Front Page Titles (by Subject) CHAPTER XIX: SUGAR BOUNTIES - The Comedy of Protection
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CHAPTER XIX: SUGAR BOUNTIES - Yves Guyot, The Comedy of Protection 
The Comedy of Protection, trans. M.A. Hamilton (London: Hodder and Stoughton, 1906).
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A political industry—In the workmen’s interest—Results—Profits to the sugar-refiners—Cost to the consumer—Production not for sale but for bounties—Results of the Brussels Conference.
Without going back so far as the ancien régime since 1819, the sugar industry had been a political one, owing its very existence to the Legislature. The law of 1884 was of the same character as all those passed during the nineteenth century, its objects being (1) to extend the consumption of sugar, (2) to limit internal consumption, (3) to encourage foreign consumption at the expense of French consumers. The tax was levied on account, but assessed at less than the real amount, the sugar produced over and above being exempt in whole or part; the difference between the amount taxed and the total output constituting a bonus on manufacture. Almost immediately on the passing of the Bill the excess was 21 to 31 per cent. of the output. The bounty ate up the tax.1 In bringing forward the Bill of 1884 giving bounties to the sugar industry, M. Méline declared that he was acting in the workmen’s interests; but the results for the workmen are shown in the Blue Books:—
proving that the number employed diminished instead of increasing; and the fall in numbers was not balanced by a rise in wages.
while the total expenditure on wages was:—
showing a diminution of £96,880. For the workmen the results were purely negative. In 1902-3 there were only 332 sugar manufacturers, and these in the eighteen years after 1884 obtained in bonuses on excess of output £41,360,000, to which must be added, since 1897, £3,000,000 in export bounties and £6,720,000 to the Colonial sugar trade. In all £51,080,000 went to the sugar manufacturers. Thus in France a few hundred sugar manufacturers—only 322 in 1902—received £41,360,000 for a plant not worth £14,000,000, while the number of workmen employed diminished.
The result of such a defence of national labour was that the consumer had to bear the burden of 52s. 9d. in duties, bonuses, and bounties on a hundred-weight of sugar, from which the Treasury only got 35s. The consumer thus paid 45 per cent. more than the Treasury received, and it went into the pockets of private individuals, a small group of manufacturers, instead of going to assist expenditure for public benefit. It was a private due like the old feudal due.
In 1901 the French consumer paid for sugar, native and colonial, more than £4,400,000 of bonuses, bounties, and rebates for export on £6,080,000 worth of sugar.
I took an active part in the negotiations which resulted in the Brussels Sugar Convention of March 5, 1902. Had England, however, not threatened the sugar-refining nations who should retain their bounties with countervailing duties, the Conference would have ended in nothing, and a fearful sugar crisis would have followed in France, Austria-Hungary, Belgium, and Holland. A manufacture cannot be carried on with impunity which aims at realising bounties rather than sales.
The Brussels Convention was a complete success. It was put in operation September, 1903, and down to the end of August, 1904, the results were: Consumption in France rose from 365,634 tons in 1902-3 to 688,700 tons in refined sugar, i.e., an increase of 83 per cent.; and in Germany raw sugar rose from 366,538 to 729,255 tons, and in Austria-Hungary from 501,977 to 1,109,470 tons.
Such a success proves the utility of reducing duties. In future the Convention is unassailable. French manufacturers who accused me of plotting their ruin admit that it has saved them. No one dared to propose the rejection of the Bill of Ratification when introduced into the House.
See Yves Guyot, “The Sugar Question in 1901” (Journal of the Royal Statistical Society, Sept. and Oct., 1902).