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jurisdiction. Now, I am here largely because of a conference I had with the Sugar Equalization Board a week ago to-day. I saw the general manager at the Wall Street office, and he told me that about the 1st of August the Sugar Equalization Board recommended three things to the administration. One was that they be given the licensing power which was provided for in section 5 of the act of August 10, 1917, commonly known as the Food Control Act. The second thing they asked for was the power to regulate the distribution of sugar; and the third thing that they asked for was the power to regulate exports, i. e., the power to put on an embargo.
Early in the year it looked as if there would be plenty of sugar, but by June it became apparent there was a world shortage of sugar this year of probably 2,000,000 tons, and they asked for this power.
Now, what I have said shows that the people who had the matter in charge, to whom the President, acting under authority of Congress, had given the matter in charge, themselves wanted the power to stop the export of sugar from this country, because of a shortage of the supply. So it is not my idea; it is not that, as a Member of Congress, I have rushed in here with an impracticable remedy. The Sugar Equalization Board asked on the 1st of August that they be given this power, but no attention was paid to it. I understand all those recommendations were referred by the President to the Secretary of Agriculture, and finally, on the advice of experts, nothing was done. In the meantime sugar has been going out of the country. From the 1st of January to the 1st of November, 1,246,869,413 pounds of sugar have been exported from the United States. We have not the figures for November. That was an average of 124,686,941 pounds per month.
Mr. Wilson. You say an average ?
Mr. DALLINGER. An average of 124,000,000 pounds a month. Now, some of you gentlemen probably heard the chairman of the Committee on Ways and Means the other day, in the House, speak about an embargo not being possible on account of an agreement which the Sugar Equalization Board made in regard to supplying England and France. As I understand, the agreement was, when the Cuban sugar crop was bought, that a third of it should go to the Royal Commission for the use of England and France, but might be refined in this country. It is assumed by some that all the sugar that is going out of this country is sugar that does not belong to us and that under this agreement we have no right to stop the exportation of it. As a matter of fact, that is not so, One reason why the Sugar Equalization Board said they wanted the power to license, with a right to examine the books of sugar dealers, particularly wholesalers, was that what was going on was this—and this accounts for the shortage in the family sugar bowl, the fact that the ordinary little family in the eastern part of the country can not get any sugar: These wholesalers were allowed so much sugar on the basis of their retail trade, as reported to the board. For instance, a wholesaler would have a country storekeeper as one of his retail customers, who in turn was supposed to get ten barrels a month to take care of his customers. Now, the wholesaler, instead of supplying his retail trade (the price of retail sugar being limited by the board), has been selling his sugar for big prii es to the manufacturers, the chocolate men, the condensed-milk men, the confectioners, and others, and a lot of the manufactured product has
been exported, and the American consumer has been charged with that consumption. And, then, we are told we are extravagant in the use of sugar regardless of the fact that this per capita consumption includes an immense amount of sugar that has been used by these manufacturers and a lot of which has been exported.
Now, the Sugar Equalization Board tells me they have no way of checking up what the wholesalers do with their sugar, and there is no way of checking up the resale sugar.
The CHAIRMAN. The wholesalers are licensed ?
Mr. DALLINGER. The McNary bill provides the licensing power shall not be given to this board.
The CHAIRMAN. I understood you to mean that the present law did not give them that power.
Mr. DALLINGER. No. My point is while it is all right to continue this Sugar Equalization Board for another year, you certainly ought to give them some power to stop what is going on. In other words, the
sugar is not now going to the ordinary small householder, and some governmental authority should have the power to see that it does.
Mr. CANDLER. I would suggest the reason why this licensing proposition was defeated in the committee of the Senate and not seriously considered in the Senate, was because a number of distinguished gentlemen over there said if they put it in they would talk the bill to death; that it never would pass.
Mr. DALLINGER. Now, in regard to this embargo, that is a matter in which I am particularly interested Mr. McLaughlin of Michigan. Just a moment. Did this Equali
McLAUGHLIN zation Board tell you why they had not exercised the power under the act of August 10, 1917, to put the dealers under license? That power has been at their disposal since that date and will continue during the life of the law unless the McNary bill is passd.
Mr. DALLINGER. They tell me that they asked to have that power given to them by the President.
