It was evident then that the margin between the available sugar supply and the requirements of the United States both for consumption and export to the Allies, for the year 1918, would be a narrow one at best. This situation was due to three causes, first, the efforts to restrict the consumption of sugar in the United States by appeal to the public for voluntary conservation had not been sufficiently fruitful; secondly, there was no reserve supply of consequence on hand in the United States, either in refineries, mills or warehouses, or in the hands of wholesalers, jobbers, and retailers; thirdly, the Allies in order to economize shipping were becoming increasingly dependent on the western hemisphere for their supplies. It will be of importance to consider each of these matters more in detail.

Difficulties in Restriction of Consumption. The problem of reducing the sugar consumption of the United States was an extremely difficult one. The pre-war

annual per capita consumption of the United States was about 83 pounds, as compared with 42 pounds for France and 90 pounds for the United Kingdom. The per capita consumption of the United Kingdom in 1917 had been reduced to about 52 pounds while France was consuming at the rate of 35 pounds. There was, therefore, considerable room for reduction of sugar consumption in the United States. But war conditions tended to increased consumption in the United States. For one result of the war had been the increased prosperity and the increased purchasing power of a very large part of the consumers. Sugar is normally used, unlike many other food commodities, as a constituent in many other food products so that the demand for sugar multiplied in all directions. Condensed milk, candy, soft drinks, canned fruits and vegetables, ice cream, flavoring extracts, chewing gum, sweet pickles, catsup, chili sauce,

baked goods and many other edible products, all require sugar, as also certain non-edible products such as tobacco, dental preparations, drugs, explosives and glycerine. Products such as condensed milk were exported in large quantities to the Allies and the sugar so used was therefore not to be considered as consumed by the people of the United States, but the effect was to create a larger demand for sugar in this country. In addition the armed forces of the United States consumed much more sugar per capita than the civilian population. Considerable amounts were shipped for the Red Cross, Y. M. C. A., Knights of Columbus, and other war organizations.

The Food Administration had endeavored in accordance with its general policy of voluntary conservation in the first and second periods of its control of sugar to combat this tendency towards increased consumption through appeals to the patriotism of the public and of the dealers. There has been a general impression both in and out of the Food Administration that these appeals to patriotism did not result in any saving. The figures available demonstrated, however, that a saving was affected. Consumption remained at the pre-war level when a large increase in consumption would have been anticipated.

Conservation through patriotic appeal alone was not sufficient, however, particularly in view of the probable continuance of the war for another year. It was essential to create some restrictive mechanism, which the Food Administration could count upon as being definitively productive of results whenever quick results were desirable. Any card rationing scheme such as existed in Europe involved a large expense for printing cards for a population of over 100,000,000 and a still greater expense for general supervision and execution.

1 It was estimated that the printing cost alone would have been $100,000 a month.

It was obvious that to satisfactorily solve the problem there was need for the creation of such a corporation as Mr. Hoover had originally suggested which could undertake the problem of sugar distribution and control and pay the expenses of such undertaking through a profit made in the purchase abroad of the foreign sugars and the resale to the American refiners.

The Reserve Stocks. The sugar supply of the United States at any one time consists of these parts: first, the "visible" stocks, that is raw and refined sugars held in mills, factories, refineries, and bonded warehouses in the United States; second, the "invisible" supply, or sugar held by hotels and restaurants, sugar-using industries, jobbers, wholesalers and retailers; third, the sugar available from the current seasonal production in the various sources of supply, principally Louisiana, the beet sugar territory of the United States, Cuba, Hawaii, Porto Rico, and the Philippines. A gradual attenuation had occurred during the war in both the "visible" and "invisible" supplies of sugar in the United States.1

1 The following figures (taken from Willett and Gray's Weekly Statistical Sugar Journal, vols. 36-41, for the years up to 1918, and from the records of the International Sugar Committee for 1918) show the decline in refiners' stocks of raw sugars at Atlantic ports refineries during the war:

