representatives of the International and Plymouth companies, the price of sisal in January of each year, and the price of binder twine to American farmers each year.

It will be noticed from the above table that immediately after the formation of the harvester company, it, together with its ally, the Plymouth Cordage Co., acquired practical control of the entire sisal industry in Yucatan, and that in only 4 years of the 15 years was there any appreciable decline in the price of binder twine, though in many of the years the price of sisal was much lower.

We submit her with an authoritative chart showing the price fluctuations of manila sisal and New Zealand hemp during the years 1903 and 1914.

An inspection of that chart shows that the highest quotation of sisal in the United States was in December, 1903, when the price reached 94 cents a pound, and that in 1914 the price fell in September to 3 cents per pound. Such was the result of the formation of the harvester company and the cooperation with it of the Plymouth Cordage Co.

The figures shown on the chart are the prices in the United States. These are not the prices that were paid to the Yucatan farmer. He realized considerably less. The harvester company and the Plymouth Co. had their agents in Yucatan. These agents lent money to the Yucatan farmers at 10 per cent interest, and the contracts of loan required the farmers who borrowed the money to sell their crops to the agents of the International and the Plymouth companies at from one-fourth cent to one-half cent a pound less than the prevailing market prices, and these market prices, it will be borne in mind, were prices which the International and Plymouth companies practically themselves fixed by reason of their control of the industry.

As a result of these practices, during the period of time referred to, the Yucatan farmers obtained for their sisel from one-half cent to 1 cent less per pound than the prices that prevailed in the United States. The consequence was that in 1911 when the market price of sisal in the United States was 33 cents per pound, many of the Yucatan sisal farmers received for their sisal less than 3 cents per pound.

We have already stated that the cost of manufacturing sisal into binder twine in the United States is 1 cent a pound, to which is to be added the cost of transportation and handling charges, which makes another one-half cent a pound, so that to ascertain the cost of binder twine to the International Harvester Co. and the Plymouth Cordage Co. there should be added to the market price of sisal 14 cents a pound to cover the cost of transportation, handling, and manufacturing the sisal into binder twine.

With this premise before us let us see what the spread was between the market price of sisal, plus the transportation, handling, and manufacturing charges, and the price paid for binder twine by the American farmer.

In 1903 the spread between the cost to the International and Plymouth companies of manufacturing binder twine, and the price paid by the American farmer, was approximately 34 cents a pound. In 1904 the spread was from 3 cents to 34 cents per pound; in 1906 the spread was from 34 cents to 37 cents per pound; in 1907 the spread was from 34 cents to 4 cents per pound; in 1913 the spread was from 34 cents to 4 cents per pound; in 1914 the spread was from 33 cents to 4 cents per pound.

These figures would indicate that the Harvester and Plymouth companies were making anywhere from 33 per cent to 50 per cent profit, or more, on the sale of binder twine to the American farmer.

The Yucatan farmers have thus for many years been at the mercy of the International Harvester Co. and the Plymouth Cordage Co., which concerns, through their direct representatives in Yucatan had the control of the purchase and sale of the Yucatan sisal.

The harvester company from 1902 to 1911 was represented in Yucatan by Avelino Montes, who is the son-in-law of Olegario Molina, who from 1902 to 1908 was governor of Yucatan and from 1908 to 1911 was secretary of public works of Mexico. Early in 1915 Avelino Montes fled his country and has not since returned.

In order to remedy the vise-like and oppressive conditions that enveloped the Yucatan farmers, the government of Yucatan took the matter in hand and enacted a public law to protect the sisal industry of the State. Under the law, which was passed in August, 1911, the governor of Yucatan was required to establish a commission or body politic. He was directed to appoint the five members of the commission, and the governor was made ex-officio president of the same.

Under the law in question the State of Yucatan, in order to protect the henequen industry, authorized a government loan of 5,000,000 pesos and imposed a tax on unmanufactured hemp carrying from one-half centavo per kilogram up to 1 centavo per kilogram, dependent upon the current Yucatan price. This tax, in American money at the rate of exchange prevailing in times of peace, is equal to from oneeighth of a cent to one-quarter of a cent a point. On the basis of the present rate of exchange the tax is less than two one-hundredths of a cent per pound. That tax is being levied under the law in order to repay the government loan and raise a fund with which to help needy farmers and to encourage and improve the sisal industry.

