The American sugar industry

Front matter

Book-

Mil.

THE AMERICAN SUGAR INDUSTRY

Part One— Economics Of Domestic Sugar Production

Chapter I— SITUATION OF THE INDUSTRY at the opening of 1899— What the industry means to the United States — Its great possibilities recognized by Congress The Dingley tariff a just measure — The effect of that law — Remarkable progress during the past three years — The vitality of this industry — What is now needed.

CiXAPTEK II— DOMESTIC SUGAR VERSUS "EXPANSION"— The interests at stake— What there is in it for the annexationists — Unlimited possibilities of sugar production by the yellow races — Protection for the American farmers and laborers — The English tariff applies to colonial equally with foreign produce — Industries to be hurt by absorption — Shall the American farmer be sacrificed? — Loss of revenue and increased taxation — No compensating advantages — These views endorsed by organized agriculture and labor.

Chapter III— THE HAWAIIAN IMPOSITION— False representation regarding coolie contract labor — More than deliberate bad faith — Abuses among coolie slaves — Some interesting sidelights — An American oligarchy.

PART TWO— THE CANE SUGAR INDUSTRY— The area capable of growing sugar cane — Peculiarity of the crop — Present obstacles to the cane industry — The great trouble in the sugar cane industry — The soil adapted to sugar cane — How the soil is usually prepared — Culture — Harvesting — Rotation of crops — How to start the cane sugar industry — Description of manufacture — Quality and grades of the product.

Ill

IV THE SUGAR INDUSTKY.

PAIIT THREE— THE BEET Si: GAR INDUSTRY IN AMERICA PRIOR TO 1897.

Chapter I— WHAT HAD BEEN ACCOMPLISHED IN THE UNITED STATES— Failure of early attempts — An exception — Honor to whom honor is due — Recent development — The record in brief — What of the future — Elementary principles — Technical terms explained — Quality of the beet sugar — How beet sugar is made.

Chapter II— HOW THE INDUSTRY GREW IN EACH STATE— California, the Spreckels enterprise at Watsonville — Alvarado's persistent fight and final triumph The marvelous results at Chino — The new factories in California — Nebraska's trying experience and ultimate success — W^onderful results in Utah — In the Pecos valley of New Mexico — Scientific and practical tests to demonstrate the adaptability of the sugar beet crop to conditions in other states, including results of the 1896 crop.

Chapter III— CULTURE OF THE SUGAR BEET— Climatic conditions— Varieties ol beets — Soils for the sugar beet — Rotation of crops — Feeding the plant — Plowing — More about subsoiling — Preparation of seed bed — Seeding — Hoeing — Thinning out — Irrigation — Harvesting — Storing beets — Feeding and storing beet pulp, tops and molasses.

Chapter IV— COMMERCIAL ASPECTS OF THE BEET SUGAR INDUSTRY— Cost and profits of beet culture — Actual recent experience of practical farmers in raising beets on a large and small scale — How the industry employs and pays labor — It;5 manifold advantages — The brilliant promise to capital, provided the American market is reserved for American sugar — How to start a factory, its location, requirements, equipment, management, etc. — Cautions to all new to the industry.

Part Four— Progress In America's Sugar Industry Since 1896

Chapter I— DEVELOPMENT EAST OF THE MISSISSIPPI— As to New England- Remarkable conditions in the state of New York, which bids fair to be a hotbed of the industry — Splendid prospects in Michigan, a great sugar state — Pennsylvania and Ohio — The middle south — Indiana and Illinois — Michigan's and Wisconsin's peculiar qualifications for beet culture and sugar making.

Chapter II— FROM THE MISSISSIPPI TO THE MOUNTAINS— A banner campaign in Nebraska — Encouraging conditions in Minnesota — The Dakotas and Iowa and other sugar states — Conflicting views from Kansas and Missouri — The Mountain states as beet sugar centers.

