it is my honest belief that our factory at Sugar City will, within a reasonable time, manufacture sugar at three cents a pound.”

Before the Ways and Means Committee, also, Col. James D. Hill, a sugar planter, of New Orleans, La., who was, of course, opposed to reciprocity with Cuba, testified that the cost of producing cane sugar in Louisiana was about 3.5 cents per pound. Furthermore, Dr. H. W. Wiley, the Chief of the Bureau of Chemistry in the Department of Agriculture at Washington, testified before the Committee that:

"It may be safely stated * * * that the minimum cost of the production of beet sugar in the United States up to the present time has not been less than four cents a pound.

"The cost of making beet sugar is slightly greater than that of cane sugar, and this is easily explained when it is considered that the process of manufacture of beet sugar is by far more complicated and more expensive than that required for cane sugar.'

99 13

With all these different statements before him, the inquirer can take his choice of estimates concerning the cost of the production of beet sugar. Mr. Oxnard was undoubtedly right in saying that cost varies greatly according to the location of the plant, its supplies of raw materials, its outlay for wages, its expenses of shipping the product to market, etc. That there were many beet sugar factories in the country which could show a cost of production as low as from three to three and a half cents per pound may be fully believed. That there were some whose cost of production ran from five to six cents a pound is possible.

It is now practicable to see what was the situation confronting those who might desire to secure a reduction of the tariff on Cuban and South American sugar imported into the United States. It must be borne in mind that the proposed reduction was to be given on raw sugar, that is to say, sugar unrefined and of a low grade of saccharinity as shown by the polariscope test. In the contest there stood on the 13 Ibid., p. 486.

12 Ibid., p. 422.

one hand, the sugar refineries of the United States, and on the other, the beet sugar producers, while midway between were the producers of cane sugar located in Louisiana and elsewhere. It was manifestly to the interest of the refiners to have their raw material come in subject to as little expense as possible. In this way they would be able to develop a steady and increasing source of supply. But how would such a situation affect the interest of the beet sugar producers on the one hand, and Louisiana cane growers on the other? It is clear that if the importation of raw sugar did not result in a reduction of the price charged by the refiner to the consumer, the interests of the beet growers would not be affected in the least degree, since they were competitors in the market for the refined product. The position of the cane growers would be somewhat different. Granting that they were obliged to sell their product to the refiners, the way in which their interests would be affected was evidently dependent upon the question whether the reduction on raw sugar imported would result in a lowering of the price paid by the refiners for raw sugar. If it did have that effect, then the cut in the tariff on imported raw sugar would result in diminishing the price paid by refiners, not merely for the imported product, but also for the output of the Louisiana sugar planter. Would the reduction in tariff also reduce the price paid by the refiner? This evidently was the crucial point in the situation so far as regarded the American producers of cane sugar. It was a question whose answer must depend upon the popular demand for refined sugar which, of course, directly determined the demand of the refiner for raw sugar. If this demand was sufficient to absorb the total Louisiana supply and the total supply upon which a tariff reduction had been granted, and also to necessitate reaching out for additional supplies which must come in subject to the full duty, evidently the price realized by the Louisiana cane planter and by the foreign planter (producing, e.g., in Cuba) favored by

a tariff reduction, would be quite as high as if a full tariff existed. That is to say, the most expensive unit of the required supply would determine the cost of the whole, and the interest of no home planter would be placed in jeopardy. This question of the amount of raw sugar which might be offered under the proposed tariff reduction was evidently two-fold. It included an inquiry into the absolute amount of sugar which could be, or was likely to be, offered under the reduced tariff, as well as an inquiry into the extent of the domestic demand for refined sugar, as ultimately determining the demand for raw sugar. Here, also, was the point at which the beet sugar interests found themselves attacked. If the supply of raw sugar on which a tariff reduction was obtained was sufficient to meet the whole demand of the refineries, then evidently the refineries would possess a competitive advantage over the beet sugar factories, and would probably reduce prices, thus rendering it impossible for the beet sugar producer to continue in business. Moreover, if, as was supposed, the beet sugar industry should develop, the more extensive its sales became the less extensive relatively would be those of the refineries, and the more likely would the latter be to cut prices, owing to the fact that their whole supply of raw material would be available at a reduced figure if the duty on raw sugar were lowered. Lastly, it was charged that if the refiners were given their raw material cheaper, they would, regardless of profit, cut prices until they had driven the beet-sugar producer out of business; after that had been done they would arbitrarily raise them again. Of course, the turning point of the whole argument lay in the question whether or not the tariff reduction would actually result in giving raw sugar to the refiner at a lower rate than before; and this, as already suggested, depended upon the extent of the refiner's demand, whether it was greater or less than the total supply of raw sugar not subject to full duty; and this demand in turn, partly depended

upon the price charged the consumer for refined sugar, as determining the extent of consumption of such sugar and hence, indirectly, the demand for the raw product.

Here was evidently a most complicated economic problem, in which many conflicting interests were involved. Judging by the history of the past, it must have been certain to anyone with the least insight that a tariff struggle of no mean importance would follow the effort to reduce the duty on sugar, either for purposes of reciprocity or for those of tariff revision. To follow the problem out in all of its ramifications and to determine just what amount of reduction in duty could be permitted by the beet sugar industry, without producing such a change in the competitive situation as to place that industry in the power of the refining trust, was evidently a most difficult problem. The widespread character of the beet sugar industry and the fact that it was really as much an "infant industry" as any in the United States, was evidently likely to give its adherents considerable political strength in resisting a reduction in the tariff.

The session of 1901-1902 opened rather gloomily. President Roosevelt, as we have seen, had declared for Cuban reciprocity in his message, thus making it evident that a tariff struggle would be forced upon Congress. It was expected that all those who wanted recognition from the administration must obey the orders from the White House. The struggle, moreover, had been foreshadowed, and it was reported that many representatives had come to Washington with orders of the most explicit character from their local managers to act under the instructions of the beet sugar interests. All the material for a most bitter struggle was at hand. January 15, 1902, Chairman Payne, of the House Ways and Means Committee, opened before that body hearings which had been arranged in view of the section in the President's message relating to reciprocity with Cuba. From that date until the end of the month, a desperate struggle raged before the com

mittee. "Interests" of all descriptions were there represented, and the Cuban planters and American capitalists who had invested money in Cuba were faced by the beet sugar operators of the West and North, and the Louisiana planters of the South. Now and then, a "government expert," or a lobbyist, cleverly coached for the occasion by one side or the other, and posing as an expert of some description, made his appearance.

It would be a work of too much detail to attempt to sift and classify the statements before the Ways and Means Committee. Most of the evidence there presented made its appearance in the course of the subsequent debate on the floor of the House and will be considered in that connection. A general review of the work done in the hearings may, however, be made.

There appeared in the first place a body of men representing domestic Cuban interests and American interests in Cuba. These men pleaded for Cuban reciprocity on three distinct grounds:

(1) The grant of such reciprocity was a debt due from the United States to Cuba, because of the loss of the Spanish market, because of the restrictions imposed upon the foreign relations of the country by the terms of the Platt amendment, and because of the pledge of President McKinley;

(2) This reciprocity would not be injurious to the protected interests of America, because the profits already realized by these interests were large under the tariff, and because the amount of sugar and other articles to be furnished by Cuba would be small, not sufficient to meet the required demand and hence not lowering the price;

(3) The grant of reciprocity was necessary as an act of humanity, to complete the beneficent work of American intervention, lift the Island out of its depressed conditions and enable the new government to go on. Unless such concessions were made, the planters would be ruined, there would