Mr. TINCHER. Mr. Ginn, what is the condition of the funds of the Sugar Equalization Board? Mr. GINN. The latest that we have, Mr. Tincher, was in 1923. I think that is published in the Congressional Record. Here is a report from Mr. Zabriskie, dated January 24, 1923. I will just read the report. [Reading:] JANUARY 11, 1923. First. The United States Equalization Board (Inc.) is engaged only in the liquidation of its affairs. Second. (a) A salary of $170 per month is being paid E. W. Scanlon, who is in charge of records and office. (b) Salaries paid for the two years ended December 31, 1922: 1921, $21,882.14; 1922, $15,866.94. Third. (a) The present expenses of the board, other than salary mentioned above, are as follows: Office rent per month, $204.17; telephone per month, $6.05; miscellaneous per month, estimated, $5. (b) The following are the expenses of the board for the two years ended December 31, 1922. I don't know whether you care for that; it is in considerable detail here. Mr. ASWELL. What is the total? Mr. GINN. The total is: 1921, $10,940.14; 1922, $61,749.44. Mr. ASWELL. May I interrupt you there? Why was that board continued all these years? What is it doing? Mr. GINN. It is rather an enigma there in the General Accounting Office as to whether that board is actually in existence or not. Mr. ASWELL. What was it spending that $60,000 a year for? Mr. GINN. I do not what they were doing at that time. Mr. TINCHER. What does it say they spent that year? Mr. GINN. I have not any report as to that; it was $61,000 in 1922. Mr. TINCHER. How much money have they on hand now, all told? Mr. GINN (reading): The following money and property was owned and controlled by the Board: Furniture and equipment, $1,376; accounts receivable, $142,905.76; cash in the United States Treasury, $15,279,636.52; in Battery Park National Bank, $161,845.52; petty cash, $100. Mr. ASWELL. How much of that did they pay the American Trading Co.? Mr. GINN. I had a report from the White House yesterday that under the President's proclamation of May 23, 1923, they paid them $2,482,476.33. Mr. ASWELL. How much did they pay De Ronde? Mr. GINN. They have not paid them. Mr. ASWELL. Why? They had the same resolution to operate under. Mr. GINN. The De Ronde claim was before the courts. Mr. ASWELL. And they refused to pay it! Mr. GINN. They refused to pay it. Mr. ASWELL. But they had the same authority from Congress as they had in the other case? Mr. GINN. Absolutely. Mr. ASWELL. Why the difference? Mr. GINN. I do not know. Mr. ASWELL. Did Brown and Glasgow have anything to do with that? Mr. GINN. I suppose they did. Mr. ASWELL. How much was Glasgow paid out of it? Mr. ASWELL. There is no record of that? Mr. GINN. There is no record in the General Accounting Office whatever in regard to this. Mr. ASWELL. How much did Brown get out of it? Mr. GINN. I do not know that. Mr. CLARKE. May I ask you right there: Haven't you files any record as to what they had January 1, 1923? in your Mr. GINN. None whatever. In fact, these figures were not in our files, this report that I have read here. These accounts have not been audited by the General Accounting Office. Mr. KINCHELOE. Does that $61,000 in 1922 represent the expenditures for the operation of the board in the way of salaries? Is that what that was spent for? Mr. GINN. Here is the itemized statement of that: Telephone, telegraph, and postage, $86.55; rent, $2,450.04; printing and stationery, $15.95; legal retainers and expenses, $4,924.12. Mr. ASWELL. Who received the legal retainers? Mr. GINN. I do not know. Mr. ASWELL. The name is not given there? Mr. GINN. No, sir. Mr. ASWELL. Could you get that information for this committee? Mr. GINN. I suppose I could get that from the records of the Sugar Equalization Board. Mr. ASWELL. I want to know whether that was Glasgow or Brown. Mr. GINN (continuing reading): Auditing, $450; traveling expense, none; legal charges in connection with Norwegian Government and Federal Sugar Refining Co. suits, $52,210.05: miscellaneous, $1,612.72. Mr. KINCHELOE. But that will not total $61,000. Mr. ASWELL. The salaries must have come before that. Mr. KINCHELOE. I am talking about the year when the total was $61,000. Mr. KETCHAM. That must have been the total of all the years. Mr. GINN. No. They have got the total under 1921 as $10,000there is evidently some mistake in that figure there. Perhaps, Mr. Chairman, you will look in volume 64, page 2355, of the Congressional Record, and it will show just exactly where we took this from. Mr. KINCHELOE. Well, if your memorandum is just a copy of it, we would not learn anything by looking at that. Mr. GINN. Not a thing. Mr. KINCHELOE. I do not see where they could spend $61,000 when they were practically out of business at the time. Mr. ASWELL. Oh, they are still running up expenses. Mr. KINCHELOE. I understood Mr. Tincher to say the other day that his information was they had gone out of existence and settled. Mr. TINCHER. They will tell you if you talk to them that they