Democratic Sentinel, Volume 16, Number 13, Rensselaer, Jasper County, 15 April 1892 — Sugar Trust Profits. [ARTICLE]

Sugar Trust Profits.

The sugar trust has at last secured full control of the three large refineries, formerly independent, owned by Harrison, Frazier & Co., Claus Spreckles, and T. C. Knight <t Co., for which it paid enormous prices. It is now, therefore, in absolute control of the sugarreflning business of the country, and is prepared to make full use of the tariff protection of pne-half cent per pound afforded by the McKinley tariff. When it was proposed to put all kinds of sugar on the free list, so as to prevent the trust from manipulating the market, the high protectionists in Congress insisted on a duty of one-half cent per pound on refined sugar to protect the trust. All the sugar, therefore, which enters into consumption, must pass through the hands of the trust. As soon as the trust secured control o! the outside refineries, it at once advanced prices, in spite of the fact that the raw sugar was lower. Few people realize the enormous profit which it is now able to make from consumers. The sugar trust, previous to its recent increase of capital, was capitalized at $50,000,000, on which it has been paying 10 per cent, dividends and earning more. It has repeatedly been asserted by experts, and never disputed by any one, that these same refineries could be duplicated for $15,000,000; so thait the trust has really earned somewhere between 30 and 50 per cant, on its actual value. It is also said by experts that raw sugars can be refined for five-eighths of a cent per pound, some of the best equipped refineries being able to turn „ out their product profitably at one-half’ cent. In the difference between centrifugal and granulated all excess above this cost is refiners’ profit. To-day centrifugal sugar is selling at 3| cents and granulated /it 4f cents, a difference ot lj cents, or the highest margin ever forced by the trust. Now, taking the cost of refining at the highest figures claimed, f cents per pound, it requires only the simplest process of arithmetic to show that ths trust is making to-day not less than S of a cent per pound profit. As a matter of . fact it is probably making more. This means that, since a barrel of sugar averages 325 pounds in weight, the profit per barrel is about $2.03. But to show theenormous profits on capital actually Invested—Something overlooked—the following may be cited. One of the largest refineries of the trust is located in Brooklyn. It cost ndt over $4,000,000. Its capacity fs 8,000 barrels per day. Taking the profits indicated above, and assuming that the refinery is in operation 300 days a year, though it runs with greater continuity, Its dally profits are $16,240. This is $4,872,000 per* year; which, allowing $4,000,000 as the cost of the refirfery, is equal to a profit es over 121 per cent. For the sake of clearness these items are repeated: < o»t of refinery #4,06),000.03 Daily capacity (barrels) 8,000 Cost of centrifugal (raw) sugar Price granulated sugar 4 % Difference 1% Cost of refining.. % Profit, per pound . % Profit, per barrel 2.03 Profit, perSOO days 4,872.000.00 This shows why the trust was so anxious to have the duty on refined sugar left at half a cent per pound. Is it not about time that refined sugar be put on the free HsK so that the consumer may get the real benefit of the decreased taxation, instead of being forced to pay exorbitant profits to the trust?