72 



BELGIUM. 



definite adhesion of Austria and France was 

 never secured, and therefore the system of boun- 

 ties and prohibitive duties flourished more rankly 

 than before. Ten years later the Belgian Govern- 

 ment, at the instance of Germany and Austria 

 and with the encouragement of Great Britain, 

 invited the same powers to a new conference. 

 The German and Austrian governments were 

 willing to suppress bounties at once, which was 

 desired by Great Britain. The Belgian and Dutch 

 representatives proposed gradual abolition. 

 France reserved the right to continue a system 

 of indirect bounties, and Russia declined to dis- 

 cuss its system of drawbacks for exports, deny- 

 ing that it was of the nature of a bounty, while 

 the Austro-Hungarian delegate pronounced it 

 equivalent to a bounty on exportation. The con- 

 ference came to an end without agreement, with 

 the understanding that the Belgian Government 

 should carry on a diplomatic correspondence with 

 the other governments, and if the basis of an 

 understanding could be reached through diplo- 

 matic channels the conference could be recon- 

 voked later. Sugar production had doubled since 

 th.e earlier convention. In December, 1901, the 

 representatives of the powers met in conference 

 once more at Brussels. The situation had 

 changed, chiefly in that England no longer 

 viewed the bounty question with platonic wishes 

 for the abolition of bounties, but indifference as 

 to the time when they should be abolished, since 

 the British people reaped the material profit so 

 long as they were continued. The necessities of 

 the British sugar colonies had reached the stage 

 when the British Parliament had to come to 

 their aid with substantial grants to offset the 

 bounties. Reciprocity agreements had been 

 made with the United States which afforded some 

 relief, but this was likely to be temporary. The 

 needs of the British treasury made a revenue 

 from sugar imperative, and the tax could not be 

 framed in utter disregard to these colonies. 

 India was already permitted to impose a coun- 

 tervailing duty on bounty-fed sugar. The effect 

 on the sugar trade of Austria would be dis- 

 astrous. Overproduction caused a crisis in Ger- 

 many and other countries. While the beet-grow- 

 ers were losing money the refining trust, or car- 

 tel, in Germany continued to make large profits. 

 Germany is the greatest sugar-producing coun- 

 try in the world. The production in 1901 was 

 2,300,000,000 kilograms, of which 700,000,000 

 kilograms were consumed in Germany, 750,- 

 000,000 kilograms were exported to Great Brit- 

 ain, and 850,000,000 kilograms went to other 

 countries. Great Britain also has taken about 

 a third of the Austrian output, and only a third 

 is consumed at home. Germany has given awjfy 

 29,000,000 marks yearly in bounties, which did 

 not save the growers and manufacturers of raw 

 sugar from a serious crisis, although the cartel 

 made a profit of 90,000,000 marks in the first 

 year after its organization in June, 1900. By 

 agreement between the refiners and the manu- 

 facturers of raw sugar, the latter received 55,000,- 

 000 marks, but this did not counterbalance the 

 loss resulting from the reduction of the price of 

 raw sugar from 205 to 155 marks a ton. On the 

 other hand, the 53 refineries were able to divide 

 their share as an extraordinary profit. A 

 direct bounty on the exportation of sugar was 

 given in Germany and Austria-Hungary, and 

 since 1S<)7 in France. In Belgium and in Russia 

 indirect bounties were given to encourage the 

 production of sugar. The excise tax duty, which 

 limits homo consumption in all European coun- 

 tries which produce sugar, was 20 marks per 



100 kilograms in Germany and equally ex- 

 cessive in other countries. In France con- 

 sumers, owing to the bounty system, had to pay 

 (jti francs per 100 kilograms for an article 

 normally worth 30 francs. In addition to the 

 excise duty an import duty of 20 murks per 100 

 kilograms was charged in Germany and one of 

 22 crowns in Austria-Hungary. In France the 

 surtax had been reduced to 10 francs and in Bel- 

 gium to 5 francs. The cartel system was devel- 

 oped first in Austria and copied in Germany. 

 It had the effect of increasing production, and at 

 the same time further limiting home consump- 

 tion. While fixing prices at a higher figure at 

 home, manufacturers were obliged to lower them 

 abroad beyond all precedent, and still could not 

 find a market for the surplus stocks, which were 

 never so large in Germany and in Austria. In 

 December, 1901, the representatives of the powers- 

 met once in a conference at Brussels. The British 

 as well as the Belgian government had endeav- 

 ored to find a basis for negotiations in the pre- 

 liminary correspondence, and the bounty-paying 

 governments had to face the alternative of coun- 

 tervailing duties that would eventually restore 

 the English market to the cane-growing colo- 

 nies unless they voluntarily gave up the pay- 

 ment of bounties and reduced the prohibitory 

 surtax on imports. In any case they had to look 

 for an expansion of the home market to take 

 the place of the English market, which was cer- 

 tain to be supplied henceforth, in great part at 

 least, with cane-sugar. The consumption of 

 sugar in Great Britain, including that of the 

 manufacturing establishments, is 37 kilograms 

 per head of population. In the United States 

 it is 29 kilograms. In Germany the consumption 

 per capita is 13.3 kilograms, in Austria only 8.4 

 kilograms. 



The Agrarians in Germany made a mien as if 

 they would defeat the ratification of the con- 

 vention and talked of a tariif war with Eng- 

 land. In the end the treaty was ratified and it 

 was arranged to fix the excise duty at 14 marks, 

 instead of 20 marks, which with the reduction of 

 the import duty from 20 marks to 4.80 marks 

 reduces the total tariff from 40 to 18.80 marks. 

 In France it was lowered from 64 to 30 francs. 



The sugar convention was signed at Brussels 

 on March 5. The signatory powers undertook to 

 suppress from Sept. 1, 1903, all direct and indi- 

 rect bounties for the benefit of the production 

 or exportation of sugar or of sweetmeats, choco- 

 late, biscuits, condensed milk, or other articles 

 containing a notable proportion of sugar; also 

 to limit the surtax on imports to a maximum 

 of 6 francs per 100 kilograms; and to impose 

 a special duty on imports from countries which 

 continue to grant bounties either for production 

 or export, this duty to be at least equal to the 

 amount of bounty given. Bounty-fed sugars 

 may even be prohibited by any of the contract- 

 ing parties, but the sugars imported from any 

 of the contracting countries or from colonies 

 belonging to them which do not give bounties 

 and submit to the obligations of the convention 

 must be admitted at the lowest import rates, 

 and no discrimination shall be made between 

 cane and beet sugar. Spain, Italy, and Sweden 

 are freed from the obligation to give no boun- 

 ties on production so long as they do not export 

 sugar, and from the limitation of the surtax 

 and the obligation to levy a countervailing duty. 

 Bounties include, besides direct bonuses to ex- 

 ports or production, total or partial exemptions 

 from taxation granted for a part of the manu- 

 factured product, profits derived from surplusage 



