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STATEMENT OF DR. VICTOR A. RENDON, OF THE COMISION REGULADORA DEL MERCADO DE HENEQUEN, MERIDA, YUCATAN, MEXICO.
The CHAIRMAN. Where are you from, Doctor?
Dr. RENDON. From Yucatan, Mexico.
The CHAIRMAN. In what capacity do you appear before us?
Dr. RENDON. Attorney general in fact of the Comision Reguladora del Mercado de Henequen. That is the name of the institution.
The CHAIRMAN. Doctor, will you explain in your own way the origin of this organization, which, I understand, is a Government agency
Dr. RENDON. Yes, sir.
The CHAIRMAN. And how you have conducted your business and what connection you have with these two New Orleans bankers, Messrs. Dinkins and Wexler. Just explain it in your own way, and then we will ask questions.
Dr. RENDON. I begin by asking you gentlemen a little indulgence for my English. It is not very correct, but I will try to make myself understood.
Allow me to go back a little to explain to you this business of the sisal hemp. The sisal hemp is a plant of the Agave family, species Agave sisalana. It takes seven years in Yucatan from the planting to the cropping of the plant. The total output at present represents half a century of hard work. In the northern part of the peninsula they can not raise anything but hemp. Corn, for instance, only yields about 24 bushels per acre, and everything is the same way. So all the people are devoted to hemp. It is the chief industry of Yucatan, and we may say that seven-eighths of the population are devoted to the cultivation of hemp. The Government derives its treasury from the henequen, or the sisal hemp. It is the only source of revenue they have. Yucatan exports a little chicle-chewing gum-but very little, and some hides, but very little. So all the efforts of the inhabitants and the Government are directed to supporting the cultivation of hemp, because it is the life of the State.
The CHAIRMAN. About what is your population, Doctor?
Dr. RENDON. About 315,000 inhabitants.
The CHAIRMAN. Yucatan is one of the States of Mexico, I believe? Dr. RENDON. Yes, sir.
The CHAIRMAN. About what is your area in square miles?
Dr. RENDON. It is about 35,000 kilometers; it is about 26,000 square miles.
Previous to 1902 and 1903 there were several buyers and exporters of sisal in Merida, and several buyers in this country. Almost everybody knows the condition of the laboring men in Mexico in general, and Yucatan in particular, because much has been written about that. They were in a condition of peonage. They were paid what the planters wanted to pay; they were compelled to stay on the farms, and so on. Those conditions have changed now. The present revolution has brought them freedom. Now they can go and work for anybody they want, and if they do not get what they think they are entitled to they go somewhere else.
At that time, previous to 1901 and 1902, there was a lively competition in the henequen market. The prices sometimes were lower
than they are now, but the industry was developed little by little, and the planters were developing their farms. But in 1902, if my recollection is correct, the International Harvester Co. was organized, and they got a connection there, first, with a Mr. Molina. Mr. Molina retired from the business and went into politics and government there. He was governor of Yucatan and afterwards was secretary of public works. His son-in-law, Mr. Montes, was his
It is common knowledge there that this Montes was the agent of the International, though at present, according to a letter I have received from Mr. Ranney, the secretary of the International, he denies that Mr. Montes has been their agent previous to February of this year. I think they are mistaken, and I have some reason to believe it. Well, the Plymouth Cordage Co., or, better said, the firm of Peabody & Co., of Boston, had been operating in Yucatan for several years-I think, previous to the International. But little by little these two firms began to cooperate in the purchase of hemp, as is shown in some tables which I have, taken from the official records published by the Montes firm in Yucatan and by the commercial agency of Yucatan. This is from the official records they publish every month. From that I have taken these figures.
Senator GRONNA. Does that show the production of henequen and also the amounts sold to the various corporations in the United States?
Dr. RENDON. Yes, sir.
The CHAIRMAN. I would suggest that that table be published in the record.
