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For thirty years, the British sugar refiners and those who had interests in colonial sugar estates endeavored to induce the Government to change its policy regarding the bounty-fed sugars of continental Europe. After many unsuccessful attempts they finally succeeded in bringing about what is commonly known as the "Brussels Convention," a commercial treaty signed in 1902, by the terms of which all European beet-sugar producing countries, except Russia, agreed to abolish all export bounties and other subsidies which had prevailed for so many years. At the time the Brussels Convention was signed, (1902) England was importing 1,769,510 tons of sugar, the sources of supply being as follows:

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raw sugar of the British colonial possessions, and the refined sugar of the British refineries. The cane sugar industry of the British colonies had lain stagnant so long that they were un able to recoup themselves to any grea: extent, and at the outbreak of the world war, Germany and AustriaHungary still continued in almost sole possession of the British sugar market. As a consequence, at the very beginning of hostilities, Great Britain found herself cut off from the source of seventy per cent of her sugar supplies. She therefore was compelled to seek these supplies in other markets, entering the normal supply markets of the United States and other countries, and bidding up the price to unprecedented heights.

ENGLAND'S NEW POLICY TOWARD SUGAR.

But profiting by past experience, Great Britain now has completely changed her national policy regarding sugar. It is the announced intention of the Government to develop the production of beet sugar in the British Isles by placing a reasonably high im port duty on sugar and rendering Government aid in financing the industry. Undoubtedly the Cantley beet sugar factory will be reopened, and quite recently an estate has been purchased at Kelham, England, on which a factory is to be erected and sugar beets grown. This enterprise will be a $5,000,000 concern, of which amount the government invests $1,250,000.

The cane-sugar industry of the British colonies is to be stimulated by the granting of preferential rates to colonial sugar imported into the

mother country, which it is expected will greatly increase British colonial sugar production.

In 1915, the British Government put out an inquiry to the governors of British cane-growing producing colonies, with a view to ascertaining their sugar-producing possibilities, provided they were granted a preferential tariff rate by the mother country. The result of the inquiry showed that while the average production of sugar in all the British colonies, exclusive of India, had been but 800,000 tons annually during the three preceding years, it would be possible to expand the production to over four and one-half million tons, or about twice the annual consumption of the British Isles. Thus, in the future undoubtedly we will see Great Britain line up with all the other principal countries of the world in the protection of a home sugar industry which the experiences of the war have taught is so essential to the economic welfare of a nation.

PROTECTION of Sugar PRODUCTION IN

UNITED STATES.

Due to our fiscal policy, the United States, the only other large sugar importing country, was in a very much. better position than Great Britain at the outbreak of war. Let us consider for a moment the effect which our tariff policy has had upon the domestic beet-sugar production, as well as the cane-sugar production of Louisiana, our insular possessions, and Cuba, since the passage of the Dingley tariff bill in 1897. That bill increased the duty on sugar imports from an ad valorem duty, insufficient to stimulate the growth of the industry, to a spe

cific rate of 1.685c. per pound on 96 degree raw sugar, the grade we most generally import.

In 1896, the six beet-sugar factories which then were operating in the United States produced 32,726 tons of sugar. Immediately after the passage of the Dingley bill, new beet-sugar factories began to spring up in many of the northern and western States. But in 1903, factory building received a severe check when, by the enactment of a reciprocity treaty, the duty on raw sugar from Cuba was reduced to 1.348c. per pound. While domestic beet-sugar factory building never has regained its former proportions, the industry has grown rapidly and the product in 1914 exceeded that of 1896 by 700,000 tons. Louisiana production has remained about the same, with a normal crop of 300,000 tons. By 1914, the annexation and free entry of sugar to United States markets from our insular possessions had increased the production of Hawaiian sugar 387,000 tons, of Porto Rico, 262,000 tons, and of the Philippines 333,000 tons, a total increase of insular sugars of 982,000 tons, or a total increase of domestic and insular sugars of 1,682,000 tons.

It thus will be seen that as a result of our tariff legislation, when the war broke out in Europe, the production of our continental and insular sugar had been brought up from 927,000 tons to nearly 2,000,000 tons, or about one-half of our total requirements.

In addition to stimulating our domestic and insular sugar production, the 20 per cent preferential duty granted to Cuba in 1903 resulted in increasing that island's sugar produc

tion over one and three-quarter million tons by 1914. Thus, when the war in Europe broke out, the United States had so fortified its position as to sugar supply, that it was not compelled to go beyond Cuba, and the result has been that we have enjoyed the lowest sugar prices of any great na

tion in the world.

The 1919-20 domestic and insular crop now is estimated at 2,389,000 tons and the Cuban crop at 4,816,000

tons.

It may be interesting to note in detail the sources of supply from which our sugår is derived:

United States Sugar Consumption and Sources of Supply,
Calendar Years 1914 to 1918.

