Evening star., 1920-01-04
AUTHORITY TO BUY
CUBAN SUGAR CROP
WILL Be REJECTED
President, Acting by Advice
of Equalization Board,
Makes Decision.
PRICE CONTROL POWERS
TO BE USED If NEEDED
Declaration Made That Available
Sugar Supply Apparently
Will Meet Needs.

President Wilson has decided not to
exercise the authority conferred by the
McNary sugar control bill so far as it
involves the purchase and distribution
of the Cuban crop by the government.
This fact was brought out last night
in a long statement issued at the White
House. The decision of the President
was made on the basis of recommended
tions of the Sugar Equalization Board.
The McNary bill, which was passed
December 20, was signed last Wednes-
day.
The statement adds that a consider
able quantity of the Cuban sugar crop
of 1920 has already been sold over
seas and to American refiners. The
declaration is made that apparently
the available sugar supply is suffi-
cient for American needs, "eVen on
the present unnecessarily large basis
of consumption"
Price Control II Necessary.
Notice is given that the power of
price control through the licensing
system, authorized by the bill. will
be invoked if necessary in co-opera-
tion with the Department of Justice.
In 4 table of figures attached to the
statement. it is shown that the esti-
mated 1919 consumption in the United
States was slightly more than A.
100000 tons, of which normally only
100000 tons was domestic produc-
ton. AS the Cuban crop is unusually
large at 100000 tons, however, of
which the allies. because of limited
purchasing power, will take about l.
100000 tons, and as the estimated
Louisiana, western beet, Hawaiian and
Porto Rican production will reach
100000 tons, the statement predicts
sufficient supply for American
needs.
tion of sugar, the statement adds, had
risen from thirty-five pounds in 1866
to an average of eighty-five pounds
during the 1914-191S period. and to
ninety-two pounds for 1919.
1t is stated that If the government
through the sugar equalization board
should appear in the Cuban market
as a purchaser of the sugar crop it
would have to buy in individual lots,
to compete with private buyers, and
"the tendency would be to strengthen
the market and further increase the
price. It would also be compelled to
buy sugar at the time of the most
mum prices and to seek to stabilize
the price on the basis of this MAXI
mum or risk a very considerable
financial loss"
Continuing. the statement says:
Domestic Control Limited.
"Furthermore, the act of Congress
limits the control of the board over
domestic sugars to June 80. 1920, and
should the board succeed in purchas-
ing a large quantity of Cuban sugar
for delivery throughout the year 1920,
the board would find itself in tie posi-
tion of trying to maintain uniform,
reasonable price over the whole coun-
try with no control whatsoever over
the large quantities Of sugar from
Hawaii and Porto Rico. which come
in mainly after June 80, and over the
new Louisiana cane and western beet
sugars, and this, too. at the time Of
the year wren, if at all, absolute con-
troll of all sugars by the board would
be essential.
I'm addition, the act forbids the
board from putting into effect its
present system of zone distribution.
under which consumers get their
supply from the nearest and most con-
venient points of production: Ihis
system was most useful during the
year 1919 in effecting fair distribu-
ton of the available sugar. The con-
ditions in the United States in respect
to sugar are such for January, Feb
ruary and March that there would be
little hope of the boards being able
to reduce the price of sugar by pur-
chasing the Cuban crop and attempt
ing to re-establish control of the in
dustry.
1T is possible that when the flow
of raw sugars from the large crops
of Cuba and Porto Rico reaches its
peak in March and April prices may
be somewhat reduced. The refiners
price is now 1920 cents per pound
wholesale, which is considerable re-
duction from the first offerings of
sugar refined from new cane sugars.
The offerings of refined sugars for
February deliveries are at 1880 cents
per pound wholesale, with still fur
ther reductions for March. which in
dicates a tendency in the industry to-
ward settling down to normal condi-
tions."
The statement said that the ques-
tion of purchasing the Cuban crop
first came up for active consideration
last August. There appeared to be
gressional leaders that the exercise
of war power should not be extended
another year. There was dissent by
one member of the sugar board from
the conclusion reached at that time
by the majority of the board mem
bers that the control should be further
exercised.
The President, the statement added.
had reached no conclusion when he
was taken i'll during his western trip.
Early in October, the sugar board
recommended to a Senate committee
the board then feeling that it's con-
tracts with both producers and re-
f1ners could be renewed. Congress
did not set, the statement adds, until
December 20.
Continuing, the statement reads:
conditions have now SO changed
that the members of the board do not
believe that action by 1t under the
provisions of the act Of Congress re-
ferred to offers a solution of the prob
lem of securing a regular supply of
sugar for the people for the year 1920
at a reasonable price. The board has
had no contract with the western beet
or the Louisiana sugar cane producers
for the new 1919-1920 crop. which be-
gan to come into the market in the
fall, and, therefore. from about Oc-
tober Is the control which the board
could exercise applied only to the re-
mainder of the 1919 Cuban sugar crop
which it had purchased and which
was deliverable on or before Novem-
Der 80, 1919