farmers this year over last year, so far as the announced prices are concerned?

Mr. WEXLER. The prices have not been announced.

Mr. FISHER. Has not the Kansas Penitentiary made a price?
Mr. WEXLER. Subject to your price.

Mr. FISHER. But the price that it has announced is an increase of more than 2 cents a pound?

Mr. WEXLER. I do not know. You might state, for the benefit of the committee, if you know it to be a fact.

Mr. FISHER. I had a copy of the circular here the other day.

Mr. WEXLER. I think the committee would like to know, if you can state the price; and then perhaps I can draw some inference, and then answer you. What is the price?

Mr. FISHER. It is over 2 cents. These answers you have given to Mr. Mayer are all based on the hypothetical and arithmetical figures he has given you?

Mr. WEXLER. Yes. I notice a time when sisal was selling at 4 cents, when your price was 8 and 9, and I noticed when it was 6, that your price was 10 cents. There is a wide variation between the price of sisal and binder twine and so, inasmuch as you are absolutely the fixer of the price of binder twine and you controlled the sisal, it was all in your hands. So we can not draw any inference from your figures at all.

Mr. FISHER. All of which we disagree to and we can not argue it now. The committee does not want us to argue it now.

Mr. WEXLER. Let me ask Mr. Fisher one question.

Do you deny that the International Harvester Co. and the Plymouth Cordage Co. absolutely fix the price of binder twine?

Mr. FISHER. I certainly do deny it.

Mr. WEXLER. Isn't it a fact that no manufacturer in the United States can fix the price, except dependent upon the price that you put it?

Mr. FISHER. This is the fact. You have asked for it. The International Harvester Co. is the largest manufacturer of binder twine in the United States, for the reason that it is the largest manufacturer of the reaping and binding machines which use it. The next largest manufacturer, as I understand it, is the Plymouth Cordage Co.

Mr. WEXLER. Which does not manufacture machinery?

Mr. FISHER. Which does not manufacture, but sells to the general market. You have harnessed them together without the slightest license or excuse in law or in fact, merely because it thereby gives you an opportunity to refer to them as controlling the price of binder twine. They are active and always have been active competitors with each other.

Mr. WEXLER. No; they have not.

Mr. FISHER. Mr. Bayley is here and will testify.

Mr. WEXLER. The evidence shows that when the price in Yucatan was made by Mr. Peirce, the agent of one, the same price was made by Mr. Montes, the agent of the other. The evidence has also been given here that when you made the price on binder twine, that they met the price. At the time the book was mutilated and we got no direct evidence of it.

Mr. FISHER. Unfortunately we do not agree with the testimony of Dr. Rendon at all, and we shall show you some very interesting facts

in that regard. You base all of your testimony on hearsay and accept the statement of Dr. Rendon at par value, which we do not. Mr. MAYER. I submit, Mr. Chairman

The CHAIRMAN. Are you answering the question?

Mr. FISHER, I am going to answer the question.

The CHAIRMAN. Well, answer the question; but please do not argue. Mr. FISHER. I will try not to do so. The International Harvester Co. merely fixes a price for itself, and without regard to the fluctuations from month to month or week to week, and it does not fix the price at all until it knows what the cost is going to be to it for the sisal hemp which it is going to use for a season's manufacture. Having ascertained that fact, it then merely adds the cost of manufacturing and a manufacturer's profit and makes and offers its twine for sale at that price. That is the only way in which it has anything to do with fixing the price.

Mr. WEXLER. Yes.

Mr. ISHER. Because of the fact that it does make so large a proportion of the total amount.

Mr. MAYER. I want to interpose an objection.

Mr. WEXLER. Let him go on, Mr. Mayer.

Mr. MAYER. No.

The CHAIRMAN. Well, I will let him go on a little further. Go ahead, Mr. Fisher.

Mr. FISHER. They necessarily can not sell anything to the American farmer-that is, the small manufacturers-unless they agree that the International Harvester Co.'s price, as finally fixed by it, is less than that fixed by the penitentiary. The penitentiary will get the benefit of any price made by the International Harvester Co. That is what is meant by fixing the price against this price. Mr. WEXLER. Here is the point

Senator GRONNA. I am not a witness, of course, but I do want to be permitted to say that the penitentiaries have been price regulators on twine in the West.

Mr. FISHER. There is no doubt about it.

Senator GRONNA. And that they have sold for a less price than the International Harvester Co. ?

Mr. FISHER. Right.

Senator GRONNA. Or anyone else that manufactures twine.

Mr. FISHER. And that has been true of the northwestern penitentiaries, particularly of the Minnesota Penitentiary.

Senator GRONNA. Also the North Dakota Penitentiary, and the gentleman from Michigan is here himself and he can answer it better than I can.

Mr. FISHER. The penitentiary, if it fixes the price below the price fixed by either the Plymouth Cordage Co. or the International Harvester Co., has the market absolutely to the extent of its output. It is only in the event that these larger producers should fix the price lower than they that they agree to protect the farmer, to make a corresponding reduction. If they make a lower price than the International Harvester Co. or the Plymouth Cordage Co. make, the farmer gets the benefit of it. And they control and regulate the price, because the relatively smaller dealer or producer can force the bigger man to come down.

