STATE BOUNTIES AND THE BEET-SUGAR 

 INDUSTRY 



By P. T. Cherington 



(From the Quarterly Journal of Economics, Vol. XXVI, p. 381, 

 February, 1 9 1 2) 



STATE bounties as a method of stimulating the development 

 of the beet-sugar industry in the United States were most 

 in vogue from 1895 to 1898. There were some cases of state- 

 bounty granting before this and a few have occurred since, but the 

 main activity took place during the three years following the expi- 

 ration of the bounty period of the McKinley Law (July 1, 1895). 



As a rule the state bounties granted during this, period took 

 the form- of a rate per pound (usually 1 cent) paid on the sugar 

 product, and commonly providing as a condition of payment that 

 the beet growers be paid at least a stipulated price per ton for 

 the beets (usually $5). On the most common basis 1 cent for 

 sugar bounty, with $5 per ton to be paid for beets the extra 

 beet price nearly offset the bounty on sugar, so that the beet 

 growers in fact secured most of the money paid out under the 

 bounty law. 



Nebraska was one of the pioneers in the payment of beet- 

 sugar bounties. That state had two experiences with the practice, 

 one before and the other during the time of greatest activity in 

 state-bounty payments. In the year 1889, when the Oxnards 

 established a beet-sugar factory at Grand Island, Nebraska, that 

 enterprise was fostered in a number of ways, including an out- 

 right gift of the land on which the factory stood, a cash bonus, 

 and a state bounty of I cent per pound on sugar produced. This 

 bounty yielded $7364 for the campaign of 1890 ; in the following 

 year the bounty was withdrawn. The same group of capital 

 undertook to establish a second factory at Norfolk, Nebraska, in 



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