'iu ,r.% ^^ IMAGE EVALUATION TEST TARGET (MT-3) 1.0 I.I 1.25 IIIM JIM M 2.2 2.0 U ill 1.6 V] A ^. .$Ss ^ ^ Photographic Sciences Corporation 23 WEST MAIN STREET WEBSTER, N.Y. 14S80 (716) 873-4503 _<;. 4.>' W (/. S vV 2'^ CIHM/ICMH Microfiche Series. CIHIVI/ICIVIH Collection de microfiches. Canadian Institute for Historical Microreproductions Institut Canadian de microreproductions historiques 1980 Technical and Bibliographic Notas/Nota* tachniquas at bibliographiquas Tha Instituta has attamptad to obtain tha batt original copy avaiiabia for filming. Faaturas of this copy which may ba bibliographically uniqua. which may altar any of tha imagas in tha reproduction, or which may significantly change tha usual method of filming, are checked below. Coloured covers/ Couverture de couleur I I Covers damaged/ D D D D D D Couverture endommagda Covers restored and/or laminated/ Couverture restauria et/ou pelliculAe I I Cover title missing/ Le titre de couverture manque I I Coloured maps/ Cartes giographiques en couleur Coloured ink (i.e. other than blue or black)/ Encre de couleur (i.e. autre que bleue ou noire) I I Coloured plates and/or illustrations/ Planches et/ou illustrations en couleur Bound with other material/ Reli6 avec d'autres documents Tight binding may cause shadows or distortion along interior margin/ La reliure serr^e peut causer de I'ombre ou de la distortion le long de la marge intdrieure Blank leaves added during restoration may appear within the text. Whenever possible, these have been omitted from filming/ II se peut que certaines pages blanches ajout^es lors d'une restauration apparaissent dans le texte, mais, lorsque cela 6tait possible, ces pages n'ont pas 6t6 filmdes. Additional comments:/ Commentaires suppldmentaires; T ti L'Institut a microfilm^ le meilleur exemplaire qu'il lui a 6tA possible de se procurer. Les details de cet exemplaire qui sont peut-Atre uniques du point de vue bibliographique, qui peuvent modifier une image reproduite, ou qui peuvent exiger une modification dans la mithoda normale de filmage sont indiquis ci-dessous. I I Coloured pages/ D D Pages de couleur Pages damaged/ Pages endommag^as □ Pages restored and/or laminated/ Pages restaur6es et/ou pelliculdes □ Pages discoloured, stained or foxed/ Pages dicolor^es, tachetdes ou piqudes □ Pages detached/ Pages ddtachies □ Showthrough/ Transparence Quality of prir Quality indgale de I'impression Includes supplementary materif Comprend du materiel suppl^mentaire P o f C b t s o f s o I I Quality of print varies/ I I Includes supplementary material/ T s T ^ d e b ri r( rr Only edition available/ Seuie Mition disponible Pages wholly or partially obscured by errata slips, tissues, etc., have been ref limed to ensure the best possible image/ Les pages totalement ou partiellement obscurcies par un feuillet d 'errata, une pelure, etc., ont 6td film^es A nouveau de fapon A obtenir la meilleure image possible. This item is filmed at the reduction ratio checked below/ Ce document est filmd au taux de reduction indiqu6 ci-dessous 10X 14X 18X 22X 26X 30X J 12X 16X 20X 24X 28X 32X The copy filmed here has been reproduced thanks to the generosity of: IVIational Library of Canada L'exemplaire film6 fut reproduit grAce A la g6n4rosit6 de: Bibliothdque nationale du Canada The images appearing here are the best quality possible considering the condition and legibility of the original copy and in keeping with the filming contract specifications. Original copies in printed paper covers are filmed beginning with the front cover and ending on the last page with a printed or illustrated impres- sion, or the back cover when appropriate. All other original copies are filmed beginning on the first page with a printed or illustrated impres- sion, and ending on the last page with a printed or illustrated impression. The last recorded frame on each microfiche shall contain the symbol — ^ (meaning "CON- TINUED"), or the symbol V (meaning "END"), whichever applies. Les images suivantes ont 6t6 reproduites avec le plus grand soin, compte tenu de la condition et de la nettet6 de l'exemplaire filmA, et en conformity avec les conditions du contrat de filmage. Les exemplaires originaux dont la couverture en papier est imprimis sont film6s en commenpant par le premier plat et en terminant soit par la derniire page qui comporte une empreinte d'impression ou d'illustration, soit par le second plat, selon le cas. Tous les autres exemplaires originaux sont film6s en commen^ant par la premidre page qui