New-York tribune., 1920-05-23

ions of Sugar
Gone Astray
No Record OF Whereabouts
$ of Missing Sweet Has
Been Found, Says Post at
Lusk Committee Hearing
Toll System Criticized as
an Incentive to Specu.
1atiOn and to Hoarding

The sugar shortage, speculation re-
sponsible for high prices and the cha.
otic condition of the sugar business
were described by James H. Post, OF
B. H. Howell & Co. and president OF
the National Sugar Refining Company
at the high cost Of living inquiry be.
fore the Lusk Committee. The inquiry
will be resumed tomorrow morning
with Herbert Hoover as a witness.
One of the chief remedies for the
situation. Mr.. Post said, would be uni
versal application of the allotment sys-
tenn employed by the National Sugar
Refining Company. Under this plan
the supply is allotted on an equitable
so-called toll basis, which permits a
comparatively few individuals or firms
to obtain possession of large amounts
without restriction, then could be elm
mated
The principal need, however, accord
ing 10 Mr.. Post, is to increase the
worlds supply. which has been greatly
depleted because of the reduction in
sugar output of Europe due to war.
Mr.. Post said thct while it was ex-
pected the Cuban crop for 1920
would yield 4,440,00o tons, dry weather
and other conditions had caused a re-
duction to 100000 tons. Of this
100000 tons have been sent to Europe.
100000 to the United States and
1,o00,O0O tons remain to be accounted
for. About 800 600 tons of the latter is
believed to be in this country, Mr.. Post
said.
us there any way to discover the
whereabouts of this million and half
tons of sugar" asked Mr.. Morse, coun-
sci for the committee.
You can get the stock of the vari-
Gus refners,' replied Mr.. Post. "Yoo
cannot get the stock in the hands Of
grocers and manufacturers. This coul-
try consumes about 4,500,000 tons in
the titty-two weeks of the year, so, YOU
see, an enormous quantity must be out
IN the country either in process of be-
ing shlpped or IN grocers or manu-
facturers' hands"
Reduction Caused by War
Mr.. Post asserted that while the
sugar output of Europe before the war
was 5000, 900 tons a year, the l9l9-20
crop will not be more than 2,S0o. 900
tons. He agreed with counsel for the
committee that there is at present a
shortage of 100000 tons in the worlds
supply of sugar.
Consumption of sugar in the United
States has increased within the last
year from 3,S00,0O0 tons to 4,35O,OO0
tons. Mr.. Post said the United States
alone could well make use of the entire
Cuban crop in addition to its own out
put and the crops of Porto Rico and
Hawaii, he told the committee.
Asked what he would consider a fair
price for sugar, Mr.. Post said that the
rate is at all times determined by sup
ply and demand.
Last September, October and No
vember," he said, 1--WE thought that
pretty high price. 1t shows how wrong
we were. We bought some at that
price and we have bought along in the
market regularly. Yesterday we paid
- 12 cents for raw sugar within a
period of about FIVE months from No
vember."
Mr.. Post asserted that speculation
had been material factor in the high
price of sugar to the consumer.
DO you know what has stimulated
speculation, whether it is economic
conditions, or conditions that have
been brought about by legislation or
regulation that has given opportunity
for speculation in raw sugar that has
"Of course, there has been no regu-
lation since December as to the price
OF sugar" replied Mr.. Post. At that
time we were selling at 8 cents per
pound and paying 1928 for our sugar,
which gave a margin of 1.54 for re-
fined. You see, our first price list
December 4-we were nine cents, and
the new crop, commencing the end Of
December was 1920, based on the cost
of raw sugar. That was 6 cents a
pound advance between December q
little bit after that, down to ID cents
on March /. Since then it has ad-
vanced to our particular price of 20A
cents per pound"
Mr.. Post explained that when a re-
fnery does toll business it cannot
distribute its stocks equally because it
can have no control over where the
sugar goes. This, he said, helps to
stimulate speculation.
The witness expressed his belief
that the government made a grave mis-
take in failing to buy the 1919-1920
sugar crop from Cuba. He denied that
dealers and spectators had advance in
formation of the governments decision
and, taking advantage of the leak,
manipulated the market to their ad-
vantage.
Revival of Sugar Board
In concluding his testimony, Mr..
Post said as far as he knew the Sugar
Equalization Board had ceased to func-
tion, but could be revived, if necessary,
under the war powers granite dthe
President
Frank c: Lowry, general sales man
aager of the Federal Sugar Refining
Company, with Offices at 81 Wall Street.
testifying on the toll plan, asserted that
the Federal Sugar Refining Company,
sSontrolling III per cent of the sugar re-
hnlng business of the country. did a
large part of it on the toll basis.
Sugar refined on toll, he said, went
TO Loft d Co., the Nestle Food Com
Pany, Borden, Czarnikow- -Rionda. Lam
Don d Co. and others. He denied that