Mr. JOHNSON. Could you have distributed it? Mr. WATSON. If I had not had arrangements with them, I could. Mr. JOHNSON. Then that letter prevented you from distributing that sugar? Mr. WATSON. Absolutely; I did not offer a pound of it, not a single pound of it. Mr. TINCHER. You would have had to comply with the Lever law, if you did not have that letter, if you did not do business through them. You would have to comply with the terms of the Lever law and they were regulating the distribution of sugar. Mr. JOHNSON. Was the Government at that time regulating the distribution of sugar, so that whatever sugar he had the Government would be regulating? Mr. ASWELL. How much did you lose? Mr. WATSON. $730,000 actual loss: $400,000 of my capital and $337.000 I owe to New York banks to-day. Mr. TINCHER. If you had not known about the Lever law and if there had not been any Lever law you would not have written the Department of Justice at all? Mr. WATSON. I was not going to fool about it at all. The banks said, "we will finance it." Mr. TINCHER. By reason of that law, when you talked to the banks and asked for credit for handling this big proposition, they said, "you had better find out if the Department of Justice, this being a big deal, will let you distribute the sugar." Mr. WATSON. That is correct. Mr. TINCHER. And they said, "in view of the great shortage, go ahead and bring it in?" Mr. WATSON. They wanted me to bring in the entire 10,000 tons. Mr. JOHNSON. Could you have distributed that sugar without some order or understanding with the Government at that time? Mr. WATSON. If I had ignored them? Mr. JOHNSON. Yes. Mr. WATSON. Only by ignoring them Mr. ASWELL (interposing). But all domestic sugar was distributed by the Government at that time? Mr. JOHNSON. The Government was regulating the distribution at that time? Mr. WATSON. Yes, sir; and my importation. Mr. ASWELL. Every pound in this country and all that came in. Mr. JOHNSON. Then they did not follow up all these directions for distribution? Mr. WATSON. No; and even for what they gave me the orders, when it got here, they would have nothing to do with it. I would not go to an optical company to sell sugar. Mr. JOHNSON. You say you lost $400,000? Mr. WATSON. Yes, sir. Mr. JOHNSON. And you still owe the banks? Mr. WATSON. $337.000. I have been out of business four years, since the beginning of 1920. Mr. TINCHER. What business were you in? Mr. WATSON. Import and export, sir. Mr. ASWELL. Why have you waited so long to bring this matter up? Mr. WATSON. I brought it up in the Senate in July, 1921. Mr. Frelinghuyson brought it up in the Senate. I did not get a hear: ing before the Senate committee until December, 1922. Mr. TINCHER. You ask that the Sugar Equalization Board be allowed to settle this. Are they still functioning? Mr. WATSON. Yes, sir; they are functioning for two years from this coming July. Mr. ASWELL. But they denied the right of Congress, a day or two ago, to legislate on this question, did they not? Mr. WATSON. I do not think it was on this question, sir. Mr. ASWELL. It was on a bill like this. Mr. WATSON. As I understood, that argument came up in the Senate. Mr. ASWELL. I do not refer to the Senate. I mean the Federal. court ordered it to be settled and the Attorney General yesterday or the day before denied the right of Congress to legislate on this question. Mr. TINCHER. The court ordered what settled? Mr. ASWELL. The De Ronde case. Mr. TINCHER. That is the case where Congress passed an act and the Equalization Board refused to touch it? Mr. ASWELL. They paid one claim and refused the other. A day or two ago the present Attorney General denied the right of Congress to legislate. It has got to go on to the higher court. They paid one and declined to pay the other. Mr. TINCHER. Mr. Watson, is there a difference between your claim and those other two claims? I was opposed to both of those claims, did not think there was a contract there, but I can remember this, that the Government approached both of those fellows and got them to do something. You seem to have called on the Govern ment to get them to withdraw some instructions. Isn't that the difference? Mr. WATSON. You are perfectly right. I went to the Government, and they demanded the right to distribute my sugar; they never gave the distribution privilege to me. Mr. TINCHER. There is another fellow who has a sugar claim. That is Lamborn. The Government went to him. He was reluctant and did not want to go into that at all. But they got him into