UNITED STATES SENATE,

SUBCOMMITTEE ON AGRICULTURE AND FORESTRY,

Washington, D. C.. The subcommittee met in the committee room, Capitol, at 10.30 o'clock a. m., pursuant to the call of the chairman. Senator Joseph E. Ransdell presiding.

Present: Senators Ransdell (chairman), Gronna, and Wadsworth. Also present: Hon. Walter L. Fisher and Mr. Philip Wells, representing the International Harvester Co.; Mr. A. P. Loring, president Plymouth Cordage Co.; Dr. Victor A. Rendon and Mr. Walker Spencer, representing the Comision Reguladora del Mercado de Henequen; Mr. Sol Wexler, Mr. Lynn H. Dinkins, and Mr. Levy Mayer, representing the Pan-American Commission Corporation, of New York; and Mr. C. D. Orth, representing Hanson & Orth, of New York.

The CHAIRMAN. The subcommittee has met pursuant to S. Res. 94, which is as follows:

Whereas binding twine is one of the large items of expense in the production of grain; and

Whereas it has been alleged in the public press and by individuals that the present price thereof is exorbitant and is fixed and controlled by certain persons and corporations: Therefore be it

Resolved, That the Committee on Agriculture and Forestry of the Senate, or any subcommittee appointed by said committee, be, and is hereby, authorized and instructed to investigate and report to Congress what companies and corporations are engaged in the importation of said sisal and manila hemp and the production of binding twine and to what extent, if any, they control the price thereof, and whether there are any combinations or agreements to fix and control the wholesale or retain prices of sisal and manila binding twine in the United States.

The committee is authorized to administer oaths, subpœna witnesses, and send for persons and papers in the prosecution of the said investigation.

The CHAIRMAN. Before proceeding, gentlemen, I wish to state that the committee has decided that they desire to obtain all the facts in this matter. They will conduct the examination themselves, but in order that either side may have an opportunity to cross-question, if it is so desired, if those who have questions to ask will jot them down as the examination proceeds and submit the questions to the committee, they will propound them, if pertinent and proper, so there will be full opportunity given to have propounded to the witnesses any searching questions that you desire to have asked.

We will begin with Dr. Rendon.

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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. Ábout 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

successor.

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.

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 testiTony 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?

Mr.

Dr. RENDON. Mr. Montes is the son-in-law of Mr. Molina. 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.