PUBLIC RECORD OFFICE
Reference :-
C.O.885
18 PUBLIC RECORD OFFICE, LONDON
ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH-NOT TO
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whether it is proposed to take any action under Article X. of the Convention during the current year of the Convention's existence, viz., before the 1st of September
next.
In reply I have to inform you that His Majesty's Government have felt that it would be unwise to come to any decision long before the time prescribed for doing so, and in ignorance of the special conditions which may obtain when the time comes; and I fear that it is not possible for me to make any announcement on the subject at present, though the time for taking a decision cannot now be very long deferred, and the Colonies interested will be at once informed as soon as such decision is taken.
I have, &c.,
7063
DEAR SIR,
No. 18.
MR. R. HARVEY to COLONIAL OFFICE.
(Received February 23, 1907.) [Acknowledged March 9, 1907.]
Scotland Street Engine Works,
ELGIN.
Glasgow, February 22, 1907.
I HEREWITH enclose you a cutting of a leading article on the sugar_question from yesterday's "Glasgow Herald." which no doubt will interest you. For some years back I have been in confidential correspondence with the editors of the articles relating to the sugar question for this paper, also giving them, at various times, the information for which they asked me. I have lately been pointing out to them the disastrous results that would occur, should the present Government withdraw from the Brussels Convention, and pressing upon them to bring the same to public notice, the result of which is the enclosed leading article, which I trust will meet with approval.
C. P. Lucas, Esq.,
Colonial Office.
Downing Street, S.W.
your
Yours, &c.,
ROBERT HARVEY.
Enclosure in No. 18.
"GLASGOW HERALD," February 21, 1907.
Whether or not the Chancellor of the Exchequer will be able to make any change in the sugar duty in his approaching Budget, it is evident that a bold effort is about to be made to induce the Government to give notice of withdrawal from the Brussels Sugar Convention. If Great Britain is going to retire from the Convention notice to that effect must be issued not later than August 31 next. The agreement would still have another year to run, and in any case need not terminate absolutely because one of the contracting parties withdraws. The other parties will have until October 30 to decide whether or not they will retire also in September, 1908. They might not retire at all, but if more than one Power gives notice of withdrawal a fresh Conference will have to meet at Brussels within three months to consider the situation and decide upon the course to be taken by all.
Now, the object of the parties to the Brussels Convention was to suppress all direct and indirect bounties on the production and export of sugar, and its design was that no bounties should be established during the whole duration of the agreement in the form of either State bounties or premiums granted by Kartels or Syndicates. The only sugar-exporting countries which did not join the Convention were Russia and Argentina, and the anti-Conventionists have circulated the fallacy that this country as a consumer has suffered by the exclusion of. sugars from these two countries. But never at any time did we receive more than a few thousand tons per annum of Russian sugar, and it was all absorbed by the English confectioners; it never came into general use. And while it is true that we do not receive sugar from Russia now, yet bounty-fed Russian sugar finds its way into markets that are not covered by the Convention, and the sugar that would have been sent to these countries by the contracting parties had Russia not supplied them is placed upon the world-market. Thus the prohibition of Russian sugar by the Convention nations has no effect on either production, consumption, or price. The price is not made in or by any one country. It is a world price. Argentina, again, is not as yet able to produce much more sugar than she consumes, and any surplus she has finds a ready market in South and Central America. What these markets do not claim
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from the Convention countries is, therefore, added to the world supply. Now, while the exclusion of Russian and Argentine sugars has had no effect on supply or influence on prices, the abolition of the Continental beet bounties has had a very material effect on our cane- growing Colonies. These Colonies, which are practically dependent on their sugar crops, were beaten down to the depths of ruin, not because they could not produce sugar as cheaply as the Continental beet manufacturers, but because they could not sell it as cheaply as the beet manufacturers were enabled to do by means of State bounties and kartels. In other words, sugar was brought down in our markets below the cost of production, and there were members of the Cobden Club and others who gloated over this as a profit we were earning