Valor de la exportación del henequén durante el presente mes, á $0.17,12 centavos el kilo, (por término The CHAIRMAN. Let us take the next witness, gentlemen. STATEMENT OF MR. LYNN H. DINKINS, PRESIDENT INTERSTATE TRUST & BANKING CO., NEW ORLEANS, LA., REPRESENTING THE PAN AMERICAN COMMISSION CORPORATION OF NEW YORK. The CHAIRMAN. Mr. Dinkins, the committee will be pleased to have you state in your own way your connection with this company about which Mr. Wexler has testified, and any points that would enlighten us that you think ought to be told by you without specific questions on the part of the committee. State first your position, Mr. Dinkins, and where you live. Mr. DINKINS. I live in New Orleans. I am president of the Interstate Trust & Banking Co. The CHAIRMAN. You are the Lynn H. Dinkins who has been referred to in the testimony here? Mr. DINKINS. Yes, sir. I am vice president of the Pan American Commission Corporation, in charge of its office in New Orleans. The CHAIRMAN. Now, will you proceed, Mr. Dinkins? Mr. DINKINS. In the spring of 1915 a man by the name of L. C. Brown was introduced to me as an individual who was familiar with affairs in Yucatan, and as being an individual who was in very close touch with the governing authorities of that State and who could likely influence large shipments from Yucatan to New Orleans. At that time I had very little knowledge of Yucatan or its possibilities. I knew very little about its agricultural production; very little about the people there. Mr. Browne was a very energetic fellow. He came in frequently, wrote a great many letters, and he was so persistent that finally one day I gave him a rather patient hearing. Previous to that time I had tried to get rid of him as quickly as possible. He told me about the conditions down in Yucatan with reference to the handling of its principal product-sisal. He made a great many statements of one kind and another, and at the end of the conference it rather seemed to me as if the arguments which he thought most persuasive would appeal less to us than almost any other arguments that he could present. In a general way he said that business down there was done more or less on a basis of personality rather than a basis of efficiencyprices; that he was in a position, he thought, on account of having been with the railroad and knowing a good deal about its affairs, to influence favorably the destination of sisal shipments and the handling of sisal shipments. As we saw it, that made the business rather unattractive to us; Mr. Browne might lose favor with the existing government. He continued, however, to discuss the matter whenever he had an opportunity, and finally I told him that if he could bring up to New Orleans some representative of the government with authority-it developed upon investigation that Mr. Browne had no authority at all. It furthermore developed that he had lost his position with the railroad and was in need of employment, and was willing to do anything he could. He wanted to make $10,000,000 out of sisal if he could; if he could not, he would accept a position at $50 a month. So he disappeared for a time, and finally came back with a gentleman by the name of Julio Rendon, who was a very different type of man from Mr. Browne and a very different type of man from my idea of what a native of Yucatan or Mexico would be-an average native. Mr. FRENSDORF. Mr. Chairman, is this material? The CHAIRMAN. Yes. The committee will conduct this examination. We can not stand for such interruptions. I must stop anything of that kind now, and ask that it be not repeated, because this committee is a committee of the Senate, the highest legislative body on earth, and we certainly will not stand for such interruptions. Mr. FRENSDORF. I realize the dignity of this court. The CHAIRMAN. All right, sir; we hope you will obey that in the future. Mr. DINKINS. I introduced Mr. Julio Rendon to a number of our associates, and he explained at considerable length the methods that were then imposed for handling sisal, and I became interested in the situation down there. Mr. Julio Rendon had some papers from his Government which we were never able accurately to determine the scope of. They seemed to be rather indefinite. So we suggested to him that he go down to Yucatan and advise his principals there our attitude in the matter and then come back with a definite proposition. Mr. Browne's idea had been that we would organize a company in Mexico and that we would pay in the preferred stock in cash and that that should have a prior lien on the assets of the company, and that we would take the existing stock of sisal which was owned by the comision and use that to pay in to the company as an equivalent of its common stock, and that that common stock should go to the comision, he and I