6
granting of the rebate is extended to Formosan sugar also, even though it has paid no duty.
The grant of this drawback has been renewed at intervals of about two years. The present law expires conjointly with the present tariff, and it is rumoured that the drawback will not be granted afresh from that date. If this should be true the Java sugar will suffer not only the loss of drawback 1.95 yon but also an increase in duty from 2.25 yen to 3-10 yen, a total loss of 2:80 per 100 kin, while Formosan sugar will suffer a loss of 195 yen drawback and gain 0.85 yen further protection against Java sugar.
(c.) The export duties abolished were :-
Brown sugar, 45 sen per 100 kin.
White sugar, 56 sen per 100 kin.
Refined sugar, 65 sen per 100 kin.
**
It will be seen from the figures of import and home product given that the most important variety of sugar is centrifugalled sugar or bunmitto." The relative position of Java and Formosan centrifugalled sugar as regards subsidies and duties is at present thus
Java.
Formosa.
Yen.
Yen.
[This Document is the Property of His Britannic Majesty's Government.]
SUGAR BOUNTIES.
CONFIDENTIAL.
[44074]
(No. 252.) Sir,
No. 1.
[December 5.]
SECTION 1.
Sir C. MacDonald to Sir Edward Grey.-(Received December 5.)
Tokyo, November 19, 1910. I HAVE the honour to forward herewith cuttings from the Japan Daily Herald" of the 28th and 29th ultimo, consisting of an article describing the prospects of the sugar industry in Formosa, together with a few comments thereon by Mr. R. Boulter, acting commercial attaché to this embassy. The article is of interest at the present moment in view of the attempt which will shortly be made to find an outlet in the Chinese market for the surplus production of raw sugar in Formosa. I am given to understand that the writer is a M. R. N. Ohey, a German subject, who is manager in Yokohama of Messrs. Tait and Co., a British firm whose head office is in Amoy, and that his knowledge of the question is up to date and reliable.
I have, &c. (For His Majesty's Ambassador),
HORACE RUMBOLD.
Subsidy (a) Drawback (6)
Import duty
Consumption tax..
Total
+ 1.95
+1
2.25
5.00
5.30
+ 1·50
+ 1.95
-*5.00
- 1.55
That is to say, Formosan centrifugalled sugar is protected against Java sugar to the extent of 3-75 per 100 kin.
There has been some talk lately of establishing sugar refineries in Formosa to compete with those in Japan proper. The Government appears to be determined to prevent such a development of the industry in Formosa, as the following extract from the semi-official "Japan Times" of the 11th instant shows :--
"With the object of preventing over-production, the Formosan Governor-General has given private notice to the existing companies manufacturing unrefined sugar to the following effect :--
"1. The Government will not give permission for the time being to the establish- ment of fresh sugar manufactories.
2. Nor will it permit an extension of the present manufactories so as to increase their productive capacities.
"3. The same restrictions shall be placed also on the production of refined sugar."
The sugar refineries in Japan are said to be excellently equipped, but never to have been worked to their full capacity by any means.
R. BOULTER.
Yokohama, November 15, 1910.
0
Enclosure 1 in No. 1.
Extract from the "Japan Daily Herald" of October 28 and 29, 1910.
THE SUGAR INDUSTRY IN FORMOSA.
THERE is one Japanese industry which, in spite of the general depression which has now lasted so long and of the consequent lack of all spirit of enterprise, and also in spite of the catastrophe of the Nippon Seito Kaisha, has during the last few years increased greatly and continually attracted capital for new enterprises. It is the Formosa sugar industry.
It must be admitted at the outset, however, that it has not reached this flourishing condition entirely by its own strength, but that it owes it partly to the extensive subsidising policy of the Government. This subsidising policy has finally gone so far that, especially in consequence of the damage done to the sugar refineries in Japan by the collapse of the Dai Nippon Seito Kaisha which was partly caused by the subsidising policy of the Government, in the last session of the Diet a protest was raised against the system of employing these subsidies hitherto in force, and that this has been replaced by a system at least less open to attack. Under the old system, the officials were bound to class all Formosa sugar as first class (although, according to its quality it should almost all have gone under the second class of the consumption tax) in order to spare it the high taxation of the better quality and in this way procure it a preference of 2:50 yen per 100 kein over the foreign product. According to the decision of the last session of the Diet, this has been changed to the extent that Formosal centrifugal sugar must now be estimated according to its quality. In compensation, however, a sort of premium of 1 yen per 100 kin is guaranteed to it irrespective of quality, so that besides the protective duty of 2-25 yen per 100 kin on foreign sugar, it has in its favour also* this consumption tax of 1 yen per 100 kin over imported sugar (Java centrifugal sugar) in favour of the big companies, and to the detriment of the people, for whom sugar is in this way constantly being made dearer !
The object of this whole development of the Formosa sugar industry as favoured by the Government, and which it will certainly attain in the near future is of course perfectly clear: it is the exclusion of all foreign sugar from Japan and the complete
* The italicised letters are inserted by Mr. Boulter for purposes of his commentary notes (Enclosure 2.)
[1825 e-1]
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