By virtue of the law, and in express obedience to it, the Yucatan governor created the Comision Reguladora del Mercado de Henequen, one of whose principal functions it was to receive and administer the funds designed for the protection of the henequen industry.

The comi ion is authorized and directed to maintain an equilibrium between supply and demand whenever the production is greater than the consumption; to apply the excess production to new industrial outlets; to open new markets to traffic in the fiber, and to give all the impetus possible to the manufacture of henequen within the State.

Under the law, the governor is directed to establish as promptly as possible in the penitentiary of Yucatan in Merida a cordage mill which shall manufacture Yucatan fiber. The law expressly provides that “the profits arising from the mercantile transactions of the comi ion for regulating the henequen market shall be applied to promote and further the manufacture of Yucatan fiber within the State."

It will thus be seen that self-preservation and the absolute necessity to protect the Yucatan farmers against the methods of the American companies, to which we have referred, made it imperative that the Yucatan Government should render the aid which the law in question and the Comision Reguladora created thereunder were designed to do and accomplish.

The comision began the discharge of its duties in 1912 and since that time has been slowly but gradually carrying out the functions which it was created to discharge.

In order to helpfully servce the Yucatan farmers, the comision after careful study and investigation has found it desirable to arrange for the establishment in the United States of a line of credit, over a period of five years, of a maximum of $10,000,000; the comision devoted much time to a study of the best means of arranging for and securing this standing credit, against which the comi ion could draw during the 5-year period. The purpose of securing the credit has been to enable the comision to advance funds to the Yucatan farmers without interest and to protect the farmers against being forced to sell their product at a time when either there was no demand or when the American companies, to which reference is made, were in a position to dictate as they have heretofore dictated the price.

The comision entered upon negotiations in New Orleans with Mr. Lynn H. Dinkins, president of the Interstate Trust & Savings Bank of New Orleans, and Mr. Sol. Wexler, president of the Whitney-Central National Bank of New Orleans, to undertake to secure the $10,000,000 credit and to obtain for the comision a guarantee that credit would always be available during five years, regardless of panics and money conditions. The result of these negotiations was the completion of an adequate arrangement with those gentlemen.

Those gentlemen have completed the task of arranging for the $10.000.000 debit over a period of five years, and that arrangement rests on a large basis c'eemed by the comision extremely satisfactory and useful to the Yucatan Government and the sisal growers of that State.

That arrangement provides, that the sisal shall be sent to the United States and there put in public storage warehouses, insured in American companies against loss by fire, and examined by American official experts as to quality and quantity. Upon these warehouse receipts the comision is entitled to borrow 60 per cent of the current market price of sisal, but the 60 per cent is limited, so that it will never exceed 60 per cent on a basis of a maximum price of 6 cents per pound of sisal, according to market quotations in the United States.

The rate of interest is fixed at the prevailing current interest rates in New Orleans at the time the loans are made, with a further proviso, that the interest shall never exceed 6 per cent nor be less than 44 per cent per annum. The maximum rate of 6 per cent is at least 4 per cent less than what the International Harvester and Plymouth Cordage companies demanded and received from the Yucatan farmers.

Those guaranteeing to provide this $10,000,000 credit agreed further to advance transportation, freight, and other handling charges, including storage and insurance up to, but not exceeding, 15 per cent of the current market price of sisal, so that those lending the $10,000,000 will never have loaned or advanced to the Comision Reguladora more than 75 per cent of the prevailing current market price of sisal in the United States, and never on a basis of more than 75 per cent of 6 cents a pound in the United States, or in other words, a maximum of approximately 4 cents a pound.

When it is considered that during the last 20 years the average price of sisal in the United States has been at least 54 cents a pound, it will be noticed that those who extend the credit have absolute security on a staple commodity and a wide margin to protect them against loss or depreciation of any kind.

The parties to the loan and factorage contract agree to look after the collection of the accounts arising from the sale of sisal and to perform other numerous and valuable services in addition to the obligation to always have available a continuous credit of $10,000,000 for five years at not more than 6 per cent interest per annum, irrespective and regardless of monetary conditions, for all of which services they as factors receive a commission of 5 per cent upon the gross proceeds of all sisal pledged to them. Such commission is the equivalent of but 3 mills per pound of sisal on a basis of 6 cents selling price.

The result of the arrangement in question is to secure advances to the Yucatan farmers through the comision without interest and to enable the farmers to obtain for their sisal a stable price, unfettered by those who have heretofore been in control of and oppressed the sisal farmers of Yucatan.