(The tabulation referred to is as follows:)
Mr. FISHER. Of course, Mr. Chairman, I do not know how you wish to conduct the hearing, but it will be a little difficult in a complicated matter of this sort to note down questions. I shall endeavor to comply with your suggestion, but I can see at this time that it will be, in my judgment, practically impossible to get at the truth of this matter if that method is followed and we are going to have such testimony as has now been offered. For instance, the accuracy of this
table and the general, sweeping statements made in connection with it. This purports to be a copy made by this gentleman, or, he says, is a record which shows something, which I think a mere examination will show it does not show.
The CHAIRMAN. The committee will give you gentlemen an opportunity to examine the table and submit any questions you wish to ask. Senator WADSWORTH. Doctor, you said something to the effect that two companies began to cooperate?
Dr. RENDON. Yes.
Senator WADSWORTH. What two companies?
Dr. RENDON. The Plymouth Cordage Co.-that has always been represented by or in connection' in some way with the firm of Peabody & Co., of Boston, the bankers-and the International, through Mr. Montes.
Senator WADSWORTH. Who is Mr. Montes?
Dr. RENDON. Mr. Montes is the son-in-law of Mr. Molina. Mr. Montes is his partner-a business man who has been in Yucatan for many years, since his childhood.
The CHAIRMAN. Mr. Molina formerly conducted the business, and then his son-in-law, Mr. Montes, took it up?
Mr. FISHER. Will you pardon me, Mr. Chairman? As I understand the statement of the witness, it is that the Plymouth Cordage Co., operating through Peabody, and the International, operating through Montes, cooperated; and he proposes to show that by a table showing the purchases of Montes.
Dr. RENDON. No; I show the purchases of both of them here. And I am sure that they cooperated, for I was a planter myself-I sold my plantation two years ago and I sold my fiber, first, to the Plymouth and then later to Montes, and many times I went first to the one and then to the other to ask about prices, and they would practically pay the same thing. Not a cent difference; not a fraction of a cent difference. That means they were in accord to work together.
They operate in this way. We want money for machinery, for rails, for tools that we use in the planting. It was difficult to operate with the banks, for this reason. The banks down in Mexico need two firms to discount paper, and many people do not want to give it to somebody else, or others do not want to ask firms for it. So we had to go to Mr. Montes, or to Mr. Peirce, the agent of the Plymouth, and get the money.
When I was in the business I borrowed money from them, giving collateral railroad shares. I paid 10 per cent interest, and I engaged myself to pay that amount of money, not in money but in hemp. So I had to deliver my hemp to them, and as they fixed a price they paid the price they wanted.
Senator GRONNA. You say they fixed a price. You mean this cordage company that you have reference to?
Dr. RENDON. The agents down there; yes, sir.
Senator GRONNA. The agents of these various corporations?
Dr. RENDON. Yes; the agents there-well, the buyers, they fixed the price.
The CHAIRMAN. Do you mean they were the only buyers there, and therefore had the power to fix the price?
Dr. RENDON. Yes. They bought three-fourths, seven-eighths, and so on, as it is shown in this table.
Senator GRONNA. And there was no competition, then, in the price of henequen?
Dr. RENDON. No competition; practically no competition. Senator GRONNA. You had to take whatever price was offered to you?
Dr. RENDON. Yes, sir. The rate was such that many times several of the richer planters sent their hemp to New York to be sold, and they could not sell that hemp for six months. They tried to sell it, and they could not sell it; and they sold to Mr. Montes. They had to sell to Mr. Montes in Yucatan the hemp that was stored in New York.
In such a condition the planters got together and asked the Government and the legislature to do something for them, and they suggested themselves to impose a tax on the hemp exported and devote that tax to create a fund and buy hemp to export it themselves. Then the legislature passed a decree in January, 1912, creating this institution, called the Reguladora del Mercado de Henequen.
Senator GRONNA. During this time you have described, Doctor, what was the average price paid to the grower of henequen for hemp; from 1902 to 1912?
