We naturally wanted to do the largest possible business, so we always gave the largest possible limits. When the market turned and began to fall, of course we lost some money; but that we could not help.

These farmers of Yucatan are divided into three classes. There were farmers who always sold to us. They would come in and ask our price and sell the hemp, and that was the end of it.

There were farmers who never sold to us. If they came into our office, it was only to get posted as to what we were talking, because we knew there was no business in them.

Then there were the farmers who shopped around and found out the best of prices going anywhere, and those would be divided into two classes: Those who gave us preference at equal prices and those who gave preference to somebody else at equal prices. Consequently we were always posted on what our competitors were doing and what they were paying.

1

If this third class of farmers got our price and went out and then came back and sold to us, we would know we were as high or higher than anybody else in the market. If they got our price and never came back, we knew we were too low.

Besides, there were the friendly farmers, who would tell us what others were paying. That was the way in which we knew what the market price was in the markets of Merida. That is why Mr. Peirce was always posted as to what prices were going; that is why his prices were about the same as our competitors. If we offered more than our competitors were paying, we would get so much sisal we could not sell it here. If we offered less, we would not get enough to do business.

Much has been said about the prices that were paid in Yucatan at which we bought. I would like to submit to the committee this list. which we have prepared from our cabled prices. This shows since the 1st of January, 1893, the highest and the lowest price delivered in Progreso, which we paid in Yucatan, as advised by our daily cables, in Mexican currency, per pound. The exchange, the highest and lowest, is given at the end of each column.

(The data here submitted by Mr. Bayley is here printed in full as follows:

Low and high prices, in Mexican currency, "delivered Progreso," paid by Henry W. Peabody & Co., (in cents per pound).

Low and high prices, in Mexican currency, "delivered Progreso," paid by Henry W. Peabody & Co. (in cents per pound)-Continued.

200 201 200 285 254 550 535 1,725

You will find that we bought from 3 cents-this is all Mexican currency a pound in June of 1895, which was the lowest point we ever paid, up to 223 cents a pound in April and May of 1902. I see we also paid 224 cents a pound in June of 1898. I should say that these prices refer through 1914. When you get into 1915 we see a very large jump in the currency prices. The low price, for instance, month by month, through to September, 1915; January, 191; February, 191; March, 18; April, 183; May, 38; June, 50; July, 52; August, 62; September, 64.

Mr. SPENCER. What was the rate of exchange at that particular time?

Mr. BAYLEY. In 1915, during this period, exchange ruled from 535 to 1725.

Mr. SPENCER. That increase is largely due to the inflation of the Mexican money, is it not?

Mr. BAYLEY. On account of the depreciation of the currency.

In connection with sisal prices I think this might interest the committee: I ought to have said previously, following our establishment as independent fiber merchants, in Yucatan, in 1890, the independent mills of the country were able to get their supplies of sisal. This enabled them to go on making twine independently of the

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National Cordage Co. This resulted in their not being obliged to sell out to the trust, and as the result of the independent mills being kept supplied in this manner the National Cordage Co. failed in the spring of 1893. In fact, their failure was the beginning of the panic of that year.

Following the panic of 1893 the prices of all fibers were very low on account of the reduced consumption, and for the four years from 1894 until the spring of 1898 sisal ruled steadily below 4 cents, New York, with the exception of, I believe, one month.

For some 14 months of that period, not consecutively, but a total of 14 months out of that period, sisal sold below 3 cents, New York. Part of the time it sold at 2 cents, New York. During those four years the Yucatan farmers lived frugally; there was no panic. We heard nothing specially of hard times, except that they regretted their fiber was not higher. With the spring of 1898 came the Spanish War, and following that the insurrection in the Philippines. The Philippine troubles tremendously reduced the production of manila hemp, and it soon showed that there was not enough hard fiber in the world to meet the demand. We got a new level at once for prices. The Philippine production for 1897 was 875,000 bales; for 1898, 742,000 bales; for 1899, 492,000 bales. That brought fibers quite permanently to a higher basis.

These charts are the office charts of my firm, showing the delivery prices [exhibiting charts to the committee]. As you can see, this is manila and this is sisal [exhibiting], and nothing has been put in for these early years.

