GOVERNMENT BUYING OF SUGAR.

[To TRH EDITOR OF THE SPECTATOR."]

SIR,—It would be surprising indeed if Mr. Tate were not to laud the Government buying of sugar, for ever since the Government stepped in the refiners have been living in clover, secured from all possible losses, and assured of a handsome profit no matter what may happen. Mr. Tate informs your readers (Spectator, December 12th) that "it would have been necessary to find some millions of pounds sterling in order to got sufficient sugar to keep the refineries working. No individual firm could possibly have carried through these transactions, and, as you are aware, none of the banks were in a position to make advances. In the meantime many of the refineries would have been closed down."

Yet the profits of Mr. Tate's company in the year ending September 30th last (that includes two war months) were no

less than £314,900, as compared with £119,100 for the previous twelve months, and the dividend on the ordinary shares, privately held, was increased from 181 to 50 per cent. Mr. Tate himself remarked at the annual meeting the week before last that they might under other conditions make larger profits—as though they had imposed upon themselves a self- denying ordinance.

We know that the refiners are represented on the Royal Commission, but the details of the Government's deal with them have not yet been disclosed. Mr. McKenna, when asked in the House of Commons for particulars, evaded the request by stating that the Report must first be presented to the King!

If the refiners are pleased, the sugar-using manufacturers

(who, although they require from twenty to twenty-five per cent. of all the sugar imported, were never consulted) are

extremely dissatisfied ; for the policy which Mr. Tate praises has seriously injured their home trade and is ruining their export trade.

Everybody is agreed that the Government did well to step in to prevent refiners and other large holders of sugar exploiting the public. The pity is it was also seized with panic, and, instead of confining its purchases for August and September delivery, bought up huge stools at prices which were forced up by the very magnitude of the•opera-

tions. As a matter of fact, there were altogether record stocks of cane sugar available in America, Java, &c., to

render the United Kingdom independent of any supply of sugar from Germany and Austria. The Government, burdened with its dear purchases, found other sugar coming freely to this country at prices which were certainly high, comparatively

speaking, but lower than those fixed by the Commission. Instead of acknowledging that it bad been badly advised, and cutting its losses, the Government proceeded to prohibit all

importation, a totally unnecessary step which was officially alleged to have been taken in order to bring economic pressure

to bear upon Germany. One minor result was that the Dutch refiners promptly repudiated their pre-war contracts with our manufacturers, causing them a loss estimated at something like £250,000, although it seems that lately some buyers in London have received undue preference from Holland.

It is difficult to advance proofs, but it is freely stated that the Government, while stopping private purchases, has itself within the last week or so been buying cube sugar from Holland; although such sugar is bound to be replaced by Germany and the enemy thus "comforted." The Government has been advised of these rumours, but at the time of writing they have not been contradicted.

Thanks solely to the Government's policy, British manufac- turers are now obliged to pay from 5s. to fis. per hundred- weight more for their sugar than their rivals in neutral countries and in the Colonies, so that effective competition in the export markets is being destroyed; while at home manu- facturers cannot pass on to the consumer, like the grocers (also represented on the Commission) can and do, any con- siderable portion of the artificially increased cost of their raw material, lest they should kill the public demand for their goods altogether. Already foreign manufacturers are trying to push their goods in this country—goods made probably with enemy, and certainly with cheap, sugar denied to our industry.

British manufacturers have asked that, as the Government chose to prohibit the importation of sugar, except by itself, on national grounds, the nation as a whole should bear the burden,

as is already proposed in other directions. They have asked for their raw material at the world's price. But all that they have got are special rates for White Mauritius Crystals, of which the Commission holds very heavy stocks, not very easy to get rid of. It happens that this sugar is quite useless for high-class confectionery and chocolate, and if it is to be used in large quantities requires further refining.

Mr. Tate talks of millions saved by the Government's action : on the evidence it would be much more sensible, and the truth, to say that millions have been lost. Exaggeration apart, persons with quite as much experience of sugar as Mr. Tate are convinced that this unfortunate sugar policy, aptly

described as "a comedy of errors," will cost the country a great deal more in the long run than if the Government had looked before it leapt, and had been content with the less ambitious and debatable course of preventing what must have proved a merely temporary " corner."—I am, Sir, &c., THE SECRETARY OF THE MANUFACTURING CONFECTIONERS' ALLIANCE.

9 Queen. Street Place, B.C.

[We have given a hearing to both sides, and must now close this correspondence.—ED. Spectator.]