Mr. TIMBERLAKE of Colorado. They are at liberty to buy it if they want to, are they not?

Mr. DALLINGER. I suppose they are. I suppose anybody could go down to Cuba and buy sugar.

Mr. McKINLEY. The facts probably are they have bought it, but they do not have to sell it in the United States.

Mr. TINCHER. You know one reason they have not produced any more sugar in the United States is, since this board has been in existence, the unfair discrimination of the President against the beet sugar has practically destroyed that industry.

Mr. LEE. You say it has destroyed it? How much beet sugar was made this year?

Mr. TINCHER. It has destroyed it in my section of the country. Mr. LEE. That is a pretty broad statement—that it has destroyed the industry.

Mr. TINCHER. They say it is being destroyed because they won't allow them the cost of production. That is what the beet-sugar men

sav.

Mr. TIMBERLAKE of Colorado. Is it possible the American sugar refiners have already bought this Cuban crop and are waiting for the Government to buy it at an advanced price?

Mr. DALLINGER. I do not know, Mr. Timberlake, what the situation is. Of course, Mr. Chairman, if the refineries have to pay 171 cents for that sugar, I can not see how they would be very anxious to have to pay 17 cents for the sugar and to sell it for 11 or 12 cents under the present regulations regulating the retail trade. would not be very much profit in that; there would be a big loss.

There

Mr. TIMBERLAKE of Colorado. I can not understand why these men in the sugar business, in normal times, would refuse to go down there and buy that sugar, anyway. That is worthy of investigation.

Mr. CANDLER. One reason why they say they did not buy it, so I have been informed, is this bill has been pending in the Senate for 10 weeks and they were afraid the Government would step in and they would get the small end of the transaction, if they went down to Cuba and purchased the sugar and then the Government took it over at the price they paid for it. That is the excuse they gave. And therefore they held off and did not buy, and my information is they have not bought and that the sugar is held in Cuba now.

The CHAIRMAN. Have you any information as to whether the refineries of the so-called Sugar Trust are for the passage of the bill?

Mr. DALLINGER. I have not.

The CHAIRMAN. You spoke of the sugar for manufacture. The board has no authority to license the manufacture or to regulate the price of what is sold to the manufacturer?

Mr. DALLINGER. They told me there was no way of checking up what the wholesalers did with the sugar under their present power. The CHAIRMAN. They have no authority to license them or to regulate the price?

Mr. DALLINGER. No. I know when this question was first brought up about the sugar being English sugar, which we had no moral right to stop going out of the country, I received letters from men in the sugar business in New York, Philadelphia, and other places (some of whom did not want their names used) calling my attention

to the fact that a great deal of sugar was being bought by the manufacturers of condensed milk-and an immense amount of sugar goes into the manufacture of condensed milk-and was being exported; and that other sugar was being used in the manufacture of chocolate, and other things of that kind which are being exported. So that not only the sugar is going out of the country, but that manufactured products containing sugar are going out of the country. And the most diabolical part of the whole thing is that this sugar which is going into the manufactured products, jams, and things of that kind, and which is going out of the country in the form of manufactured products is charged against the American consumer and the American consumer is told "Why, you are too extravagant in the use of sugar." In other words, the per capita consumption is increased by the sugar that is being bought from the wholesalers by the manufacturers and put into commodities that are being exported and the foreigners are getting it. So that they are getting a great deal more than their share; they are getting the sugar that is simply brought in here and refined, which is supposed to be their portion, and which is sent over there, and then the people over there are getting a whole lot of other sugar in the form these other commodities and our people are going without the small amount necessary for their daily household use.

Mr. MCLAUGHLIN of Michigan. There is a feeling here that the President has had for a long time all the power that is necessary, but he has not seen fit to exercise it. He may have good reasons for not doing it. At this time, we are not criticising him for the failure to act, but under section 5 of the food control act, the license section, we find that from time to time whenever the President shall find it essential to license the importation, manufacture, storage, mining, or distribution of any necessaries, he may provide for licensing those engaged in those lines of work. And under the license he can direct every operation of an individual or a company, and he certainly could forbid the exportation and he could regulate and direct the distribution of all these necessaries. Now that is under the licensing

section.

Mr. DALLINGER. Yes, sir.

