can be sent home if they become "persona non grata'.

Seventh. Those who, through gross undervaluation, are now reaping enormous profits out of our market would at least be compelled to share these profits with the Government and thus reduce the unjust competition between them and honest importers and domestic manufacturers, as they would have to pay an amount of duty equal to their fellow importers from whatever country the goods

came.

OBJECTIONS TO THE CHANGE.

A number of objections would be forthcoming to this proposition:

First. The difficulty in settling the comparability of the domestic with the foreign product.

Answer. The law could be so worded as to provide reasonably for comparisons.

Second. The difficulty of ascertaining the real wholesale selling price in this country.

Answer. Every article of merchandise sold in the United States must of necessity have a selling value; having both the seller and purchaser within the jurisdiction of this Government, the ascertaining of the value is easy as compared with obtaining the same information abroad.

Third. The difficulty of ascertaining the wholesale selling price of merchandise when such values fluctuate from day to day.

Answer. The same conditions obtain on all such merchandise abroad, and such fluctuation in the foreign

country our appraisers are supposed to know at the date of shipment. It is surely easier to ascertain the fluctuating value on the day of entry within our own country. This difficulty could be largely overcome by proclaiming a value to cover a period of time according to the ordinary. fluctuations of such commodity.

Fourth. The difficulty of arriving at the wholesale market value when goods of various trades, qualities, and values are packed together.

Answer. Have a provision by which such goods shall be packed separately, as in many kinds of merchandise under the present law.

Fifth. That the knowledge now had by Government experts and employes would be of little value in arriving at the American wholesale selling price.

Answer. One of the greatest difficulties in our present system is that few of the so-called "experts" have any knowledge of foreign market value other than the knowledge obtained from the invoices of importers, very few of these employes having ever been abroad for the purpose of obtaining information as to the foreign market value. The wholesale selling price in this country is comparatively easily obtained by these experts, and much more definite and exact information is within their reach.

There will be advanced many other objections to this change, but no objections can be put forth that are not surrounded by infinitely greater difficulties in the ascertainment of the foreign market abroad.

One of the results of the recent world war has been to bring forcibly to the attention of the peoples of all countries the important place which sugar occupies in the world's economics. From the outbreak of the war, the question of securing an adequate supply of sugar at a reasonable price has given far graver concern, both to individuals and to national governments, than has the supply and price of almost any other food commodity. This intense international interest in sugar seems somewhat remarkable, when we stop to consider that less than a century ago, sugar was a luxury, and neither its price nor its supply gave much concern to either household or to manufacturers of food commodities.

Until the beginning of the 19th century, when the production of sugar from beet roots was begun, the world's supply of sugar was produced solely from the sugar cane of the tropics and the total world production amounted to about one million tons. While the beet-sugar industry was first established in France in 1811, by Napoleon Bonaparte, later spreading. to other continental European countries and to America, its early progress was slow. In 1840 it amounted to but 50,000 tons, out of a total of 1,150,000 of both beet and cane, and in 1861 of 2,000,000 tons produced,

400,000 came from beets. During the next fifty years, there was a slow but steady increase in cane sugar production, which in 1901 reached 4,000,ooo tons, and by reason of the payment of extravagant export duties, there was a phenomenal increase in beet-sugar production, which in that year reached 6,800,000 tons. With the abolition of the export bounties in 1903, the pendulum again swung to cane sugar production, which at the outbreak of the European war, had reached 11,000,000 tons, as compared with 9,000,000 tons from beets, or a total of 20,000,000 tons.

While of late years people have come to recognize sugar as an absolute essential in both the diet and in manufactures, little thought was given, prior to the outbreak of the world war, either by individuals or national governments to the effect of a serious shortage in the world's sugar production. It was about the cheapest article of food which the consumer could buy, and as long as the supply was abundant and the price reasonable, the average consumer rested complacent in the idea that this condition always would prevail. WAR'S EFFECT ON SUGAR PRODUCTION.

But upon the outbreak of war, the world's sugar situation took on a sudden change, and the very substantial

curtailment of the supply of this product set the whole world agog. It was at once realized that because of the British bockade of German ports, the Central Powers would be unable to export the three million tons of beet sugar which they annually exported prior to the war. It also was realized that the calling to the colors of millions of laborers in continental Europe, where nearly one-half of the world's supply of sugar was produced, would result in a greatly decreased production of that commodity. Consequently, there was a wild scramble for sugar all over the world. So serious was the situation that all the principal nations were impelled to take drastic action to secure at least a partially adequate supply of sugar to meet the requirements of their peoples. In many countries, authorities took control of the sugar situation, the natural law of supply and demand was set aside, and price fixing and rationing were resorted to. Each year, as the war progressed, the world's production of sugar became less and less, until at the present time there is a shortage of nearly three million tons, as compared with the period just preceding the war. Due to this shortage and to the increase in the cost of labor and materials entering into its manufacture, the price of sugar has risen to unprecedented heights throughout the world. Fortunately for the American consumer, he has been purchasing his sugar at a price considerably lower than that prevailing in any of the other principal countries of the world.

Strange though it may seem, while the prices of all food commodities in

the United States have greatly increased on account of war conditions, outside of wheat and sugar, no attempt has been made by the Government to control prices. Under the Lever Food Control Act, the Government was not given authority actually to fix prices, but through the licensing system provided in that act, it virtually had power to fix prices by refusing to issue a license to a manufacturer or wholesaler unless he agreed to charge not more than a specified price for his product. This provision was equally applicable to all industries, but for some reason it was applied only to the sugar industry. In setting aside the natural law of supply and demand and assuming control of the price and distribution of sugar in this country, it was the Government's announced desire to accomplish two objects, viz., to lower the price and at the same time encourage production, a difficult feat in economics.

