SUGAR MANUFACTURE

New Zealand Times, Volume XXXVII, Issue 8354, 14 February 1913, Page 11

SUGAR MANUFACTURE

To the Editor " N.Z. Times.” Sir, —It was the determined intention of the late liberal Government to wipe out of existence the present sugar monopoly of New Zealand, even to the cost of establishing a State sugar industry. . For this purpose Sir Joseph Ward decided that it should set aside a special grant for tho establishment of a sugar industry in New Zealand. On this subject, the Colonial Sugar Refining Company was brought into question. Somo pertinent or “ bluff ” statements were made by this company—that it would be a sorry day the Government embarked on the sugar industry, more particularly as a State enterprise. But owing to the change of Government, the question of the beet sugar industry, appears to have died by strangulation by the present Government swallowing the swab of the "sorry day ” threat of the Colonial Sugar Refining Company, or ©lso it has been " eiderdowned ” by party interests. Hence my query which prompted tho official answer "that no proposal for the establishment of a State sugar industry has yet been seriously entertained.” ‘‘ No proof is so for available that sugar beet can be profitably grown in New Zealand, remembering the labour required in the production as compared with other sugar-growing countries.” Such a statement is analogous to the whipping ' a baulking horse with an ostrich feather, and must bo expected from tho Government of "square deals,” who are insincere and incompetent. The opening-up of new industries is a primary outlet for our congested cities. And when industries become more varied, it enhances tho value of speculation and adds to the stability of any country or nation. Wo have seen that New Zealand is practically depending upon two industries, the pastoral and dairying. Let us take a glance through tho sugar industry. It Is well within memory that the recent “ Cost of Living ” Commission was the resultant of some very important disclosures, the chief being the opening of the claws of the Sugar Trust or Combine of New Zbaiand. Yet, notwithstanding the astounding evidence adduced at tho Sugar Trust inquiry, it is but a smattering compared to the real state of affairs still existing, and which controls this powerful combine. Hence I will draw your attention to’the "Royal Commission of Inquiry on the Sugar Industry of Australia ” and “ Statement tendered by the General Alanager of the Colonial Sugar Refining Company, Limited,” published May 17th, 1912. By this statement we see that tho Colonial Sugar Refining Company started practically in a small way. To-day wo know that the same company controls the whole of the sugar industry of Australia. Tho statement made by the general manager of the Colonial Sugar Refining Company is certainly a very comprehensive one. It is well prepared to suit the occasion of inquiry .... it is also most contradictory, is scintillating with a chameleon-like ambiguity, and is in cognation with the Government throughout tho whole of Australia, and particularly with the Government of Now Zealand. Some idea may be formed of this huge sugar monopoly. In paragraph "Capital outlay on sugar mills and returns therefrom” we find the following: “But tho first cost of tho whole of our mills in the Commonwealth has amounted to £2 10a per ton for a crop of 645,000 tons for a single season, irrespective of floating capital and New Zealand refinery and plantation work. The items making up the total being plant and , sites _ of factories, tramways and rolling stock, tho tugs and punts, the working stocks of spare machinery and material.” That two of the company’s most important refineries should bo eliminated from the statement that the company should suit themselves as to what years they will base their report, shows that the Government are hand-in-glove with this sugar combine. For the three refineries stated, we see a net profit of over £637,280. This does not include a sale of over 20,000 acres of the C.S.R. Co.’s land, which realised over £105,000, nor does it include the lion’s share of the bonus of the Australian Commonwealth sugar bounties from 1902 to 1910, of £2,205,736. To-day the C.S.R. Company are still reaping tho rich sugar bounty harvest of the Commonwealth of Australia for an indefinite period, of six shillings per tan sugar cane, bearing a 10 per cent.

