are certainly allowed to interrupt with something which they think is particularly important at the moment. For instance, they may interrupt and read a contract into the record and comment on it, and the correction is then made. It seems to me that the same opportunity must be given to other people that is given to them. That is all.

The CHAIRMAN. We certainly have given you every opportunity, Mr. Fisher. You have been interrupting time and time again.

Mr. FISHER. If the committee please, I have no personal complaint. The CHAIRMAN. You are certainly a very able counsel, and you are assisted by the gentleman by your side, who is also an able counsel. We have not cut you off from interruptions, but Mr. Orth is not here as a lawyer. He is here as a man who has been dealing in sisal hemp for many, many years, and he has given us valuable testimony, and I know, for one, that what has been said has been very gratefully received by me and has apprised me of a number of things which I was very glad to know of. But I think that when he takes the stand that there ought to be a chance to cross-question him.

Mr. FISHER. I quite agree with you; but I merely suggest this, that if there is something that is thought to be particularly pertinent at the moment, that he be permitted to interrupt, and if that applies to the counsel that ought to apply to all of the people here.

The CHAIRMAN. I think we had better go on with the witness. Mr. ORTH. I have not at any time interrupted the proceedings here except for the purpose, as I saw it, of giving the committee what has seemed to me very pertinent information and with which it seemed to me a better understanding of the situation could be had. The CHAIRMAN. We appreciate that, and we will give you a right to be heard; but we must try to go ahead with the witness we have. Mr. MAYER. Do you think it is fair to the committee to pin down the witness-not to the committee-the committee knows where the truth lies. Here was a question put to this witness by the first retained and the first time counsel, acting for the International Harvester Co., who said in February, 1915, that sisal in the United States was selling at 4 cents.

The CHAIRMAN. If you want to ask a question on that the committee will let you, but after that the committee is going to discharge this witness. You may ask him one question on that point. Mr. ORTH. May I ask the witness a question?

The CHAIRMAN. You can ask him now, and then we will let his lawyer ask him.

Mr. ORTH. You have testified several times to the effect that one of the important considerations for the contract between the Comision Reguladora and the Pan American Commission Corporation was the fact that the Pan American Commission Corporation is required at any time to advance to the Comision Reguladora the sum of $10,000,000. You have specified as the quantity of hemp upon which you were to make those loans as 400,000?

Mr. WEXLER. No; I have not said that.

Mr. ORTH. Are you aware of the fact that 400,000 bales of hemp at 3.60 per pound would require an advance of $5,400,000?

Mr. WEXLER. I presume your figures to be correct.

Mr. ORTH. That the freight on that hemp, at 1 cent a pound, which is the present freight, would be about a million and a half?

Mr. WEXLER. Yes.

Mr. ORTH. Making a total advance against the hemp and that freight paid, $6,900,000. Now, in order for the Pan American Commission Corporation to advance the sum of $10,000,000 referred to, would it not be necessary for that quantity of hemp to be increased very materially over 400,000 bales?

Mr. WEXLER. Provided we loaned the full amount, yes.

Mr. ORTH. Provided you loaned the full amount. If the quantity of hemp stored in New Orleans, New York, or elsewhere exceed 400,000 bales, do you not believe that the market price for hemp would decline very materially as the result of that accumulation? Mr. WEXLER. I have no opinion on the subject.

Mr. ORTH. Do you not know in the past when there has been an accumulation of, say, 200,000 bates, that the market has declined materially as a result of that accumulation?

Mr. WEXLER. I have no knowledge of that. I have never gone into these questions.

Mr. ОRTH. Are you not aware that it is physically impossible for the Pan American Commission Corporation to advance as much as $10,000,000 to the Comision Reguladora under your contract? Mr. WEXLER. No; I do not know that.

Mr. ORTH. In the course of your testimony you specified that the business which the Pan American Commission Corporation engaged in was a commission and factorage question?

Mr. WEXLER. Yes, sir.

Mr. ORTH. Does the business of commission and factorage in sisal hemp differ materially from the business in sisal hemp which we and other merchants conducted in sisal hemp before the Pan American Commission Corporation was formed?

Mr. WEXLER. I should think that it does. This particular arrangement does. It does differ very materially from it, because it is an extraordinary arrangement carrying with it an obligation to lend money over a long period of time, and to lend large sums of money, which you have never done in your commission or factorage business, nor do I know of any other commission merchant who has made such a contract.

