(a) Pure manila, 600 feet to the pound, made of a good quality of abaca fiber.

(b) Manila, 600 feet to the pound, made of abaca with a mixture

of other fibers.

(c) Standard manila, 550 feet to the pound. Made of mixed abaca and henequen

fiber.

(d) Standard, 500 feet to the pound. Made of sisal (henequen).

(e) White sisal, 500 feet to the pound. Made of sisal (henequen) fiber; sometimes

with a mixture of other fibers.

Abaca, commonly called manila hemp, and henequen, known as sisal in the trade, are used for binder twine more than all other fibers combined. The best and highest priced grades of binder twine are made of abaca (manila). This plant is cultivated extensively in the Philippines, Java, and New Zealand. Different grades of abaca are quoted on the market, the differences resulting chiefly from the greater or less care in cleaning and preparing the fiber.

These grades vary in price, but the average maket price for abaca (manila) in the United States during the last 10 years has been about 8 cents per pound, and at the present time is 10 cents per pound. The difference in market price in the United States between abaca (manila) and henequen (sisal) is 34 cents per pound. The average difference in the United States during the last 15 years between the two fibers has been about 2 cents per pound.

The following is a table trom 1903 up to and including 1914 of the yearly exports of sisal (henequen) from Yucatan and manila (abaca) from the Philippines into the

United States:

Each bale contains 375 pounds; substantially all of said manila and sisal is manufactured in the United States into binder twine and rope.

The following is a table of the monthly market price in the United States from 1900 to 1914, inclusive, of sisal and manila:

Hemp― Monthly average prices of sisal and manila from 1900 to 1915.

STANFORD

Hemp-Monthly average prices of sisal and manila from 1900 to 1915-Continued.

It will be noticed that the importation of sisal into the United States was, in 1900, 469,217 bales and in 1914, 967,107 bales, or about 100 per cent increase, while that of manila has varied between the years 1900 and 1914, in 1900 being 409,623 bales and in 1914, 402,918 bales. In 1909 the importation into the United States of manila reached its highest point, viz, 766,949 bales.

The Philippines export to the United States one-half as much fiber as Yucatan sends to this country. In addition, Java and New Zealand export to the United States varying amounts of fiber. Furthermore, henequen, or sisal, is indigenous to all of southeastern Mexico, which includes the States of Campeche, Chiapas, Sinaloa, and Temaulipas; it is also now being grown in Cuba, Bahamas, and German South Africa.

The cost of manufacture in the United States of sisal, or manila, into binder twine is 1 cent a pound, and the cost of transporting and handling sisal from Yucatan to the United States is one-half cent a pound.

If the entire Yucatan sisal industry were destroyed, its place would be taken by

an increased cultivation of fiber in other of the southeastern States of Mexico. Furthermore, the Philippines, New Zealand, Java, the Bahamas, Cuba, and German South Africa would supply all the needs of the United States, though at a higher price. Of the sisal imported into the United States from Yucatan, the International Harvester Co. buys an annual average of from 50 per cent to 60 per cent and the Plymouth Cordage Co. 15 per cent to 20 per cent.

Of the sisal imported into the United States during the years 1903 to 1914 by the International Harvester Co. and the Plymouth Cordage Co., those companies have, respectively, resold the raw material or unmanufactured sisal as follows:

There are now engaged in the United States about 35 parties that manufacture sisal into binder twine, which does not include a number of small manufacturers making other twines, ropes, etc.

It will be noticed from the above table that the International and Plymouth companies have sold the raw material (sisal) in the United States to other binder-twine manufacturers to the extent at times of as high as from 50 per cent to 75 per cent of their original or direct purchases. In other words, the International and Plymouth companies, instead of manufacturing all their sisal purchases into binder twine, have themselves been venders in the United States to other manufacturers of a large part of the sisal which the International and Plymouth companies purchased, and, as will be seen later on, purchased in Yucatan through their agents located there; or, to put it in a different way, the International and Plymouth companies bought sisal in Y Yucatan, imported it into the United States, and then resold the sisal in its raw state to other manufacturers who have been dependent for the supply of sisal upon the International and Plymouth companies. These other or outside manufacturers did not and could not obtain in Yucatan a supply of sisal, but had to rely entirely for the supply of their needs upon the International and Plymouth companies.

The International Harvester Co. was originated in 1902 with a capital stock of $——. As an illustration of the effect of the formation of the International Harvester Co we submit a table of sisal purchased in Yucatan beginning with the year 1900, or two years before the harvester company was formed, and continuing thereafter down to 1914. The table also shows the number of buyers, the quantity absorbed by the

representatives of the International and Plymouth companies, the price of sisal in January of each year, and the price of binder twine to American farmers each year.

It will be noticed from the above table that immediately after the formation of the harvester company, it, together with its ally, the Plymouth Cordage Co., acquired practical control of the entire sisal industry in Yucatan, and that in only 4 years of the 15 years was there any appreciable decline in the price of binder twine, though in many of the years the price of sisal was much lower.

We submit herewith an authoritative chart showing the price fluctuations of manila sisal and New Zealand hemp during the years 1903 and 1914.

An inspection of that chart shows that the highest quotation of sisal in the United States was in December, 1903, when the price reached 94 cents a pound, and that in 1914 the price fell in September to 3 cents per pound. Such was the result of the formation of the harvester company and the cooperation with it of the Plymouth Cordage Co.

