H.—2.

20

be necessary, it is proper to ascertain the exact relation that the price of labour bears to the cost of production. In Europe the number of skilled hands required in a sugar manufactory is very small, the great proportion of workmen being common farm labourers, who work in the fields in summer and in the mills in winter. The making of beet sugar is only carried on in the fall and winter months, say from October to February. With us, by reason of a more favourable climate, not only for the earlier development, but also for the better preservation of the beet, it could be extended from September to March, or even later. It will be acknowledged that these are the months in which labour in this country can be most readily and reasonably procured. The probability is, inasmuch as the establishment of this industry in Illinois would permit the hiring of men by the year, that the price of labour per day would average considerably less than it does at present in the summer time, which, in the region I have selected, is about $1.50 per clay [6s.] for a first-rate hand. One of the first merchants and manufacturers of France told me that, with wages at 3J- francs [2s. lid.] per day, the value of labour in 100 kilogrammes [2201b.] of sugar should not exceed 4to 4| francs [3s. 4d. to 3s. 9d]. That is, with wages at 66 cents [2s. 9d.] per day, the cost of labour should be less than 4 mils [id.] per pound. By the preceding tables the cost of labour at 66 cents per day varies in a pound of sugar from 4to 7-nr mils in France. The average is not far from ST7T5 T7T mils per pound. If the same amount of labour be required here as the average of France, and its value be three times greater, or $2 [Bs.] per day, then the average cost of a pound of sugar from beets yielding 7 per cent, will be 5J cents [2sd.], instead of 4 cents [2d.], per pound. I herewith present a table showing the results that I have no doubt can be attained in Illinois by a company with $300,000 capital, of which §200,000 shall be appropriated for buildings and machinery, and §100,000 reserved for working capital. Expenses. 24,000 tons of beets, at $4.00 = 16s. ... ... ... $96,000 — £19,200 Labour, 225 men, 150 days, at §1.75 = 7s. per day ... 50,625 10,125 Salaries ... ... ' ... ... ... ... 10,000 2,000 Coal, 3,000 tons, at $1.50 = 6s. per ton ... ... 4,500 900 Sacks for pulp, 8,000, at §1.00 = 4s. per sack ... ... 8,000 1,600 Bone-black waste ... ... ... ... ... 7,500 1,500 Insurance ... ... ... ... ... ... 2,000 400 Lighting ... ... ... ... ... ... 750 150 Lime, metals, barrels, rasp blades, repairs, &c. ... ... 15,125 3,025 §194,500 = £35 ; 900 Eeceipts. 1,680 tons sugar (yield calculated at 7 per cent.), at §200 per ton, or 8-fr cents per pound ... ... ... §336,000 = £67,200 720 tons molasses (yield calculated at 3 per cent.), at $10.00 per ton, or 4 cents per gallon ... ... ... 7,200 1,4-iO 4,800 tons of pulp, at §2.00 per ton (equivalent to hay at §6.00 per ton) ... ... ... ... ... 9,000 1,920 §352,800 £70,560 Less expenses ... ... ... ... ... 194,500 38,900 Profit equal to 52 percent, on capital ... ... ... §158,300 £31,660 From which is to be deducted for local taxes and internal revenue ... ... ... ... ... 10,000 2,000 Net profit, being nearly 50 per cent, on capital ... ... §148,300 = £29,660 It will be seen that the yield of sugar is placed at 7 per cent. I have no doubt it would be more, for by the method recommended, and which is in use in France, the yield is 8 per cent. The price of sugar is also calculated at 8t 9o cents [4sd.] per pound, but samples made by the process referred to are declared to be now worth an average of 13 cents [G-J-d.]. The value of the molasses I have placed at 4 cents [2d.] per gallon, but it will produce 25 per cent, of its weight in 90° alcohol, and the market value of a material that will give that result is certainly not less than 25 cents per gallon.* I have placed the market value of the pulp at §2 [Ss.] per ton, at which price it has been ascertained, by years of experiment, to be equivalent to hay at §6 [245.] per ton; therefore it cannot be said that the estimate is too high. On the other hand, beets are charged at §4 [16s.] per ton, upon which there is little doubt a saving of 50 cents per ton, or §12,000 [£2,400], could be effected. On pages 26 to 39, the probable cost of beets is discussed. There can be little doubt that the actual cost to the farmer will rarely exceed §3 [12s.] per ton, even with small crops, while with twenty or thirty tons per acre, the larger of which is by no means an uncommon yield, the cost would be from §1.50 to §2 [6s. to Bs.] a ton. Manufacturers could certainly raise their own beets at §3 [12s.] per ton, and probably at considerably less. * The molasses contains from 45 to 55 per cent, of crystallizable sugar. Until recently no economical method for its extraction was known. Last year, however, three or four establishments were erected in Europe for that purpose, and I have been assured that nearly all the sugar can be extracted at a cost of 3J cents per pound.

Cost of production, and return therefrom.