Chapter III— THE BEST DEVELOPMENT ON THE PACIFIC COAST— A new factory's encouraging start in eastern Oregon — Washington in line — Millions going into beet sugar enterprises in California — Largest beet sugar mill in the world — The model beet sugar plant of America — Other factories and notes of progress.

Chapter IV— LESSONS OF MOST RECENT EXPERIENCE— Mistakes to avoid- How to insure success — Latest teaching from science and practice in culture of the beet — Steam plowing — Use of beet pulp — Other hints.

APPENDIX— Reference tables and statistics — List of places that want sugar factories — Directory and advertisements of manufacturers of sugar mill machinery, implements for culture of beets and cane, seed, supplies, etc., etc.

Author's Preface*

In January, 1897, appeared the author's first book on this subject, entitled "Sugar, a New and Profitable Industry in the United States, for Agriculture, Capital and Labor, to Supply the Home Market with $100,000,000 of Its Product." That book was received with favor, not only among farmers and capitalists and by the press, but especially in the Congress of the United States and by American statesmen at home and abroad.

National legislation favorable to the development of our domestic sugar-producing industry was enacted by the Congress during the summer of 1897. This was followed by a phenomenal interest in America's domestic sugar industry, which, however, gave way to uncertainty with the advent of the Spanish war and the problems raised thereby. Provided those problems are now solved with due regard for American interests, it only needs proper direction and right management to secure for the United States large and permanent good from a vast development of its domestic sugar-producing industry.

Many of those best capable of judging have been kind enough to partly attribute the promising outlook for this new industry, at the outbreak of the Spanish war, to the book referred to, to the American Sugar Growers' Society organized by the author, and to the agricultural journals under his editorial direction. This would seem to impose upon the author a moral obligation to do whatever lies in his power to help the industry through its new politico-economic crisis.

It also seems incumbent upon the author to present the important scientific, practical and financial results of the seasons of 1897 and 1898, in addition to the fruits of all prior experience. Thus unfortunate and costly mistakes in this new industry may be avoided, and uniform success attained by both farmer and capitalist.

In order that Congress and the general public, as well as farmers, may obtain a true idea of the magnitude and promise of this new industry in various directions, an appendix is added to accommodate the announcements of machinery builders, furnishers of seeds, supplies and implements, communities that want sugar mills, settlers, etc. No one can look through these announcements without being deeply impressed, while they also constitute a most useful directory of everything pertaining to the sugar industry.

Embodied in this new edition are Parts Two and Three from the author's first work, the better to reflect the evolution of the industry and to emphasize the teachings of experience. This is perhaps an unique plan in a book, but if so it is merely in keeping With the unique spectacle of a nation of 75,000,000 people attempting to speedily develop its domestic sugar industry.

THE AUTHOR.

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Chapter I. Situation At The Opening Of 1899

An entirely new danger now threatens the otherwise promising domestic industry of sugar production. It is the proposed free admission into the markets of the United States of sugar from Porto Rico, Cuba, the British West Indies and the Philippines and the continuance of the contract labor system in Hawaii. But for these dangers, there would now be under construction many new and large beet sugar factories in the eastern, central and western states, and extensive cane sugar houses in Louisiana, Florida and Texas. With four-cent cotton at the south and wheat down again to low prices, the importance of developing the domestic sugar industry may be emphasized by rehearsing a few comparisons.

The value of the sugar imported into the United States averages about $100,000,000 each year. The quantity doubles every fifteen years. Besides this, the imports of tobacco, wool, cotton, hides, vegetables, breadstuffs, fruits and nuts, dairy produce and eggs, hay and hops, rice and flaxseed, bristles and hair, bark and sumach, etc., represent in value another $100,000,000. This is somewhat less than formerly. But it is true that within the present limits of continental United States could be produced all these $200,000,000 worth of agricultural imports without materially affecting American agricultural exports.

