COMMODITIES: Sugar Cloudy

When World War II began, many Americans were 1917-wise, outsmarted themselves by buying up staple groceries in which they expected a famine. A squirrel’s panic (TIME, Sept. 23) forced price rises and even trade shortages in flour, canned goods, lard, and especially sugar, which rose from 4.40¢ to 5.75¢ a pound in one week. But by last week few housewives were laying by sugar any more. And speculators wondered whether sugar is still a good short sale. The beet price had fallen to a new all-time low, just .04¢ below the 3.426¢ a pound bottom hit in the dreary month of May 1932.

The squirrel spree forgotten, sugar was back at its humdrum ways: an industry of chronic depression, divided into a number of tough and coony political pressure groups. The U. S. consumes about 6,750,000tons of sugar a year. The big cane importers and refiners are equipped to serve a market for 8,000,000 tons. Besides this, the relatively high-cost beet operators of the Mountain States, California and Michigan, can turn out 2,000,000 tons. Under a free economy, beet sugar would not get a smell of the domestic market until demand broke all records and exceeded 8,000,000 tons. But the beet growers, chief of whom is one of the Mountain States’ best connected businessmen, President Heber Jedediah Grant of the Mormon Church, are better politicians than economists. Via Senator Reed Smoot they were Washington insiders in the ’20s, and via their dozen-odd Senators (most of whom double in silver) they are Washington insiders still. Their achievements: an increased tariff and a domestic quota system.

Every session of Congress is punctuated by the sniping of seven main sugar groups at each other and the public weal. As the balance of power has worked out since 1934, the Mountain beet lobby has grudgingly accepted something between a 1,342,000 and 1,584,000 ton quota. Another 4,700,000 has gone to the refiners of imported cane, allocated as follows: 2,000,000 tons to Cuba, whose cheap cane competes with domestic beet after paying a .9¢ tariff; the rest to four duty-free areas, the Philippines (nearly 1,000.000 tons), Puerto Rico (800,000), Virgin Islands (8,900), Hawaii (900,000 tons). The domestic cane growers & refiners in Florida and Louisiana get another 400,000 tons.

Maneuvering to up their quotas in the current session, the Mountain beet lobby and its friendly rival, the Cuban cane lobby, have sought to limit imports from U. S.-owned sugar countries. This “unholy alliance” drew Humanitarian Roosevelt’s wrath—as it would also draw the wrath of Libertarian Wendell Willkie. President Roosevelt reminded Congress that Hawaiians. Puerto Ricans and Virgin Islanders “are American citizens . . . with local governments that lack the protection of statehood,” i.e. Senators.

But meanwhile the cloud over U. S. sugar is growing darker. Cuba has depended on the European market to get rid of 33% of her crop; Britain’s sugar islands have depended on Europe even more. In Asia, the huge Javanese crop is facing a smaller market in India (which can now turn exporter), is backing up close to the Philippines and Hawaii. Thus, if the U. S. assumes the job of taking care of distress commodities inside the Monroe Doctrine area (TIME, July 1), sugar will stand near the head of the line.

The beetslobby would not like that. Hence, if the New Deal is serious about its hemisphere-cartel scheme, it may be forced to revive a still more radical scheme in the beet country. The scheme: the U. S. to get an independent valuation on the beet properties, buy their owners out.