Sweet Satisfaction

When Franklin Roosevelt's No. 1 Good Neighborhood agent, grey and graceful Norman Hezekiah Davis, went to the reconvened Sugar sessions of the ill-fated World Economic Conference of 1933 in London last month, he announced his intentions with such a neat sous-entendu as would make a French Foreign Officer preen (TIME, April 19). Said he: "This is the sweetest [mission] I have ever had. . . . If we could only reach one agreement ... it would be important in this crucial period of world history to Democracy . . . showing that 22 nations can sit down and reach some agreement."

Not so sweet a game as smart Mr. Davis would have it, Sugar is international. What he may have done for Franklin Roosevelt toward saving Democracy remained in the jackpot, but last week Special Ambassador Davis dealt the cards in the game of Sugar without anyone leaving the table, showed that even in 1937 22 nations could reach an economic agreement: a production-control scheme.

Sugar's trouble dates back to the World War, when beet production in Europe was severely disrupted. At that time cane producers who are sellers on the world market in London, particularly Java and Cuba, increased acreages mightily. The War over, European beet growers so sprouted behind tariff fences that by 1929 the continental sugar output topped 1913-14 production by 500,000 tons, the world market was glutted.

A single-handed attempt by Cuba to curtail her production in 1926 fizzled as other sugar countries simply increased theirs. The Cuban-sponsored Chadbourne restriction plan, which Manhattan Lawyer Thomas Lincoln Chadbourne sold to world producers in Brussels in 1931 behind a smokescreen of U. S. press-agentry, failed from the beginning because quotas agreed upon were too high in face of declining world demand. Typical was the quota asked by Java during the Chadbourne negotiations: 3,300,000 tons per year. Admonished that their country had never produced that much sugar, the Javanese replied: "No, but we will some day." They accepted 2,300,000 tons.

As with all production-control schemes, purpose of the Chadbourne plan was to raise prices. They dropped. In 1930 the average world price of sugar was1 1/2-c-per Ib. In 1932 it was 10-c-, considerably below the cost of production. With tariffs and import quotas keeping the world market limited without any limit on the amount of sugar dumped in London, the price has remained depressed. Last week raw sugar at Cuban docks was quoted on Manhattan's Coffee & Sugar Exchange at 1.18-c- per Ib., with domestic contracts being made at 2 1/2-c-.

Presiding at this year's Sugar Conference in the magnificent Locarno Room of the British Foreign Office, as he had at many another full-size international conference while he was Prime Minister, was hoary old James Ramsay MacDonald. Although the British called the Conference with the hope of stabilizing the world market and relieving them of onerous subsidies to Empire sugar growers, not old Mr. MacDonald, but Special Ambassador Davis steered the meeting off political shoals. While the Big Powers were easily won over to the idea of crop restriction along AAA lines, Mr. Davis and a special committee interviewed delegations representing sugar exporting countries one after another, day after day, for nearly a month.

When hotel-room sessions started, the sum total of demands was substantially more than market requirements (3,170,000), which meant that the results of the Conference would be no more concrete than the Chadbourne plan. The British club of encouraging further Empire sugar production backed up Mr. Davis' academic assault on trade barriers, and concessions were made.

Result was a five-year agreement between the world's sugar producers, subject to ratification by their respective governments, theoretically permitting production for export of 3,700,000 tons per year (approximately one-tenth of total world con-sumption), with further initial curtailments which would limit the amount on the open market to about 3,400,000 tons in 1937-38. Biggest quota tentatively agreed upon was 1,050,000 tons for Java, with Cuba receiving a 940,000-ton allotment. Great Britain and the U. S. were not assigned quotas because they are importers. Other results of the Conference: a clearing house for sugar information; agreement upon a propaganda campaign to cultivate sweet teeth and a bigger open market.

While sugar men in Manhattan's Front Street and London's Mincing Lane rejoiced that any agreement at all had been reached between importing and exporting countries and with quotas as small as they are, the likelihood remained that prices will not rise so long as the market is called on to absorb more sugar than it can consume.

Even while Special Ambassador Davis was doing his best against tariff barriers in London, Secretary of State Cordell Hull appeared before the House Agriculture Committee in Washington to assail "inequitable treatment" accorded Cuba and the Philippines in the pending O'Mahoney-Jones sugar bill which would curtail Cuban importations of refined sugar according to the wishes of big American Sugar Refining Co. (TIME, March 22). Lectured Mr. Hull: "There is no warrant for a reduction in the amount of direct consumption sugar allowed Cuba under existing legislation [the Jones-Costigan Act]. My opinion on this question is strengthened by the record of the sugar refining industry . . . which does not make reassuring reading."

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