Mr. ORTH. Would it change your opinion if I were to show you that there was a daily market in Yucatan?

Mr. WEXLER. It would not change my opinion. I do not know anything about the facts you are stating, but I think there are gentlemen here that can answer you.

Mr. ORTH. Are you aware that in the month of September, 1915, that charters were made to bring hemp from Progreso to Mobile for the rate of 50 cents a hundred pounds across the Gulf?

Mr. WEXLER. I have no knowledge of that. If you know it to be a fact, state is as a fact.

Mr. ОRTH. I state it as a fact.

for 50 cents.

Hanson & Orth chartered a steamer

Mr. MAYER. Mr. Chairman, I want to cross-examine this witness

now.

Mr. WEXLER. You understand that he is asking questions about things I know nothing about.

The CHAIRMAN. Please continue to ask questions and do not testify. Mr. ORTH. Are you aware of the fact that the increase in freight rates between September and February across the Gulf was one-half cent a pound, whereas the advance in the price of sisal was 13 cents a pound?

Mr. WEXLER. I do not know anything about it.

Mr. ORTH. That is all, Mr. Chairman.

Mr. MAYER. Mr. Wexler, Mr. Fisher has said to you that sisal was selling in February, 1915, at 4 cents a pound in the United States, and asked you to figure out the difference between that and 73 cents a pound. I call to your attention what has been sold in the United States in February in each year beginning in 1900-I speak now, members of the committee, of sisal in the United States, and I read from documentary proof which will be offered in evidence-1900, February, sisal, 8 cents a pound; 1901, February, sisal, 6 cents a pound; 1902, February, sisal, 9 cents a pound; 1903, February, sisal, 73 cents a pound. So that I need not repeat the word "February.' The year will indicate the word "February."

The CHAIRMAN. All right. Go ahead.

Mr. MAYER. 1904, 7 cents a pound; 1905, 7 cents a pound; 1906, 73 cents a pound; 1907, 71 cents a pound; 1908, 5 cents a pound; 1909, 5 cents a pound; 1910, 6 cents a pound; 1911, 4 cents a pound; 1912, 5 cents a pound; 1913, 7 cents a pound; 1914, 5 cents a pound. I just want to ask Dr. Rendon, Are these the prices in New York or in New Orleans?

Dr. RENDON. New York.

Mr. FISHER. At what date in the month, do you know?

Mr. MAYER. The average for February.

Mr. FISHER. The average for February?

Mr. MAYER. Now, take those figures. Instead of 4 cents as the basis of calculation, has sisal gone up or down, even at the prevailing war prices or war freight rates?

Mr. WEXLER. I should say that the price was below the average of the February of the years you mentioned.

The CHAIRMAN. We close with this witness and we will convene at 2.30.

(Thereupon, at 1.03 o'clock p. m., a recess was taken until 2.30 o'clock p. m.)

AFTER RECESS.

The subcommittee reassembled at the expiration of the recess.
The CHAIRMAN. Senator Curtis is with us, and wishes to make a

statement.

STATEMENT OF HON. CHARLES CURTIS, A SENATOR FROM

KANSAS.

Senator CURTIS. Mr. Chairman, when this matter first came up, my attention was called to it by the officers of the State of Kansas who had charge of the penitentiary. We have a binding twine plant in the State penitentiary there, which is operated under the management of the prison board, and they use about 4,996 bales of sisal a year; and by correspondence I have gathered a good deal of data which I would like to put into the record. I have no personal knowledge of the matters at all, but the data I use I have taken from letters received some of them personal and confidential, and I have eliminated the parts that were personal, and simply put down the statement as I thought the parties who wrote would like to have it presented to the committee.

The CHAIRMAN. Will you present the statement, Senator?
Senator CURTIS. I will present the statement.

The CHAIRMAN. Proceed in your own way,

Senator CURTIS. I would like to make the statement and then read the affidavit.

The CHAIRMAN. Yes.

