Fable in Sugar

Last week a big ship (the Berengaria) entered a big port (New York) carrying a big man (6 ft. 6 in. and 240 Ib. avoirdupois). He was a man who a year ago established probably the most comprehensive cartel ever set up to rescue a world industry from destruction by overproduction. Now, almost a year later, the industry is beyond all question far worse off than before; from opposite sides of the globe rumble ominous rumors of the cartel's imminent dissolution. Last week the man--Thomas Lincoln Chadbourne--on the deck of the Berengaria announced: "I am quite certain that further limitations upon both export and production . . . will be made." But he was never more confident of his plan's ultimate success.

The plan has worked beautifully for the five smaller producers (Czechoslovakia, Poland, Germany, Hungary and Belgium) but Cuba which a year ago had a surplus of 1,300,000 tons, has today, after reducing her production by one-third, a surplus of 1,540,000 tons. Java, which a year ago had a surplus of 700,000 tons, is likely by the first of April to have a surplus of 1,400,000 tons. And the price of sugar (Cuban raw) is 1.14-c- per Ib. compared to 1.38-c- a year ago. All because the world used still less sugar in 1931 than it had in 1930.

If the Chadbourne plan is to continue there will be still larger carrying charges on the surplus, still smaller crops permissible to balance production with consumption. Will the producers stand for it? Last week Mr. Chadbourne said they would. The reasons he gave were hard cold facts:

"Java and Cuba together at the beginning of the new crop will have on hand sugar to produce which cost them more than $116,000,000. If that sugar could be sold at present prices it would yield only $72,000,000, a loss of at least $44,000,000. If this same sugar were to be dumped on the present saturated markets, there would be such demoralization in prices that the greater part of the whole of this huge cost-investment would be lost."

If the Chadbourne plan survives, it will be because it would be still more costly to give it up.

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