TABLE OF CONTENTS 25 42 INTRODUCTION THE distortions in the world's sugar industry and trade,1 consequent upon the upheaval of the Great War, affected the United States almost as seriously as it did the European belligerents. The problem of procuring adequate sugar supplies for the United States and stabilizing the price of this peculiarly indispensable commodity, which "has grown during the last one hundred years into our culinary and dietetic life to act as a sort of binding material on which our cuisine so largely revolves," 2 became acute shortly after the United States entered the world conflict. The formation of a public commission to attempt solution of this problem was foreshadowed by Herbert C. Hoover a year before the severe logic of sheer economic pressure compelled the actual creation of such a body. Appearing before the Senate Committee on Agriculture and Forestry on June 19, 1917, to testify in behalf of the then pending Food Control Bill (S. 2463), Mr. Hoover made the following statement: "At the present moment our sugar refiners are competing with the allied sugar commission for the purchase of Cuban sugar. It must be patent that if we create a sugar commission and if that sugar commission coöperates with the Allies and the Cuban producers to take over the Cuban crop at the fixed price, that we can effect a considerable saving on the present inflated price of raw sugar, and we can stabilize the price of sugar throughout the whole of next year, because the sugar commission should be able to impose upon the refiners the necessity to pass 1 See Appendix, Exhibits 27, 28, and 29, for statistics of world production, imports and exports of sugar. 2 From Mr. Hoover's statement in the Hearing before the Subcommittee of the Committee on Manufactures, U. S. Senate, Jan. 2, 1918 (p. 577). the savings made on raw sugar through to the consumers. As there would be a dominating amount of imported raw sugar, it should be possible to maintain a stable price throughout the next year; there would thus be no incentive to speculation, and the savings to the public on its sugar should reasonably amount to 20 to 25 per cent. "There can be no loss in such an operation, because one half of the American sugar supply would be in the hands of the Sugar Commission, and the Sugar Commission should be able to make a price to cover the whole of its outlay. In this matter, like that of wheat, we require a certain margin of cash with which to provide for bank credits. "In order to carry out such operation as this we must have the operation of section 3 in the bill for voluntary agreements; we must have section 5, by which we can impose a license on refiners and elevators in such a manner that they play their part in this teamwork; we must have the use of section 9, giving the power to buy and sell, and section 19, to finance the trade." Congress did not see fit, however, to comply with all of Mr. Hoover's recommendations and the Food Control Act, as finally enacted, did not give the Food Administration the authority to fix sugar prices directly or to make purchases of raw sugar, as had been done abroad. Consequently it was necessary to depend on the voluntary coöperation of the various branches of the sugar trade. A Sugar Division, under the efficient direction of Mr. George M. Rolph, was created within the Food Administration, and the entire sugar industry was mobilized to meet the impending war exigencies. Agreements were effected with the domestic beet-sugar producers, the Louisiana cane-sugar producers, and the cane-sugar refiners, relative to the prices and distribution of 1917-18 crops, and the entire Cuban crop of that year was purchased by the International Sugar Committee, which acted in behalf of the United States and the Allied Governments. This first period of Government control of the industry continued to July 1, 1918. Early in 1918, it became apparent that the problems relating to sugar could no longer be effectively solved through these separate voluntary agreements with the |