CHART No. 35.

(Page 44.)

Again we suggest a comparison between the crop averages of the United Kingdom, where no sugar beets are raised, and Germany, where sugar beets are extensively and intensively cultivated, in order to arrive at a fairer comparison than with the United States. Such a comparison will explode the theory here advanced that sugar beets are necessary in order that increased yields of other crops may be secured. On account of the limited area for cultivation in proportion to population as compared with the United States, the United Kingdom, like Germany, indulges in intensified methods of farming that are not resorted to in the United States.

CHARTS NOS. 36, 37, AND 38.

(Page 45.)

As there is no beet-sugar factory in North Dakota and but one in both Minnesota and Kansas, how many factories would it require to produce result claimed? It now requires 76 factories to take care of the production from 474,000 acres. If rational beet-sugar rotation in connection with sugar beets means planting to sugar beets one year in four, one-fourth of the area of Minnesota (5,200,000 acres), or 1,300,000 acres would have to be cultivated to sugar beets annually. This would be 2.74 times the present area now cultivated to sugar beets in the whole United States, and would require 200 beet-sugar factories in Minnesota alone. Upon the same basis for Minnesota, North Dakota, and Kansas, one-fourth of 16,672,000 acres, or 4,143,000 acres annually, would have to be cultivated to sugar beets, which would require 639 beet-sugar factories in these States alone in contrast to only two that now exist. Could these States, or the United States, support this number of factories? According to the representations made by Mr. Palmer this must be accomplished before the "indirect benefits" accrue to the farmer.

CHART NO. 39.

(Page 46.)

The total area now cultivated to sugar beets in the United States is 474,000 acres. In order to equal or exceed the crop yields of Germany, which Mr. Palmer claims are due to the rotation with sugar beets one year in four, he advocates cultivating to sugar beets upon the same theory of rotation the 85,546,000 acres now planted to cereals and potatoes in the United States. This would mean that every year one-fourth of this area should be cultivated to sugar beets, or 21,386,500 acres. The 474,000 acres no wcultivated to sugar beets produce over 600,000 tons of beet sugar. Were the cultivation increased to 21,386,500 acres upon the same basis of increase in production it would amount to 27,000,000 tons of beet sugar per annum, or over 45 times as much. To take care of this increase in production 45 times the number of the present factories (76) would have to be erected, or 3,420 factories, and upon the present basis the capitalization of the beet-sugar companies necessary to erect these factories and take care of the increase in production of sugar beets would be $6,390,000,000, or 45 times $142,000,000. In his "vision" Mr. Palmer

is not troubled by the practical question of how the above-mentioned details would be taken care of, or how this increased production, amounting to 27,000,000 tons, or one and three-fourth times the present world's production of both cane and beet sugar, would be marketed. Certainly under these conditions beets would be worth so little that we presume the farmer would have to rely entirely on "indirect benefits" for his gain (?). Of course, there would be no trouble in disposing of this increase in production and the farmer would receive the same price for his beets that he does now! Neither would the farmer have the least difficulty in procuring the necessary help or be under any additional expense! All he would have to do would be to sit back and collect $1,376,915,000 more a year than now, according to this "dream."

Now, if Mr. Palmer's theory is correct that Germany owes her increase in crop yields to the extensive cultivation of the sugar beet in rotation every fourth year with other cereals, it must be true that her 42,776,000 acres scattered over the whole Empire have, at some time or another, been grown to sugar beets, and that factories have been erected in the vicinity of all these lands in order to take care of the product. In order to carry out the rotation theory one year in four, at least one-fourth of this area would have to be grown in sugar beets each year or lose the benefits of the rotation process. Upon the basis of production in the United States this would mean 12,825,000 tons of beet sugar in Germany per year as against their present maximum production of 2,800,000 tons. It would be impossible to account for beet-sugar cultivation or rotation one year in four as responsible for the increased yield of crops without the above results. This not being the actual case in Germany, is it not more sensible and logical to ascribe these increased yields rather to intensified methods of farming and cultivation in general than solely to beet-sugar cultivation, which only extended over 1,247,000 acres in 1912, and not the necessary 10,694,000 acres of Germany so as to be rotated one year in four in connection with other crops? According to the testimony of Fred. R. Hathaway at the hearings on the sugar schedule before the last Senate Finance Committee, the actual ares planted to sugar beets in Germany averaged 1,107,000 acres for the years 1909, 1910, and 1911. According to the statistics of the German Empire it was 1,247,213 acres for the year 1912.

CHART NO. 40.

(Page 47.)

The possibilities of accomplishment seem too remote and the benefits too "indirect" for even our imagination to follow along the lines of the workings of Mr. Palmer's mind in this chart.

CHART No. 41.

(Page 48.)