Mr. ORTH. Are you aware that the firm of Hanson & Orth loaned money almost continuously to shippers of hemp in Yucatan?

Mr. WEXLER. I have no knowledge of the business carried on by Hanson & Orth.

Mr. ОRTH. Have you any knowledge of what the customary rates of finance were in the sisal hemp business before you became inter

ested in it?

Mr. WEXLER. I have no knowledge of that whatsoever.

Mr. ORTH. You made no investigation of what had previously been paid to shippers in Yucatan?

Mr. WEXLER. I was not concerned in that at all.

Mr. ORTH. Are you aware that the firm of Hanson & Orth formerly sold hemp for planters in Yucatan for a commission of 1 per cent? Mr. WEXLER. No.

Mr. ОRTH. Are you aware that the firm of Hanson & Orth advanced to planters in Yucatan 80 per cent of the market value of their hemp one-eighth for the first month and one-sixteenth for every month

thereafter?

Mr. WEXLER. For what period?

Mr. ORTH. For any period.

Mr. WEXLER. I am asking the question. You do not want to mislead the committee of the terms under which you loaned money. Mr. ORTH. I am trying to bring out merely the conditions which existed in this business before, and the committee will be able to judge of the true situation themselves.

Mr. WEXLER. Don't you think it possible that people who pay a 5 per cent commission might be able to make a great deal more than by paying one-eighth of 1 per cent if they get a better price for their commodity?

Mr. ORTH. That is a matter of opinion, and I can not express myself. You stated in the course of your testimony also that the elimination of the firm of Hanson & Orth as brokers or commission merchants or factors was a process of evolution.

Mr. WEXLER. I think so.

Mr. ORTH. Do you not regard that a process of evolution which does away with the man who works for one person for a moderate fee, in place of the man who charges 5 per cent, is more in the nature of a revolution than an evolution.

Mr. WEXLER. No; I do not. I think that any concern that can arrange for a five-year credit of $10,000,000, irrespective of whether they sell the stuff for them or not, with the credit over a period of five years, irrespective of panics, wars, or any condition that may arise, at a maximum rate of interest of 6 per cent, is worth the price charged for it. I know of many manufacturers in this country who would be very glad to make an arrangement of that kind. I think it is an admirable arrangement for people who have no credit facilities and have to contend with the corporation which these people have had to contend with. I think it is admirable from their standpoint. Mr. ORTH. I think you stated that the Comision Reguladora has not in the past been able to secure advances against hemp? Mr. WEXLER. That is my impression.

Mr. ORTH. Are you aware of the fact that they, from time to time, during the past four years borrowed sums of money running into millions of pesos from responsible and willing parties in Mexico?

Mr. WEXLER. I have no knowledge of it. If that is true, Dr. Rendon can answer your question. He knows, but I do not.

Mr. ORTH. In regard to the advance in the price of sisal you have by your testimony indicated that the advance in price was due to an advance in freight?

Mr. WEXLER. Part of it, I said.

Mr. ORTH. Are you aware of the fact that during the month of September, 1915, the highest price at which sisal hemp was sold in the United States was 5 cents in New York and about 5.30 in New Orleans?

Mr. WEXLER. Yes. You were out of the market then. You were not buying any sisal. September, 1915, that is when your boycott

was on.

Mr. ORTH. Would you change your statement to that effect if I were to read to you a memorandum of sales in September, 1915, showing that there was constant sales in the market?

Mr. WEXLER. Sales where ?

Mr. ORTH. Both in New York and in Mobile.

Mr. WEXLER. How about sales in Yucatan?

Mr. ORTH. Would it change your opinion if I were to show you that there was a daily market in Yucatan?

Mr. WEXLER. It would not change my opinion. I do not know anything about the facts you are stating, but I think there are gentlemen here that can answer you.

Mr. ORTH. Are you aware that in the month of September, 1915, that charters were made to bring hemp from Progreso to Mobile for the rate of 50 cents a hundred pounds across the Gulf?

Mr. WEXLER. I have no knowledge of that. If you know it to be a fact, state is as a fact.

Mr. ORTH. I state it as a fact. Hanson & Orth chartered a steamer for 50 cents.

1

Mr. MAYER. Mr. Chairman, I want to cross-examine this witness

now.

Mr. WEXLER. You understand that he is asking questions about things I know nothing about.