Dr. RENDON. Here in this table I give the prices that were paid in New York, because the price in Yucatan is much lower than this, and I could not give it correctly because the rate of exchange varied very much, and the price that is paid there depends on the rate of exchange.
Senator GRONNA. That is the price to the grower delivered in New York
Dr. RENDON. Oh, no; in Yucatan. Many times they complained because they could see by the papers, or they had letters written from New York, that the price was 5 cents, for instance, in New York, and they were getting 3 or 2 cents. There was not any relation between the price in New York and the price they were paid down there. They made several efforts to get rid of that greed of the International and the other company.
In 1907 they got together and retained
Mr. SPENCER. Who was that that got together?
Dr. RENDON. The planters, I mean. They got together and engaged themselves to retain their hemp, not to sell it until they were paid and received their price, and they retained the hemp for about three months.
Senator GRONNA. You have been a grower of hemp?
Dr. RENDON. Yes, sir.
Senator GRONNA. What would be a reasonable price for hemp to the producer, to the grower?
Dr. RENDON. According to not only my opinion but the opinion. of Mr. Daniels, who is a man that has been in that business for many years, from the International
The CHAIRMAN. The International Harvester Co., you mean?
Dr. RENDON. Yes. In an investigation that was made he testified that in 1910. I think, he went to Yucatan, and at that time the farmer was paid 5 cents. He realized that 5 cents was not a remunerative price, and the planters were losing all interest in the sisal hemp, and it was needed here. So he made up his mind to pay a better price. It is on record, and I have the book, which I will show you.
The CHAIRMAN. How much better price did he propose to pay?
The CHAIRMAN. What is your opinion about the price that it should bring?
Dr. RENDON. My opinion about the price-the lowest price at present should be above 62 cents, because you have to take into consideration the new taxes that have been imposed upon the hemp; the reconstruction of the country needing money, and the money coming from the taxes that are imposed on hemp. Naturally when the taxes have been imposed the price has to be raised. The cost of living-I remember I wrote a letter to Mr. McCormick, I think it was, last November, pleading for the planter and the laboring man down in Yucatan. I told them I did not want to have any fight with them, that I wanted to work harmoniously with them, and that they ought to take into consideration that the cost of living in Yucatan was very high. All the flour we use is imported from this country; all the corn we use is imported from this country; all the machinery is imported from this country. In fact, almost everything. And the rate of exchange has been going up, going up, until now it is 20 to 1. Now, how much does the laborer have to pay for a pound of flour or corn?
Senator GRONNA. Dr. Rendon, I was trying to get at a reasonable price for henequen, viewing it altogether from the standpoint of the grower.
Dr. RENDON. Yes, sir.
Senator GRONNA. What is the value of the land per hectare in Yucatan the average value?
Dr. RENDON. The average value uncultivated, you mean?
Senator GRONNA. I mean cultivated land.
Dr. RENDON. Cultivated land, I suppose, per acre
Senator GRONNA. I asked per hectare. I will change that to per
Dr. RENDON. It must be about $400.
Senator WADSWORTH. Gold?
Dr. RENDON. Yes.
The CHAIRMAN. That is, after how many years' growth, Doctor? Dr. RENDON. Well, seven years.
The CHAIRMAN. You mean it is planted in henequen, and it takes seven years to mature?
Dr. RENDON. Yes, sir.
Senator GRONNA. What is the cost per acre of producing this henequen? I mean the raw material. What is the cost of producing raw henequen per acre?
Dr. RENDON. Per acre? I can not tell you exactly. The acre is different; we have not that measure now.
Senator GRONNA. Can you tell the committee approximately the yield per acre of henequen?
The CHAIRMAN. You mean, in pounds?
Senator GRONNA. In pounds. [After a pause.] I probably should not delay the matter, but it is important to know the value of this product.
Mr. FISHER. I might suggest, Mr. Chairman, that you let him take whatever unit he prefers and let him adhere to that.
Senator GRONNA. Yes; that is a good idea.