Taking the fiscal year 1896 as a fairly average one for our foreign trade, and it appears that "every pound of the wheat and flour exported from the United States that year was barely enough to pay for the sugar imported. The total value of all live and dressed beef, beef products and lard exported that year barely equalled the amount paid for imported sugar. The immense export trade in cotton represented in value only twice as much as the import of sugar. The vast exports of tobacco must be magnified thrice to counterbalance sugar imports. The barley, oats and rye, fruits and nuts, hops, vegetable oils, oleomargarine, butter and cheese, pork and hams that were exported that year all put together represented in value only two-thirds of the sugar imported."

WHAT THE vSUGAR INDUSTRY MEANS TO THE X'XITED STATES.

Taking the Imports for 1895-6 as representing the fair average importation of sugar, say 1,720,000 long tons annually, to produce this quantity would require 920 factories, each working up 350 tons of beets during a campaign of 100 days of 24 hours. Each factory would need 2,000 to 2,500 acres of beets, or about 2,000,000 acres in all. As the crop should be rotated and only grown on the same ground every third year, three times as large an area would be needed.

At an average of only ten tons of beets per acre, the total crop would approximate 20,000,000 tons. At only $4 per ton net for beets delivered to the factory, the farmers

2 THE SUGAR INDUSTRr.

would receive $80,000,000 for this new crop. That is to say, this money would go into our farmers' pockets each year instead of being sent out of the country to pay for imported sugars.

Each factory would cost about $350,000, or over $300,000,000 for the 920 factories needed to malte our own sugar. The cost of labor and materials for running each fdctory, aside from beets, would be about $500 a day during the campaign, or $50,000 for the season. Thus the annual distribution for labor and materials would approximate $45,000,000!

Each of these 900 or more sugar mills means the distribution every year in the immediate community of the following amounts:

Factory labor and supplies 50,000 to 75,000

Repairs, salaries, etc 10,000 to 25,000

Profits and reserves 25,000 to 75,000

It is safe to calculate on a yearly turn-over by each factory equal in amount to its capital, under average conditions. This is even more true of the larger sugar factories. It is proving true of the mammoth concerns that are growing up in California, each representing an investment of from $1,000,000 to nearly $3,000,000. Indeed farmers will be paid $2,500,000 or more each year for the beets needed to supply only the two mills at Watsonville and Salinas in that state.

CONGRESS RECOGNIZED THE GREAT POSSIBILITIES

of the domestic sugar industry and in the Dingley tariff of July 24,1897, endeavored to provide suitable protection to both producers and refiners. That tariff was not secured until after a bitter fight, in which the AmericTu farmer for the first time came to the front and demanded that the sugar schedule should be framed in the interests of the domestic grower of sugar beets and sugar cane, instead of being framed to specially protect the refiner of imported raw sugars.

The Dingley tariff is serving its purpose well. Owing to large imports before it went into effect, its operation for the fiscal year 1S98 is only indicative of what may be expected from the present sugar schedule if it continues to be fairly enforced against all sugars.

Certain friends of the American Sugar Refining Company, or sugar trust, claimed the new law was especially favorable to that concern even after the House had compelled the Senate to recede from the Senate schedule that did foster the refiners at the expense of domestic producers. On the strength of this claim, the shares of the trust were "boomed"' from around par to nearly 150. But in spite of the profits on imports at lower duties prior to July, 1897, the new law did not specially benefit the trust and its shares collapsed again. Indeed the imports of refined sugar under the Dingley tariff have been unexpectedly large.

Imports of raw sugar from Europe have almost ceased, owing to the higher tariff and the countervailing duties equal to European export bounties. Indeed only 158 million pounds of raw sugar were imported from Europe in 1898, compared to 1,899 million pounds in '97. Contrast this decrease of twelve-fold in one year with the increase of fivefold in Europe's sugar exports to the United States in '96 over '95!

Imports from the countries to the south of us also show a decline, largely owing to the continued curtailment of production in Cuba caused by the war.