comporte une empreinte d'impression ou d'illustration et en terminant par la dernidre page qui comporte une telle empreinte. Un des symboles suivants apparaitra sur la dernidre image de cheque microfiche, selon le cas: le symbole —^ signifie "A SUIVRE", le symbols V signifie "FIN". Maps, pl&:«^s y^arlz, etc., may be filmed at different rebu Jon t atios. Those too large to be entirely included in ons exposure are filmed beginning in the upper ieft hand corner, left to right and top to bottom, as many frames as required. The following diagrams illustrate the method: Les cartes, planches, tableaux, etc., peuvent dtre film^s A des taux de reduction diff6rents. Lorsque le document est trop grand pour dtre reproduit en un seul clichd, il est filmd d partir de Tangle sup^rieur gauche, de gauche d droite, et de haut en bas, en prenant le nombre d'images n6cessaire. Les diagrammes suivants illustrent la mdthode. 1 2 3 1 2 3 4 5 6 ■ ' Af/ H^-**.*r mM^ r r-njJI C n'fl' /tT^'si—^ U^ Jt .^ NATJO^^' MBHAllV BDI!,1011lK(;i i: NATIONAI.E HE BEET SUGAR INDUSTRY ^^T CAN BE SUCCESSFULLY DEVELOPED IN CANADA UNDER A Reasonably Liberal Govern naent Policy; OBSERVATIONS BY ROBERT H. LAWDER. OTTAWA Printed by Thoburn & Co., No. 36 Elgin Street 189s w -^ / THE BEET SUGAR INDUSTRY ^ys^ \^ ^^^' "^y \y^\^ IT CAN BE SUCCESSFULLY DEVELOPED IN CflNRDfl UNDER A Reasonably Liberal Governnaent Policy OBSERVATIONS BY ROBERT H. LAWDER. OTTAWA Printed by Thohurn & Co., No. 36 Elgin Street 1895 -C L3 THE BEET SUGAR INDUSTRY- ii The principal objections entertained with resi^ect to any attempt to extend the beet sugar industry in Canada at the present time, are based on the expectation that the present unprecedentedly low prices of sugar are likely to continue, and on the impression that the conditions here are so unfavorable as compared with the beet manufacturing countries of Europe, that it will be impossible to conduct the business profitably in this country, except by the maintenance of such an excessive rate of bonus as would largely outweigh all the advantage which the co'intry would derive from the enterprise. This paper is intended to discuss these two objections. First, as to present price of sugar, the following quotations are taken from "Sugar," published in London, January 15, 1895 : — AVERAGE PRICES OF 88° BEET-SUGAR FOR II YEARS 1884 1885 1886 1887 1888 1889 1893 189I 1892 1893 1894 3/»» 4/ 2/ 2/2 4/3 6/11 2/7 3/3 3/7 5/3 1/6 ) I 5 years' average 13/3; 6 yeafs| average 13/10 Highest. l^owest. i8/4>^ 9/9 16/9 10/ IS/9 lo/i^ 16/ , 10/6 16/3 12/6 28/4 >^ ii/i>4 14/3 iik'A 14/9 I2/4>4 15/ 12/6 19/3 12/3 isli'A 8/6 The above statement shows that the present low prices of sugar are not the result of a natural or gradual reduction produced by de- creasing cost of production, but are wholly attributable to the over-pro- duction of beet-sugar in Europe from beet crop of 1894, the increase o^er" preceding year being about one million tons. This was caused by the immense profits realized by manufacturers of beet sugar in dm- 4 paign of 1893. Very nearly as low a price as present quotation (9/3) was reached in 1884, but before crop of 1885 had matured, price advanced to 16 9. It is generally believed that the present very low prices of sugar will so largely increase the year's consumption that the excess of sugar stock now held will be greatly worked off before the next crop comes in. Sle[)s are being taken in most of the beet-producing countries to decrease the spring's area cultivated to beets ; and the contracts with farmers are being made for smaller quantities of beets, and at lower prices than last year, and ii is expected that by this means prices for sugar will soon be restored lo their average value. The situation of the beet sugar industry in Germany is so critical that it is proposed that the bounty on exports (at present 15 cents per 100 lt)s. of raw sugar) should be mcreased, for this season only, to 48 cents per 100 lbs. The actual cost of production of fair refining raw sugar, either of cane or beet, is about $2.60 per 100 U)s. The present price, 9/ @ 9/3, is equal to $2.00 per cwt., leaving a heavy loss to producers on every cwt. sold. Mr. Edgar Tripp, commercial agent for Canada, in Trinidad and Tobago, in a recent report to the Dominion Government, estimates the cost of producing raw cane sugar at ^^12.0.0 to ;^i3.o.o per ton ; the medium is equal to 12/6 per cwt., or per 100 tt)s.,$2.6i^. "Deutche Zuckerindustrie'" gives the following statement of the results of the operations of 15 standard beet sugar factories in Germany. The average for the three years 1890-91 to 189293, was : — Tons of beets worked per season 33.279 Cost of beets per 1,000 Kilos (2,204^ lbs.) $5 05 equal per ton, 2,000 fcs $4 58 Cost of coal per ton of beets worked 52 equal per ton, 2,000 Bis 47 Cost of labor in factory per 1,000 Kilos 48 equal per ton, 2,000 tt)s 44 J^ Miscellaneous expenses (per 1,000 Kilos 96 equal per ton 2,000 Bbs 87 Total cost of beets and manufacturing (2,204^ ft>s.) . . 