Mr. SPENCER. I notice by this record that your shipments reached their high-water mark in 1907, did they not?

Mr. BAYLEY. They did; yes, sir. I believe I so testified yesterday that that was our maximum year.

Mr. SPENCER (continuing). Being in that year 254,541 bales. Then there was a considerable decrease in subsequent years quite a decrease in 1909 and 1910.

Mr. FISHER. Mr. Spencer, will you kindly read the figures for 1908, 1909, and 1910, so that we may have them immediately before us! Mr. SPENCER. 1908, 240,610; for 1909, 161,913-what is the oceasion of that falling off in 1909?

Mr. BAYLEY. That was the result of the large contracts made by Montes, amounting to 220,000 bales, which included a considerable number of farmers who had formerly sold to us.

Mr. SPENCER. 1910, 148,981.

Mr. BAYLEY. Well, the contracts to which I refer, of 1909, extended over into 1910. They cut down our business both years.

Mr. SPENCER. Did you have difficulty in getting sisal in those two years?

Mr. BAYLEY. Not so much difficulty in getting it as there was difficulty in selling it at the prices prevailing.

Mr. SPENCER. In the United States?

Mr. BAYLEY. In the United States.

Mr. SPENCER. Well, was there any difficulty in getting it at a reasonable price in Yucatan during those two years?

Mr. BAYLEY. Following those large contracts, the market was advanced to about 6 cents landed in New York, and during those years manila hemp was very plentiful and cheap and there was a great falling off in the consumption of sisal and a great increase in the consumption of manila. The result was that our business in manila increased very largely during those years and our business in sisal was materially cut down.

Mr. SPENCER. You stopped buying sisal or cut down your purchases of sisal and increased your purchases of manila, was that it? Mr. BAYLEY. We never stopped buying sisal; we have bought sisal every week in the year, but the scale of our purchases was materially reduced.

Mr. SPENCER. Would you have any objection to putting in that whole table that you have there?

Mr. BAYLEY. Why

Mr. SPENCER. I would like to have that introduced, showing shipments by various people.

Mr. BAYLEY. I brought that on from my office information book. Mr. SPENCER. Do you believe that is fairly accurate?

Mr. BAYLEY. It is made from our office records for reference, and I could not possibly leave these particular sheets, but I can have copies made.

Mr. FISHER. Mr. Spencer, do you refer to the first page?

Mr. SPENCER. The first page.

Mr. FISHER. But not the subsequent pages; I have not looked at the subsequent pages.

(The data submitted by Mr. Bayley is as follows:)
Shipments of sisal to the United States.

Mr. SPENCER. Does Peabody & Co. export any sisal from the United States to Europe?

Mr. BAYLEY. No, sir.

Mr. SPENCER. Do you know whether the International Harvester Co. does so?

Mr. BAYLEY. No, sir; I do not. We have attended strictly to our own business. We do not pay any attention to what our neighbors may be doing.

Mr. SPENCER. Have you exported any sisal from Yucatan to Europe?

Mr. BAYLEY. No, sir.

Mr. SPENCER. All the sisal that you buy comes to the United States?

Mr. BAYLEY. Yes, sir.

Mr. SPENCER. And it is all consumed here?

Mr. BAYLEY. Yes, sir. In times past we have occasionally sold a small quantity for Havana; but, I think, we have not done that for years. In the United States, of course, is included Canada.

Mr. SPENCER. Are you an importer of manila hemp?

Mr. BAYLEY. Yes, sir.

Mr. SPENCER. Do you import it in your own name or in the name of the Plymouth Cordage Co/?

Mr. BAYLEY. May I answer that a little at length?

Mr. SPENCER. Yes, sir.

Mr. BAYLEY. In the summer of 1890, when I first went to Yucatan to get established in the sisal business, we sent our Mr. Charles L. Smith to Manila to open an office there and to engage in the hemp business for the very same reasons which led us to engage in the sisal business. For five years we maintained our own office in Manila as merchants in manila fiber.

Mr. SPENCER. In the name of Peabody?

Mr. BAYLEY. Under the name of Henry W. Peabody & Co. At the end of five years we decided it would be much more profitable if we made arrangements with the largest manila hemp firm in the Philippine Islands, Smith, Bell & Co., under which arrangement we closed our Manila office and they closed their New York office and we entered into an agreement to act for them as American agents, selling for them on commission, and that arrangement has been continued to the present time. Every sale of manila hemp which we make in America is made as agents for Smith, Bell & Co. (Ltd.), of the Philippine Islands; that is the only way in which we do business in manila hemp.

