The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1923-04-06

sugar and charms prices about IN
a 1ClirtpOoL of speculation.
By w. s. COUSINS.
Copyright. 1929. by Cosmopolitan
News Service.)
NEW YORK, April 6.-Specula-
ton In sugar on the New York
sugar exchange Is credited by such
men as Claus Spreckels, Of the
Federal Sugar Refining Company.
and Earl Babst, Of the American
Sugar Refining Company, as the
reason why refined sugar jumped 3
cents a pound in the last few
weeks. Three cents a pound win
add 1912, 100000 to the nations
sugar bill
None of the big American sugar
refiners buy their raw sugar
through the New York sugar ex-
change. The bulk of the transac.
lions on the sugar exchange orig.
mate in the buying and selling OF
contracts for future delivery by
brokers, some of whom act merely
for SPECTATORS and some in behalf
| of persons who are interested in
Cuban sugar plantations and who
use the exchange as a convenient.
speculative medium to catch the
fluctuations in prices.
Exchange Governs Prices.
But this is the important result:
The prices fixed by operations on
the sugar exchange coI1trol-yes,
they practically fix-the price at
which actual raw sugar IL offered
to the refiners in New York.
The sugar exchange was not
established by the United States
Constitution. 1t is, on the other
hand, of mushroom growth. There
was no sugar exchange in New
York ten years ago.
Prior to the world war a real
sugar exchange was operated at
New Orleans for buying and selling
of sugar ready for immediate de.
livery. Buyers and sellers met at
New Orleans and arranged terms
OF their transaction, every one OF
| which was followed by the actual
delivery Of sugar. Dealing in
futures and short and long sales
were unknown.
In December 1914 the New York
sugar exchange was established rs
part of the New York coffee OK
change. But it was used very lit
tie and upon this country's entrance
into the world war in 1917 was
closed by the Government. 1t was
reopened February is, 1920, and its
functions were not limited to trad.
ing in spot sugar ready for i'm
mediate delivery but was extended
to permit dealing - gambling In
futures.
During last February when the
sensational rise occurred on the
sugar exchange and when sales"
of upwards of 100000 tons OF
sugar in futures were dealt in, only
$50 tons of actual sugar were de-
livered through this exchange.
The unit Of trading on the sugar
exchange is fifty tons, the equiva-
lent of 1900 pounds of sugar.
Each unit. therefore, would require
for speculation more than $1,000, q
portion of which is provided by the
speculator and the balance financed
through the sugar brokers and the
| Wall street banks. Should the re-
timers wish to negotiate transactions
on the exchange 1t IL necessary Tor
them to deal in nultiples OF 5O'ton
| units.
Result Of False Statement.
The speculation on the New York
sugar exchange, which ran riot in
the first part of February, and as
q result Of which prices advanced
about 3 cents a pound within the
short space of two weeks, was the
direct result OF an official state
ment of the Department of Com.
merce on the sugar situation, issued
on February 10. The report was
entirely misleading and that is an
additional reason why 1t played into
the hands of the sugar spectators.
The heading of Secretary HooVer's
statement was as follows:
"PrOductiOn for 1898, only 1885,
900 tons higher than last year.
Consumption needs estimated at
| 725, 900 tons production
On its face this looked az though
we would be about 600, 900 tons be.
hind our actual needs, and this
would have been logical deduction
had the Department OF Commerce
not innocently overlooked the fact
| that there was a carry-over of
1900. 900 tons OF sugar from last
year.
| Subsequently estimates both in
and out of the Department Of Com.
merce have clearly established that
the worlds production this year
will be more than adequate for its
needs. Secretary Wallace, Of the
Department of Agriculture, who
made a careful canvass of the whole
situation, says there will be 2,O0O,-
900 tons more sugar than the pre-.
war average and 100000 tons more
than last year.
| A great deal has been said OF the
failure of Russia to continue her
sugar production. But on the other
side of the ledger Is the fact that
soviet Russia has practically
dropped out of line as a consumer
OF sugar. Whereas American con.
sumption is about 100 pounds per
capita: Canada, eighty eight; Great
Britain, n.eeventy-one; Germany,
fifty.five NDeumark, ninety-eight.