of the sugar producers of this country on the question of whether or not there should be continued this Sugar Equalization Board. And, by a resolution, they favor its continuation and urge the purchase of the 1919 Cuban crop of sugar. This was passed before the passage of this bill that has been referred to, which was passed by the Senate on December 12, and whether or not this meeting was in favor of section 5 or whether or not they have indorsed or would indorse the action of the Senate relieving this board from the operations of section 5, I have not any means of knowing. I would like to leave with you, Mr. Chairman, the resolution that was adopted. It seems to me, however, from the discussion of the subject I have heard this morning from Mr. Dallinger and others, that without this provision the law would be where it is, would it not? Is not that the understanding? Without this provision, section 5 of the food control act would operate?

The CHAIRMAN. It would until the authority under the food control act ceases.

Mr. TIMBERLAKE. And when would that be, until peace is declared? Mr. ANDERSON. He can extend it for six months after the proclamation of peace.

Mr. CANDLER. Sixty days after peace is declared.

Mr. TIMBERLAKE. The resolution is as follows. At the suggestion of the chairman, I will read it:

POLICY AS TO CONTROL BY THE SUGAR EQUALIZATION BOARD.

Mr. Havemeyer advocated the continuation of the Sugar Equalization Board and the purchase by it of the 1920 crop. He explained that in his opinion such purchase would be in the interest of the domestic producers, as it would tend to prevent wide fluctuations in price, especially the possibility of very high prices for sugar during certain periods of the coming year.

From that, it would seem to be the sentiment of this meeting that section 5 should still operate; that the licensing feature and probably an embargo would be advisable, and the result he mentioned would be desirable of accomplishing.

After further discussion participated in by Mr. Welch, Mr. Farr, Mr. Dillingham, Mr. Kemper, and the chairman, Judge Rolapp moved the following resolution, which was seconded by Col. Edgar:

"Resolved, That in view of the prospective continuation of scarcity of sugar supplies, this conference recommends that the United States Sugar Equalization Board be continued in power with authority to purchase the 1920 Cuban crop, making proper provision for the protection of domestic sugar, and for fixing a fair price to the ultimate consumer, and that a committee be appointed to consider and report.'

The resolution was then put to vote and adopted. The chairman voted against its adoption, making the explanation that he did so because he believed the plan for continued control impracticable.

Gentlemen, I believe that is all, and I thank you.

The CHAIRMAN. We are very much obliged to you, Mr. Timberlake. Mr. Martin, I believe you desire to be heard this morning? Mr. MARTIN. Yes, sir.

STATEMENT OF HON. WHITMELL PUGH MARTIN, A REPRERESENTATIVE IN CONGRESS FROM THE STATE OF LOUIS

ΙΑΝΑ.

Mr. MARTIN. Mr. Chairman, following out what Mr. Timberlake said just now, I wish to add that I know the sugar beet producers, like the Louisiana cane producers, do not object to control and con

tinuation of the Sugar Equalization Board, but the sugar beet people as well as the Louiana cane people do object, most seriously, to the continuation of the licensing feature. I will come to that directly. I want to call the attention of the committee first to the fact this legislation is absolutely unnecessary to start with. Under the laws as they presently exist, the Sugar Equalization Board has all of the powers and more too than they are asking for in this legislation. Mr. VOIGT. May I ask you a question right there?

Mr. MATRIN. Yes, sir.

Mr. VOIGT. There is some doubt in my mind as to whether this board has the power to buy the crop of sugar that is now in Cuba without additional legislation. Here is the telegram from the chairman of that board

Mr. MARTIN. What legislation did they have to buy, then?

Mr. VIOGT. This bill that has been passed by the Senate provides that the President is authorized to continue during the year

Mr. MARTIN. I mean without this bill; what authorization did they have last year to buy the Cuban sugar crop that they bought last year?

Mr. VOIGT. I do not know, I am frank to admit, but just by reading the bill passed by the Senate, I should judge authority is necessary to continue the power of the board until next year. You will notice this bill passed by the Senate provides

Mr. MARTIN. The Sugar Equalization Board, gentlemen, is an offshoot of the Food Administration. It is a corporation, incorporated under the laws of Delaware, the only stockholder of which is the President of the United States.

Mr. CANDLER. You have, then, the power to buy as one of the powers in the charter of that corporation?