Senator CURTIS. During the entire history of the penitentiary twine plant of the State of Kansas they have purchased sisal in the open market and have paid usually under $6 per hundredweight, f. o. b. Lansing. In the autumn of 1914 it was as low as $3.60 and a year ago they purchased some at $4.40. In April, 1915, they purchased at $4.29. Since then the price has gradually increased until last September, when it was $5.83. In November they were notified that they could purchase sisal only through the Comision Reguladora, which is a division of the Government of Yucatan. All individual brokers were out of the business and since then the price has been increased steadily until their last purchase on February 2, at $7.35. Just what happened to bring this about was related to a member of the Board of Corrections of the State of Kansas and to others, who are interested in the buying end, last week by Mr. Leo C. Browne, of New Orleans, assistant secretary of the Pan American Commission Corporation. He visited Kansas with letters of recommendation from Sol Wexler, of New Orleans, and David R. Francis, of St. Louis, and said he was the organizer of the combination which controls the entire sisal output of Yucatan, the only source of sisal supply for the they are understood, and is as follows: A synopsis of his report will give the facts as The sisal producers were selling to a number of brokers and last summer an effort was made to control the market. He stated that he was the agent who worked out the plans. It was arranged with the governor of Yucatan and soon after that governor was and the second governor was approached, and it was under deposed

American farmer.

28201-VOL 1-16-17

way

when he was succeeded by Gen. Alvarado, the present governor. Mr. Browne stated that he went to New Orleans and organized a company backed by bankers with a million dollars capital, and the New Orleans bankers agreed to finance the purchase of sisal to the extent of $10,000,000. He returned to Yucatan and the Comision Reguladora was appointed by the governor, who issued an order that all sisal should be sold to this Comision and to no one else. Later, he states, that after certain procedures had been carried on it was made voluntary instead of compulsory, but that every planter entered the agreement so that all sisal amounting to about 960,000 bales a year is marketed through this Comision, which obtains its money for purchase from the New Orleans bankers. The sisal is warehoused at New Orleans and money loaned on warehouse receipts. The bankers through the company receive 6 per cent interest on the money and 5 per cent commission on the amount of sisal sold.

The price is fixed by the Reguladora Comision and it is planned so they distribute the output that no firm can warehouse any considerable amount in advance, thus making it easy to control the distribution. He also stated, that when he went to Gov. Alvarado and proposed the matter to him he was authorized to pay the governor $500,000 in gold for his cooperation, but also added that the governor refused to accept the money. His argument was, that by thus controlling the price the producer would receive more for his sisal on the farm than he would before and would be the beneficiary from the increase in price. He professed, however, not to be familiar with the price the producer is now receiving, but said that in September the producer received 4 cents per pound. He predicted that the price would be made yet higher and that there was no limit to the figures the commission might fix. He also presented the argument that if Congress upset the financial arrangements of the company at New Orleans the comision could finance the sisal trust through London and place the American farmer absolutely at the mercy of the Mexican Government. His mission seemed to be to visit all those who have been active in opposing the sisal trust and convince them that it would be wise to accept the new situation and to look upon it as a necessary condition growing out of the general rise in prices for all kinds of products. In this he was not particularly successful so far as advices come from people with whom he talked. He made a special trip to Kansas and said that the interviews there had caused them more annoyance than anywhere else.

From Browne's talk the impression he left in Kansas was that New Orleans bankers are nervous over the agitation and are very anxious to have things quieted. It is also evident that they look for a very handsome profit. It is not believed that the producers on the farms of Yucatan are receiving any increase in price for their sisal. That should be easily a matter of proof. On the face of it, it appears, to some at least, that the Carranza government is making a handsome income from the arbitrary increase in price to the American farmer. Practically all the Yucatan sisal comes to America, only a few thousand bales go abroad.

