The total output of sugar in the world was for some years in excess of the requirements for consumption. This over-production and consequent accumulation of stocks brought prices down to a point which in all probability was considerably below the average cost of production. Germany, as the largest sugar-producing country, naturally fixes the market prices of the world. The refiner in New York will pay no more for sugars to be shipped from Havana than the equivalent of the price at which he can buy at Hamburg; difference of freight, duties, bounties, and quality, of course, considered. The present average cost of production of German raw sugar is said to be about 9_s._ per 112 pounds. At this figure the existing bounty upon exports would allow sales for shipment to England, where no duty is paid, as low as 8_s._= $1.71 per pound for 88 analysis beets; this, allowing for difference in values of the two grades, would be equivalent to $1.89 United States currency for 96 test Cuba centrifugals, under like conditions, viz.: f.o.b. at port of shipment, for any country such as England where the two grades enter upon equal terms. The effect of our countervailing duty assessed upon bounty-fed sugars under the Dingley Act of 1897, has been to raise the comparative value of cane sugar in producing countries, as against beet sugar, and to place Germany and other European sugar countries in exactly the same condition, so far as the United States market is concerned, as if no bounties were paid by them; thus in considering Germany's competition with Cuba in the United States markets, we may eliminate both bounties and countervailing duties as factors, and say that when Germany can sell to England at 8_s._ she must obtain 9_s._ from the United States to give her shippers an equal price; 9_s._ is equivalent to about $2.18 United States currency, for Cuba centrifugals, 96 test, f.o.b. Cuba. The export price of German sugar at Hamburg from January 1 to June 1, 1898 (a period covering the Cuban sugar crop season), ranged from 9_s._ to 9_s._ 9_d._ with an average of about 9_s._ 4-1/2_d._ Last crop prices gave the Cuban manufacturers an average of about 4-1/2 reals per arroba, say 2-1/4 cents Spanish gold, a price at which they could be laid down in New York slightly under the parity of European beets, duty paid. The imports of beet sugar from Europe into the United States, from January 1 to June 1, 1898, were 22,000 tons against 496,000 tons for same period of previous year; while imports of cane sugars showed an increase of some 60,000 tons; this change in source of supply being brought about by the countervailing duty.