Furthermore, the plan and purposes of the comision is to sell sisal in the United States to every consumer, whether large or small, at a uniform price to everybody, and thus cut out the necessity which has heretofore existed of the smaller manufacturers being compelled to go to the International Harvester Co. and the Plymouth Cordage Co. for a supply of raw material and pay these companies a substantial profit. Furthermore, there will always be available, because there will always be kept in storage in the United States, an adequate supply of sisal ready for the market and within reach of all factories where the sisal is manufactured into the finished product. Though the purpose of the creation of the comision may have the effect of preventing the International Harvester and the Plymouth Cordage companies from in future controlling the sisal and binder-twine markets of this country, and though the scale of profits which they have been making by the control of the market may be reduced, there is and can be no reason, economic or commercial, why the American farmer should be required to pay any advance in price over that which has prevailed during the past 10 years. On the contrary, it will be observed from the figures herein furnished that the American farmers need not and ought not to be required to pay the slightest advance for the binder twines used by them, but if by reason of the methods of the American companies, to whom frequent reference has been made, the price of binder twine should be raised, an increase of 1 cent per pound would only cost the grower of grains upon 100 acres of land the insignificant sum of from $2 to $3.

Against this possible, although we submit unjustifiable, increase is the interests of the Yucatan farmers, who have been unjustly and harshly treated. While every other commodity which the Yucatan farmers have been compelled to buy by way of cloth and food has increased from 100 to 300 per cent, the purchase price of their product has not advanced, but, as the chart shows, has either declined or been kept at the lowest level, a level far below what is necessary to meet the absolute needs of the Yucatan sisal growers.

The Comision Reguladora del Mercado de Henequen is a public body politic created by the government and Legislature of the State of Yucatan. The comision is not a private corporation directly or indirectly. The law creating the comision is precisely 1 ke that which creates any municipal body politic, except that the powers of the comision are limited by the laws of its creator "to protect the henequen industry of the State of Yucatan," to quote from the language of the creating statute.

The comision has no capital stock, is not organized for profit, and can not declare or pay dividends. It is purely and simply a governmental farmers' association. There are several reasons why the laws of the United States do not undertake to and can not possibly apply to the subject matter of this communication.

Let us assume that the comision was organized in the United States under a law of Congress or of one of our States. This is taking the strongest possible position that the most hostile of those seeking to obstruct the comision could advance. What does the law of this country say on the subject:

On October 15, 1914, Congress enacted what is commonly known as the Clayton Act; under that law if there ever was the remotest possibility of supporting an attack on a farmers' association that remote possibility has been completely removed. Section 6 of the Clayton Act expressly provides that: "Nothing contained in the antitrust laws shall be construed to forbid the existence and operation of labor and agriculture or horticultural organizations, instituted for the purposes of mutual help and not having capital stock or conducted for profit, or to forbid or restrain members of such organizations from lawfully carrying out the legitimate objects thereof; nor shall such organizations or the members thereof be held or construed to be illegal combinations or conspiracies in restraint of trade under the antitrust laws." To make our position clear beyond all cavil, we refer to the decision of the Supreme Court in American Banana Co. v. United States Fruit Co. (213 U. S., 347). That was a suit by the banana company against the United Fruit Co., in which the United Fruit Co. was charged with a conspiracy in violation of the antitrust law, and the banana company sought to recover treble damages under that law from the fruit company. The opinion of the Supreme Court on the particular point of the discussion is crystallized in the following quotation from the syllabus: "The prohibitions of the Sherman Antitrust Law of July 2, 1890, do not extend to acts done in foreign countries even though done by citizens of the United States and injuriously affecting other citizens of the United States. A conspiracy in this country to do acts in another jurisdiction does not draw to itself those acts and make them unlawful if they are permitted by the local law." There is nothing whatever in the law of Mexico which has the slightest application to the Comi ion Reguladora. The comi ion is a body politic and does not and can not create a monopoly. It is a public institution, the purpose of which is to protect the Yucatan farmers and to encourage and develop their industry, to promote their welfare, to advance money to them without interest, and to do other things tending to the public good of Yucatan. But if the comision were in fact a monopoly the United States Government could not legally attack it. If the comision by the farthest stretch of dreaming can be charged with being a monopoly, that question is one and only one for the Government of Mexico, and if that government were to attempt an interference there would be created this strange anomaly: On the one hand the government by statute would have created the comision for the public benefit, and on the other hand the government would be attacking the child of its own creation on the ground of its illegitimacy.

