because these conditions were largely the aftermath of government control. 

 A brief review of the sugar market for these three years will serve to make 

 plain the chief causes of the industry's recent troubles. 



R . f The year 1919 opened with the sugar situation in the United 



Sugar States closely controlled by the United States Sugar Equali- 



Market zation Board. The 1918-19 crop of Cuban sugars had been 



in 1919 



purchased and the price was fixed at 7.28 cents per pound duty 



paid in New York. In January, the British Royal Commission made ar- 

 rangements with American refiners for refining on toll 300,000 tons of raw 

 sugar, but it was several weeks before the Commission could secure shipping 

 facilities to move the refined product. In February stocks of both raw and 

 refined sugar began to accumulate and this accumulation was further stim- 

 ulated by the harbor strike in New York in March. To relieve the situa- 

 tion the Board announced that considerable quantities of sugar had been 

 contracted for by foreign buyers and that, in view of the general conditions, 

 it would be wise for the public to accumulate stocks of sugar. Country-wide 

 publicity was given to this announcement and after the long period of severe 

 restrictions, it was only natural that consumers should hurriedly attempt to 

 increase their stocks. In the months following this announcement, domestic 

 consumption was at a high rate and the export movement also attained con- 

 siderable volume. The shortage of sugar in this market became so serious 

 that exports were restricted in order to supply the domestic demand. Had 

 imports and prices not been under control of the Board at this juncture, it 

 seems probable that considerable quantities of foreign sugar would have 

 been marketed here and future troubles largely avoided. 



As control of the sugar market was expected to terminate in December, 

 there was active bidding for the new Cuban crop by both domestic and 

 foreign buyers and prices moved upward. In the fall of the year, the At- 

 torney General approved a maximum price of 18 cents for Louisiana plan- 

 tation granulated and the market was further stimulated. It was officially 

 announced that after December 1st, no licenses would be required for importa- 

 tion of sugars from Cuba. On account of advancing prices and the increasing 

 shortage of supplies, Congress was urged to take the necessary action to 

 protect the consumer. The result was that the McNary Bill was passed 

 which empowered the administration to control the situation by such plans of 

 purchase and distribution as were deemed necessary in the public interest. 

 The administration, however, did not act under this law, but deemed it 

 advisable to depend only upon the anti-profiteering and general license 

 provisions of the Lever Act. For most practical purposes the Sugar Equaliza- 

 tion Board ceased to function December 31, 1919, and during that month 

 raw sugar prices rose from 7.28 cents to 12.79 cents per pound. The way 

 had been paved for the runaway market of 1920. 



26 



