742 READINGS IN RURAL ECONOMICS 



object. The experience of European governments with bounties 

 upon the exportation of beet sugar clearly indicates the proba- 

 bility of such a result. The insidious origin of this policy in 

 Germany is an interesting episode in economic history. Other 

 nations of Europe, such as France, partly to keep their own 

 sugar producers from being at a competitive disadvantage and 

 partly through national jealousy, inaugurated a similar policy, 

 until most of the nations of the Continent have vied with each 

 other in favoring the sugar industry. The result has been an 

 enormous increase in the beet-sugar product, from 2,223,000 tons 

 in 1885-1886 to 4,975,000 in 1894-1895, accompanied by such 

 a reduction in price that the industry is seriously depressed. Pro- 

 ducers complain that the prices received do not cover the cost of 

 production, and it has even been proposed to establish a sugar 

 bank to relieve distressed refiners and beet-root growers. In 

 addition to the loss sustained by the producer, the bounty system 

 upon sugar costs the taxpayers of Europe about $25,000,000 per 

 annum. Consequently, as a reward for this expenditure of the 

 public treasure, the sugar producers of Europe have been led to 

 do business at a loss, while the other nations of the world have 

 had the benefit of cheap sugar. In addition to the economic evils 

 which the policy entails, the fact that one nation cannot abandon 

 it independently of the others, without leaving its own producers 

 at a competitive disadvantage, is a matter that should not be 

 overlooked. The overthrow of the system is thus subject to all 

 the delay and uncertainties of international agreement. This 

 experience of European nations certainly indicates that a policy 

 of export bounties upon agricultural staples in the United States 

 would stimulate production in our own country ; but it also indi- 

 cates that other food-exporting nations would be led to adopt a 

 similar policy and that in consequence no advantage would accrue 

 to the American farmer. 



As regards cotton, it is almost certain that an export bounty 

 would not permanently enhance the price. The proof of this 

 proposition lies in the fact that the United States is the most 

 important single factor in producing the world's cotton supply. 

 Her annual product is 50 per cent of that of the entire world. 



