required to make a pound of sugar, and on this basis the drawback was calculated; or for every hundred-weight of sugar exported, there was granted a drawback of nearly twelve times the tax paid on each hundred-weight of beets. For a number of years after 1869 this arrangement worked well, the drawback being about equivalent and no more than the tax. But nothing stimulates human ingenuity in a greater degree than the prospect of gain through the avoidance of a tax; and gradually a change in the condition of affairs took place. By careful and scientific cultivation the saccharine element in the beet was so much increased and the mechanical and chemical methods of extracting it so greatly perfected, that while in 1869 twelve pounds of beets were needed in the average German factories to make one pound of sugar, in 1878 the requisite quantity was 10·78 pounds; in 1882, 10·08 pounds; in 1884, 9·28 pounds; in 1886, 8·80 pounds. The effect of this was to make the drawback on the exports of sugar no longer equivalent to the tax, and convert it into a bounty; or the exporter received a drawback as if he had paid an excise-tax on twelve pounds of beets, when in reality he had paid on a much smaller quantity—less than nine pounds after 1885. The fact that this bounty was accruing was not unknown to the German Government; but as it became especially manifest during the years 1876-'79, when the great depression of industry had developed a strong protectionist feeling, nothing was done to stop it; but on the contrary it was popularly regarded with satisfaction. Under such favorable circumstances, the beet-root sugar product of Germany increased with great rapidity; and as the amount soon far exceeded any requirements for domestic consumption, and as a net profit of from 6 to 7 per cent was guaranteed to the manufactories by the export bounties, the exportations soon assumed gigantic proportions, rising from about 500,000 cwt. in 1876 to over 6,000,000 cwt. in 1885. The other states of Continental Europe, finding the markets for their own product of beet-root Sugar everywhere supplanted by the German sugars and their domestic manufacturers being even thereby brought to the verge of ruin, made haste to follow the example of Germany, and improve upon it, by offering larger bounties for the domestic production and export of sugars than were offered elsewhere; until the policy of Germany, France, Belgium, Holland, Austria, and Russia during recent years, seems to have been to stimulate their domestic product of sugar to the greatest extent, and then enter into competition with each other to see which of them could sell cheapest to foreigners at the expense of their own people; the home-grown sugars of France and Germany, for example, selling, it is reported, in England for about one half the prices paid for the same article by the French and German people.
- In 1883-'84, Germany, at an estimated cost of about $7,000,000 in the way of export bounties, exported more than three fifths of her annual product of beet-sugar.