The CHAIRMAN. That runs from 1894?

Mr. BAYLEY. That runs from 1894 to 1898. You remember the Battle of Manila Bay was in May. Here is sisal [indicating]. Mr. SPENCER. How high did it go, Mr. Bayley?

Mr. BAYLEY. Why, 11; but that was an excited time.

According to my chart, it started at 43 at the end of April and was 114 by the middle of June.

The CHAIRMAN. Does the red mark indicate manila?

Mr. BAYLEY. The red mark indicates manila.

The CHAIRMAN. And white indicates sisal?

Mr. BAYLEY. White indicates sisal.

From 1898 on, for several years, you will see that sisal was on a permanently higher price.

Again, the red is manila [indicating]. Here is the closing of the Manila ports, when prices for Manila went very high. But if you will compare this chart with the previous one you will see that sisal was for several years on a permanently higher basis. The result was what would be expected. The scale of living of the Yucatan farmer at once changed with his increased prosperity; it was most natural that it should be so. The price of farms increased tremendously; the price of everything increased. From living frugally he lived in luxury.

Senator WADSWORTH. By the way, Mr. Bayley, have you been to Yucatan very often?

Mr. BAYLEY. I have been there only those two times to which I have referred, but the others from the office have been down quite frequently, and, of course, the manager, Mr. Peirce, comes up every year or two, and the others of the office come up-submanagers come up, so that we are in constant consultation.

National Cordage Co. This resulted in their not being obliged to sell out to the trust, and as the result of the independent mills being kept supplied in this manner the National Cordage Co. failed in the spring of 1893. In fact, their failure was the beginning of the panic of that year.

Following the panic of 1893 the prices of all fibers were very low on account of the reduced consumption, and for the four years from 1894 until the spring of 1898 sisal ruled steadily below 4 cents, New York, with the exception of, I believe, one month.

For some 14 months of that period, not consecutively, but a total of 14 months out of that period, sisal sold below 3 cents, New York. Part of the time it sold at 2 cents, New York. During those four years the Yucatan farmers lived frugally; there was no panic. We heard nothing specially of hard times, except that they regretted their fiber was not higher. With the spring of 1898 came the Spanish War, and following that the insurrection in the Philippines. The Philippine troubles tremendously reduced the production of manila hemp, and it soon showed that there was not enough hard fiber in the world to meet the demand. We got a new level at once for prices. The Philippine production for 1897 was 875,000 bales: for 1898, 742,000 bales; for 1899, 492,000 bales. That brought fibers quite permanently to a higher basis.

These charts are the office charts of my firm, showing the delivery prices [exhibiting charts to the committee]. As you can see, this is manila and this is sisal [exhibiting], and nothing has been put in for these early years.

The CHAIRMAN. That runs from 1894?

Mr. BAYLEY. That runs from 1894 to 1898. You remember the Battle of Manila Bay was in May. Here is sisal [indicating]. Mr. SPENCER, How high did it go, Mr. Bayley?

Mr. BAYLEY. Why, 11; but that was an excited time.

According to my chart, it started at 43 at the end of April and was 111 by the middle of June.

The CHAIRMAN. Does the red mark indicate manila?

Mr. BAYLEY. The red mark indicates manila.

The CHAIRMAN. And white indicates sisal?

Mr. BAYLEY. White indicates sisal.

From 1898 on, for several years, you will see that sisal was on a permanently higher price.

Again, the red is manila [indicating]. Here is the closing of the Manila ports, when prices for Manila went very high. But if you will compare this chart with the previous one you will see that sisal was for several years on a permanently higher basis. The result was what would be expected. The scale of living of the Yucatan farmer at once changed with his increased prosperity; it was most natural that it should be so. The price of farms increased tremendously; the price of everything increased. From living frugally he lived in luxury.

Senator WADSWORTH. By the way, Mr. Bayley, have you been to Yucatan very often?

Mr. BAYLEY. I have been there only those two times to which I have referred, but the others from the office have been down quite frequently, and, of course, the manager, Mr. Peirce, comes up every year or two, and the others of the office come up-submanagers come up, so that we are in constant consultation.