701 equal per ton, 2,000 lbs 6 36 With a yield of 100 lbs. raw sugar from 835 tt)s. of beets, $6.36 per 1,000 B)s., makes cost of 100 Jbs. sugar $2.65. I 1 I 5 COMI'ARISON WlIM Ol'KKATION IN C.VNADA. In Canada, for the first two seasons, it would be imprudent for any factory to contract with farmers for the purchase of the full quantity of hetUs required for the whole season's ca- pacity of the works, as allowance should be made for stop pages incidental to the working of new machinery. Much also has to be learned as to the best methods of storing and , preserving beets ; and the extention of the lime to which it would be safe to venture in their preservation would be grad- ual. It is likely that any new factory erected in Canada will hi of a capacityfor working 500 tons of roots in each 24 hours. There are certain fixed charges which will be incurred, all ot them as heavy, or nearly so, in working 30,000 tons as for 50,000 tons, viz,: — fire insurance, wear and tear, repairs, re newals of buildings and machinery, annual salaries for skilled operatives and officers of the company. A careful calcu- lation made by an expert, shows that these expenses in working only 30,000 tons of roots will be greater than when working 50,000 tons, by an amount etiual to, on every 100 tt)s. of sugar produced $ 45 The cost in Germany for coal is much the same as in Can- ada. The cost in Germany for labor in the factory per ton of beets (2,000 Ihs.) is 44/i' <:ents, and for miscellaneous ex- penses 87 cents,the two items together being $1.31 >j cents. In Canada these expenses for wages, materials, skilled oper- atives, etc., would be fully 50% higher, this excess being 66 cents per ton. Allowing beets in Canada to yield 10 per cent, of sugar, the increase in cost is equal to per 100 lt)s. of sugar 33 In Germany 12 lt)s. of sugar are obtained from 100 ths. of beets. In Canada, for some years, only 10 ll)s. is likely to be obtained. With cost of sugar at $2.60 per 100 lbs., this is equal to a loss per 100 lbs. sugar 43 Excess of cost in Canada per 100 lt)s. sugar $121 The capital required tor a 500 bu. factory in Ger- many is about one million marks (nearly $250,- 000), With money there at 4°/^ interest, this is per annum $1 00,00 In Canada, $400,000 of capital would be required, which, with interest at 6%, forms a charge per annum 24,000 Excess in Canada $13,000 On 3,000 tons sugar first year, is equal to per jQo S>s. sugar a$ $1 44 When the Canadian factory gets into full operation, the first item of excess (15 cents per 100 llts.) will be wi|)ed out. The second item (35 cents per 100 lbs.) is likely to continue. The third item (43 cents per 100 Ihj.) is expected to be extin- guished in a few years, when it is believed that the price and value of beets will be the same as in (lermany, for like relative quality. The fourth item (23 rents per 100 lbs.) will be reduced to 14 centst when the factory |)roduces 5,000 tons of sugar per season. When the al)ove has been accomplished, the excess of cost of 100 llts. of sugar in Canada will be:— 2nd item, 33 cents; balance of 4th item, 14 cents, or in all, 47 cents. I'ul.lCV Ni:CK.SS.\KY TO T!IK KsiAIM.ISHMKNT OF THIi BeKT-SUOAR Indi'.stry in Canada. In every country in Europe where the beet sugar industry has been successfully established, the early promoters were aided by direct as- sistance by royal grants, either in the shape of gifts or loans at nominal rates of interest. The industry has always been protected by heavy duties on imports of foreign sugar, and through the maintenance of this policy, (let many, France, Austria, Hungary, Russia, and some other countries have not only ceased to be importers, but have become ex- tensive exporters of sugar. This export trade has been extended and promoted by meani of bounties on exports. From an extensive series of experiments in sugar beet cultivation conducted for three successive years in the Province of Ontario, and from the results ascertained by the beet sugar