have converted all that money into the Treasury. Mr. KINCHELOE. If they had done that, would not your office. know something about it? Mr. GINN. The Treasurer of the United States would know something about that. You see, we have not audited these accounts at all, and so we have not anything in the General Accounting Office in regard to these expenditures. They turned in about $50,000,000 some time ago. Now there has been a suit brought by the De Ronde Co. to enjoin the Sugar Equalization Board from turning this money over to the Government and closing up its affairs. Mr. ASWELL. Have they turned it over? Mr. GINN. They have not. Mr. ASWELL. They still have it in their own possession? Mr. GINN. Still have it in their own possession; or rather, as stated here Mr. KINCHELOE. Who is fixing the salaries of those people who are running along here to the extent of $61,000 a year? Mr. GINN. I do not know, Congressman. Mr. TINCHER. The act authorizing the organization of the Sugar Equalization Board, or incorporating the Sugar Equalization Board, I think, gave the President of the United States all the stock of the corporation, and I suppose at the time the President organized the corporation he let them fix their own salaries. Mr. KINCHELOE. I am wondering if it is going to be a perpetual thing. Mr. CLARKE. Oh, no. As I understand it, they are enjoined from dissolving until they can have a real determination Mr. KINCHELOE. I don't think there is any inclination on the part of those people to dissolve. Mr. VOIGT. Has the suit been decided? Mr. GINN. That has been decided by the district court in Delaware. Judge Morris rendered the opinion, which will be found in 299 Federal page 659. Mr. ASWELL. What did he decide? Was it favorable or unfavorable? Mr. GINN. He enjoined them from turning this money over to the Government for the time being. Mr. ASWELL. Where is the case now pending? Mr. GINN. It is in the appellate court. Mr. KINCHELOE. Is that in the State court or in the Federal court? Mr. GINN. It is in the Federal court. Mr. ASWELL. I want to know one more thing. Why is it that one of them got $2,400,000 and the other got a lawsuit, under the same authority from Congress? Mr. GINN. I do not know. Mr. TINCHER. That ought not to be left that way. The members of this committee will recall that the officers of the Sugar Equalization Board, including their distinguished attorney, Mr. Glasgow, stated that they would recommend that the President issue a proclamation Mr. GINN. If you would like to hear it, here is a letter I received from Mr. Zabriskie, who was president of the Sugar Equalization Board. Mr. CLARKE. What date is it? Mr. GINN. It is dated January 2, 1925. He says: The claim of the American Trading Co. and B. H. Howell, Sc & Co. was adjusted, settled, and paid pursuant to Executive Order on May 24, 1923. In the matter of the claim of P. De Ronde & Co. (Inc.), the President of the United States has never directed the United States Sugar Equalization Board to adjust and settle this claim. On November 3, 1923, P. De Ronde & Co. (Inc.) instituted a suit in the District Court of the United States for the District of Delaware to enjoin the United States Sugar Equalization Board from distributing its assets without first having liquidated and paid its claim. This cause came on for hearing and a decree was entered enjoining the United States Sugar Equalization Board from disposing of or conveying its property and dividing its capital stock, and from in any manner distributing its assets to its stockholder, without having liquidated, ascertained, and paid the claim of P. De Ronde & Co. (Inc.). The United States Sugar Equalization Board took an appeal to the United States Circuit Court of Appeals and from the decree of the court below. On December 12, 1924, the appeal was argued, briefs submitted by the respective parties, and no decision has yet been rendered by the circuit court of appeals in this cause. A number of claims have been made against the board from time to time, which the board has refused to recognize, and no recent action has been taken by any of these claimants. The board, therefore, considers that it has wound up all its outstanding affairs, except in respect to the above mentioned claim of P. De Ronde & Co. (Inc.). Mr. KINCHELOE. Well, the only thing that is involved in that suit is the question of keeping the Sugar Equalization Board from winding up its affairs; it does not bear on the merits or demerits of the De Ronde proposition or whether the President shall issue a proclamation directing the Sugar Equalization Board to settle. Mr. GINN. The decision is somewhat long. Mr. CLARKE. Is there not an analysis of it? Mr. GINN. I can read the syllabi if you would like to hear it. Mr. GINN. (reading): Congress has power to recognize and provide for payment of claims against Government which could obtain no recognition in court of law, but which grow out of general principles of right and justice, and are based solely on consideration of moral