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Only the yellow races have held their own in our markets. In '97 the sugar imported into the United States from the East Indies, Hawaii and Africa (Egypt) was double the imports of '95. The full increase was maintained in 1898. The imports of coolie-grown sugar into the United States are now some 600,000 tons per year, compared to only 250,000 so recently as 1892.

In two years Hawaii practically doubled its shipments of sugar to the United States, which in 1898 were 500,000,000 pounds, compared to 274,000,000 pounds in '95, That region is enormously Increasing its output.

A JUST MEASURE. — THE DINGLEY TARIFF,

aside from the mistake of free sugar from Hawaii (for v/hich it is not responsible), may therefore be said to be quite satisfactory to domestic producers, and is fairly designed to develop a great American sugar industry. For details of its operation, see Table A, appendix.

The present duties levied upon sugar imported into the United States are much lower than the tariff of any other modern nation, England excepted. The United States tariff on. sugar is now only from one-half to one-fourth as much as European tariffs, as shown by Table B, appendix. This country pays no export bounty on sugar. It now offers less encouragement to domestic sugar production than any other modern nation, England alone excepted, and she is naturally ill-adapted to beet culture. Certainly, it is only fair that this slight measure of protection to our domestic sugar producers be not jeopardized by favors of any kind to tropical sugars.

A few more years of this policy, and the home production of sugar in the United States will become so large as to result in still further lowering prices to consumers, although consumers in the United States now pay much less for this necessity than any European people. A continuance of the present tariff policy will in time probably enable our producers to compete in the export trade. This has been the outcome of a similar policy regarding steel rails and a variety of manufactures, of which the export is now constantly increasing. Indeed steel rails are now being exported to all parts of tho world at $15 to $18 a ton, which cost nearly ten times as much to import some years since.

EFFECT OF THE DINGLE Y TARIFF

on the development of domestic cane sugar and beet sugar production in the United States is shown in detail in Tables C and D, appendix. Observe that in spite of 1898 having been the worst season in Louisiana for twenty years, the cane sugar industry shows a gratifying increase.

A most astonishing exhibit is afforded by the increase of the beet sugar industry in this country. Prior to the Wilson tariff of 1894, six factories were operating, employing some $4,000,000 of capital, using about 400,000 tons of beets and paying farmers therefor upward of $2,000,000 a year.

In 1899 these six old mills and fifteen new factories are now (January, '99) about ready to run, employing $10,000,000 of capital, and have already contracted for some 1,250.000 tons of beets, for which farmers are to be paid nearly $6,000,000.

This statement does not include any of the great number of beet sugar enterprises that are now in the formative stage. Many of these would have been under construction ere this, but for the uncertainties caused by th^ Spanish war and its results. Some of these enterprises are being rapidly pushed in order to have factories ready to work up the 1899 crop of beets, and in the confidence that Congress will not lower the tariff on tropical sugars. It is probable, therefore, that numerous additional factories will be

4 THE SUGAK IJTDUSTKY.

operating this fall, representing additional millions of capital and of money paid to farmers. But for an unprecedented drouth in California, the product of beet sugar in 1898 would have been much larger.

For a complete insight into the progress of the industry prior to 1897, see Parts Two and Three, while the results and lessons of 1897 and 1898 are fully stated in Part Four.

ALL THAT IS ??OW NEEDED

to insure a speedy, permanent and profitable development of this industry in the United States, is the declaration by Congress that sugar from the tropics shall continue to pay the same duties in the future as in the past. Also prohibit coolie-contract labor in the Sandwich Islands, and avoid unjust reciprocity.

Millions upon millions of capital, domestic and foreign, will at once flow into this industry. It is conservative to say that, if Congress thus acts promptly, upward of $50,000,000 will be invested in new factories in time to work up the 1900 crop of beets. This would make a home market for some $25,000,000 worth of beets in 1900, in addition to the crop required for existing factories. Several millions would also go into the cane sugar industry of Louisiana, Florida and Texas.

I also venture the prediction that, if such politico-economic policy is at once determined upon and is not changed for ten years, long before 1910 the United States will be producing practically all the sugar it now consumes. This is a consummation devoutly to be wished.