manufacturers in the Province of Quebec, sufficient evidence has been obtained to show that the soil and climate in these provinces are as well adapted to this crop as in any country in Europe. There is also good reason for believing that the same favorable conditions prevail in large sections of the Prov- inces of Nova Scotia and New Brunswick. With a few years* experi- ence in the selection of the most favorable soils, varieties of seed and methods of cultivation, and after the acquirement of all the labor-saving instruments which have proved profitable, there should be no difficulty in producing beets of as rich saccharine quality as are raised in any of the European countries, and at a lower cost, because of the compara- tively high prices there for land and fertilizers. In Canada, it has been considered sound policy to admit foreign raw sugar, free of duty, and it appears to be thought advisable to con- tinue this policy. Under such circumstances the only means of estab- lishing the industry here is by way of bonus, in a similar manner as in the case of iron. The beet sugar industry has special claims to the favorable consideration of Government and Parliament ; 1. Because the whole value of the finished product will consist of Canadian material and labor. 2. Because 60 per cent and upwards of ihc cost cf the manufac- tured sugar will go directly into the hands of fanners in payment for their beets. The farmers will be benefited not only from the profits obtained from the sale of the crop, but through the improvement to their land, owing to the high cultivation and thorough cleaning cm- ployed on this crop, by means of which their fields are prcatly increased in fertility for succeeding crops. In addition to this, the pulp remain- ing after the sugar has been extracted will be procurable for fodder at much lower prices than any other ec^ually good milk-producing or flesh- creating fodder can be raised. 3. The railway and other transportation romjjanies will derive an immense amount of profitable traftic from the freight to and from the factory. 4. Dealers in coal and lime will have a large market for these articles. 5. Builders and agricultural implement-makers will derive a large business from the erection of factories, dwelling houses, etc., called into requisition by this industry, and lor new implements recpiired in husbandry. 6. Because the industry is free from many of the objections enter- tained against other manufacturing establishments. To provide for the manufacture, from Canadian beets, of all the sugar retjuired for con- sumption in the Dominion, there is ample employment for thirty beet sugar factories of even laiger capacity than the average of those in Europe, with which they will have to compete. 'I'hey would be equipped with the most approved machinery, and could afford to em- ploy the very best skill that can be found anywhere, so that the di/Ter- ence in cost of finished sugar would not exceed the difference in price paid for Canadian labor and beets. Proposition for Bonus. It has already been shown that in the early years of the enterprise the cost of sugar manufacture in Canada will be about $1.44 per loc lbs. more than in Germany, and that this difference should be greatly reduced in the cours;^ of a few years. To meet this position, it is pro- posed that any measure granting a bonus should be on a graduated scale, being reduced from year to year, as beet sugar companies should be able to succeed with the diminishing bonus. For some years there has been a bonus on beet sugar made in Canada, of $1.00 per 100 ll)s on sujar testing 70"; with an increase of 3^ cents per 100 tt)s. for every de^gree above 70", making bonus on 8 absolutely pure sugar testing ioo°, $2.00 per 100 fbs It may be asked why, with such a liberal bonus, the iiidustry has not developed. The reason has been that the bonus measure was simply a temporary and tentative act, which in no sense indicated the views of Parliament as to its disposition towards a permanent measure. It could hardly be ex- pected that capitalists would invest the very large sums necessary for the erection of capacious factories until assured that the policy neces- sary to their profitable operation would be continued for the years required . In view of the present low prices for sugar, and of the fact that the owners of the only beet sugar factory in operation in Canada have made preparations for the next season, by the importation of seed, etc, and that fully 2,000 farmers have