The

The figures shown on the chart are the prices in the United States. These are not the prices that were paid to the Yucatan farmer. He realized considerably less. harvester company and the Plymouth Co. had their agents in Yucatan... These agents lent money to the Yucatan farmers at 10 per cent interest, and the contracts of loan required the farmers who borrowed the money to sell their crops to the agents of the International and the Plymouth companies at from one-fourth cent to one-half cent a pound less than the prevailing market prices, and these market prices, it will be borne in mind, were prices which the International and Plymouth companies practically themselves fixed by reason of their control of the industry.

As a result of these practices, during the period of time referred to, the Yucatan farmers obtained for their sisal from one-half cent to 1 cent less per pound than the prices that prevailed in the United States. The consequence was that in 1911 when the market price of sisal in the United States was 33 cents per pound, many of the Yucatan sisal farmers received for their sisal less than 3 cents per pound.

We have already stated that the cost of manufacturing sisal into binder twine in the United States is 1 cent a pound, to which is to be added the cost of transportation and handling charges, which makes another one-half cent a pound, so that to ascertain the cost of binder twine to the International Harvester Co. and the Plymouth Cordage Co. there should be added to the market price of sisal 14 cents a pound to cover the cost of transportation, handling, and manufacturing the sisal into binder twine.

With this premise before us let us see what the spread was between the market price of sisal, plus the transportation, handling, and manufacturing charges, and the price paid for binder twine by the American farmer.

In 1903 the spread between the cost to the International and Plymouth companies of manufacturing binder twine, and the price paid by the American farmer, was approximately 3 cents a pound. In 1904 the spread was from 3 cents to 3 cents per pound; in 1906 the spread was from 3 cents to 3 cents per pound; in 1907 the spread was from 34 cents to 4 cents per pound; in 1913 the spread was from 34 cents to 4 cents per pound; in 1914 the spread was from 3 cents to 4 cents per pound.

These figures would indicate that the Harvester and Plymouth companies were making anywhere from 33 per cent to 50 per cent profit, or more, on the sale of binder twine to the American farmer.

The Yucatan farmers have thus for many years been at the mercy of the International Harvester Co. and the Plymouth Cordage Co., which concerns, through their direct representatives in Yucatan had the control of the purchase and sale of the Yucatan sisa).

The harvester company from 1902 to 1911 was represented in Yucatan by Avelino Montes, who is the son-in-law of Olegario Molina, who from 1902 to 1908 was governor of Yucatan and from 1908 to 1911 was secretary of public works of Mexico. Early in 1915 Avelino Montes fled his country and has not since returned.

In order to remedy the vise-like and oppressive conditions that enveloped the Yucatan farmers, the government of Yucatan took the matter in hand and enacted a public law to protect the sisal industry of the State. Under the law, which was passed in August, 1911, the governor of Yucatan was required to establish a commission or body politic. He was directed to appoint the five members of the commission, and the governor was made ex-officio president of the same.

Under the law in question the State of Yucatan, in order to protect the henequen industry, authorized a government loan of 5,000,000 pesos and imposed a tax on unmanufactured hemp carrying from one-half centavo per kilogram up to 1 centavo per kilogram, dependent upon the current Yucatan price. This tax, in American money at the rate of exchange prevailing in times of peace, is equal to from oneeighth of a cent to one-quarter of a cent a point. On the basis of the present rate of exchange the tax is less than two one-hundredths of a cent per pound. That tax is being levied under the law in order to repay the government loan and raise a fund with which to help needy farmers and to encourage and improve the sisal industry.

By virtue of the law, and in express obedience to it, the Yucatan governor created the Comision Reguladora del Mercado de Henequen, one of whose principal functions it was to receive and administer the funds designed for the protection of the henequen industry.

The comi ion is authorized and directed to maintain an equilibrium between supply and demand whenever the production is greater than the consumption; to apply the excess production to new industrial outlets; to open new markets to traffic in the fiber, and to give all the impetus possible to the manufacture of henequen within the State.

Under the law, the governor is directed to establish as promptly as possible in the penitentiary of Yucatan in Merida, a cordage mill which shall manufacture Yucatan fiber. The law expressly provides that "the profits arising from the mercantile transactions of the comi ion for regulating the henequen market shall be applied to promote and further the manufacture of Yucatan fiber within the State."

It will this be seen that self-preservation and the absolute necessity to protect the Yucatan farmers against the methods of the American companies, to which we have referred, made it imperative that the Yucatan Government should render the aid which the law in question and the Comision Reguladora created thereunder were designed to do and accomplish.

The comision began the discharge of its duties in 1912 and since that time has been slowly but gradually carrying out the functions which it was created to discharge. In order to helpfully servce the Yucatan farmers, the comision after careful study and investigation has fo' nd it desirable to arrange for the establishment in the United States of a line of credit, over a period of five years, of a maximum of $10,000,000; the comi-ion devoted much time to a study of the best means of arranging for and securing this standing credit, against which the comision could draw during the 5-year period. The purpose of securing the credit has been to enable the comision to advance funds to the Yucatan farmers without interest and to protect the farmers against being forced to sell their product at a time when either there was no demand or when the American companies, to which reference is made, were in a position to dictate as they have heretofore dictated the price.

The comision entered upon negotiations in New Orleans with Mr. Lynn H. Dinkins, president of the Interstate Trust & Savings Bank of New Orleans, and Mr. Sol. Wexler, president of the Whitney-Central National Bank of New Orleans, to undertake to secure the $10,000,000 credit and to obtain for the comision a guarantee that credit would always be available during five years, regardless of panics and money conditions. The result of these negotiations was the completion of an adequate arrangement with those gentlemen.

Those gentlemen have completed the task of arranging for the $10,000,000 debit over a period of five years, and that arrangement rests on a large basis deemed by the comision extremely satisfactory and useful to the Yucatan Government and the sisal growers of that State.