or honorary nature. Recognition of moral or honorary claims against Government depends solely on Congress, and such claims must be left to discretion of that body. Congress may decide for itself all facts with respect to moral or honorary claims against the Government, or may prescribe principal or major premise by which all claims to be paid must be treated, and leave to specified tribunal or officer determination of what claims fall within rule. If Congress confers on officer or tribunal, not only power to determine some specified fact or state of things in respect to moral or honorary claims against Government, but also power to make its own controlling rule with respect to their payment, it delegates full legislative power and discretion, and its act is invalid. Committee reports may be resorted to in ascertaining intention of Congress in passing resolutions, as expressed therein. What a public officer is empowered by Congress to do for others, and it is beneficial to them to have done, law holds that he ought to do, and that language, though permissive in form, is in fact peremptory. Resolution of Congress by which President was "authorized to require" United States Sugar Equalization Board (Inc.) to pay sugar losses for which Government morally responsible, held mandatory. Fund to become absolutely due United States on liquidation and winding up of Sugar Equalization Board, organized under act of July 1, 1918, is subject to equitable assignment, and is in effect assigned by resolution of Congress authorizing President to require board to pay losses for which Government morally responsible. It is not essential to equitable assignment of funds that debtor, agent, or depositary should be expressly directed to pay over to assignee. Sugar company, in effect equitable assignee of fund in hands of United States Sugar Equalization Board by congressional resolution, was entitled to injunctive relief to prevent threatened payment by board of fund into Treasury, where it would probably be beyond reach of company, though there was no privity between company and board. The court held that it was mandatory upon the Sugar Equaliza tion Board to go ahead and pay that, and that there was no discretion. Mr. TINCHER. You do not mean that, do you? The President issued a proclamation for them to adjust it; it was not mandatory on them. Mr. GINN. I think if you will read the decision of the court you will find they held that a proclamation is not really necessary, because Congress has directed this to be paid. Mr. KINCHELOE. No; the resolution did not direct it to be paid; the resolution authorized the President to order the board to settle. Mr. VOIGT. Will you read that paragraph again? I think the court holds that it is mandatory on the President. Mr. GINN (reading): Resolution of Congress by which President was "authorized to require" United States Sugar Equalization Board (Inc.) to pay sugar losses for which Government morally responsible, held mandatory. Mr. SINCLAIR. Mandatory on the President. Mr. GINN. Mandatory on the President to go ahead and issue that proclamation. Those are the syllabi of that decision of Judge Morris as district judge of Delaware. Mr. TINCHER. Of course it was held by the Sugar Equalization Board that all he did was to empower the President to issue a proclamation, and after he issued it all they had to do was to adjust the claim. It was argued to us that we had nothing to do with the amount that was between the Equalization Board and the claim ant. Mr. KINCHELOE. The fact is that President Harding issued the order to the Sugar Equalization Board to wind up the B. H. Howell claim, but declined or refused to issue such an order for De Ronde. Mr. GINN. I have here a copy of the proclamation of the President in the B. H. Howell Co. case. Mr. KINCHELOE. What does it direct him to do? Mr. GINN (reading): Now, therefore, I, Warren G. Harding, President of the United States, under and by virtue of the act of Congress aforesaid, and pursuant to the power and authority conferred by said act, do hereby approve, ratify, and confirm the findings of the United States Sugar Equalization Board (Inc.) aforesaid and do hereby order and direct said board to forthwith pay out of its corporate funds jointly to said American Trading Co. and said B. H. Howell, Son & Co. the sum of two million four hundred and eighty-two thousand one hundred and twentytwo and 31/100 dollars as and for a full and final liquidation, adjustment, and settlement of the loss sustained by them, or either of them, in the transaction as in said act provided. Mr. KINCHELOE. That is where he approved the findings; that is not where he ordered the Sugar Equalization Board. Mr. GINN. No; they had made that, and then he approved those findings. Mr. KINCHELOE. Mr. Chairman. I would like to ask this question: According to your statement a moment ago, this fund is still intact? It is still in the hands of the Sugar Equalization Board? Mr. GINN. Yes. Mr. KINCHELOE. It is not in the Treasury? |