Mr. McLaughlin of Michigan. I understood what they asked the President for was authority to buy the Cuban sugar.
Mr. DALLINGER. That was another proposition. They also asked for that, but that was not the thing. I knew all about that; that was an old story when I went to see them.
Mr. McLAUGHLIN of Michigan. They did not have to ask the President for that power, because it was contained in the act of August 10, 1917, the power to license.
Mr. DALLINGER. They told me they asked the President for that power for another year and, as I understand, it was refused.
Mr. McKINLEY. "Why did not the President give them the power to buy this 1919 crop?.
Mr. DALLINGER. I do not know. To my mind, that whole question of the Cuban sugar crop is absolutely inexcusable--but that is spilled milk. I am satisfied, and I think the Sugar Equalization Board all believe, that if the President had given them, in August, the right to buy that Cuban sugar crop, it probably could have been obtained at that time for 6! cents a pound.
Mr. PURNELL. He did not give them that power?
Mr. DALLINGER. He did not give them the power; no.
Mr. PURNELL. Because he said he acted on the advice of Prof. Taussig, who is supposed to be an expert.
Mr. DALLINGER. It makes no difference upon whose advice he acted. I think if he had gone ahead and done what the board asked, we would not have had any trouble at all.
Mr. PURNELL. That is really the nut of the whole proceeding.
Mr. DALLINGER. That water has gone over the wheel; we can not remedy that.
Mr. PURNELL. The Cuban sugar crop could have been purchased for about 64 cents, an advance of 14 cents over the price of last year, which was 5 cents ?
Mr. DALLINGER. Yes.
Mr. Wilson. Did they not have the right to purchase the sugar without authority from the President?
Mr. DALLINGER. I understand not.
Mr. DaLLINGER. They tell me they did not have it, because the
Mr. McLAUGHLIN of Michigan. Their authority to purchase extended to the 1918 crop, but without the action of the President they could not purchase the 1919 crop and he withheld that consent.
Mr. DALLINGER. Of course, this McNary bill is all right so far as it goes. As I understand, it gives this board the right to purchase the 1919 crop. The price, I believe, is 121 cents now, or something of that kind. It is going up all the time, and it is now a question of what they can get it for. And I am not here to oppose this bill, but in my opinion this McNary bill, in its present form, will be of very little help. It will be of some help, however, and I am not opposed to it.
Mr. TINCHER. What is your suggestion about the provisos of the McNary bill, that they be cut out? There would not be any object in cutting out the two last provisos, would there?
Mr. DALLINGER. I do not care about the last proviso--the zone system. I think that that particular provision may probably work a lot of injustice. It may be, as Mr. Candler says, impossible to get anything through the Senate with that licensing power in it. Of course, if that is so, like lots of other things, we have to take what the Senate is willing to give us. But I would like to see some provision to which the Senate will agree, which will give the board the right to examine the books of the wholesalers. There is no way to check this thing up and protect the little householder now, and without some power in this board to find out what the wholesaler does with the sugar, there will be very little benefit.
The CHAIRMAN. Mr. Dallinger, do you think the bill would be of any value whatever unless it gives authority to license?
Mr. DaLLINGER. Yes, I think the power to buy the Cuban sugar would be of some benefit.
The CHAIRMAN. I am in receipt of a telegram from the chairman of the Sugar Equalization Board which says that the Sugar Equalization Board is unanimously of the opinion that without the powers of licensing, embargo, and distribution control, its continuation could not serve any useful purpose, and Judge Glasgow, counsel of the board, said repeatedly at the hearing in the Senate that it would be
of no value whatever unless it provided for the power of licensing, in particular, and embargo.
Mr. DALLINGER. That is what I have been saying. I think it would be of little value, but I would not go so far as to say it was not of any value. While most of the harm has been done, I think that the power to buy the rest of the Cuban sugar crop may be of some value.
Mr. CANDLER. There are 3,262,500 tons of sugar still in Cuba. Here is a statement of the situation
The CHAIRMAN. We need about 3,000,000 tons besides our own production; we would only be entitled to two-thirds of it, which would be about 2,000,000 tons.
Mr. CANDLER. Here is the full statement, and I would like to have this go in the record, so as to show the situation.