out of Protectionist countries. But against this delusive profit of cheap sugar on the one hand, we had the losses of our sugar Colonies on the other hand, and we had, moreover, the paralysation of our own refining industry at home and the practical suspension of the manufacture of sugar- making machinery a very important industry in which the West of Scotland has always had the leading share. With the removal of bounty-fed sugar from our markets under the Con- vention, confidence was restored in the West Indies, and fresh capital was invested in the improvement and extension of sugar estates. Prior to the Convention the importation of West India sugar into the Clyde was practically stopped by the flood of beetroot, but now the Greenock refiners are taking cane instead of beet sugar, and last year they imported some 21.130 tons from the West Indies, as compared with only 965 tons in 1902. There are now five refineries at work in Greenock, and last year the consumption of raw sugar there was 44,739 tons more than in 1905 and 60,000 tons more than in 1902. The West Indian Colonies are now able to send their sugar to us instead of being dependent on the United States, from which market they are being gradually shut out by the enlargement of American and Cuban supplies. Now, the improvement of the market for cane sugar since 1902 has caused the sugar Colonies to set their house in order. One of the immediate results was the erection of the first central factory in Antigua, the machinery for which was sent from Glasgow, and which has been in successful operation since 1904. We are told that the intention was to double this factory in the course of the present year, but that in view of the proposals to terminate the Convention these extensions have been arrested. For the same reason operations on a projected new factory in St. Kitts have this year also been suspended. During the ten years of bounties prior to the Convention orders for sugar factories practically ceased to come to this district at all; within the past four years the orders have been numerous, exceeding over a million sterling and giving large employment to labour. Since the Convention every one of our sugar plant engineers has been actively employed with business that, but for the Convention, would not have come to this country at all.
What, then, has been the effect of the Convention on prices? It has been to bring them to an economic level-not necessarily to dead low-water plane. The Convention came into active effect in 1904, and the beet sugar crop of 1903-4 was 5,881,333 tons. It fell in 1904-5 to 4,712,976 tons, not because of the Convention, but because of bad weather and short crops in Germany, Austria, France; and Russia. Naturally the price rose with the reduced supply, but fell again as the crop of 1905-6 produced 6,933,649 tons." At the close of 1906 the price of beet sugar without bounty was practically the same as it was at the close of 1902 with bounty. Meanwhile, the world's crop of cane sugar has gradually increased from 4,296,500 tons in 1903-4 to 4,996,500 tons the estimated yield of 1906-7. And the world's consumption of both beet and cane, which dropped to 9,361.611 tons in 1904-5 in consequence of the high prices following upon the short crop, in 1905-6 rose again to 11,550,000 tons, and in 1907 may reach 12.000.000 tons as the result of cheap sugar. Happily, the world's supply until the end of the present sugar year on August 31 next, is estimated at 13.182,270 tons, so there is margin enough to keep down prices. But there would not have been this margin had not the Convention stimulated the production of cane sugar. It is quite a delusion to suppose that the removal of bounty-fed sugar has injured our export trade in commodities in which sugar is a component part. In 1906 our exports of confectionery, jams, preserved fruits, &c., were 125,806 cwt., as compared with 345,530 cwt, in 1905 and 314,879 cwt. in 1904. This is progressive gain, not loss. By establishing an alternative source of supply (cane), the Convention has prevented beet sugar from obtaining the monopoly of the market, and has imposed on that market economic, not artificial conditions. To do anything that would revive the bounties would indeed be a disastrous step backwards.
A typographical error occurred in the leader on the Sugar Convention yesterday. The crop of cane sugar in 1903-4 was 4,296,500 tons, not 2.296,500 tons.
3624
No. 19.
COLONIAL OFFICE to THE IMPERIAL COMMISSIONER OF AGRICULTURE FOR THE WEST INDIES. [Answered by No. 25.]
SIR,
you
Downing Street, February 22, 1907. I AM directed by the Earl of Elgin to state that he understands that contemplate publishing in the "Bulletin" of the Imperial Department of Agri- culture a number of papers which were read at the recent Agricultural Conference, and also the report of the Committee of Planters which was appointed to report on the actual facts as to the effect of the International Sugar Convention in the
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