Mr. MAYER. I want him to show the total amount that Montes controlled.

Mr. SPENCER. For the same period of time, 1905 to 1914.

Mr. MAYER. No; it was 1910 to 1915, five years.

Mr. FISHER. Both inclusive.


Mr. BAYLEY. During those five years we shipped 876,000 bales, making Montes and our total shipments

Mr. SPENCER. What is your percentage; give your percentage.
Mr. BAYLEY. Ours was about 22 per cent.

Mr. MAYER. So that between the two you have 92 per cent of the total shipments in those five years?

Mr. BAYLEY. We and Montes shipped 3,550,000 out of 3,886,000. Mr. MAYER. About 92 per cent-you said 70 per cent and 22 per


Mr. FISHER. What was the total of your shipments, the two concerns?

Mr. BAYLEY. Eight hundred and eighty-six thousand bales or 221 per cent.

Mr. FISHER. Did the house of Escalante continue in the business after its failure? I mean was it conducted by a receiver, or anything of that sort?

Mr. BAYLEY. Why, when houses fail in Yucatan, the procedure is quite different from what it is in this country. They seem to go on until they evaporate. There is not an abrupt cessation because a firm has failed as there is here. Often firms that are known to be insolvent go on doing business for some time, and according to my statistics. the firm did ship sisal after 1907 for a year or two.

Mr. FISHER. That is the reason I asked the question. In fact, clear down to 1914-or you have carried the totals on down to 1914? Mr. BAYLEY. Yes, sir.

Mr. FISHER. Now it has been suggested that there was an affect of this purchase in 1909 on the binder-twine market in this country. You said you had not followed the binder-twine market. Mr. Bayley, do you not know that in 1909 the Plymouth Cordage Co. did, as a matter of fact, cut the price of binder twine below the price of twine fixed by the International Harvester Co. for its sales?

Mr. BAYLEY. I think I remember hearing that.

Mr. FISHER. That is all I care to ask.

The CHAIRMAN. Is there anything else?

Mr. SPENCER. I would like to ask a question. Prior to the organization of the International Harvester Co., who bought sisal for the McCormick Co. in Yucatan?

Mr. BAYLEY. Why, they bought from several concerns. I think we sold them more at one time than anybody else. During the last year or two or three, before the organization, I think, Molina sold them more than we did.

Mr. SPENCER. Who represented the Deerings?

Mr. BAYLEY. Deering bought in the open market, but he had an arrangement with Carlos Urcelay, Yucatan, through whom he was buying very steadily. We also sold Deering a considerable quantity. Mr. SPENCER. They did not confine themselves to any one particular firm, Deering and McCormick?

Mr. BAYLEY. No, sir.

Mr. FISHER. And I judge, Mr. Bayley, that continued to be true for a number of years after the formation of the International Harvester Co.

Mr. BAYLEY. Oh, I am quite confident that we sold the International Harvester Co. substantial amounts of sisal some time after they were organized.

Mr. SPENCER. What do you mean by some time?

Mr. BAYLEY, I should suppose for some years. I have not my statistics before me.

The CHAIRMAN. Does that conclude this witness?

Mr. ORTH. Just one question, if you please, Mr. Chairman. Mr. Bayley, in the course of your cross-examination by Mr. Mayer, he asked you some questions with regard to the Comision Reguladora in the year 1912. I would like to ask you if from the time of the formation of the Comision Reguladora until October, 1915, they did anything to restrict or harrass the business in sisal hemp?

Mr. BAYLEY. Not in the least, except in so far as their being such a prominent buyer in the market would restrict the amount which we could get.

Mr. ORTII. Did they interfere with your operations in any way, directly or indirectly-I mean the particular operations of your firm? Mr. BAYLEY. They interefered not at all except in that economic way.

Mr. ORTH. Did they in any manner attempt to hide their market transactions or were they public so that everybody else in Yucatan knew about them.

Mr. BAYLEY. Oh, fairly public. There had been talk about them. Mr. ORTH. Did they attempt in any way to manage or control or restrict the movement of hemp on the railways?

Mr. BAYLEY. Not in the least.

Mr. ОRTH. Did they ever sell large quantities of hemp below what it had cost them?

Mr. BAYLEY. I think it did at the end. It seems to me it sold a large quantity.