sugar. Or, in other words, the Australian Government aro charging an Excise duty on the company’s sugar, and paying it back again to the C.S.R. Company under the guise of sugar bounties or bonuses for sugar produced by white labour. In paragraph ’‘Questions put by the Minister of Customs in connection with the inquiry” (a) “whether the Sugar Bounty and Excise Acts have fulfilled or are rulfilling the purpose of developing the sugar industry by white labour?” wo find this very important question completely shirked until we read the following: “We believe that the tendency at present it to obtain the sugar required by the cultivation of beets lather than by increasing the area under cane.” (b) “And if so, whether such results promise to bo permanent F” To this second question we find a choice selected sugar plum given to the commission to swallow, by throwing the onus of burden and expense on the employment of white labour. For this preference of white labour and the “£1 of Excise duty now retained by the Customs, be paid away (to whom?) as a bonus on sugar exported to other markets!” This is certainly what is termed “going tho whole hog.” Now lot us glance through this muchprotested cost of white labour pre forence, because it will serve as a basis for our own sugar industry. The sugar bounties for white labour preference started in the Australian Commonwealth in 1902. The “Official Returns” for sugar produced by white and black labour from 1902 to 1910 are as follow: “New South Wales, white labour produced 62,743 tons, black labour 12,215; Queensland, white ,]abour 667,422 tons, black labour 447, 591 tons.” Further, “the number of sugar factories in New South Wales from 1870 to 1891 was 174; from 1891 to 1901, 64 factories, from 1901 to 1909, only 20 factories, or, in other words, the factories have diminished from 64 down to 4, for tho year, ending 1909.” Tho number of employees engaged during the same period gives us some interesting comparisons. “In 1886 the number of hands employed in the New South Wale* sugar mills was 2259. In 1909 they diminished to 629. In Queensland _ the number of employee* has been omitted for- the years 1870 to 1907. The reason is indeed obvious, but what inference do w© draw from the above statistics P Thai) tho Colonial Sugar Refining Company prospered to their present monopoly on black labour, and that the sugar industry has become permanent since the inception of preference to white labour. But this cracks the spine of tho high rate of labour (white) thrown up by the general manager of the Colonial Sugar Refining Company, and which, with the utmost tact, is omitted from the report. In 1909 the Colonial Sugar Refining Company had “1470 hands employed in their five refineries in the Commonwealth, and the total amount of wages paid during the-year was £165,602,” or the valuable sum of £lO5 per year per employee. . . Suffice to say that th 6 profits of the C.S.R. Co. are enormous. Wo remember some little time back, the °* sugar advanced to £1 per ton. does this advance mean to the New Zealand branch of the Colonial Sugar Refining Company, which turns out about 1000 tons daily of rehned sugar. It means a profit of £J.wv) per day to the company as long as they so desire. The C.S.R- Co. alone absorb the whole of this or any other advance on sugar Under £2 Is 6d per ton. Consequently, the wholesale merchant or the retailer cannot advance their price on sugar unless the C.S.R. Co. do so by £2 Is 6d per ton, which would be a farthing per lb advance retail which is tho lowest coin in CU'cu* lation (English). Although this £1 per ton advance on sugar means £wJw per week to the C.S.R. Co. it still remains a problem for the retailer how to split this one shilling per cwt rise into 113 parts when retailing his sugar per lb. The following question was put to the general manager of the Colonial Sugar Refining Co.: 1 “To what extent has co-operation amongst growers enabled the. latter to own then mills?” and “is co-operation increasing; is there opportunity for ■ expansion ol co-operative efforts, and if so, in what direction and by what means may they be encouraged?” (Answer): “i know of no case where a co-operative mill has boon established” (sic). 1 have before mo tho whole workings, profits, cost and system of three very large and modern co-operative sugar mills and which could not have escaped the notice of the general manager of the C.S.R. Co., and which we shall review. Another question asked by the Royal Commission was “the relation, the difference, the cost and receipts bear to the capital invested in tire three branches of tho sugar industry?” (Answer): “ VVe cannot furnish an estimate of the returns to the grower of cane, on the capital ho has invested.” Further on in the statement we read, “but we can say that some 20,000 of our original holdings we sola to 160 farmers for a sum approximately £IOO,OOO with a low rate of interest” and “practically the whole of the purchase money has been paid by the farmers out or the proceeds from the cane grown.No one will doubt that the farmers who bought this 20,0t)U acres of land on the extended and interest payment system from the C.S.R. Co. were allowed to go in for dairying or anything else that may suit thenown sweet fancy. This will suffice to show how unreliable is the statement made by the general manager of the C.S.R. Co., and how they have endeavoured to convert their high profits, under their methods of combine, into channels of capital expenditure. Now, let us turn our attention to a sugar industry of our own. If we look in the “New Zealand Journal of Agriculture” for September and October, 1912, we find a general summary on various root crop experiments made in various districts. Comparing the nature of the soil, the rotation of crops, cost of manures, results of manuring, etc.; we find them almost identical in principle with experiments carried out by eight agricultural colleges in various parts of England for the purpose of ascertaiing sugar beet versus mangolds, and other root crops. Although the experiments were very numerous and diversified and with no special attention over ordinary root crops, the results were in every instance most favourable for sugar beet. As the report contains over twentyfive pages on the results of the beet sugar experiments, it will bo sufficient to say that if certain nomenclature of sugar beet were tried in the Masterton, Taranaki, Eltham, Levin, and Palmerston districts oh the same principle as turnips and mangolds, wc would at once be convinced of a permanent and profitable industry in tin beet sugar, as well as a first supple-, ment to the dairying and pastoral, from by-products and ensilage. Practically no portion of the sugar beet is wasted. Let us now consider what system or conditions jvould fee most fav-