reserving a portion of it for our services. That idea did not seem to appeal very strongly to Mr. Julio Rendon. He did not care about paying for common stock in sisal; in fact, he did not feel disposed to have anything to do with financing it, further than that he desired to borrow money on sisal. Well, he returned to Mexico and came back with a proposition. My recollection of it is that it provided for the American company buying all the output of sisal Mr. SPENCER. Whom do you mean? Mr. Browne, or Mr. Rendon? Mr. DINKINS. Mr. Rendon went to Mexico and came back to New Orleans, and I think Mr. Browne came back with him, though I do not think Mr. Browne went with him. This contract was manifestly an absurd one to operate under- Mr. DINKINS. Proposition. Then it was we met with Dr. Rendon. I am not entirely sure, Doctor, that your brother accompanied you. I think he did. Dr. RENDON. You mean the first time? Mr. DINKINS. Yes. Dr. RENDON. No; he was alone. The second time we came together. Mr. DINKINS. Yes; Dr. Rendon knew a great deal about sisal. He told us a good deal about the cost of producing it, and he further influenced us favorably in connection with the matter of financing it. Mr. FISHER. When you say "us," will you kindly indicate whom you mean? Mr. DINKINS. That time I mean myself and such people as I might take in with me later on. During the course of negotiations backward and forward I found that the people I knew best who were in a position to lend money in large amounts were indisposed to make advances against a product they were not acquainted with and a product that was controlled largely by farmers. They seemed to, have a prejudice especially against Mexico. So I decided about that time that if I had anything to do with advances on sisal I would only lend against it the minimum cost of its production under the most unfavorable conditions, and when we questioned Mr. Browne about that he seemed to have no idea what the actual cost was. We talked to the Rendons about it, and it finally seemed to me that, allowing a reasonable amount for freight, storage, and warehousing, considering the way in which it was handled in Yucatan from the time it was planted until they began to cut the leaves, that about 6 cents a pound delivered in America would be the cost of production. The CHAIRMAN. You mean the cost of production of sisal, or the price? Mr. DINKINS. The cost of production, plus the getting it over here, plus the interest on the money from the time you bought it in Yucatan until it reached here. We loaned 60 per cent, as a rule, on real estate values, and that was the controlling factor, in my mind, in the making of this 60 per cent of 6 cents. That is how we reached that figure. I thought that was entirely safe. During Dr. Rendon's visit Mr. Wexler, I think, called me on the telephone and mentioned that he had some inquiries about it, and so on. I paid him a visit and found out that he knew about as much of the sisal situation as I did. We talked it over at some length, and finally he said, "Suppose you and I make an effort to finance this transaction. I think it would benefit our section of the country if it could be handled here." So we then introduced the Mexicans to our port authorities. They went up and examined our facilities in New Orleans. They seemed pleased with them, and we began then the negotiations which led up to the making of the present contract. We drew a contract at that time which, as Mr. Wexler explained, never became effective. We found we would not have time to get our company in shape before its expiration. Up to that decision I think that perhaps I was the dominant figure in the transactions, it being inaugurated with me, and I usually had the last say. About that time Mr. Wexler had under consideration the change which he has since made, moving to New York to live, and as the headquarters of the company were going to be in New York we thought he would make a good president. So we decided he should be the president of the company, and from that time he has conducted most of the negotiations. We have consulted very frequently, and at times we have differed rather widely, but on the whole Mr. Wexler's statements would be my statements so far as I have any knowledge of the transactions which he mentions. I never saw Mr. Legge or Mr. McCormick or Mr. Perkins of the harvester company to know them. He acquainted me with the conversation he had with Mr. Mitchell of the Illinois Trust & Savings Bank when I reached Chicago, and I went to see Mr. Mitchell. I told him what Mr. Wexler had said to me about it, and he confirmed it. He said, "That is so; and if it is agreeable to you I will not give you an answer to-day, though I said to Mr. Wexler that I would. I do not know whether it would be ethical for me to take part in an