Mr. SPENCER. How is the hemp imported? In whose name does it come to the United States?

Mr. BAYLEY. Shipped by Smith, Bell & Co. to order and financed through bankers. The back of each bill of lading would bear the notation required under the war regulations, consigned to Henry W. Peabody & Co.

Mr. SPENCER. Who collected the refund of the export tax which was granted under the Dingley bill?

Mr. MAEYR. It was collected in Manila by Smith, Bell & Co., in accordance with the Government regulations, and when remitted to the United States was paid to each manufacturer who had bought the hemp, provided he had consumed it in the United States and had not reexported it.

Mr. SPENCER. So that the manufacturer then got the benefit of the refund of the export tax?

Mr. BAYLEY. Yes, sir, entirely. This amounted to 95g cents per bale, and it was about 35 cents per 100 pounds.

Mr. MAYER. Mr. Bayley, is your concern a corporation or a firm? Mr. BAYLEY. A firm.

Mr. SPENCER. Oh, I just want to ask one question. May I?

Mr. MAYER. Yes.

Mr. SPENCER. Did Cyrus H. McCormick ever have an interest in your firm?

Mr. BAYLEY. No, sir.

Mr. SPENCER. Did he have any connection with it?

Mr. BAYLEY. Yes, he had a connection with it. When we commenced business in 1890 we found that the business was going to take more money than we had available. We turned to people that we thought were most interested, the Pearson Cordage Co., of Boston. We made an arrangement with B. C. Clark & Co., who were connected with the Pearson Cordage Co., to advance money if we required it, in return for which we agreed to pay them interest on the money and a portion of the profits in the sisal business. That agreement was guaranteed by Cyrus H. McCormick, but the arrangement was with B. C. Clark & Co.

Later on, when we found that we could dispense with it, that agreement was terminated.

Mr. SPENCER. Will you state the year that was terminated?

Mr. BAYLEY. It was terminated promptly after the formation of the International Harvester Co.

Mr. MAYER. The International Harvester Co. was formed in 1902, so that the arrangement was terminated that year or the next year? Mr. BAYLEY. I would say that same year.

Mr. MAYER. Who is the head of your firm?

Mr. BAYLEY. The senior partners are Charles D. Barry and Frederick W. Lincoln, both of whom reside in New York and are senior partners in the firm of Henry W. Peabody & Co. in New York. The other remaining partners in my firm are myself and Charles L. Smith, both of whom conduct the Boston office. So that while Mr. Barry and Mr. Lincoln are considered as senior partners, the management of the business is in the hands of myself and Mr. Smith.

Mr. MAYER. Your concern does a very large business, does it not? Mr. BAYLEY. You mean Henry W. Peabody & Co. of Boston? Mr. MAYER. Henry W. Peabody & Co., whether of Boston, New York, or any other place.

Mr. BAYLEY. The firm of Henry W. Peabody & Co. of New York is separate from the firm of Henry W. Peabody & Co. of Boston. although there are two of the same partners in each firm. But I have no interest in the firm of Henry W. Peabody & Co. of New York, and there are also partners in New York who have no interest in Henry W. Peabody & Co. of Boston.

Mr. MAYER. As to Henry W. Peabody & Co., of Boston, do they do business other than in hemp?

Mr. BAYLEY. No, sir.

Mr. MAYER. So that your branch deals exclusively in

Mr. BAYLEY. Exclusively in hard fibers, sisal, and manila-before the war in German East Africa, New Zealand, and sometimes in Istle.

Mr. MAYER. Who handles the largest part of the manila hemp that comes into the United States-your firm?

Mr. BAYLEY. The Plymouth Cordage Co.-do you mean who consumes it?

Mr. MAYER. No; who handles it.

Mr. BAYLEY. Henry W. Peabody & Co.

Mr. MAYER. About how many bales of manila hemp does your firm import or act as agents in the handling of in this country-approximately a year.

Mr. BAYLEY. Probably an average of 200,000 bales. I think we have sold as much as 264.000 bales in a single year and it runs down as low as, I think, 125.000 bales.

Mr. MAYER. You sell that manila hemp to the manufacturers alike in the United States, do you?

Mr. BAYLEY. Yes, sir.

Mr. MAYER. Your largest customers, I presume, being the Plymouth Cordage Co.?

Mr. BAYLEY. Yes, sir. They have been the largest consumers of manila hemp in the United States.

Mr. MAYER. You spoke of making a total of loans to the Yucatan farmers aggregating 1,000,000 pesos, and you also added that it