Mr. ORTH. In the course of your testimony the statement was made by Dr. Rendon, I believe, that the price in the present contract was 4 cents Merida. Are you not aware that paragraph 5 of the present contract states specifically that the price shall be $1 or peso in American gold for every 11 kilos delivered in Progreso?

Mr. BAYLEY. I know the price was 4 cents Progreso, as I testified this morning.

Mr. ORTH. And it is not 4 cents Merida as has been stated?
Mr. BAYLEY. No, sir; it is 4 cents Progreso.

Mr. ORTH. You spoke of taxes; you spoke of 20 per cent super tax. Do you know whether that 20 per cent supertax goes to the State government of Yucatan or to the Federal Government?

Mr. BAYLEY. No; I think I testified that the 20 per cent supertax always goes to the Federal Government and is imposed on State


Senator GRONNA. Mr. Chairman, Mr. Schmidt, of Wausau, Wis., is here, and would like to be heard for about 30 minutes. Mr. Schmidt represents a large organization not only in the State of Wisconsin but in the Western States generally. I did not know, nor did

any of the members of the committee know that Mr. Schmidt would be here. Our time is limited, but we are willing to give Mr. Schmidt 30 minutes, if any of the attorneys desire to ask Mr. Schmidt any questions, and I think they ought to be asked through the committee.

The CHAIRMAN. Very well; we will try to adhere to that suggestion. Mr. Schmidt, will you please state your position and business?


Mr. SCHMIDT. In that connection, Mr. Chairman, I will present the credentials of our society.

(The credentials submitted by Mr. Schmidt are as follows:)

[American Society of Equity, an organization that teaches cooperation among farmers. National headquarters at Wausau, Wis.]


Wausau, Wis.

WAUSAU, WIS., April 11, 1916.

DEAR MR. SCHMIDT: Having received information that an investigation is in progress at Washington, D. C., conducted by congressional committee relative to the mix up in the fiber situation in Mexico.

The American farmers represented by this and other organizations are vitally interested in the price of sisal fiber, and any attempt to monopolize this product for the purpose of exacting exorbitant prices from the twine manufacturers hits the American farmer the hardest, because he is the one who ultimately pays the bill.

You are hereby authorizd to represent the American Society of Equity, a national organization of American farmers operating in 14 of the Central and Northwestern States before this committee to do anything and everything in your power to secure relief for the farmers.

Kindly make detailed report of your findings.
Yours, truly,



National Secretary-Treasurer.

Gentlemen, I represent the American Society of Equity. They are organized in 14 States of the Union, doing business particularly in the States of Wisconsin, Minnesota, the Dakotas, Montana, and Iowa. Those are the States in which we have our office representation or membership, and we have all told, at the present time, in the neighborhood of 200,000 farmer members in our organization. I am not interested, gentlemen, in the manufacturers' controversies here or their quarrels whatever they may be. I do not understand them, but I am vitally interested in the way this agitation of the last two years, and especially this year, is affecting the delivery prices on binder twine. We, after all, you realize, pay the freight. When everybody gets through, when everybody else has done everything he wants to do-when they are all through, we buy the twine and pay the freight, and we figure that this raise this year, as compared to the last years' prices, is not right. Our members will, through three different channels in particular, purchase about 15,000,000 pounds of binder twine. I guess Senator Gronna will bear me out in that, and the increase of 2 cents a pound delivered, which is the case at the present time, I understand from some of our manufacturers, and the Lord only knows how much higher it may go, but I am taking

this as a basis, will mean a difference to our farmers of $300,000 out of their pockets, and that is the thing we are interested in.

If there are any questions that any member of the committee desires to ask I shall be glad to answer them. That is why I have come here, to protest for our members-if there is a sisal fiber trust, as the manufacturers assure us, which produces a rise in prices, we, as the ultimate consumers, would like to protest so as to have some method of relief. If we are wrong, we would like to be set right.

The CHAIRMAN. Have you any information to give to the committee or any suggestions to make?

Mr. SCHMIDT. Well, as I have just stated, the only information we have is that twine is at present-what we can get costing us 2 cents a pound more than it was costing us last year, and the worst part of it is that we are not assured that we will be able to get all the twine that we need, at that.

The CHAIRMAN. You mean you have not been able to make a contract for advanced delivery of your twine?