Mr. MCLAUGHLIN of Michigan. That is still in force. And I may say that it is under this food control act of August 10, 1917, that the President acts when he delegates power to the Sugar Equalization Board and he can delegate to that board any power that is given him under this act. Now besides the license section, No. 5, we find section 12, that whenever the President shall find it necessary to secure an adequate supply of necessaries for the support of the Army or the maintenance of the Navy, or for any other public use connected with the common defense-and it is that; this is a condition growing out of the war, and if the war power can be exercised to regulate and to take care of these conditions, and if this act by which the Congress has invoked the war power is proper, under this section the President is authorized to requisition and take over, for use or operation by the Government, any factory, packing house, oil pipe line, mine, or other plant, or any part thereof, in or through which any necessaries are or may be manufactured, produced, prepared or mined and to operate the same. And further along in the section, we find the President is authorized to prescribe such regulations as he may deem essential for carrying out the purposes of this section,

including the operation of any such factory, mine, or plant, or part thereof, the purchase, the sale or other disposition of articles used, manufactured, produced, prepared or mined therein, and so forth.

Now he has not only the power to license, but he has the power if the license provision is not adequate, to take possession of the factories and to run them himself or to provide for their operation. Mr. DALLINGER. Yes; I understand that.

Mr. MCLAUGHLIN of Michigan. And to provide for the distribution of all the products of those manufacturers. Now, how could broader power be given to the President? In his wisdom he has not seen fit to exercise those powers. The question is will he avail himself of the power that we might give him now by the additional legislation, such as you and others are suggesting.

Mr. RUBEY. It seems to me, from reading this bill, that the Senate has agreed with the President in not having exercised this authority. The Senate by this act, which was passed on December 12, puts in a specific provision which says after the passage of this act that neither the President nor the corporation shall have or exercise, either directly or indirectly, with respect to raw or refined sugar, sirups, or molasses, any of the powers conferred upon the President by section. 5 of the act just read by Mr. McLaughlin.

Mr. DALLINGER. That is the license section?

Mr. RUBEY. That is the license section. Evidently the Senate is opposed to the President exercising this right. Yet if we pass this bill and give the President or this corporation the right to go down to Cuba and buy that sugar, we will, as the gentleman from Massachusetts has very well said, increase the supply of sugar. But unless this board has the right, after it gets hold of that sugar, to follow it out, through the trade, and regulate the price that the wholesaler shall sell to the retailer for and possibly the retailer to the consumer, we are going to get a big supply of sugar here and simply give these people the right to profiteer on it. Now, then, it may be, under this bill passed by the Senate, it says to exercise his control over the corporation and its directors, in such a manner as to authorize and require them to adopt and carry out, until December 31, 1920, plans and methods of securing, if found necessary for the public good, an adequate supply at a reasonable price and an equitable distribution of sugar at a fair and reasonable price to the people of the United States. Now whether that language will give the corporation the right to follow the sugar into the trade and to regulate its price, I do not know; it would seem to me that without some method of regulating the price of sugar we are going to buy down there in Cuba, the people of our country, while they will have sugar, they will get a sky-high price.

Mr. WILSON. The President has the right under the present law to regulate the price.

Mr. RUBEY. I say the Senate seems to want to get rid of that right. They have repealed it. They have said here the right shall not be exercised.

Mr. WILSON. They can not repeal it; they can not say he shall not exercise that right. They have not any right to say that.

Mr. RUBEY. They have it here in this bill.

Mr. WILSON. That is not in the law.

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Mr. RUBEY. But this bill, having passed the Senate, stands as the will and the opinion of the Senate as to what ought to be done. Mr. WILSON. That does not mean anything.

Mr. RUBEY. Evidently the Senate of the United States does not want the licensing feature put into force.

Mr. WILSON. That is true.

Mr. CANDLER. It was stated on the floor of the Senate, in debate, that with the licensing feature in there, the bill could not pass; that certain Senators would talk it to death. And that was not denied in the Senate.