it. Mr. ASWELL. Did the Government come to him first? Mr. WATSON. No, sir. Mr. JOHNSON. They were only going to relieve him from the Lever Act, provided he would distribute as he wanted. Mr. PURNELL. The department undertook to say where that sugar would go and how it would be distributed. Mr. JOHNSON. Suppose, for instance, he had not followed up the distribution as provided for in that letter. Then he would have been liable under the Lever Act. But they were releasing the operation of the Lever Act on the consideration that he would follow the distribution as directed by the Government. Mr. FULMER. Have you a letter giving orders as to where to ship any of this sugar, a letter by the Government or by anybody representing the Government? Mr. WATSON. Not to ship it, because it had not yet arrived when I was getting the orders. It was still on the way. I have a letter here from the Department of Justice, which was handling the proposition at an office at 135 Broadway, New York City: this letter is dated July 23, 1920. Mr. WATSON, Esq., New York City. CANNERS SUPPLIES Co. (INC.), DEAR SIR: Relative to the sale of one carlot of 60,000 to 80,000 pounds of Argentine grade A granulated refined sugar to F. B. Lovelace, of Poughkeepsie, N. Y., at 21 cents net per pound f. o. b. car New York, would advise that I have just written acknowledging this order, and in consideration of you reducing the price of this sugar to 19 cents net per pound f. o. b. New York, I have quoted a price to Mr. Lovelace of 20 cents per pound f. o. b. New York. Will you kindly note this order on your books and oblige, Very truly yours, CANNERS SUPPLIES CO. (INC). By JAMES BOYD, President. NEW YORK, July 24, 1920. CANNERS SUPPLY CO. (INC.), New York City. GENTLEMEN: I thank you' for your order contained in your letter of yesterday's date. I have also booked the 30 tons for Bausch & Lomb Optical Co. and the 80 tons for your friends in Tampa confirming our verbal conversation of this morning. As the sugar will shortly be arriving, I would like to have the entire quantity placed so that arrangements can be made promptly as the sugar is unloaded from the vessel. As previously advised you, I have cable advice that at least 1,000 tons are coming per steamship Winona, and I hope to have further advices of a larger lot. Yours very truly, Mr. WATSON. The Optical Co. order was a verbal one. The BAUSCH & LOMB OPTICAL Co., Rochester, N. Y. NOVEMBER 10, 1922. GENTLEMEN: I have at present a bill before the Senate to secure relief for losses sustained by bringing in Argentine sugar to this country in the year 1920. I had arrangements made with the Department of Justice at their request, to bring this sugar to the market, they explaining to me at that time that the sugar situation was very serious and that many people could not secure supplies at any price. After my arrangements were made, they gave me orders for distribution to various firms. My arrangements provided that I should agree to supply those firms who had applied to the Department of Justice for supplies. The Department of Justice handled the transactions through a company which they organized as distributors for those sugars, called the Canners Supply Co. of No. 135 Broadway. Among the firms whose names were given me to distribute some of my sugar was that of your corporation. They asked me at that time to reserve 30 tons for you. As the Senate committee have asked me to give them all data in connection with the case, would you kindly advise me if you were allotted a certain quantity of sugar by the Department of Justice, or the Canners Supply Co. operating for them. I will very much appreciate your assistance in this matter, and in case you might have any thought that there was any other motive than the one mentioned in securing the information from you, I will be glad to have you address your information to the Committee on Agriculture and Forestry, sending me a copy of your communciation, or the original, in order that I may have it when I appear before them. Thanking you in anticipation, believe me Yours very truly, They did not reply to that letter. I wrote them a week later as follows: BAUSCH & LOMB OPTICAL CO., Rochester, N. Y. NOVEMBER 17, 1922. GENTLEMEN: I wrote you on November 10 in regard to sugar transactions which I had with the Department of Justice in 1920. As I expect to be called before the committee next week, will you kindly let me have a line from you with whatever information you may have as to your connection with a request