Mr. SCHMIDT. Yes, sir. Take, for instance, this situation, and Senator Gronna will bear me out in it. The territory gets its twine in the Minnesota prison and the Wisconsin State prison, and to a large extent through independent buyers and firms and, of course, the International Harvester Co. Now, in the prisons both of the wardens informed us they were sold up; that they could not promise any more.

Senator WADSWORTH. When the wardens informed you that they were sold up, does that mean that they have sold all the twine which their supply of raw material enables them to make, or does it mean they have sold the capacity of the mill, if they continue to get the raw material.

Mr. SCHMIDT. No, sir; the impression given us was this: They said, "This, of course, is not final, but the fiber situation is in such a position that we can not guarantee that we shall have actual fiber on hand or are sure we can get the twine there that is disposed of. We can get more fiber, we think, but we are not sure." That is what I mean. They are sold up-not the capacity sold up.

Mr. SPENCER. Who is it that gave you all this information, the manufacturers?

Mr. SCHMIDT. I have just stated in answer to a member of the committee that I got this information from the wardens of the Wahpeton and the Minnesota State prison at Stillwater.

Mr. SPENCER. Have the farmers' journals been having much to say on this subject?

Mr. SCHMIDT. I do not know what you would call "much," but all the agricultural papers have had considerable discussion of it. It is a matter that is pretty vital to us, you understand.

Senator WADSWORTH. Tell us, Mr. Schmidt, does your organization, or the members of it, club together and buy in carload lots? Mr. SCHMIDT. Yes, sir.

Senator WADSWORTH. On the cooperative basis?

Mr. SCHMIDT. Yes, sir.

Senator WADSWORTH. And you have been accustomed to purchase carloads, the members in groups-they have been accustomed to buying carload lots from the Minnesota prison.

Mr. SCHMIDT. We have purchased through those, and in the last two years the American Society of Equity has always had a separate buying organization, which has been incorporated so as to make it legal, known as the American Cooperative Association, and they have entered directly into contracts with manufacturers and bought from them in the past two years. That association is only 2 years old, and all of the States are direct members of it. Through that, in particular, they have bought carload lots and then delivered it in either carload or local shipments.

Senator WADSWORTH. How long has your organization been operating in that way?

Mr. SCHMIDT. The buying end of it has been incorporated for two years.

Senator WADSWORTH. Who have you purchased twine from?

Mr. SCHMIDT. The last two years our contract-in fact, the only way we have bought, that is, the American Cooperative Association has bought, has been from J. C. Groendyke.

Senator WADSWORTH. What manufacturers does he represent? Mr. SCHMIDT. I do not know. I believe he has his factory down in Miamisburg, Ohio. We bought through the Chicago office.

Mr. SPENCER. You say that this agitation that you spoke of has been going on for two years?

Mr. SCHMIDT. What I have reference to is the last year, toward the end; well, I would not even say toward the end. In the beginning of it there was more or less uncertainty about getting any sisal fiber at all. I understand at that time that the port was closed, and finally our State Department intervened, and the farmers became nervous at that time, and this year the price as a rule has been made,` it has been our experience, in January or the early part of February, and we have not been able to get any prices or any assurances or delivery until recently.

Mr. SPENCER. You are a farmer yourself?

Mr. SCHMIDT. Yes, sir.

The CHAIRMAN. What are the purposes of your organization, Mr. Schmidt?

Mr. SCHMIDT. The purpose of our organization is to band the farmers together, to enable them to better farming conditions, to obtain a living price for agricultural produce, and, if possible, buy to the elimination of unnecessary middlemen.

The CHAIRMAN. And you try to get just as good prices as possible for your products?

Mr. SCHMIDT. Yes, sir.

The CHAIRMAN. As a result of your cooperation?

Mr. SCHMIDT. Yes, sir.

The CHAIRMAN. As a result of your cooperation to buy as cheaply as possible?

Mr. SCHMIDT. Yes, sir.

Mr. MAYER. And to get rid of the middlemen?

Mr. SCHMIDT. As much as possible, the unnecessary middlemen. Senator GRONNA. Have you experienced any opposition from the so-called chamber of commerce, Mr. Schmidt?

Mr. SCHMIDT. Yes, sir. We have had a great deal of opposition. We carried on an immense fight with the Minneapolis Chamber of

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