extension of credits to your company, but I will talk it over with my associates in the harvester company." The next day he told me very plainly that he did not care to go any further with it; that if we got the thing in good shape and wanted to borrow any money on sisal, properly stored, he would lend it just as he would to any other customer if he was in funds, but that was as far as he would go. I talked to Mr. Arthur Reynolds and Mr. George Reynolds with reference to their conversation with Mr. Wexler, and they told me substantially what Mr. Wexler has stated they told him. Mr. Wexler then went over to New York and I remained in Chicago, and during that period I went in to see Mr. Arthur Reynolds. He said, I am not sure that we are going to be able to go along with you folks in this transaction, because since George left, why, the matter has been taken up again. I am not sure what can be done, though the final decision will likely rest with George." I told Arthur very plainly that I thought that was an intolerable condition, the idea of such a thing as he had intimated there, and I really did not credit it much. I thought perhaps that he had been a little too prone to think that pressure was being exerted Mr. MAYER. A little louder. Mr. DINKINS. I thought he was a little too prone to think that the International Harvester Co. intended to exert the pressure he indicated against his bank if they extended this credit. I told that to Mr. Wexler, that in my judgment the Reynolds were unnecessarily alarmed over the situation, and then we went over a number of rather significant facts that had developed during the progress of the negotiations. Mr. FISHER. When you say "we" you mean Mr. DINKINS. I mean Mr. Wexler and myself. He stated that a bank examiner had called on his institution shortly after the contract was signed and wanted to see a copy of his minutes, and wanted to see a copy of the contract; and also that a representative from the Department of Justice had called on the president of the board of port commissioners about that time. Mr. SPENCER. And also on me. Mr. DINKINS. I do not think he stated on you; it is not my recollection. He said, "This is the situation". Mr. MAYER. Do not use the pronouns. Mr. DINKINS. Mr. Wexler said: "This is the situation, Mr. Dinkins. This seems to be a good piece of business, and a profitable piece of business. Somebody is throwing obstructions in our way. Now, it is a process of elimination. You do not think Dr. Renden is doing it; he wants to make a trade. It is not our lawyers; you submitted the contracts to your attorney, and I submitted them to mine, and the Reguladora has employed a firm that is also connected with yours as counsel. Who in the deuce is it?" So with that in mind I talked over the situation with a number of men whom I know well in business, and the consensus of opinion among those gentlemen was that we had better get the contract in some shape and bring it down to Washington and submit it here to the departments at interest; that otherwise we were going to be continually annoyed by first one development and then another, and it was better to lay our cards on the table, and if we had done anything wrong, to try and correct it, and if we could not, to abandon the business. The CHAIRMAN. Had you done anything up to that time? Mr. DINKINS. Yes, sir; we had these contracts. The first one had not expired at that time, and the other was in the process of making. So Mr. Wexler had consulted with Mr. Mayer, and I told Mr. Mayer that that was what my friends said. Later we told Mr. Spencer and they both rather opposed coming to Washington. They said, "No; it is no violation of the law, and the attitude of the Government official is that he will listen to anything you have to say-very noncommittal. It will just waste your time and you will have a lot of unnecessary publicity. The newspapers will all get it, and a lot of people do not care about figuring in the newspapers." So for a while we thought we would not come down to Washington. Later on, after the Reynolds were rather undecided for about the third time as to what they would do, we decided we would go down to Washington, so we made up a statement of what we wished to accomplish, brought it down and filed it with the Department of Justice, and then over in the State Department, and then, on account of the visit of the national-bank examiner, at a very unusual time my impression is that Mr. Wexler told me that he had never had a visit from a bank examiner with a request for that sort of information between his regular examinations-why, we took it over to the comptroller's office. The CHAIRMAN. In the Treasury Department? Mr. DINKINS. Yes, sir. And none of these departments raised any objection to it. The State Department, we learned there that some |