THE VITALITY OF THIS INDUSTRY,

especially beet sugar, is shown by its development in the face of the greatest economic and political changes and uncertainties that ever beset a new industry. Just as it began to attract attention, the free-sugar law of 1890 offered a mighty stimulus to Europe's established beet sugar factories at the expense of the struggling industry in the United States, which our domestic bounty of 2c per lb by no means equalized. "Free sugar and a bounty," at that time was one of the greatest economic errors ever committed.

This was overthrown by the Wilson revenue tariff of 1894, which introduced an entirely new set of conditions. Then came the Dingley tariff of 1897, which had not been in operation a year before the Spanish war brought in wholly unexpected complications and uncertainties.

Surely it is not unreasonable to demand that now the present law be steadily maintained in full effect for a series of years. This demand is all the more reasonable in view of the fact that existing duties are less than one-half the average tariff now enforced by eight European nations.

WHY DID NOT THE AMERICAN SUGAR INDUSTRY DEVELOP EARLIER?

Because when the sugar beet was first tried, 20 and 25 years ago, other crops paid so much better that farmers did not have the patience to learn how to grow beets. The first factories were not well located to secure an abundant supply of rich beets. The whole thing was comparatively new, and beets were of poorer quality than now. Then, 10 and 12 per cent, of .sugar in the beets was considered fair; now anything below 12 per cent, is not accepted at the factory, averages of 14 to 15 per cent, over large areas are not uncommon, while tests of 18 to 24 per cent, sugar in American beets are on record. The beet is a thoroughbred that improves in richness as a result of proper inbreeding and care. Another powerful obstacle to the beet-sugar industry in America 10 and 20 years ago was, that with high-priced wheat and virgin land free of cost, other crops were more profitable in comparison with the labor involved.

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With sugar cane, the industry prior to the war was conducted by slave labor and without much enterprise, the increase in slaves being an element of the profits. The industry was destroyed during the war. It took 20 years thereafter and an expenditure of 321,000,000 to rebuild the levees and reclaim the plantations, and it was not until 1878 that Louisiana's product was restored to the figures of 1844—115,000 tons. From 1878 to 1886 there was much trouble with high water and crevasses, while as early as 1884 an era of low prices set in, which were helped by a reduced scale of duties. Almost any other industry would have succumbed to such adverse influences, but our sugar producers, though discouraged, would not admit defeat. They established an experiment station to learn more about fertilizing and chemical control of sugarhouse work, changed in a large measure to the central factory system— just as the dairy people have done— improved the sugarhouse equipment, and by 1890 had doubled the crop of 1878. Then came the "bounty" period, in which the growth of production in four years was from 165,000 tons to 824,000 tons. Then came reduced duties in 1894, following which sudden change many plantations were sold for a song. But the Dingley tariff of 1897 restored fair prospects for the cane sugar interests of the United States.

Another reason why the beet sugar industry did not develop much prior to 1890, was that the United States department of agriculture, discouraged by a few failures, or blind to the merits of the beet root, led a wild-goose chase after sorghum. The possibilities of sorghum are not denied, but the practical realities of cane and beets are such as to eclipse sorghum for commercial purposes. After it had been demonstrated that sorghum was not a reliable sugar plant, as compared with sugar cane or the beet root, government spent millions of money and years of time upon it. Sorghum could be cheaply raised like corn, v/as not a "back-bending crop" like the beet. The American Agriculturist did what it could to stem the sorghum craze by showing what the beet sugar industry was doing in practice compared to the meager results of the sorghum theory, but it took years of bitter and costly experience on the part of government and farmers to vindicate our position. So the sorghum craze, fed from national and state treasuries, swept over the country for a dozen years.

But as it exploded, more work was done with sugar beets, until, when the McKinley law of 1890 was enacted, experience had pointed out the way to the success that has since been achieved. But hardly had a few beet sugar factories been established under the McKinley act before its repeal was ordered by the people. In spite of the ensuing uncertainties, the development of this industry since 1894, and especially since 1897, is proof conclusive of its necessity and its advantage to the whole United States.

