Sugar by Quota

Though far apart in the public mind silver and sugar in the U. S. have much in common. Industrially both are small compared with Steel. Wheat, Automobiles, Cotton, Railroads. Geographically both centre in the same region--the Rocky Mountain states--and use the same spokesmen in Congress to voice their demands. Politically both have power to enforce those demands far out of proportion to their size or importance. Economically both have strong allies to mobilize to their support. Last week silver, with its implication of inflation (see p. 9) and sugar, with its implication of tariff-protected industry, monopolized the Washington news.

Louisiana and Florida grow sugar cane as do Hawaii, Puerto Rico and the Philippines. But production in Louisiana and Florida is relatively small and the insular possessions of the U. S. have no vote in Congress. Politically speaking, the U. S. sugar industry is the sugar beet industry in Colorado, Montana, Nebraska, Idaho, Utah, Michigan and California. Sugar beets require an immense amount of hand labor. Therefore beet sugar is more expensive to make than cane sugar. Thirty-seven years ago the beet sugar industry learned how to counteract this disadvantage when it induced Nelson Dingley Jr. of the Ways & Means Committee to give it a tariff.

That tariff worked directly against Cuban cane but, much to the chagrin of the sugar beet people, it also benefited Hawaii and Puerto Rico and, after 1913, the Philippines. After the War more and more of U. S. sugar came from the U. S. and its island possessions, less and less came from Cuba. Cuba, who could not sell her products elsewhere, got into much the same sort of trouble as U. S. wheat and cotton producers who lost their foreign markets. To make matters more comfortable for the beet sugar industry the tariff on Cuban sugar was raised to 1 3/4-c-, then to 2-c--per Ib.

But the ancient tariff device began to work in unfortunate ways for the beet sugar industry. It left Cuba with a huge sugar surplus, brought her producers such hardships that they sold their product as low as 5/8-c- a Ib. (in 1932). But even with a 2-c- a lb. duty the costly beet sugar industry could not make a profit out of 3-c- sugar. Hawaii. Puerto Rico and the Philippines, well inside the tariff, could. They expanded their output immensely, until beet sugar producers realized that sooner or later the islands would take the U. S. market away from them. Thus while U. S. consumers were paying some $250,000,000 a year extra for sugar in order to keep the beet industry going, that industry was steadily losing ground.

To help it out of this new fix the beet sugar industry could think of nowhere else to turn for help but to Congress. Its first move was to agitate for Philippine independence--less to give the little brown men freedom than to keep their sugar from coming in duty free. A few weeks ago the Philippines were given their second offer of freedom. But still all was not well. Some of the President's advisers wanted to knock down the tariff barriers, thereby administering a death blow to the beet industry as too inefficient and costly a luxury to maintain at the expense of the country at large. At this suggestion, a howl of anger went up from the representatives of beet sugar states.

President Roosevelt, ever apt at Compromise, worked out an agreement aimed to conciliate the beet industry, to help Cuba and regain the U. S. market there. He proposed (TIME, Feb. 19) to quota sugar production for the beet industry and provide import quotas for the U. S. islands and for Cuba. With sugar made a basic commodity and imports controlled, a processing tax would be applied in the U. S. to subsidize beet sugar producers. The quotas which the President proposed were liberal to U.S. producers compared to past performances:

U. S. sugar beet industry Quota (tons) 1,450,000 1932-33 (tons) 1,390,000

Louisiana & Florida Quota (tons) 260,000 1932-33 (tons) 200,480

Hawaii Quota (tons) 935,000 1932-33 (tons) 1,008,000

Puerto Rico Quota (tons) 821,000 1932-33 (tons) 963,200

Philippines Quota (tons) 1,037,000 1932-33 (tons) 1,279,040

Cuba Quota (tons) 1,944,000 1932-33 (tons) 2,240,000

Cuba got the biggest setback but with no vote in Congress she had to be content with what was given her. The Philippines, about to be given their freedom, were in more or less the same predicament, but were more liberally treated to induce them to accept freedom. The others began at once to wrangle. Movements for Statehood took life in both Hawaii and Puerto Rico (see p. 14) as one means of getting a vote in Congress and lobbying for bigger quotas. The beet industry alone was in a position to wrangle at once. When the Jones-Costigan bill was passed by the House three weeks ago, its quota had been raised from 1,450,000 to 1,550,000 tons. Louisiana and Florida were granted the same quota proposed by the President. Only these quotas were fixed in the law. The Secretary of Agriculture was authorized to fix import quotas so as to bring production and imports into balance with consumption. Since the beet industry's quota was raised by law it meant that the other quotas would have to be reduced by an equal amount.

Last week the Senate put its approval (49-to-18) on the House bill practically without change. Amendments to fix the Hawaiian quota at 975,000 tons and the Puerto Rican quota at 875,000 were defeated. Only the beet sugar industry was favored over the President's proposal.

Indignantly the Hawaii Sugar Planters Association exclaimed: "Except when it comes to assessing the territory with all Federal taxes and compelling us to bear our proportion of the burdens borne by the mainland, we are apparently not to be considered as an integral part of the United States. . . ."

Senator Copeland of New York (Manhattan has a large Puerto Rican population) declared: ''To overlook the obligations we owe to Puerto Rico and its citizens is something I cannot approve. The act will add at least 200 million dollars a year to the cost of sugar. ... In short. we ruthlessly abandon Puerto Rico and dig into our pocketbooks for the beet sugar farmers."

Said President Carlos Mendieta of Cuba, grateful for small favors: "The bonds of friendship have been strengthened by this aid to our sugar industry."

Before it passed the bill the Senate did the beet sugar industry one last favor. The House bill provided that crop restriction agreements with beet producers "may contain provisions which will eliminate child labor and fix minimum wages for workers." Notable was this provision, for beet growing requires so much hand labor (hoeing, thinning out. pulling) that any beet farmer who wants to cultivate more than four or five acres must hire the cheapest labor--Mexicans and their wives and children--under conditions which scandalize reformers. The Senate struck out the provision for minimum wages and the "elimination" of child labor, substituting merely the power to "limit or regulate child labor."

When Senator Wagner read a statement that declared that children of twelve worked 16 hours a day in the beet fields, Senator Borah of Idaho, champion of all righteous causes, leaped to his feet, demanding "Where is it? It is a slander!"

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