The CHAIRMAN. Please continue to ask questions and do not testify. Mr. ОRTH. Are you aware of the fact that the increase in freight rates between September and February across the Gulf was one-half cent a pound, whereas the advance in the price of sisal was 13 cents a pound?

Mr. WEXLER. I do not know anything about it.

Mr. ORTH. That is all, Mr. Chairman.

Mr. MAYER. Mr. Wexler, Mr. Fisher has said to you that sisal was selling in February, 1915, at 4 cents a pound in the United States, and asked you to figure out the difference between that and 73 cents a pound. I call to your attention what has been sold in the United States in February in each year beginning in 1900-I speak now, members of the committee, of sisal in the United States, and I read from documentary proof which will be offered in evidence-1900, February, sisal, 8 cents a pound; 1901, February, sisal, 6 cents a pound; 1902, February, sisal, 9 cents a pound; 1903, February, sisal, 7 cents a pound. So that I need not repeat the word "February.' The year will indicate the word "February."

The CHAIRMAN. All right. Go ahead.

Mr. MAYER. 1904, 7 cents a pound; 1905, 7 cents a pound; 1906, 73 cents a pound; 1907, 7 cents a pound; 1908, 5 cents a pound; 1909, 5 cents a pound; 1910, 6 cents a pound; 1911, 4 cents a pound; 1912, 5 cents a pound; 1913, 7 cents a pound; 1914, 5 cents a pound. I just want to ask Dr. Rendon, Are these the prices in New York or in New Orleans?

Dr. RENDON. New York.

Mr. FISHER. At what date in the month, do you know?

Mr. MAYER. The average for February.

Mr. FISHER. The average for February?

Mr. MAYER. Now, take those figures. Instead of 4 cents as the basis of calculation, has sisal gone up or down, even at the prevailing war prices or war freight rates?

Mr. WEXLER. I should say that the price was below the average of the February of the years you mentioned.

The CHAIRMAN. We close with this witness and we will convene at 2.30.

(Thereupon, at 1.03 o'clock p. m., a recess was taken until 2.30 o'clock p. m.)

AFTER RECESS.

The subcommittee reassembled at the expiration of the recess. The CHAIRMAN. Senator Curtis is with us, and wishes to make a statement.

STATEMENT OF HON. CHARLES CURTIS, A SENATOR FROM KANSAS.

Senator CURTIS. Mr. Chairman, when this matter first came up, my attention was called to it by the officers of the State of Kansas who had charge of the penitentiary. We have a binding twine plant in the State penitentiary there, which is operated under the management of the prison board, and they use about 4,996 bales of sisal a year; and by correspondence I have gathered a good deal of data which I would like to put into the record. I have no personal knowledge of the matters at all, but the data I use I have taken from letters received-some of them personal and confidential, and I have eliminated the parts that were personal, and simply put down the statement as I thought the parties who wrote would like to have it presented to the committee.

The CHAIRMAN. Will you present the statement, Senator?
Senator CURTIS. I will present the statement.

The CHAIRMAN. Proceed in your own way.

Senator CURTIS. I would like to make the statement and then read the affidavit.

The CHAIRMAN. Yes.

Senator CURTIS. During the entire history of the penitentiary twine plant of the State of Kansas they have purchased sisal in the open market and have paid usually under $6 per hundredweight, f. o. b. Lansing. In the autumn of 1914 it was as low as $3.60 and a year ago they purchased some at $4.40. In April, 1915, they purchased at $4.29. Since then the price has gradually increased until last September, when it was $5.83. In November they were notified that they could purchase sisal only through the Comision Reguladora, which is a division of the Government of Yucatan. All individual brokers were out of the business and since then the price has been increased steadily until their last purchase on February 2, at $7.35. Just what happened to bring this about was related to a member of the Board of Corrections of the State of Kansas and to others, who are interested in the buying end, last week by Mr. Leo C. Browne, of New Orleans, assistant secretary of the Pan American Commission Corporation. He visited Kansas with letters of recommendation from Sol Wexler, of New Orleans, and David R. Francis, of St. Louis, and said he was the organizer of the combination which controls the entire sisal output of Yucatan, the only source of sisal supply for the American farmer. A synopsis of his report will give the facts as they are understood, and is as follows:

The sisal producers were selling to a number of brokers and last summer an effort was made to control the market. He stated that he was the agent who worked out the plans. It was arranged with the governor of Yucatan and soon after that governor was deposed and the second governor was approached, and it was under way

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