Mr. Wilson. Where did you get the statement ?
Mr. CANDLER. It is taken from the speech of Senator Gay, in the Congressional Record of last Friday. This statement is given and it seems to me very carefully prepared. It says the Cuban crop for 1920 is estimated at 4,500,000 tons, and the local consumption in Cuba amounts to 150,000 tons, thus leaving for export 4,350,000 tons; that Mr. Zabriskie, the president of the United States Sugar Equalization Board, stated before the Senate committee that about onefourth of this crop had been sold partly to European countries and in part to American refiners; and deducting this one-fourth, or 1,087,500 tons, we have in Cuba still remaining for export 3,262,500 tons.
The Government estimates the domestic sugar crop of the United States and its possessions as follows: Beet crop United States, 953,000 short tons; Louisiana cane crop, 138,000; Hawaiian cane crop, 600,000; and Porto Rican cane crop, 300,000, making a total of 1,991,000 short tons.
The sugar shortage, reduced to long tons, this domestic crop would be 1,777,700 tons. Adding Cuban crop now available for purchase and export, 3,262,500 tons, that leaves a total for distribution in this country of 5,040,200 tons. To this may be added such portion of the Cuban crop as has already been purchased by refiners in this country, and also such portion of the Philippine crop as may be brought to this country
The estimated consumption of sugar in this country for the current year amounts to about 4,260,000 tons, thus leaving a surplus of 780,000 tons.
So that the situation shows enough sugar yet available if we can get hold of it.
(The statement submitted for the record by Mr. Candler is as follows:) The ('uban crop for 1920 is estimated at....
4, 500, 000 The local consumption in Cuba amounts to.
150,000 Thus leaving for export..
4, 350, 000 Mr. Zabriskie, the president of the United States Sugar Equalization
Board, stated before our committee that about one-fourth of this crop had been sold partly to European countries and in part to American refiners; deducting this one-fourth, or...
We have in Cuba, still remaining for export...
3, 262, 500
The Government estimates of the domestic sugar crop of the United States
Beet crop, United States..
953, 000 138, 000 600, 000 300,000
Tons. Reduced to long tons this domestic crop would be..
1, 777, 700 Adding ('uban crop, now available for purchase and export.
3, 262, 500 Leaves a total for distribution in this country of..
5, 040, 200 (To this may be added such portion of the ('uban crop as has already been purchased by refiners in this country, and also such portion of the
Philippine crop as may be brought to this country.) The estimated consumption of sugar in this country for the current year amounts to about......
4, 260, 000
Thus leaving a surplus of.
780, 200 The CHAIRMAN. The present consumption of sugar is 92 pounds per capita. With 110,000,000 people in the United States over 5,000,000 tons are required for our consumption. It is estimated that there are only a little over 4,000,000 tons.
Mr. CANDLER. It is 5,040,200 tons available.
Mr. CANDLER. That is what this shows. And it gives it in a very detailed statement.
The CHAIRMAN. That would not allow anything for Europe? Of course if we absorb the whole crop, that is a different thing.
Mr. CANDLER. It is stated it leaves a total for distribution in this country of 5,040,200 tons.
The CHAIRMAN. But it is conceded in your statement that onethird of that must be deducted. According to your statement, European countries took one-third of it, and the United States two-thirds, last year.
Mr. CANDLER. This statement deducts one-fourth for export, amounting to 1,087,500 tons.
The CHAIRMAN. Besides it states that 4,260,000 tons are required for consumption, the consumption at 92 pounds per capita requires over 5,000,000 tons.
Mr. CANDLER. Even taking your statement that it requires 5,000,000 tons for consumption in this country, this shows 5,040,200 tons can be available if action is taken promptly.
Mr. PURNELL. What does the Cuban sugar cost now?
The CHAIRMAN. The head of a jobbing concern here in Washington states that it is costing 17 cents a pound.
Mr. CANDLER. I have heard some people were even offering 20 to 25 cents a pound for sugar in this country. That is the very thing I want to prevent.
Mr. LEE. That would be a very good reason why it should be regulated.
Mr. RAINEY. That statement was from the committee of the Louisiana sugar producers who appeared before the committee in the Senate. Mr. Gay made the speech, I think.