prepared their land for this crop, under the expectation of a continuance of the present bonus on sugar, it is reasonable that it should be extended for another season. No new factories can be erected so as to operate on any beet crop earlier than that of 1896, or for which any bonus shall be required be- fore the financial year 1896-97. It is suggested that the bonus for that year shall He granted at 10 per cent, less than the existing bounty, and that in each of the following four years there should be a similar reduc- tion, and that the reduced rate of bounty payable in i9oo-'oi should be continued for the next five years by which time the beet-sugar industry ought to have become self-sustaining. Proposition for Bonus on Beet Sugar. Qnnlity of Present Iidiuis Propns(!d bonus for live years. Siigixr per 100 lbs. I8it(i-'(17 1897-'S>8 1898-'(>U ISitO-litOO tOOO-'Ol Sugar. 70^ $1 00 $ 90 $ 80 $ 70 $ 60 $ 50 75" I l6f3 05 93^ Sifi 70 5»'A 8o<' I SSVi 20 062,^ 93/^ 80 66fi 85° I 50 35 20 05 90 75 88^ 1 60 44 28 12 96 80 90" I 662^3 5^ 33^S 16^^ I 00 83/3 95" » 83 >i 65 46r3 281/^ I 10 91^2 100'' 2 00 94 78 62 I 46 I 30 By maintaining the same rates of bonus as in year 1900-01 for the fkve succeeding years, the average rate for the ten years on 88" sugar (which is the usual standard for beet sugar and equal to fair refin- ing cane sugar) is 96 cents per 100 lbs., or equivalent to 32 per cent, on $3.00, which was its average value during last six years. The bonus on 100^ sugar, or pure refined sugar, is placed at 50 cents per 100 H)s. above the bonus on 88" sugar. It requires about $1.50 per 100 ft)3 to cover waste and cost of refining 88° sugar. This makes value of loo" sugar $4 50, the average bonus on which for ten years is $1.46 per 100 fcs., or equivalent to 32.44 per cent. It is urged that owing to present financial position of the Domin ion extra caution should be exercised in incurring any new liabilities. As has been above shown, no new factories can possibly be erected so as to create any bonus liability previous to the fiscal year i896-'97, and even in that year, the customs revenue derived from the imports of the machinery, etc., required for the factory and the dwelling houses re- quired to be erected in connection therewith will very nearly, if not altogether, equal the probable bonus payable on that year's output of sugar. Conclusion. There is no reason why Canada should not produce all the sugar required for its own consumption. Its imports during i893-'94 amounted to 150.000 tons. This is an increase of 50 per cent, since i887-'88. To produce a quantity of sugar equal to last year's importa- tion, fully 100,000 acres <»t beets would require to be cultivated ; thirty large first class beet sugar factories would be erected, involving an ex- penditure of over $10,000,000 ; about $9,000,000 would be expended annually in payment to farmers for beets and to operatives and others employed at the factories, and for transportation and for coal, lime and other materials ; and an immense stimulus would be imparted to the dairy and cattle feeding industries. All this can be accomplished dur- ing the next ten years by the adoption of a liberal but reasonable measure of Government assistance to the industry. The following ^xiract is taken from the annual review of the Sugar Trade of 1894, issued by Messrs. VVillett and Gray of New York, the largest sugar brokers in the world, and recognized authorities on all points connected with the trade : — " There is no good reason why the last increase of 1,000,000 tons in our (United States) consumption should not have been provided by our own agriculturists under exactly the same stimulus as has been given by Germany. That Germany now has every confidence in the shortsightedness of the United States in this direction, and is still extendmg field cul- ture, building new factories, and continuing bounties in order to supply us with the million more tons increase of the next ten years, while our own farmers are throwing away their energies and capital in raising wheat at 50 cents a bushel or less, and for which there is no market. What we need in this country now is German statesmanship, not in the interest of Germany and free trade, but of the United States and pro- tection. And we need to devise some binding plan by which a bounty u contract made by one political party to stimulate industry can not be broken by the other party. Otherwise there can be no stability and no safety or success to the enterprise."