Mr. Palmer would like to have us infer from the fact that we exported less foodstuffs, beef, and pork in 1910 than we did in 1900 that therefore the production of foodstuffs and the supply of cattle S. Doc. 23, 63-1-4

and swine had decreased. This falling off is mainly due to increase in home consumption, due to the natural law of supply and demand. We have increased in population 15,000,000 in these 10 years. Also there has been a large increase in the domestic price in comparison with the exports that keeps these commodities at home. Besides, in consequence of the high prices at home the farmers have shown a tendency to increase the stock-carrying capacity of their farms, as will be demonstrated by the following comparisons between the two years. In 1900 there were in the farmers' hands 44,002,000 cattle, valued at $1,204,298,000, and 37,079,000 swine, valued at $185,472,000. In 1910 there were 69,080,000 cattle, valued at $1,697,771,000, and 47,782,000 swine, valued at $436,603,000. The average price per head of cattle in 1900 was $28.28, and in 1910, $27.60; for swine, $5 in 1900 and $9.14 in 1910. So there was an increase in the stock-carrying capacity of farms in the United States in 1910 over 1900 in the number of cattle of 25,078,000, valued at $493,473,000, and an increase in the number of swine of 10,703,000, valued at $251,131,000. Our yield of wheat in 1900 was 522,230,000 bushels, valued at $323,515,000, and in 1910, 635,121,000 bushels, valued at $561,051,000, an increase in production of 112,891,000 bushels, and an increase in value of $237,546,000, though there was a falling off in exports of 30.5 per cent, due more than likely to a difference in the farm value of 61.9 cents per bushel in 1900 as against 88.3 cents in 1910. Our yield of corn in 1900 was 2,105,300,000 bushels, valued at $751,220,000, and in 1910 was 2,886,260,000, valued at $1,348,817,000, or an increase in production in 1910 over 1900 of 780,960,000 bushels, valued at $633,597,000, and a falling off in exports of 4.3 per cent, due perhaps to a difference in price of 35.7 cents in 1900 as against 48 cents in 1910. The secret is that the United States no longer has a surplus for export, due to the increased domestic demand and the attractive domestic price as compared with export. The mere fact that there is a falling off in exports proves nothing. As a matter of fact there has been an increase in everything, including the stock-carrying capacity of farms, yet there has been no decrease in prices but a steady increase. Moreover, there has been an increase in the production of beet sugar in the United States between 1898 and 1913 of 600,000 tons, and during that same period of growth and extension of the beet-sugar industry there has been an increase in the price of wheat of 30 cents per bushel, an increase in the price of cattle of $2.50 per head and $4 per head in swine. If the cultivation of the sugar beet is to contribute to the solution of the high cost of living by reducing prices by increasing crops and stock carrying capacity of farms, it seems to have failed so far in the United States.

PAGE 50.

THE BLIGHTING EFFECT OF CUBAN RECIPROCITY ON THE DEVELOPMENT OF THE AMERICAN BEET-SUGAR INDUSTRY.

We submit herewith a complete list of the beet-sugar factories in the United States, together with their daily slicing capacity and the capitalization of the various companies who operate them.

From this list it will be seen that the total number of beet-sugar factories is 76, of which 17 are located in Colorado, 16 in Michigan, 13 in California, 6 in Utah, 5 in both Idaho and Ohio, 4 in Wisconsin, 2 in Nebraska, and 1 each in Montana, Minnesota, Kansas, Iowa, Illinois, Indiana, Arizona, and Nevada. Were this number augmented to the extent of the plants said to be abandoned in the list submitted on this page then there would be located altogether in the above States the following number of factories: Michigan, 40; Colorado, 22; California, 18; Wisconsin, 17; Utah, 9; Ohio and Iowa, 7 each; Idaho and Minnesota 6 each; Arizona, Nebraska, North Dakota, Montana, New York, South Dakota, Indiana, and Wyoming, 2 each; and 1 in each of the States of New Jersey, Oregon, Nevada, and Pennsylvania, making 152 beet-sugar factories in all. If all of these projected factories had been realized, $58,000,000 would be added to our present beet-sugar capitalization of $142,000,000, making a total beet-sugar capitalization of $200,000,000. However, did they capitalize on the basis of the beet-sugar companies now in existence to wit, $2,458 per ton of daily slicing capacityinstead of on the normal basis of $1,000 per ton the total capitalization of the new factories would be $120,422,000, which would make a total beet-sugar capitalization of $262,442,000. Except for these 152 factories we have no data for the balance of the 355 factories, said to be projected and abandoned between 1898 and 1911. Suffice to observe that if they were realized and put in operation Michigan, Colorado, California, Utah, and Idaho, where the desirable, profitable, and easily irrigated beet-sugar lands are located, would be called upon to bear the brunt of the increase, and the beet-sugar companies located in these various States in which the trust is so heavily interested would be called upon to meet the demoralizing competition of such an increase. Instead of an annual beet-sugar production of 700,000 tons there would be an increase to 3,500,000 tons, which would be about sufficient to supply the whole of the United States without taking into consideration the 1,200,000 tons of cane sugar now supplied by Louisiana, Hawaii, Porto Rico, and the Philippines. Upon the present basis of capitalization the 419 projects spoken of by Mr. Palmer would be capitalized at $781,000,000. Even in the absence of "tariff agitation and enactments," some difficulty would be experienced in attempting to make profits sufficient to pay dividends upon such an amount. We desire to observe that instead of 419 factories that Mr. Palmer speaks of as projected between 1898 and 1911, according to his representations in chart No. 42, under the heading of "New factory projects," the total number appears to be 728 instead of 419. Surmounting all difficulties, and for the sake of argument admitting the possibility of this accomplishment, we find that the farmer's hope of "indirect benefits" so graphically depicted by Mr. Palmer have no chance of realization, as these projects would utterly fail to take care of rotation of available lands to sugar beets one year in four in these respective States.

But aside from "tariff agitation and enactments" and the so-called "blight of Cuban reciprocity," let us see whether or not the realization of these factories has not been circumvented by other and more probable means.