Beet culture, however, cannot be learned in a single season. It is high farming, intensive horticulture, like the market gardening near our great cities, which is the result of fifty years of experience. Under the best management it takes from two to four seasons for the farmers in any locality to learn how to grow beets to the best advantage. Until this is done, the sugar factory is not assured of an abundant supply of beets of proper qualitj\ Meanwhile the immense investment is at a risk— from $350,000 upward in each factory, and at best the factories can run only 100 or 150 days during the year. Experience in this country has demonstrated that where the industry has survived this first stage, it has in every case become well established, to the satisfaction and profit of the farraers, laborers, railroads and capitalists interested in the business.

And since the world's production of beet root sugar has increased from about 2,500,000 long tons in 1884 to almost double that quantity as the average since 1892, the general success of this industry is no longer questioned by any well-informed person. Indeed, nearly two-thirds of the world's consumption of sugar in 1898 came from beets.

Chapter II. Domestic Sugar Vs. "expansion

Nothing less than immediate, unconditional annexation of Porto Rico, Cuba and the Philippines and their admission to the Union as territories, with all the privileges of interstate free trade, irrespective of their form of government! This demand comes from Spanish property holders on these islands, and from a small but powerful coterie in this country that seeks to monopolize the cheap labor and marvelous productiveness of the tropics. Whether or not this demand is generally joined in by the so-called "expansionists," or "imperialists," those elements of the body politic are being industriously but Stealthily "worked" in the interest of this scheme.

WHAT IS THERE IN IT FOR THE ANNEXATIONISTS?

By remission of duties they would make an extra profit of $30 to nearly $40 on every ton of sugar, $5 to $8 on every pound of cigars, $1.50 on every pound of wrapper tobacco, 35 cents on every pound of filler tobacco, $25 to $40 on every ton of rice and proportional extra profits on all early or tropical fruits and vegetables.

Because of the cheapness of production with tropical climate and labor, the profits of the business under free admission to this market would be quite "beyond the dreams of avarice." These crops and industries here in the United States would of course be ruined by such competition.

The inability of the domestic grower of beets and cane and of the manufacturer of sugar therefrom to compete with the tropics (at least for many years) is shown by the following comparative exhibit, based on official data and gold values:

United West East

States Indies Indies Hawaii

Yield of sugar per acre, tons 1^/4 ^Vz 2% 4

Cost of sugar per ton $75 $40 $20 $35

This is a fair mean under average conditions, though the yield for the United States may be criticised as too high and the cost as too low. On the other hand, experts will claim that the tropics can produce more sugar per acre and at less cost.

Quite likely the latter is true, for only on this basis can an explanation be found for the momentous increase in imports into the United States of sugar produced by the yellow races — from 250,000 tons in '92 to 600,000 tons per year. And this while Cuba's industry was almost prostrated by war!

In Egypt alone, over $50,000,000 have been invested in cane sugar houses and plantations within the past few years, mostly English money, at vast profit, owing to cheap fellah labor and great productiveness of soil under irrigation. Vast projects for further extensions are under way in Egypt and other parts of Africa.

The enormous profits in the Sandwich Islands are due in part to the marvelous productivity of Hawaiian plantations. The Ewa boasts of having produced an average of 8% tons of raw sugar per acre in 1896, or four times the largest yield ever reported from Louisiana cane or California beets. Reports of the Ewa, Hutchinson and other plantations give the cost of production at from 1% to 2 cents per lb, compared with 3 and 4 cents as the cost of making raw sugar from cane in Louisiana or beets in California or New York after the industry is well established. The enormous increase in the Hawaiian sugar industry, the immense plantations that are being developed and tne preparations now on to double and triple the sugar output of those islands, are now matters of common notoriety, that have already caused a saturnalia of speculation.