Letter on Sugar Legislation.
Dear Mr. Chairman:
Reference is made to your recent letters to the Departments of State, Interior, and Agriculture, requesting comments on the various bills with respect to sugar which were introduced in the 76th Congress and are now pending before the House Committee on Agriculture. In accordance with your request, and since your Committee is now holding public hearings on these measures, it is believed that you may wish to have at this time a summary of our views on the basic issues of public policy which are involved in this group of bills.
In reviewing the present sugar situation I have been gratified to note the great improvement in conditions that has taken place since the adoption of the sugar program six years ago. Domestic sugar producers are fortunately receiving incomes at approximately the parity level, and they are enjoying a large volume of production. The losses of sugar processors in the years preceding the program have been converted into profits; child labor has been greatly reduced; wages and working conditions for labor have been improved; and there has been brought about an important and greatly needed recovery in the market for our surplus products in the foreign countries from which sugar is imported into the United States. Furthermore, the world price of sugar has increased substantially.
I also find that under the existing provisions of the Sugar Act of 1937, domestic sugar producers and processors will receive price-protection through the quota system for the full calendar year of 1940, and that domestic sugar beet and sugar cane growers will receive benefit payments on their 1940 crops even though the marketings of the sugar may extend well over into 1941. The seaboard cane sugar refiners are protected for an indefinite period against competition of Philippine refiners under terms of the Philippine Independence Act, and they will continue to enjoy quota protection from the competition of Cuban refiners for the full calendar year of 1940. The tax on sugar will remain in effect until July 1, 1941. Consequently, it seems clear that no sugar legislation is necessarily required at this session of the Congress, although it might be advisable to extend the life of the Sugar Act of 1937 for an additional period through a Joint Resolution of the Congress.
In considering the questions raised by these bills, I find myself again confronted with the fact that the basic problem of good government inherent in sugar legislation is to balance, practically and fairly, the directly conflicting interests of the various groups of American citizens concerned: the producers of sugar and the producers of export commodities, the farmers and the processors, the employers and labor, and the industry as a whole and consumers and taxpayers. These requirements of the general welfare indicate that at least three fundamental aspects of the major bills on sugar now pending before the House Committee on Agriculture should be given special consideration.
In the first place, several of the proposals would unavoidably bring about an impairment of the export market for surplus American agricultural and industrial products, and they would do so at a time when increased export outlets are so greatly needed. It is to be regretted that each increased acre of domestic sugar beet and sugar cane production inevitably results in a con. traction of our export markets in an amount equal to the value of the product of several acres of our principal agricultural crops. A decrease in sugar imports would, therefore, require an unnecessary and painful readjustment and contraction in our production of export commodities. It would also injure the economic status of other American Republics, to which we must look in increasing degree for enlarged outlets for the products of our own labor, land, and factories. It would strike a serious blow, particularly at the foreign marketing of such important surplus farm commodities of the United States as corn-hog products, rice, wheat, and cotton.
In the second place, some of these bills would discard the established basis of distribution of quotas among the various sugar producing areas that was carefully developed by the Congress after considerable labor. In its report to the Congress in 1937, your Committee stated that the quotas had been arrived at "after careful consideration of the history of production in each area and its present and future capacity to market." I believe that we all appreciate readily the natural desire of each producing area to enlarge its share of the market, but it would be most difficult to justify an abandonment of the existing distribution of quotas in favor of a new and arbitrary basis of allotments. It is also clear that a reshuffling of domestic quotas so as to discriminate against producers in the domestic insular areas would, under the special circumstances, hardly be a conscionable procedure. The people of the Territory of Hawaii and the possessions of Puerto Rico and the Virgin Islands are American citizens who compose some of those minority groups in our population with local governments that lack the protections of Statehood. If this circumstance were not given adequate consideration, it would be possible to destroy by legislation the livelihood of our citizens in the insular parts of the United States through the enactment of discriminatory prohibitions against their products; and they would possess no legal power to take counter measures in self-defense. Such a course of action, as I have pointed out on a previous occasion, would be tantamount to an imperialistic classification of citizens and a tyrannical abuse of minority rights that is utterly contrary to the American concept of fairness and democracy. Among the cases in point is the proposal to reinstate the former discrimination against the refining of sugar in the insular parts of the United States.
In the third place, the bills submitted to your Committee include a proposal that would sacrifice the protection afforded consumers under existing legislation and substitute a sugar price standard requiring a reduction in total quota supplies to consumers to a point that would enhance sugar prices beyond the level required to give a majority of producers full parity returns. One of the principal objectives of the sugar program is to assure producers and others fair and reasonable incomes; but after that has been done, further increases in price would place an excessive burden of public protection for the sugar industry as a whole on agriculture, industry, consumers, and taxpayers.
Under the existing circumstances, with sugar producers enjoying approximately a parity level of income and a large volume of production, with labor being benefited by improved wages and working conditions, with sugar processors making substantial profits, and with a gratifying increase in our exports to foreign sugar-producing countries, I am confident that the House Committee on Agriculture will not recommend any bill that would impair the foreign outlets for our surplus products, run counter to the Good Neighbor Policy, discriminate among various groups of domestic producers and processors, or increase the burden on our consumers and taxpayers.
Very sincerely yours,
Honorable Marvin Jones,
Chairman, Committee on Agriculture,
House of Representatives,
Franklin D. Roosevelt, Letter on Sugar Legislation. Online by Gerhard Peters and John T. Woolley, The American Presidency Project https://www.presidency.ucsb.edu/node/209471