Office of the Historian

No. 516.
Mr. White to Mr. Bayard.

Legation of the United States,
London, April 25, 1888. (Received May 5.)
No. 729.]

Sir: With reference to my dispatch No. 728, and to previous correspondence on the sugar-bounties question, I have the honor to inclose herewith a memorandum which I have received from Mr. Walpole, director of Her Majesty’s customs at Dublin, and one of the British delegates to the international sugar conference.

This memorandum contains a computation made here of the present indirect bounty on sugar in the United States, caused by excess of drawback over duty, and several members of the conference are very desirous of ascertaining whether the figures therein contained are correct.

I shall be much obliged if you will be so good as to cause this memorandum to be referred to the proper department of the Treasury, with a view to obtaining an expression of opinion on the subject.

I have, etc.,

Henry White.
[Inclosure in No. 729.]

Memorandum on the indirect bounty granted on sugar exported from the United States.

The duty on raw sugar is now levied in proportion to the pure sugar contained in it, the scale beginning at the bottom with sugar containing 75 per cent, of pure sugar, which is charged with duty of 1.40 cents per pound, and going up at the rate of 0.04 cent per pound for every additional percentage of pure sugar, so that 100 per cent, of pure sugar, i. e., pure sugar, would pay 2.40 cents per pound. The drawback granted on the exportation of pure sugar is 2.60 cents per pound. It is evident according to this scale of duties, that a raw sugar containing 76 per cent, of pure sugar is estimated to yield 1.44/2.40 x 600, or 60 per cent, of pure sugar, and so on up the scale, which therefore runs thus:

Per cent
Raw sugar containing 76 per cent, of pure sugar is estimated to yield 60
Raw sugar containing 79 per cent, of pure sugar is estimated to yield 65
Raw sugar containing 82 per cent, of pure sugar is estimated to yield 70
Raw sugar containing 85 per cent, of pure sugar is estimated to yield 75
Raw sugar containing 88 per cent, of pure sugar is estimated to yield 80
Raw sugar containing 91 per cent, of pure sugar is estimated to yield 85
Raw sugar containing 94 per cent, of pure sugar is estimated to yield 90
Raw sugar containing 97 per cent, of pure sugar is estimated to yield 95

The excess of drawback is therefore fully proved as follows:

Percentage of pure sugar contained in the raw sugar. Equivalent yield of extractable pure sugar as calculated from the scale. Drawback allowed on this yield at the present rate of 2.60 cents per 100 pounds. Duty paid on the raw sugar. Excess of drawback. Excess per 100 pounds of pure sugar.
Cents. Cents. Cents. Cents.
76 60 1.560 1.44 .120 .20
79 65 1.690 1.56 .130 .20
82 70 1.820 1.68 .140 .20
85 75 1.950 1.80 .150 .20
88 80 2.080 1.92 .160 .20
91 85 2.297 2.04 .170 .20
94 90 2.370 2.16 .180 .20
97 95 2.470 2.28 .190 .20
[Page 712]

But it may urged that because the refiner converts his raw sugar into various proportions of hard and soft sugar, sirup, and waste, therefore the above calculation does not apply in all cases. Let us see if this is so. The refiners say that they get out of 100 pounds of raw sugar 60 pounds of hard sugar, 24 pounds of soft sugar, 11 pounds of sirup, and 4½ pounds loss of weight. According to the yield on which the scale of duties is based, as previously shown, this yield stands as follows:

Per cent of pure sugar.
60 pounds hard 60
24 pounds soft, (drawback 1.84=76.6 per cent, yield) 18.38
78.38

The drawback and duty received by the refiner are:

Per 100 pounds.
60 pounds hard (drawback 2.60 cents) $1.56
24 pounds soft (duty at least 1.84 cents) .44
11.5 pounds sirup .00
4.5 pounds loss of weight .00
Total duty returned 2.00
Duty paid on raw sugar (78.38 yield, or 87 polarization,) 1.88
Excess .12

which is equal to an excess of drawback on 100 pounds of hard sugar of 20 cents, exactly the same result.

F. G. W.