STOCKS OF Raw Sugar at ATLANTIC PORTS REFINERIES ON 1ST OF

MONTH

(LONG TONS RAWS)

1914 59,934

1915 94,677

1918

5,697

1912 1913 1916 1917 72,849 45,065 65,181 42,190 186,569 184,115 157,573 116,137 92,006 274,284 27,071 190,110 308,767 278,590 256,849 177,436 290,718 98,643 89,958 155,293 260,343 131,637 94,747 56,028 29,039

Beet sugar stocks as reported by the Department of Agriculture (Food Survey, vol. ii, Nos. 7 and 17) on July 1, 1918 were 73.6 per cent of the stocks on July 1, 1917; stocks in warehouses on July 1, 1918 were but 30.5 per cent of the stocks on July 1, 1917; wholesalers' stocks were but 71.6 per cent, retailers' stocks were but 73.7 per cent. Bakers' stocks were 92.9 per cent and confectioners' stocks were 68.5 per cent of the stocks held on July 1, 1917. Milk condensers and manufacturers of preserves had larger stocks on July 1, 1918 than on July 1, 1917. The total stocks of sugar reported for the United States as a whole on July 1, 1918 were but 67.3 per cent of stocks held on July 1, 1917.

This decline was due to a combination of several factors. First, the shipping situation for the United States had not been such as to encourage the movement of more sugar from Cuba, Hawaii, and Porto Rico than was necessary to meet current needs. Second, the stabilization of prices and profits for all the branches of the sugar industry from refiner to retailer had a strong tendency to discourage larger holdings than was essential for a "hand to mouth " trade. In previous years the speculative factor had induced larger holdings of sugar particularly in those months of the year when there was heavy sugar production in all the sources of supply. During the war, on the other hand, with the price of sugar stabilized and with the prospect of equitable distribution of the available sugar supplies by government control there was no inducement to accumulate stocks. Third, there was a general world shortage of supplies, particularly for Allied and neutral countries, and this shortage forced reduced surplus holdings in all importing countries.

In view of this reduction in marginal supplies the Food Administration was constantly in fear of a sugar famine if there should be any interruption in the continuous flow of sugar to the United States from Cuba, Hawaii, or Porto Rico. Moreover there was always the possibility of labor disturbances in the sources of supply or in the ports of the United States. It was felt that it was necessary to provide the United States with a reserve supply of at least two months requirements of sugar or about 600,000 tons. Such an undertaking, however, required large financial resources and could not properly be managed by the existing agencies in the Food Administration.

1 The Food Administration was influenced in this direction by the example of the British Ministry of Food which had accumulated 271,000 long tons of sugar on June 1, 1918 as against only 30,000 tons on June 1, 1917 and 243,406 tons, the pre-war average for June 1.

The Sugar Position of the Allies. As the war continued the Allies turned in increasing degree to the United States and Cuba for supplies of sugar. The following figures show to what extent this was true:

IMPORTS INTO THE UNITED KINGDOM, FRANCE, AND ITALY FROM THE UNITED STATES AND CUBA

Total imports from United
States and Cuba -into
United Kingdom, France
and Italy

251,134

293,290

402,915

619,992

789,032

21,382

37,636

6,801

120,196

61,243

....

6,285

3,823

272,516 473,506 831,710 1,242,750 1,150,320

While the production of sugar in Cuba and the United States had increased considerably in this same period there had been a simultaneous increase 1 in consumption in the United States which partially neutralized this gain in production.

The net result of the operation of the several factors noted was to leave a smaller margin of supplies for the United States for domestic use in 1917 than was present in 1913. But in 1918 the drain from the Allies was to be even greater, since the United States Food Administration acting in coöperation with the Allied governments had purchased in December, 1917 the entire Cuban exportable surplus for the United States and Allies, a full third of which, or approximately 1,150,000 short

1 This increase in production amounted to about 1,049,000 short tons while the increase in consumption amounted to about 225,000 short tons of refined sugar. The requirements of the United Kingdom, France and Italy from the United States and Cuba increased 877,000 tons in this period.