks a difference OF SIO,OOO.-
900 to the consuming public"
Lauck exculpates labor in the sugar
industry for the phenomenal rise in
prices. pointing out that the labor
cost Of producing a pound of sugar
advanced from 1913 to 1917 only
cents. or only IS per cent of the gen.
eral price advance to the consumer.
Had the producer and the retailer"
said Lauck, been satisfied to take the
same proportionate increase in their
margins as labor received in its share.
sugar could be sold to the consumer
at 11h cents a pound instead OF for
20 cents.
"A study OF the financial returns OF
the sugar corporations merely serves
to confirm the conclusion that they
took advantage of the war situation
to increase the proportion of the price
taken by themselves as profits. and to
decrease the proportion taken by
labor as wages"
"A table was presented the board
showing the vast increase in profits
. l. hx,t N 10 ding nr01nrerS
The average net income of the Ameri-
can Sugar and Refining Company in
creased from the 1924 to the
1868 period from $3,S1S,666 to S.
322,34S; the Oahu Sugar Company
from $577,799 to 81 1855. .921: the Pio-
neer Mill Company from $670,419 to
81 .355,653 the Utah-Idaho Sugar Com
pany from $955,977 to $3,775.722: the
Waiahua Agricultural Company from
s52S,746 to $1,32692S; the American
Beet Sugar Company from S9O5,92S to
$3,072 ,969; the Hawaiian Commercial
and Sugar Company from 81 .46I,I94 to
S2,566, $40; the Eva Plantation Com
pany from $463,427 to 81 .533,572; the
South Porto Rico Sugar Company
from s479,346 to 81 ,701 .073: the Guam
tanamo Sugar Company from $94,2I5
to s664,223; the Cuban-American
Sugar Company from s1,264,453 to
S6.4b2,1O5, and the Central Aguirre
Sugar Company from S1S0.O93 to ST.
III, ,410.
Big Reduction Made.
"The figures in this table de-
clared Lauck. do not show all the
profits of the American Sugar Re
ining Company, the largest OF the
American sugar producers. This
concern charged off $2.O00.0oO for de
probation during each year of tho
war period, as compared with de-
probation of 1921 900 for 1914, and
it deduced from its earnings before
computing net income the sum of
S3,3S3 900 in 1916, $4DOOOO0 in 1917
and S2,153,111 in 1913 for Improve.
ments and reserves, as compared with
similar deductions of $4S1 ,907 in 191.
and s924,114 in 1914.
Had these deductions during the
war period only equalled deductions
for like reasons during the pre-war
period, the American Sugar Refining
Company would have shown annual
net earnings during the war of 40
per cent more than 1t did show. In
other words, heavy deductions to
avoid reporting large excess profits
explain the apparently lower per-
centsge OF return on capital stock
shown by the larger companies"