Mr. MARTIN. I know there is a provision in the charter which says that this corporation is not to have a permanent existence, but its existence is to commence on the 15th day of July, 1918, and is to cease on the 14th day of July, 1923, unless it is sooner dissolved in a manner provided by law.

Mr. VOIGT. In the telegram sent by the chairman of than committee, he says this:

The Equalization Board was a war emergency, dealing only with last year's crop and this has already been distributed. It has no control of our domestic sugars now available in fair volume, nor new Cuban sugars which are now beginning to move.

The board is evidently of the opinion it has no power to buy this new crop without additional legislation or possibly without authority from the President. That is what they say in this telegram.

Mr. MARTIN. The board took the position at the Senate hearings, while they had the power at this time, that it might be that peace would be declared, and that when peace should be declared by a proclamation of the President, that they would lose their power because the Lever Act went out of existence. That is the position of the board before the Senate committee.

Mr. PURNELL. Would they go out of existence by reason of the proclamation of peace by the President?

Mr. MARTIN. They would not for this reason

Mr. PURNELL. For the reason that the charter itself provides that the corporation shall continue until 1923 unless dissolved by law.

In other words, it would take some affirmative act to bring about a dissoulation, other than the declaration of peace.

Mr. MATRIN. And not only that, but I want to call attention to section 24 of the Lever Act:

That the provisions of this act shall cease to be in effect when the existing state of war between the United States and Germany shall have terminated, and the fact and date of such termination shall be ascertained and proclaimed by the President; but the ter ination of this act shall not affect any act done, or any right or obligation accruing or accrued, or any suit or proceeding had or commenced in any civil case before the said termination pursuant to this act; but all rights and liabilities under this act arising before its termination shall continue and may be enforced in the same manner as if the act not terminated. Any offense committed and all penalties, forfeitures, or liabilities incurred prior to such termination may be prosecuted or punished in the same manner and with the same effect as if this act had not been terminated.

So that the Board of Equalization could make contracts and purchase the Cuban sugar, and could place it on the market at a given price. It has authority to go on and continue to do that until this act expired.

Mr. VOIGT. It is your opinion, then, that this board has the power to buy the sugar now available in Cuba without the passage of this bill?

Mr. MARTIN. They have had it all the time. In the correspondence with the President, which I will be very glad to read to you gentle

men

Mr. VOIGT. Why do they not exercise that power?

Mr. MARTIN. For this reason I just stated, that they fear when peace is declared they will lose all their powers. But I say they do not under the very terms of the Lever Act.

Mr. MCLAUGHLIN of Michigan.

they can carry out to completion? Mr. MARTIN. They can carry out.

Anything they have undertaken,

Mr. McKINLEY. Is it not a fact, Mr. Martin, the reason they do not exercise it is because the President does not let them?

Mr. MARTIN. That is it, exactly.

Mr. ANDERSON. I would like to ask you a question on that: Of course it is true that a contractual relation established would continue; but I do not think it is true that the powers of control under the license section, would continue after the termination of the food control act.

Mr. MARTIN. I doubt that myself, and I certainly hope this committee and no other committee will continue us under license in peace time. I do not see why our sugar producers should be put under license any more than they should put the cotton producers under license to hold down the price of cotton, or to put wheat under license, or to put shoes under license, and to continue them under license.

Mr. TINCHER. This year's wheat crop is under license.

Mr. MARTIN. I know it is. But you gentlemen do not want to continue it under license when that time expires.

Mr. TINCHER. Sugar ought to continue as long as wheat does. Mr. MARTIN. I believe the sooner they take it all out, the better it will be.

Mr. TINCHER. As a producer, I think you are right.

Mr. MARTIN. The situation is just this: In July of this year the Cuban producers offered to sell their entire crop of sugar to the Equalization Board.

Mr. WILSON. For how much; did they say how much?

Mr. MARTIN. No, sir; they did not.

Mr. PURNELL. Referring to the price, was it not about 61⁄2 cents? Mr. MARTIN. About 6 cents or 7, I was going to say.

Mr. PURNELL. A cent and a half advance over the price of the preceding year?

Mr. MARTIN. That is what I thought. The Equalization Board said they thought it could be bought at that time for 6 to 7 cents, and on August 14, the Sugar Equalization Board placed the matter before the President, calling his attention to the critical situation confronting the consumers of sugar and advised that the board's control be extended another year with authority to purchase the 1920 Cuban crop. They evidently took the position at that time the President had the right to extend their authority; he being the sole and only stockholder in that corporation, that he had the right to tell them whether or not they should proceed to buy the Cuban erop.