CONTROL OF PRICE.

Let us compare the action taken by the Government in regard to wheat and sugar, the only two commodities over which it has assumed control.

The price of sugar was fixed by executive action; of wheat, by Congressional action, endorsed by the Executive. By so-called "voluntary agreement," the executive branch of the government fixed a maximum price, above which domestic sugar producers were not allowed to sell; whereas in the case of wheat, Congress fixed a minimum price, which it guaranteed to the producers, and appropriated a billion dollars with which to purchase the product, provided the

price should decline. This minimum price of $2.26 per bushel, which Congress guaranteed the farmers, was the then prevailing price of wheat, but in the case of sugar the maximum of 7 1-4c. per lb., less 2 per cent, which was fixed by the Food Administration was I 1-4c. per pound less than imported sugar was being sold for by the refiners at that time, f.o.b. New York. Any producer who would have dared to charge more than the maximum price fixed by the government would have had his license to do business revoked, and his sugar would have been confiscated.

Later, agreements were entered into between the Government and other domestic sugar producers, and during the past two years the Government has virtually controlled the price and distribution of all all sugar in the United States. In 1918, the price was fixed at 9 cents per pound (less 2 per cent), while for the forthcoming crop (1919-20), the Department of Justice has, to all intents and purposes, fixed the maximum price for domestic beet sugar at 10 I-4c. per pound; 17 and 18 cents per pound for Louisiana cane sugar, with no definite restrictions on the price of foreign cane sugar imported and refined at our seaports.

While Government control of sugar during the past two years no doubt. has benefited American consumers, it has not had a tendency to increase the production of domestic sugar. For instance, in many States, the beet sugar manufacturers purchase beets (their raw material) from the farmers at a price based on the price which they receive for their sugar. It is obvious that if the price of sugar is restricted

by the Government to a point where the farmer's returns would be greater by devoting his fields to wheat for which a high price has been fixed by the Government, or to other crops on which no price limit has been set, he will cease growing beets and devote his land to these other crops and a consequent reduction in the production of domestic beet sugar results.

It seems rather paradoxical that the Government should single out sugar as the one article upon which to fix a maximum price limit and yet make no attempt to control the price of all the many materials which enter into the manufacture of that product. As stated before, price fixing by the Government is rather a difficult and dangerous task, and unless it can be exercised over all products and all industries, which is impractical, injustice is bound to be done the industry over which control is exercised.

NATIONAL ENCOURAGEMENT OF

SUGAR INDUSTRY.

One very valuable lesson in regard to sugar has been learned from the war and that is, that every nation which has the facilities for producing its sugar supply at home should encourage the expansion of the industry to a point where it at least is self-sustaining.

Great Britain and the United States are the only countries of importance which during normal times import sugar to any considerable extent. Great Britain has the soil and the climate for producing sugar beets equal in quality and tonnage per acre to those produced in continental Europe; she has tropical possessions which are capable of producing more

than twice the amount of sugar needed to supply her entire sugar requirements. But in order to establish a home beet sugar industry on a firm footing in any country, it has been found necessary to provide the industry adequate tariff protection against the more cheaply produced cane sugar of the tropics, and until the outbreak of war this was steadily refused by the British Government. In 1911 a beet sugar factory was erected at Cantley, England, with the hope that the Government would aid the establishment of a domestic beet-sugar industry by placing a protective tariff on imported sugar. But in protection, the British free-trader sees only a scheme for subsidizing a special industry, and he believes in the slogan that "every tub should stand on its own bottom." England levied a comparatively low duty on all imports of sugar, granting no favors to its colonial cane sugars and whenever it was proposed to establish a home. beet-sugar industry, the projectors were warned by members of Parliament that if they did so, an excise tax equal to the import duty would be levied on production.

ENGLAND'S UNWISE POLICY.

In order that the reader may obtain a clear understanding of the British attitude regarding sugar, it is necessary to review briefly the history of the policy which proved so unfortunate to that country at the outbreak of the recent war. This policy was largely the result of the fiscal policy adopted by the continental European countries with regard to the expansion of the beet sugar industry. In order to stimulate this industry and

secure the indirect benefits of sugar beet culture upon agriculture in general, the continental European countries paid out millions of dollars annually in export bounties, cartels and subventions. Germany alone paid out over $351,000,000 in export bounties during the period from 1836 to 1903, when the bounty system was abolished. Not only did this policy greatly stimulate the production of beet sugar on the continent, but the bounties paid soon became so large that the European beet sugar producer was able to sell his sugar abroad below the actual cost of production and still reap a substantial profit. Great Britain, the second largest sugar importing country of the world, became the dumping ground for the surplus sugar of the continent. The Britishers seemed well satisfied to purchase the bounty-fed sugars of Europe at a very low price, without any thought as to the effect which such a policy eventually would have upon the British colonial cane sugar industry or the refining industry of the Brtish Isles.

For many years the continental exports consisted of raw sugar, and while the British sugar refining business thrived under these conditions, the unfair competition all but ruined. the cane sugar industry of the British colonies, which could not successfully compete with the bounty-fed sugars, sold below the cost of production. Finally, the continental countries began to export great quantities of refined sugar to Great Britain and this all but ruined the British industry as well as her colonial raw sugar industry.