ourable for the surety of the beetsugar industry. But let us boar ii; mind first that the general manager of the C.S.R.C. said, "1 know of no case where a co-operative mill has been established.” Without going into the pros cons ot several co-operativo sugar mills, wo will select one that will compare most favourably with tho New Zealand branch of the Colonial Sugar Refining Company, because tho tonnage capacity of manufactured sugar is about tho same. Tins co-operative beet sugar company was formed in January, 1909, practically by all farmers wnu 3CKA) original shares on which tho fanners paid £8 4s per share, making a total of £30,000 lor which tho tanners ro ceived 4 per cent, interest. “ Tho contract of this most up-to-date factory was let on January 9th, 1909. t lie building began in February, and. tinfactory was making sugar on Uctqbci 13th of tho same year.” “ The complete cost of this beet-sugar factory was £135,000.” Here, wo find, a query presents itself. How was tho balance of this enormous sum financed? Thefarmers or shareholders only paid £30,000, or about one-fourth of tho value of tho subscribed shares. In this enormous monetary advance we find tho agricultural credit banks and societies tho prime supporters of this beet sugar industry. But the farmers enhanced tho confidence of tho agricultural credit banks by their solid method of co-operation. Tho first season (19091910) this beet sugar factory handled 65.000 tons of beet, for which the farmers received 21s 8d per ton. Second season (1910-11) 87,000 tons of beet at 25s Id per ton. Third season (1911-12) 119.000 tons of beet at 28s 4d per ton. The membership increased in this short time from 644 to 720, and tho shares from 3150 to 3430. Bo satisfactory have been tEo results of this co-opera-tive sugar industry or factory that tho company have decided to expend another £14,000 to give a total capacity of 1700 tons daily. “In their second season this co-operative beet sugar factory paid off considerably more than £4OOO in redemption, allowed, 4 .per cent, for depreciation on plant and carried over £20,000 to the reserve fund.” In addition Hie farmer received 8s 4d more per ton for his beets under tho co-operative system than he would have fot from the Joint Stock Company, Tnder the co-operative system the farmer gets his profit as a beet-grower and his dividend as a sugar manufacturer. Wo have seen that the. beet, sugar industry would bo an impetus, to. the pastoral and dairying industries. It would also develop two other very important industries, tho coal and the limestone industry. For a sugar factory with a daily tonnage capacity equal to the Auckland branch of the Colonial Sngar Refining Company about sixty tons of good ooal would bo required every twenty-four hours and about forty tons of limestone. In a recent communication which I received fronk an authoritative sugar expert regarding a beet sugar industry in New Zealand is the following: (a) “ Under ordinary conditions, about twenty-five to thirty tons of sugar beet per acre could bo expected.” (b) “It pays any Government to subsidise tho beet sugar industry, as there is no agricultural industry that has outside of its direct advantages so many indirect advantages.” (o) “In connection with a sugar industry in a new country if put into the hands of experienced builders and operators all obstacles aro easily surmounted and a successful conclusion can be looked forward to with certainty.” No doubt a sugar industry is urgently needed in New Zealand. The consumption , per capita is over 1121 b (excluding Maoris). We next ask ourselves whether, fata to control, State .partnership. State subsidy, co-operative system, or a private, company would be most advantageous for a beet-sugar industry in New Zealand? I trust that tho general public will voice their opinion on this important industry.-—-I am, etc., K. BAY N.