Mr. WEXLER. But the smaller man turns out so little it is not appreciable.

Mr. FISHER. I beg your pardon. It is very appreciable if you know the statistics.

Mr. WEXLER. If you engage a great supply at 4 cents along through the months of August, September, October, November, and December, and then you buy a small quantity of hemp from January to March, you base your price of binder twine naturally upon the price of sisal prevailing at the time just before you fix the price.

Mr. FISHER. We do not. You are entirely incorrectly informed. Mr. WEXLER. But your own people testified to it in the hearings here, and it is in the records of those hearings.

Mr. FISHER. I beg your pardon.

Mr. WEXLER. Then the record is wrong.

Mr. FISHER. No; your recollection of the record is wrong.

Mr. WEXLER. Why do you not do like every other manufacturer does, the cotton-goods manufacturer, and why do you not make your price of binder twine from time to time through the year based upon the price of the raw supply? Why do you not do like the cotton manufacturer in North Carolina when he puts out his commodity, or the cotton manufacturer when he puts his cotton up to sell it? He fixes his price for his commodity from month to month. Why do you hold it up and make it only once a year?

Mr. FISHER. For the very conclusive reason that the farmer handles this stuff at a certain time when the season is on. As I understand it,. the International Harvester Co. does that for that reason. I do not know, because I have never represented them before.

Mr. MAYER. You seem to have represented them all of your life, judging from the amount of information that you have. The CHAIRMAN. Answer the question, please.

Mr. FISHER. The International Harvester Co. is making a price for that season. It waits until it knows what the price of binder twine is going to be to it, what the cost of it is going to be.

Mr. WEXLER. But it knows every month what it costs?

Mr. FISHER. I beg your pardon, but the International Harvester Co. is only in the binder-twine business for the reason that it is of the greatest importance to it that the people who use its machines shall get binder twine, shall be sure to get it of a kind that will be suitable for use in those machines, and at a reasonable price. Its interest is not to make a profit, but to see that the price is a reasonable one to the American farmer, and all it seeks to make, and all it does make, is a manufacturer's profit on that article.

Mr. WEXLER. What is the capitalization of the International Harvester Co. ?

Mr. FISHER. Do not let us go into that.

Mr. WEXLER. He says they do not make any profits?

Mr. FISHER. I am telling you that, and it will be conclusively demonstrated, Mr. Wexler. Now, if you are through asking me questions, I would like to ask you a question or two.

Mr. WEXLER. Go ahead.

Mr. FISHER. There have been repeated references in your answers to Mr. Mayer's questions and in Mr. Mayer's questions to the 4 cents in gold, which it was said was required to be paid to the Yucatan farmer. Now, we have had this contract read to you, or you have read it. I want to call your attention to the words in Spanish,

which are "por hoy." That means "for to-day," does it not, in Spanish?

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Mr. FISHER. For the time being. Let us take that, then. For the time being. The price is recited to be $1

Mr. WEXLER. $1 gold.

Mr. FISHER. Or its equivalent in national currency-I quote.

Mr. WEXLER. Yes.

Mr. FISHER. Do you know who determines what the equivalent shall be in national currency?

Mr. WEXLER. I presume the exchange market.

Mr. FISHER. But you notice it does not say "at current rate of exchange," as do some of these contracts which have been read before the committee. Had you noticed that?

Mr. WEXLER. I do not recall any that have been read here which say "at current rates of exchange?"

Mr. MAYER. I would like to have you name one.

Mr. FISHER. I will call your attention later to something. The Comision Reguladora determines what it regards as the equivalent in national currency in Yucatan and pays the farmer that price, whether he likes it or not.

Mr. WEXLER. No, sir.

Mr. FISHER. Do you know how it is determined?

Mr. WEXLER. I do not know, and I do not suppose you do.

Mr. FISHER. I only know, as you do, what has been told.

Mr. WEXLER. Therefore, I can not answer the question. Dr. Rendon is here. He can answer it, if you really want to get the information.

Mr. FISHER. NO. I prefer to get it from another source.
Mr. WEXLER. That is headquarters.

Mr. FISHER. Not for me.

Mr. ORTH. May I take advantage of this little lull to say to the committee

Mr. MAYER. Let me interpose an objection. We have been very courteous, the committee has, and we are having constant interruptions by this gentleman, without the slightest possibility of our cross-examining him. Now, he is going to be a witness and I beg of the committee that the very great spirit of fair play that has pervaded the committee from the beginning should be exercised, and to let the witness take the stand, so that we can cross-examine him. This gentleman has interrupted, I should say, half a dozen or a dozen times.

The CHAIRMAN. I think, Mr. Orth, that you are going to be a witness. We have allowed a great deal of latitude. We have allowed you to break in a number of times, but I think it would be fairer to let the cross-examination of this witness continue with him, since we are proceeding with one witness. We will give you an opportunity to be heard in time.

Mr. ORTH. The golden moment sometimes passes.

The CHAIRMAN. I think we had better go ahead one at a time. Mr. FISHER. Might I be permitted to suggest, I think the committee desires to get at the real facts, exactly as you said, but counsel

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?

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