Furthermore, for this Government to attempt interference with a Mexican creation would be an undertaking which in the very language of the Clayton Act would be prohibited to this Government if the comision had been created by Congress or one of the State legislatures. In fact, institutions like the comision, but of much greater magnitude and of wider reaching influence in this country, are universally recognized. The California Fruit Growers' Association, the Cranberry Growers' Association of Massachusetts, and other similar agricultural and horticultural organizations are instances in point. A recent example of an effort to protect the farmers of this country arose in the latter part of last year when the cotton growers of the South formed an association for self-protection and entered into an arrangement with the bankers of the United States for a large credit of $135,600,000, in order that the cotton growers. could hold their cotton for a higher price and prevent forced or sacrifice sales. The legality of this arrangement was upheld in an opinion rendered by the Attorney General, November 7, 1914.

The workings of the comision will also greatly benefit the business of the United States, and particularly of the Gulf ports of New Orleans and Mobile. Several hundred thousand bales of sisal will be always in warehouse in those cities, and the resultant revenue derived from taxes, storage, insurance, and handling services will be very heavy. The avowed and appreciated efforts in the past of this Government to help Mexico, her people and her commerce, added to the crying necessities of the Yucatan farmer for relief from the oppressive conditions that have heretofore prevailed, all unite in support of the position of the Comision Reguladora del Mercado de Henequen, that its plans and operations should be encouraged and supported by the United States.

Respectfully submitted.

COMISION REGULADORA DEL MERCADO DE HENEQUEN.

Mr. FISHER. In connection with this testimony, directly bearing on the point, following the precedent established, I would like to read to the committee now the copies of these decrees that were issued relating to these pesos.

The CHAIRMAN. Have we finished with the present subject? If so, we will come back at 2 o'clock.

(Thereupon, at 1 o'clock, the committee took a recess until 2 o'clock p. m.)

AFTER RECESS.

(The committee reconvened, at the expiration of the recess, at 2.35 o'clock p. m.)

Mr. FISHER. Before we go on, and because of its appropriateness to the matter under discussion at the time of adjournment, I would like to read the decrees issued by Gen. Alvarado on March 25, 1915. Mr. SPENCER. What do you read from?

Mr. FISHER. I am reading from an exhibit to a sworn answer filed in a suit in the New York Supreme Court.

DECREE No. 7.

I, Gen. Salvado Alvarado, in command of the Southeastern Army Corps, governor and military commander of the State, in the exercise of the special powers conferred upon me by the Citizen First Chief of the Constitutional Army, by these present decree as follows:

ARTICLE 1. The notes issued by the Comision Reguladora del Mercado de Henequen (the Regulating Committee of the Sisal Market) and belonging to series C and D, unduly authorized by decree of February 26 last, are declared to be null and void.

ART. 2. The holders of the notes to which the preceding article has reference, are notified to deliver the same to the general State treasury within a term of 30 days, so they may be destroyed in the manner prescribed by law.

ART. 3. Any and all persons having in their possession, or placing in circulation the notes to which articles of this present decree have reference, will be considered as counterfeiters, and the proper penalties will be inflicted on the same, in case of failure to deliver the same, as set forth in the preceding article, within the stated term.

ART. 4. Decree No. 3, of March 20 of the current year, remains in force with these present amendments.

Done in the Executive Mansion, in Merida, on the 25th day of the month of March, 1915.

Constitution and reforms.

The Governor and Military Commander.

S. ALVARADO,

V. A. RENDON, Secretary General pro tem.

Now, I will read the decree to which reference was made in the decree as remaining in full force.

Mr. MAYER. What series is that?

Mr. FISHER. Series C and D. [Reading:]

DECREE No. 3.

I, Salvador Alvarado, general in command of the Southeastern Army Corps, governor and military commander of the State of Yucatan, in the exercise of the special powers vested in me, by this present decree:

ARTICL . The Decree No. 3, issued by the alleged provisional governor, Abel Ortiz Ar umed under date of February 26 of the current year, and pub'i hed in the Diario Oficial (Official Gazette) of the State, issue of February 27 last, is declared to be wholly null and void.

ART. 2. In consequence thereof, the checks for $20 (pesos), $50 (pesos), and $100 (pesos), respectively, issued by the Comision Reguladora del Mercado de Henequen