Mr. VOIGT. When you speak of the 1920 crop, that means the crop grown in 1919?

Mr. MARTIN. They do not begin to harvest until about January 1, in Cuba. The President having taken no action in the meantime, the board wrote to him on September 20, calling his attention to the fact that the time was fast approaching if it had not already arrived, when they would be unable to control the 1920 Cuban crop unless action was taken at once, and that between one-fourth and one-third of the 1920 Cuban crop already had been sold to foreign nations. To this communication, the Executive Secretary to the President replied that the letter would be brought to his attention at the first favorable opportunity. On September 22, the Sugar Equalization Board received word from the representatives of the Cuban producers that their offer to sell their crop to the United States Government was withdrawn, and the following day the Equalization Board wrote the President to this effect, stating thatin view of the fact that about one-third of the Cuban crop of next year has been disposed of for export to countries other than the United States, we believe the situation is out of hand.

Mr. MCLAUGHLIN of Michigan. To whom had that portion of the Cuban crop been sold?

Mr. MARTIN. Mostly to foreign countries.

Mr. PURNELL. To England?

Mr. MARTIN. To England

Mr. PURNELL. And France?

Mr. MARTIN. To England, France, Norway and Sweden, and at that time about 300.000 tons had been sold to the American refiners. The CHAIRMAN. Did you say one-third or one-fourth?

Mr. MARTIN. About one-fourth at that time. Now, Mr. Chairman, I also want to direct your attention to the fact that the Sugar Equalization Board was not a unit on that matter. Prof. Taussig filed a minority report, which was also sent to the President, saying he believed the time for this country to enter into a great commercial

venture of that kind had passed and sugar like other commodities in this country should be permitted to be governed by the law of supply and demand and, if the refiners were given the opportunity, they would go in there and buy the Cuban crop.

Now I want to say, Mr. Chairman, that in my opinion the high price of sugar for next year is due more than anything else to the agitation in this legislation. The President, evidently took Prof. Taussig's advice and did not intend to continue this Equalization Board.

Mr. WILSON. Who is this Pro. Taussig?

Mr. MARTIN. He used to be chairman of the Tariff Commission. Mr. PURNELL. He is a Government expert.

Mr. CANDLER. He is the author of the "History of the Tariff." Mr. PURNELL. Have you estimated how many million of dollars that expert's advice has cost the consumers of the United States? Mr. MARTIN. I do not think, if it had been followed, it would have cost them 1 cent.

Mr. PURNELL. You do not. You believe, Mr. Martin, that Mr. Taussig's position in the matter was correct?

Mr. MARTIN. I do. But here was the unfortunate situation, that when the President failed to act, the Senate then held these hearings and they introduced the McNary bill some two or three months ago. If Prof. Taussig's advice had been followed, the Sugar Equalization Board having given the refiners notice that they were not going to buy the Cuban crop and told them to go ahead and buy it, three months ago, the American sugar refiners could have gone into Cuba and made contracts for next year's crop at a price less than this Government would have had to pay for it; because you know and I know any Government always has to pay a higher price for anything than an individual does."

Mr. PURNELL. But the Government could have purchased it for 6 cents.

Mr. MARTIN. I say the American sugar refiners could have purchased this sugar for 64 cents, but the American sugar refiners kept out of the market because of this bill pending, authorizing the Sugar Equalization Board to buy this crop, and they did not propose to go in there and interfere with the Government and possibly be left with the bag to hold. And they kept out of the market and are out of the market to-day.

Mr. CANDLER. They had this bill pending in the Senate?

Mr. MARTIN. They had this bill pending in the Senate and now it is before the House so that the American sugar refiners are still out of the market.

Mr. PURNELL. Then where does the fault lie?

Mr. MARTIN. The fault lies, to start with, in ever bringing up any legislation at all. The American refiners would have gone in there and this crop would have been bought and refined in this country

Mr. PURNELL. I do not think the consumers would have gotten sugar any cheaper.

Mr. MARTIN. They should have done one of two things: Either the Sugar Equalization Board, in July or August, should have bought the sugar with the authority they have now and had then, and have always had; or, if they were not going to buy, then the American sugar refiners of this country ought to have been permitted to go in