The International Harvester Co. has two mills in Europe to which it ships raw material. Its South American trade is furnished the manufactured material, twine. It is impracticable for American farmers to use Manila twine because of its expense and they must

use sisal unless other material is found to take its place. Kansas in a good wheat year uses 15,000,000 to 20,000,000 pounds of twine. An increase of 1 cent per pound means $150,000 added to its harvest account. The Kansas penitentiary twine plant, with its convict labor, sells twine approximately 1 cent per pound less than the dealers. This year their price is $9.25 per hundred pounds, as compared with 7 cents a pound last year. On their output of three and one-half million pounds they are charging the farmer nearly $90,000 more for his twine than he has ever paid before, and this merely from their own institution. A cent a pound on the entire harvest area means approximately $2,000,000 increased cost to the American farmer.

These are the facts, as I get them, and with them comes the inference that the New Orleans bankers are nervous, and the feeling that there is something unfair in the proposition. I am attaching an extract from a late copy of the Implement News, which has carried on considerable campaign and which contains some matters of interest. The remarks of Mr. Browne stated above were made in the presence of several Kansas business men and, I take it, represents the idea that the Reguladora wants to have accepted as its side of the project.

The CHAIRMAN. What is that data, Senator?

Senator CURTIS. This is a statement I have prepared from the various letters I had received, and it is copied virtually from the letters.

The CHAIRMAN. Yes.

Senator CURTIS. There were some letters written personally and confidential, and some local.

The CHAIRMAN. You know nothing about the facts?

Senator CURTIS. I said not. I have absolutely no information at all.

The CHAIRMAN. You just prepared that statement from your correspondence?

Senator CURTIS. I just prepared it from my correspondence from the letters on file in my office.

Then I have a statement showing the distribution in this country, and if you gentlemen have not already had it put in your record, I think it would be well to place it there. It shows the amount used by the different plants in the United States, and especially the penitentiaries.

The CHAIRMAN. We have not had that.

Senator CURTIS. If you will just put that in; it is not necessary to read it, I think.

(The statement referred to by Senator Curtis is as follows:)

Distribution of sisal from Progreso and Campeche in 1914.

D. Allen's Sons Rope Co......

American Manufacturing Co.

Brantford Cordage Co.....

Columbian Rope Co...

Consumer's Cordage Co..
Cupples Cord Co..
Edw. H. Fitler Co..
Hooven & Allison Co..
Indiana State Prison..

Bales.

8,856

5,365

6, 766

22, 232

4, 500

3, 779

12, 781

23, 286

10, 489

Estimated amount used by the Kansas State Prison during 1915, 12,000 bales.
Data compiled by Mid-State Brokerage Co., Kansas City, Mo.

Then I had presented to me some wires, and an affidavit, which I think should be called to your attention. This wire was from Jack Danciger, Mexican consul at Kansas City, dated February 1, 1916 [reading]:

Can you quote me price on current white sisal in amounts 5,000 to 20,000 bales in Yucatan; wire answer collect.

Mr. SPENCER. Who is that addressed to?

Senator CURTIS. Jack Danciger, to which the following reply was received [reading]:

JACK DANCIGER, Mexican Consul, Kansas City, Mo.:

FEBRUARY 1, 1916.

Are not quoting sisal in Yucatan; to-day's price f. o. b. New Orleans 7 cents, New York 73, February, March, or April shipment.

V. A. RENDON.

Then a letter dated February 2, 1916, from the comision office in New York, 120 Broadway [reading]:

Mr. JACK DANCIGER, Mexican Consul, Kansas City, Mo.

DEAR SIR: We confirm telegrams exchanged yesterday, as per inclosed copies. As you were informed in our telegram, we are not quoting prices for sisal delivered to Yucatan. Our object being to make the same price to all buyers, it can only be done by quoting prices delivered at some United States port. These prices are as follows: Current sisal, February, March, April shipment, 73 cents New York; current sisal, February, March, April shipment, 7 cents New Orleans.

The same as in the statement [resumes reading]:

We hope you will advise us the name of the party interested in the purchase of 5,000 to 20,000 bales, in accordance with your telegram, as it is our intention to keep in direct touch with all consumers of sisal fiber in this country.