New-York tribune., 1921-03-10

pany IN August offered to continue to
conduct its business under government
control in 1920, but no answer was
gwen until January .. 1920, when the
resident, who had been authorized
~ congress to continue government
euh,roi, decided that "it is doubtful
whether 1t will be practicable or wise
Tor the President to exercise the now
ers conferred"
ouch control as there was thereto
iore was under the Lever act. under
which the American Sura- Refining
company could itself buy raw sugar
lor It's own account, refine it and sell
~ IN America or abroad. but it would
De prevented by the government from
taking large profit had a large profit
been possible, while it would be com
PEELED to stand the full loss should
any purchase prove improbable. 1t had
another alternative, and that was to
reiine sugar on what is known as the
tod contract, under which the refner
SIMPLY receives stated sum for per
forming the service of refining and
hlmself has no interest either in the
price of raw sugar or the market mice
OF retned sugar. The American Sugar
Refining Company did only small
part of this business.
Aahutes Large lmpOrtations
The. American Sugar Refining Com
pany has been until comparatively re-
Gently refner of imported sugar ex
cluslvely In 1920 the company handled
approximately % per cent Of the total
sugar imported
When the prices began to rise early
IN 1870 the sugar markets of the whole
world were secured for sugar, and
n frra t,o& !, 4
sugar to America did so in large GUAM
titles.
The American company felt impelled
10 some extent to enter into this
scramble for sugar at any price. It
entered into contracts around 90 cents.
lc also made contracts with its GUS
toners, who wanted sugar at any price.
lhen sugar began to appear from no.
where- The situation was analogous to
Ene breaking Of corner in wheat. Hid
den supplies came into New York Har-
Dor by the shipload.
In September, 1920, prices dropped
overnight. Customers of the American
Sugar Refining Company began to re-
pudlate contracts. On the other hand.
the American company had to live up
to its contracts to buy raw sugar on
the basis Of % cents, when the market
tor refined was about or 10 cents
1T Is this situation which is reflected
IN the 1921 balance sheet of the Amer
lean Sugar Refining Company.
The company at the beginning of the
year had s23152,000 unappropriated
surplus and was carrying $23 3,366o00
as reserve on the liability side of the
balance sheet, against which it had in
yestments totaling roughly S44,0O0O0O
including its Liberty bonds, etc.
To clear up the 1920 situation in 1920
the company took from its unappropri-
ated surplus approximately S10,0000O0
and put 1t into sundry reserves. This
;ccounts for the changes on the habil-
lty side of the balance sheet. 1t com
blned its Investments into one general
fund that had heretofore been carried
under various titles, and took from this
fund $l4,372,000 United States Liberty
bonds, showing them separately and
the remainder, approximately $50, ,000,-
900, IN lump sum under the heading
Of general investments.
Merchandise and supplies at cost
were carried on the 1919 balance sheet
at Slo,0oo 600 approximately. In 1920
and supplies, which in
cluded only the raw sugar received and
not the amounts undelivered on con-
tracts. were carried on the balance sheet
at s45,405,00o. OF this, that part which
represents raw, or partly refined, or
refined sugar, due on contracts with
customers of the company, is carried
at It's cost price; the remainder of the
sugar represented by this item is
carried at the market price, which, of
course, IS much lower than the cost
price.
The American Sugar Refining Com
Pany IS engaged in attempting to en-
force legally the contracts which some
OF its customers have repudiated If
It is able TO do this in full. the S45.-
100000 of merchandise and supplies
viii not have to be written down. Ac-
counts receivable are carried at sl2.-
% 900, compared with Sc ,691.0OO ac
counts receivable in 1919.