The CHAIRMAN. A Senator said in the debate, "I voted against that in the committee, because the committee were informed that there were certain Senators who had stated that they would speak at such length as to kill the proposed legislation if the licensing feature should be adopted." The Senator also stated, "Mr. President, I desire to say before this bill is passed and the pending amendment is adopted, that, in my opinion, the legislation does not go far enough, and I sincerely hope that at the other end of the Capitol, the House of Representatives will amend the bill so as to make it more effective. Mr. RUBEY. Now, let me ask the gentleman a question. He has given the subject a great deal of consideration and I know he knows a great deal more about it than I do. It occurs to me if you will examine this bill here, on page 2, line 5, where it puts in the bill a provision prohibiting, after the passage of this act, the licensing feature if we would strike out that provision and all the rest of the bill and pass down to line 5, on page 2, giving the Sugar Equalization Board this right, and not placing any limitations upon them, would that meet the situation?

Mr. DALLINGER. I am not at all sure, Mr. Rubey, that it would. If the President still refuses to act, as Mr. McLaughlin says, why the Sugar Equalization Board, unless you give the board the power-if you just simply strike out the proviso, you may be meeting the same situation you are now. The President has absolutely refused to follow a single suggestion of this board since August 1. They have asked him to give them these powers and he has declined to do itwhether on Prof. Taussig's recommendation or not, it makes no difference.

The CHAIRMAN. The President has control of the board and controls its actions.

Mr. RUBEY. We are giving them here the power to do it.

Mr. DALLINGER. Inasmuch as the President has the power and has had it right along, and has paid no attention to the suggestion of the board, I would like to see something, as the chairman suggested, that has some teeth in it, that would provide that the board itself may have the right to exercise this power.

Mr. RUBEY. The proposition I make is this, if you pass the bill as written down to that point, the Congress of the United States authorizes the Board of Equalization to go ahead and buy this sugar, and then it leaves out the Senate amendment which says "shall not exercise," and leaves to the Board of Equalization any power he may now have under the law.

Mr. TINCHER. As I understand this Senate amendment, it is a compliance with the Department of Justice's idea of the enforcement of this law. They have done away with the licensing system

applying practically to everything. Of course, that does not apply to the Department of Justice. If we adopt a law with this proviso in it, it does not prevent the Department of Justice from following and prosecuting anyone as long as the law is in existance for profiteering. And I am inclined to agree with Congressman Rubey, that in this instance it would be all right to continue the licensing system, and I especially agree with you on that because of the telegram from the board, in which they say they can not enforce this law; it won't be effective, without that feature. And I believe if that bill is sent to the Senate with that proviso stricken out I do not believe they will talk it to death; I believe they will pass it. But it is folly to pass a bill to be enforced by the Sugar Equalization Board, and expect that board to enforce it, when the chairman of that board has sent a telegram to this committee stating that in its present form it would have no effect. Of course, this is a square issue between this board and the Department of Justice, because we all know the Department of Justice does not believe in using the licensing system to control profiteering.

Mr. DALLINGER. I am very much obliged to you, Mr. Chairman and the committee, for this hearing.

The CHAIRMAN. We are very much obliged to you, Mr. Dallinger. Mr. ANDERSON. Just one question. Would it not meet the situation sufficiently for all purposes if we simply strike out the words in the proviso beginning in line 5, page 2, and put in language there "and for such purpose the board shall have the power conferred upon the President in section 5 of the food control act"? That would affirmatively give them that power.

Mr. DALLINGER. That is right.

Mr. ANDERSON. It would not have to go through the President at all.

Mr. DALLINGER. No.

Mr. RUBEY. Instead of repealing that, just affirmatively give them here the authority to act under that section.

Mr. ANDERSON. And that would put teeth in it.

Mr. DALLINGER. Of course, it may be that Mr. McLaughlin is right, that the power to license gives the right to prohibit exportation under certain restrictions. If that is so, I have nothing to say. But I would like to have it perfectly clear that they have that right, whenever they see a lot of resale sugar going out of the country, to stop it. If the licensing power can be so exercised, that is sufficient. I think your suggestion is excellent.

Are there any other questions. If not, I thank you again?

The CHAIRMAN. We have with us Mr. Timberlake, of Colorado, who desires to make a brief statement.

STATEMENT OF HON. CHARLES BATEMAN TIMBERLAKE, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF COLORADO.

Mr. TIMBERLAKE. Mr. Chairman and gentlemen, I will not take very much of the committee's time this morning. Colorado is a great beet-sugar producing State, with 10 beet factories in my congressional district. And that being true, there was sent to me a few days ago a resolution passed by a meeting which was held by all