to the Department of Justice for 30 tons of sugar. I may say that the department told me at that time that you wished it for distribution among your employees, as they were unable to purchase any sugar in Rochester. There is no question of holding your firm in any way responsible for not taking delivery of the sugar. All I want is to be able to truthfully confirm to the committee the statement I have made to them. In some cases the department themselves wrote the names of the firms to me, but in other cases they asked me to call and get instructions, and the name of your firm was one of those given to me verbally. Will you kindly let me hear from you promptly? Yours very truly, They wrote in reply to that, under date of November 20, as follows: Mr. R. A. WATSON, New York City. BAUSCH & LOMB OPTICAL CO.. DEAR SIR: Answering yours of the 17th, would say that in July of 1920 the writer interviewed Mr. A. W. Riley, the Assistant Attorney General, Department of Justice, with reference to our needs for sugar, and Mr. Riley offered the department's cooperation in assisting us, but just what steps he took to cooperate, I do not know. Very truly yours, BAUSCH & LOMB OPTICAL CO.. Mr. ASWELL. Have you the statement of the Department of State or the Department of Justice on this particular matter? Mr. WATSON. I have not. Mr. ASWELL. Have they ever made any report on it? Mr. WATSON. The Department of Justice made a report on it. Mr. ASWELL. Where is it? Mr. WATSON. It is in the Senate committee hearings. Mr. ASWELL. Was it a favorable report? Mr. WATSON. Yes; and in the report that they made in certain of the other cases to the chairman of your committee, I think they made a rather significant statement on this; this is from the Attorney General to the chairman of this committee: Apart from the arrangement entered into with the department, these companies were independent quoting and distributing agencies; but with respect to the arrangement, while retaining much of their independence, which, indeed, was necessary for the purpose, they were in a very large measure controlled by the department, and especially in these particulars out of which the loss might accrue. The significant clause to me there is "while retaining their independence." I retained none of my independence; they absolutely handled my business as if I did not exist, except to secure the supplies. Mr. JOHNSON. And distribute them as directed? Mr. WATSON. Absolutely. Mr. KETCHAM. And at how much below the general prices that you could have obtained if you had been acting independently? Mr. WATSON. If I had been acting independently, from 4 to 6 cents a pound below the price I could have received, according to the customers I might have been able to find. Mr. PURNELL. And what was the price at which you were to sell it? Mr. WATSON. Nineteen cents. When the reduction was made in duty my price was fixed at 19 cents. Mr. PURNELL. The price was fixed by the Government? Mr. WATSON. Yes. Mr. SINCLAIR. When did the sugar arrive? Mr. WATSON. I bought some in June and some in July; it was shipped out of the Argentine in July and reached here in about 40 days. Mr. SINCLAIR. That would have been along in August that it reached here? Mr. WATSON. Along in August. Mr. SINCLAIR. And what was the price of sugar at that time? Mr. SINCLAIR. Then if you had been allowed to sell it you could not have gotten your cost price out of it? Mr. WATSON. I doubt if I could. I think you could make no sales at that time; I checked up the prices of the American Sugar Refinery Co. up to August 15, and it was 21.58. Mr. SINCLAIR. Did the Government then tell you where you could find purchasers? Mr. WATSON. No. sir; they would have absolutely nothing to do with it. They threw it back on my hands. And I asked them for permission to sell it, and they would not give me permission. Mr. JOHNSON. Have you got that in writing? Mr. WATSON. No, sir. They ignored me. Mr. SINCLAIR. They absolutely ignored you entirely? Mr. WATSON. They absolutely ignored me entirely and never answered my letter until I wrote Mr. Riley a letter accusing him of welching on the arrangement made, and he called that scandalous. Mr. JOHNSON. Who is Riley? Mr. WATSON. He was Assistant Attorney General; he is now buyer for John Wanamaker. Mr. JOHNSON. A buyer of what? Mr. WATSON. I think what the Government has to sell. Mr. CLAGUE. Did you talk to Riley about this? Mr. WATSON. I tried to; I came down to Washington. Mr. CLAGUE. You did not have a personal interview with him? |