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By Alfred L. Aiken, President of the National Shawmut Bank of Boston.

The foreign trade commissioners from Great Britain, France, Italy and Belgium, who visited the United States last November, presented Europe's condition in such clear terms as to leave no doubt as to its seriousness. American bankers who have investigated the situation abroad realize

how near the truth that statement iEurope expressed complete condence that we will do our share toward rehabilitating the weaken:: nations.

The people in a large part of Erope today are in much the same relation to us as would be a good c

tomer, the destruction of whose plant by fire was followed by the temporary embarrassment of the companies in which it was insured. Under such circumstances the companies, which had done heretofore a profitable business with the unfortunate concern, would consider it no more. than plain common sense to help their former customer to recover and resume business relations. There are many reasons, aside from those of sentiment, why it is our task to aid Europe. The war has so broadened our vision that we appreciate more fully than formerly that a serious injury to any large part of the world will, if unremedied, result in equally serious injury to us.

Aside from other reasons for extending our aid there is the fact that Europe owes us a debt of $10,000,000,000. We know that she cannot pay that debt without some help from us. She can pay only out of her future earnings, and the longer we keep her from employing her productive earning power the longer will she remain unable to pay. Under existing conditions Europe's debt will continue to increase and her credit continue to shrink. This situation is reflected in the falling of exchanges and in higher prices for goods which she may import, the high rate of exchange acting as an export tax. The British govThe British government, as a result of high prices and the reduced value of the pound, is now paying 115 shillings for flour, which it is reselling to the millers at 60 shillings, in an effort to maintain an equitable price for bread. It is not to be wondered at that conditions existing in a large part of Europe should be productive of a degree of

unrest which aggravates the difficulty of applying a remedy.

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A recent survey of the debt and financial situation in the allied countries shows that 'their greatest need is for an extension of time on their existing debt. In the meanwhile they look to us for raw materials and for food and clothing. As the best equipped and wealthiest nation, a large part of the task of 'feeding and clothing the world must be assumed by us for the next few years. The industrial nations of Europe may be expected to take up their former share in that task when their equipment has been put into complete working order. Many industrial concerns in France, Belgium, Italy, Poland and CzechoSlovakia are even now ready to go ahead if they can secure the needed materials for manufacture. A resumption of industry abroad will put an end to unrest, largely due to unemployment, and will not only tend toward 'a reduction of the high cost of living abroad, but should correct in some measure our own high cost of production by relieving us from the present strain.

If we allow the situation in Europe to become worse, the effect is certain to reflect here in the United States. Should Europe abandon hope in our assistance there would follow an abrupt stoppage of our export. That would necessarily mean a violent readjustment of our industrial organization, the shutting down of plants and general curtailment. This sudden contraction on our export trade might of course bring about some reduction in prices, but unemployment consequent upon such contraction would represent a very high price to be paid

for a benefit of indeterminate value. It is now quite clear that our American banking institutions alone will be unable to finance the country's foreign business and at the same time care for the increasing demands of domestic financing. The financing of Europe alone is a task which calls for the most complete co-operation between banks, manufacturers, and the general public, the latter in its capacity to absorb foreign securities. Encouragement may be drawn from the fact that plans are now under way for extending credit to Europe in which the government, bankers, and manufacturers will each have a part. The amendment to the War Finance Corporation Act, authorizing loans up to a billion dollars to promote foreign commerce through the extension of credits, will need additional legislation to make it really effective. The final enactment of the Edge bill will add to our equipment for financing foreign business through the use of long time credits. It is the opinion of many bankers that the extension of credits to Europe will be far more beneficial than loans. A wider distribution will thus be possible both as regards the burden here and the benefit abroad. This policy should result in greater production of goods in European countries which, in the absence of gold, they must depend upon to settle their trade balance.

The organization by important financial interests of eight internal banking associations, organized primarily to finance foreign trade, represents practical preparation on the part of American bankers. The foreign credit

clearing house, formed several months ago, is another example of the con prehensive plans which are being carried out by our bankers. Investigation in every country in Europe has shown that many firms which were in excellent position before the war have lost considerable of their former stability. On the other hand, a large number of new firms have come into strong financial positions. A general revision of credit information thus becomes a necessity. Through the formation of the credit clearing house. bankers will be in a better position to assist manufacturers in extending credits abroad.

Apart from the creation of organizations for dealing with various phases of foreign financing, the bankers of the country are rendering valuable service to exporters in helping them to avoid some of the dangers incident to the exchange situation. Equally practical are the measures being taken by the foreign departments of the larger banking institutions to promote interest in foreign securities among the increasing number of our American investors.

The absorption of foreign securities is one feature of the problem of financing Europe which is directly up to the American public. The part of the banker should be limited, at most. to procuring the securities and arranging for their being listed on our exchanges. The difficulty of educating the American public to the value of these foreign offerings is of course complicated at present by our own need for capital expenditure.

One factor in the problem, the most

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