[TO THE EDITOR OH TER "SPECTATOR-1
Sin,—My attention has been drawn to the various letters that
have appeared in your issues of July and August with regard to the Sugar Convention Bill, and though I am very loth to enter into a newspaper discussion, I feel compelled to address you in order to correct some of the misstatements which have appeared with regard to the sugar-refining industry.
A "Sugar Merchant" in your issue of July 18th states : "As a matter of fact, a great deal more sugar is refined in this country than was the case before those bounties came into force." I do not know how "Sugar Merchant" obtained his facts, but the quantity of sugar turned out By the British refiners last year was smaller than any year since 1872, and in that year the quantity of sugar refined in this country was about 80 per cent. of the total consumption, whereas last year the quantity refined was only about 40 per cent.
Further," Sugar Merchant" states that, "with a few trivial and temporary exceptions, the foreign bounties on raw sugar have been only proportionate to those on refined sugar, so that to the refiners, as such, the bounties made no difference at all." In reply to this I would point out that the bounty on foreign refined
has always been from 7s. 6d. to 10s. per ton higher than the - bounty on raw beet sugar, so that the foreign refiner has boon enabled to sell at cost price and yet receive a handsome profit on his manufacture. During the last two or three years this advantage to the foreign refiner has been considerably increased owing to his profits out of the Cartel system, and it is impossible. to estimate accurately the increased bounty on refined which the foreigner has lately obtained.
More serious still is his statement that, "so far as Great Britain is concerned, this preference to German refiners in the bounties was put an end to by the protection unintentionally given by Sir Michael Hicks Beach in the existing scale of our Sugar-duties. That protection was so obvious that the Brussels negotiations would have come to an end unless our Government had consented to our refiners being compelled to work in bond, paying duty on the finished product only."
The advantage to the British refiners under the system of duties on raw sugar was practically nil. Refining in bond was insisted upon by the British delegates in order to secure fair play to the British refiner, as by no other system would it have been possible to prevent indirect bounties being received by the foreign refiners.
"Sugar Merchant" admits that sugar refining during the twenty-three years of duty-free sugar did not increase in pro- portion to the consumption, but states that "this, however, was in no way due to bounties, but to the fact that under free sugar the better forms were so cheap that the public refused any longer to buy the common forms of so-called refined sugar manufactured in this country under the Protective scale of Sugar-duties in force up to the time of their abolition in 1878."
It is quite true that there has been a large increase in the con- sumption of foreign granulated sugar since the abolition of duties in 1874, not in 1878, but the great increase did not take place until 1883 and onwards. A good deal of the white sugar coming to this country is not refined sugar at all, and up to about 1883 only received the bounty given on raw sugar; but after that date this white raw sugar was exported under the head of refined sugar, and therefore received the increased bounty which was paid on refined sugar. The British sugar refiners would have been quite prepared to supply this sugar, but they, of course, could not compete in the face of the increased bounty which the foreigner received.
I do not wish to touch upon the question of confectionery and other trades which are stated to have been built up on cheap sugar, for it has been clearly demonstrated over and over again that their present position is not in any way due to the low prices of sugar during the last few years ; but they were flourishing when sugar was at a considerably higher value, owing to the pro- tected market which they enjoyed under the bounty systems.
21 Mincing Lane, E.C.
[The important position of Mr. Tate's firm in the sugar trade alone induces us to give place to his reply to a letter published so long as seven weeks ago. But even his authority cannot avail, in our judgment, to establish the inaccuracy of the view which, we believe, has been long and generally accepted as beyond challenge,—viz., that the great, though doubtless artificial, cheapness of sugar which has prevailed under the bounty system has served to build up the pros- perity of a number of subsidiary industries.—ED. Spectator.]
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